CAMBIUM LEARNING GROUP, INC. PURCHASE AGREEMENT
Exhibit 4.4
$175,000,000
9.75% SENIOR SECURED NOTES DUE 2017
February 14, 2011
BARCLAYS CAPITAL INC.
BMO CAPITAL MARKETS CORP.
As Representatives of the several
Initial Purchasers named in Schedule I attached hereto,
c/o Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
BMO CAPITAL MARKETS CORP.
As Representatives of the several
Initial Purchasers named in Schedule I attached hereto,
c/o Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cambium Learning Group, Inc., a Delaware corporation (the “Company”), proposes, upon the terms
and conditions set forth in this agreement (this “Agreement”), to issue and sell to the several
initial purchasers named in Schedule I attached hereto (the “Initial Purchasers”), for whom you are
acting as representatives (together, the “Representatives”), $175,000,000 in aggregate principal
amount of its 9.75% Senior Secured Notes due 2017 (the “Notes”). The Notes will (i) have terms and
provisions that are summarized in the Offering Memorandum (as defined below), and (ii) are to be
issued pursuant to an Indenture (the “Indenture”) to be entered into among the Company, the
Guarantors (as defined below) and Xxxxx Fargo, National Association, as trustee (the “Trustee”).
The Company’s obligations under the Notes, including the due and punctual payment of interest on
the Notes, will be irrevocably and unconditionally guaranteed (the “Guarantees”) by the guarantors
listed in Schedule II hereto (together the “Guarantors”). As used herein, the term “Notes” shall
include the Guarantees, unless the context otherwise requires. This Agreement is to confirm the
agreement concerning the purchase of the Notes from the Company by the Initial Purchasers.
The Notes being issued, the entry by the Company and the Guarantors into a new senior secured
asset-based revolving credit facility (the “New ABL Facility”), the initial borrowings thereunder
on the closing date thereof, if any, and the repayment of certain of the Company’s and the
Guarantors’ existing credit facilities and existing notes as described in the Pricing Disclosure
Package (as defined below), are referred to herein collectively, as the “Transactions.”
The Notes will be secured on a first priority basis, subject to certain permitted liens (to be
defined in the Indenture) (the “Permitted Liens”), by liens on certain assets (collectively, the
“Notes Collateral”) of the Company and the Guarantors other than the ABL Collateral (as defined
below), as more particularly described in the Pricing Disclosure Package. The Notes will have a
second priority security interest in the collateral securing the New ABL Facility (the
“ABL Collateral” and, together with the Notes Collateral, the “Collateral”). The rights of
holders of the Notes to the Collateral will be documented by a security agreement, and other
instruments evidencing or creating or purporting to create a security interest in favor of the
Collateral Agent (collectively, the “Security Documents”), each in favor of Xxxxx Fargo, National
Association, as collateral agent (in such capacity, the “Collateral Agent”), for its benefit and
the benefit of the Trustee and the holders of the Notes.
The Notes will be entitled to the benefits of an Intercreditor Agreement, dated as of the
Closing Date (the “Intercreditor Agreement”), by and among the Collateral Agent and Xxxxxx X.X., as
administrative agent and collateral agent under the New ABL Facility (the “Administrative Agent”),
and acknowledged by the Company and the Guarantors.
1. Purchase and Resale of the Notes. The Notes will be offered and sold to the Initial
Purchasers without registration under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance on an exemption pursuant to Section 4(2) under the Securities Act. The Company
and the Guarantors have prepared a preliminary offering memorandum, dated February 11, 2011 (the
“Preliminary Offering Memorandum”), a pricing term sheet substantially in the form attached hereto
as Schedule III (the “Pricing Term Sheet”) setting forth the terms of the Notes omitted from the
Preliminary Offering Memorandum and an offering memorandum, dated February 14, 2011 (the “Offering
Memorandum”), setting forth information regarding the Company, the Guarantors, the Notes, and the
Exchange Notes (as defined herein), the Guarantees and the Exchange Guarantees (as defined herein).
The Preliminary Offering Memorandum, as supplemented and amended as of the Applicable Time (as
defined below), together with the Pricing Term Sheet and any of the documents listed on Schedule
IV(A) hereto are collectively referred to as the “Pricing Disclosure Package”. The Company and the
Guarantors hereby confirm that they have authorized the use of the Pricing Disclosure Package and
the Offering Memorandum in connection with the offering and resale of the Notes by the Initial
Purchasers. “Applicable Time” means 4:15 p.m. (New York City time) on the date of this Agreement.
You have advised the Company that you will offer and resell (the “Exempt Resales”) the Notes
purchased by you hereunder on the terms set forth in each of the Pricing Disclosure Package and the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom you reasonably believe
to be “qualified institutional buyers” as defined in Rule 144A under the Securities Act (“QIBs”),
and (ii) outside the United States to certain persons who are not U.S. Persons (as defined in
Regulation S under the Securities Act (“Regulation S”)) (such persons, “Non-U.S. Persons”) in
offshore transactions in reliance on Regulation S. As used herein, the terms “offshore
transaction” and “United States” have the meanings assigned to them in Regulation S. Those persons
specified in clauses (i) and (ii) are referred to herein as “Eligible Purchasers”.
Holders (including subsequent transferees) of the Notes will have the registration rights set
forth in the registration rights agreement attached hereto as Exhibit A (the “Registration Rights
Agreement”) among the Company, the Guarantors and the Initial Purchasers to be dated the Closing
Date (as defined herein), for so long as such Notes constitute “Transfer Restricted Securities” (as
defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the
Company and the Guarantors will agree to file with the United States
Securities and Exchange Commission (the “Commission”) under the circumstances set forth
therein, a registration statement under the Securities Act relating to the Company’s 9.75% Senior
Secured Notes due 2017 (the “Exchange Notes”) and the Guarantors’ Exchange Guarantees (the
“Exchange Guarantees”) to be offered in exchange for the Notes and the Guarantees. Such portion of
the offering is referred to as the “Exchange Offer”.
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2. Representations, Warranties and Agreements of the Company and the Guarantors. The Company
and each of the Guarantors, jointly and severally, represent, warrant and agree as follows:
(a) When the Notes and Guarantees are issued and delivered pursuant to this Agreement, such
Notes and Guarantees will not be of the same class (within the meaning of Rule 144A under the
Securities Act) as securities of the Company or the Guarantors that are listed on a national
securities exchange registered under Section 6 of the United States Securities Exchange Act of
1934, as amended (the “Exchange Act”) or that are quoted in a United States automated inter-dealer
quotation system.
(b) Assuming the accuracy of your representations and warranties in Section 3(b) and your
compliance with your agreements set forth therein, the issuance and sale of the Notes to the
Initial Purchasers and the resale of the Notes by the Initial Purchasers pursuant hereto and in the
manner contemplated by this Agreement, the Pricing Disclosure Package and the Offering Memorandum
(including pursuant to the Exempt Resales) are exempt from the registration requirements of the
Securities Act.
(c) No form of general solicitation or general advertising within the meaning of Rule 502(c)
Regulation D (including, but not limited to, advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or broadcast over television
or radio, or any seminar or meeting whose attendees have been invited by any general solicitation
or general advertising) was used by the Company, the Guarantors, any of their respective affiliates
or any of their respective representatives (other than you, as to whom the Company and the
Guarantors make no representation) in connection with the offer and sale of the Notes.
(d) No directed selling efforts within the meaning of Rule 902 under the Securities Act were
used by the Company, the Guarantors or any of their respective representatives (other than you, as
to whom the Company and the Guarantors make no representation) with respect to Notes sold outside
the United States to Non-U.S. Persons, and the Company, any affiliate of the Company and any person
acting on its or their behalf (other than you, as to whom the Company and the Guarantors make no
representation) has complied with and will implement the “offering restrictions” required by Rule
902 under the Securities Act.
(e) Each of the Preliminary Offering Memorandum, the Pricing Disclosure Package and the
Offering Memorandum, each as of its respective date, contains all the information that, if
requested by a prospective purchaser of the Notes, would be required to be provided to such
prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
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(f) Neither the Company, any Guarantor nor any other person acting on behalf of the Company or
any Guarantor has sold or issued any securities (as defined in the Securities Act) that would be
integrated with the offering of the Notes contemplated by this Agreement in a manner that would
require registration of the Notes under the Securities Act, the rules and regulations thereunder or
the interpretations thereof by the Commission.
(g) The Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering
Memorandum have been prepared by the Company and the Guarantors for use by the Initial Purchasers
in connection with the Exempt Resales. No order or decree preventing the use of the Preliminary
Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act has been issued, and no proceeding for that purpose has
commenced or is pending or, to the knowledge of the Company or any of the Guarantors is
contemplated.
(h) The Offering Memorandum will not, as of its date or as of the Closing Date, contain any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided that the Company and each of the Guarantors make no representation or warranty with
respect to any information contained in or omitted from the Offering Memorandum in reliance upon
and in conformity with written information furnished to the Company by or on behalf of any Initial
Purchaser through the Representatives specifically for inclusion therein, which information is
specified in Section 8(e).
(i) The Pricing Disclosure Package did not, as of the Applicable Time, and the Pricing
Disclosure Package when taken together with each Free Writing Offering Document listed in Schedule
IV(B) hereto did not, as of the Applicable Time, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the Company and each of
the Guarantors make no representation or warranty with respect to any information contained in or
omitted from the Pricing Disclosure Package (or Free Writing Offering Document listed in Schedule
IV(B) hereto) in reliance upon and in conformity with written information furnished to the Company
by or on behalf of any Initial Purchaser through the Representatives specifically for inclusion
therein, which information is specified in Section 8(e).
(j) Other than the Pricing Term Sheet, the Company has not made any offer to sell or
solicitation of an offer to buy the Notes that would constitute a “free writing prospectus” (if the
offering of the Notes was made pursuant to a registered offering under the Securities Act), as
defined in Rule 405 under the Securities Act (a “Free Writing Offering Document”) without the prior
consent of the Representatives; any such Free Writing Offering Document the use of which has been
previously consented to by the Initial Purchasers is listed on Schedule IV.
(k) [Reserved].
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(l) Each of the Company, the Guarantors and their respective subsidiaries has been duly
organized, is validly existing and in good standing as a corporation or other business entity under
the laws of its jurisdiction of organization and is duly qualified to do business and in good
standing as a foreign corporation or other business entity in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses requires such qualification, except
where the failure to be so qualified or in good standing could not, in the aggregate, reasonably be
expected to have a material adverse effect on the condition (financial or otherwise), results of
operations, stockholders’ equity, properties or business of the Company and its subsidiaries taken
as a whole (a “Material Adverse Effect”). Each of the Company, the Guarantors and their respective
subsidiaries has all power and authority necessary to own or hold its properties and to conduct the
businesses in which it is now engaged. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Company’s Annual Report on Form 10-K for the most recent fiscal year.
(m) The Company has an authorized capitalization as set forth in each of the Pricing
Disclosure Package and the Offering Memorandum, and all of the issued shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and non-assessable.
All of (i) the issued and outstanding shares of capital stock of each subsidiary of the Company
that is a corporation have been duly authorized and validly issued, are fully paid and
non-assessable (ii) the outstanding equity interests of each subsidiary of the Company that is not
a corporation have been, to the extent applicable, duly authorized and validly issued, and, except
as otherwise set forth in the Pricing Disclosure Package and the Offering Memorandum, all
outstanding shares of capital stock or other equity interests of each such subsidiary are owned
directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or
claims, except for such liens, encumbrances, equities or claims as could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(n) The Company and each Guarantor has all requisite corporate, partnership or limited
liability company power and authority, as applicable, to execute, deliver and perform its
obligations under the Indenture. The Indenture has been duly authorized by the Company and the
Guarantors, and upon its execution and delivery in accordance with its terms by each of the parties
thereto and, assuming due authorization, execution and delivery by the Trustee and the Collateral
Agent, will constitute the valid and binding agreement of the Company and the Guarantors,
enforceable against the Company and the Guarantors in accordance with its terms, except as such
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in a proceeding in
equity or at law) (collectively, the “Enforceability Exceptions”). No qualification of the
Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture Act”) is required in
connection with the offer and sale of the Notes contemplated hereby or in connection with the
Exempt Resales. The Indenture will conform to the description thereof in each of the Pricing
Disclosure Package and the Offering Memorandum.
(o) The Company has all requisite corporate power and authority to execute, issue, sell and
perform its obligations under the Notes. The Notes have been duly authorized by the Company and,
when duly executed by the Company in accordance with the terms of the Indenture, assuming due
authentication of the Notes by the Trustee, upon delivery to the Initial Purchasers as provided in
the Indenture against payment therefor in accordance with the terms hereof, will be validly issued
and outstanding and will constitute valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in
accordance with their terms, subject to the Enforceability Exceptions. The Notes will conform
in all material respects to the description thereof in each of the Pricing Disclosure Package and
the Offering Memorandum.
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(p) The Company has all requisite corporate power and authority to execute, issue and perform
its obligations under the Exchange Notes. The Exchange Notes have been duly and validly authorized
by the Company and if and when issued and authenticated in accordance with the terms of the
Indenture and delivered in accordance with the Exchange Offer provided for in the Registration
Rights Agreement, will be validly issued and outstanding and will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, subject to the Enforceability Exceptions.
(q) Each Guarantor has all requisite corporate, partnership or limited liability company power
and authority, as applicable, to execute, issue and perform its obligations under the Guarantees.
The Guarantees have been duly and validly authorized by the Guarantors and when the Indenture is
duly executed and delivered by the Guarantors in accordance with its terms and upon the due
execution, authentication and delivery of the Notes in accordance with the Indenture and the
issuance of the Notes against payment therefor in the sale to the Initial Purchasers contemplated
by this Agreement, will constitute valid and binding obligations of the Guarantors, enforceable
against the Guarantors in accordance with their terms, subject to the Enforceability Exceptions.
The Guarantees will conform in all material respects to the description thereof in each of the
Pricing Disclosure Package and the Offering Memorandum.
(r) Each Guarantor has all requisite corporate, partnership or limited liability company power
and authority, as applicable, to execute, issue and perform its obligations under the Exchange
Guarantees. The Exchange Guarantees have been duly and validly authorized by the Guarantors and if
and when executed and delivered by the Guarantors in accordance with the terms of the Indenture and
upon the due execution and authentication of the Exchange Notes in accordance with the Indenture
and the issuance and delivery of the Exchange Notes in the Exchange Offer contemplated by the
Registration Rights Agreement, will be validly issued and delivered and will constitute valid and
binding obligations of the Guarantors entitled to the benefits of the Indenture, enforceable
against the Guarantors in accordance with their terms, subject to the Enforceability Exceptions.
(s) The Company and each Guarantor has all requisite corporate, partnership or limited
liability company power and authority, as applicable, to execute, deliver and perform its
obligations under the Registration Rights Agreement. The Registration Rights Agreement has been
duly authorized by the Company and each Guarantor and, when executed and delivered by the Company
and each Guarantor in accordance with the terms hereof and thereof, will be validly executed and
delivered and (assuming the due authorization, execution and delivery thereof by you) will be the
legally valid and binding obligation of the Company and each Guarantor in accordance with the terms
thereof, enforceable against the Company and each Guarantor in accordance with its terms, subject
to the Enforceability Exceptions and, as to rights of indemnification and contribution, by
principles of public policy. The Registration Rights Agreement will conform in all material
respects to the description thereof in each of the Pricing Disclosure Package and the Offering
Memorandum.
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(t) The Company and each Guarantor has all requisite corporate, partnership or limited
liability company power, as applicable, to execute, deliver and perform their respective
obligations under this Agreement. This Agreement has been duly and validly authorized, executed
and delivered by the Company and each of the Guarantors.
(u) The Intercreditor Agreement has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery and, assuming due authorization, execution and
delivery by the Collateral Agent and the Administrative Agent, will constitute the valid and
legally binding agreement of the Company and the Guarantors, enforceable against the Company and
the Guarantors in accordance with its terms, subject to the Enforceability Exceptions. The
Intercreditor Agreement will conform in all material respects to the description thereof in each of
the Pricing Disclosure Package and the Offering Memorandum.
(v) Each of the Security Documents has been duly authorized by the Company or the applicable
Guarantor, as appropriate, and, when executed and delivered by all parties thereto, will constitute
the legal, valid, binding and enforceable agreement of the Company or the applicable Guarantor,
subject to the Enforceability Exceptions. The Security Documents, when executed and delivered in
connection with the sale of the Notes, will create in favor of the Collateral Agent for the benefit
of itself, the Trustee and the holders of the Notes, valid and enforceable security interests in
and liens on the Collateral and, upon the filing of appropriate Uniform Commercial Code financing
statements and the taking of the other actions, in each case as further described in the Security
Documents, the security interests in and liens on the rights of the Company or the applicable
Guarantor in such Collateral will be, (i) in the case of the Notes Collateral, valid and perfected
first priority security interests and liens, superior to and prior to the liens of all third
persons other than Permitted Liens and except as otherwise provided for in such Security Documents
and the Intercreditor Agreement and (ii) in the case of the ABL Collateral, valid and perfected
second priority security interests and liens, superior to and prior to the liens of all third
persons other than Permitted Liens and except as otherwise provided for in such Security Documents
and the Intercreditor Agreement. The Security Documents will conform in all material respects to
the descriptions thereof in each of the Pricing Disclosure Package and the Offering Memorandum.
(w) The issue and sale of the Notes and the Guarantees, the execution, delivery and
performance by the Company and the Guarantors of the Notes, the Guarantees, the Exchange Notes, the
Exchange Guarantees, the Indenture, the Registration Rights Agreement, this Agreement, the Security
Documents, and the Intercreditor Agreement (collectively, the “Transaction Documents”), the
application of the proceeds from the sale of the Notes as described under “Use of Proceeds” in each
of the Pricing Disclosure Package and the Offering Memorandum, the granting of the security
interest in the Collateral and the consummation of the transactions contemplated hereby and
thereby, will not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or impose any lien, charge or encumbrance upon any property or assets of the
Company, the Guarantors or their respective subsidiaries other than pursuant to the Transaction
Documents, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement,
license, lease or other agreement or instrument to which the Company, the Guarantors or any of
their respective subsidiaries is a party or by which the Company, the Guarantors or any of their
respective subsidiaries is bound or to which any of the property or assets of the Company, the
Guarantors or any of their respective subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws (or similar organizational documents) of
the Company, the Guarantors or any of their respective subsidiaries, or (iii) result in any
violation of any statute or any judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company, the Guarantors or any of their
respective subsidiaries or any of their properties or assets, except, with respect to clauses (i)
and (iii), conflicts or violations that would not reasonably be expected to have a Material Adverse
Effect.
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(x) No consent, approval, authorization or order of, or filing, registration or qualification
with any court or governmental agency or body having jurisdiction over the Company, the Guarantors
or any of their respective subsidiaries or any of their properties or assets is required for the
issue and sale of the Notes and the Guarantees, the execution, delivery and performance by the
Company and the Guarantors of each of the Transaction Documents, the application of the proceeds
from the sale of the Notes as described under “Use of Proceeds” in each of the Pricing Disclosure
Package and the Offering Memorandum, the granting of the security interest in the Collateral and
the consummation of the transactions contemplated hereby and thereby, except for (i) the filing of
a registration statement by the Company with the Commission pursuant to the Securities Act as
required by the Registration Rights Agreement, (ii) such consents, approvals, authorizations,
orders, filings, registrations or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Notes by the Initial Purchasers,
each of which has been obtained and is in full force and effect and (iii) the filing of financing
statements under the Uniform Commercial Code as from time to time in effect in the relevant
jurisdictions and any filing to be made in the United States Patent and Trademark Office or the
United States Copyright Office.
(y) The consolidated historical financial statements (including the related notes) included in
the Pricing Disclosure Package and the Offering Memorandum present fairly in all material respects
the financial condition, results of operations and cash flows of the entities purported to be shown
thereby, at the dates and for the periods indicated, and have been prepared in conformity with
accounting principles generally accepted in the United States (US GAAP) applied on a consistent
basis throughout the periods involved.
(z) The pro forma financial statements included in the Pricing Disclosure Package and the
Offering Memorandum include assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and events described therein, the
related pro forma adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included in the Pricing Disclosure Package.
The pro forma financial statements included in the Pricing Disclosure Package have been prepared
in accordance with the Commission’s rules and guidance with respect to pro forma financial
information. The pro forma financial statements set forth in the Pricing Disclosure Package and
the Offering Memorandum have been prepared on the basis consistent with such historical financial
statements, except for the pro forma adjustments specified therein, include all material
adjustments to the historical financial data required by Rule 11-02 of Regulation S-X of the
Commission, and give effect to assumptions made on a reasonable basis and in good faith present
fairly in all material respects the historical and proposed transactions contemplated by the
Pricing Disclosure Package and the Offering Memorandum. The other financial information and data
included in the Offering Memorandum, historical and pro forma, are, in all material respects,
accurately presented and prepared on a basis consistent with such financial statements
and the books and records of the Company.
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(aa) Whitley Penn LLP, who have certified certain financial statements of the Company and of
Voyager Learning Company (“Voyager”), whose reports appear in the Pricing Disclosure Package and
the Offering Memorandum therein and who have delivered the initial letters referred to in Section
7(e) hereof, are independent registered public accountants within the meaning of the Securities Act
and the applicable published interpretations and rulings thereunder. Xxxxx Xxxxxxxx LLP and Ernst &
Young LLP whose reports appear in the Pricing Disclosure Package and the Offering Memorandum and
who have delivered the initial letter referred to in Section 7(e) hereof, were independent
registered public accountants within the meaning of the Securities Act and the applicable published
interpretations thereunder.
(bb) The Company and each of its subsidiaries maintain a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies
with the requirements of the Exchange Act and that has been designed by, or under the supervision
of, the Company’s principal executive and principal financial officers, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific
authorization, (ii) transactions are recorded as necessary to permit preparation of the Company’s
financial statements in conformity with accounting principles generally accepted in the United
States and to maintain accountability for its assets, (iii) access to the Company’s assets is
permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accountability for the Company’s assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company’s Annual
Report on Form 10-K for the year ended December 31, 2009 does not include a report of management’s
assessment regarding internal control over financial reporting or an attestation report of the
Company’s independent registered public accounting firm due to a transition period established by
rules of the SEC for newly public companies. As of September 30, 2010, the Company is not aware of
any material weaknesses in the Company’s internal controls.
(cc) (i) The Company and each of its subsidiaries maintain disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) under the Exchange Act), (ii) such disclosure controls
and procedures are designed to provide reasonable assurance that the information required to be
disclosed by the Company in the reports they file or submit under the Exchange Act is accumulated
and communicated to management of the Company and its subsidiaries, including its principal
executive officer and principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure; and (iii) such disclosure controls and procedures are effective in
all material respects to perform the functions for which they were established.
(dd) Since the date of the most recent balance sheet of the Company and its consolidated
subsidiaries reviewed or audited by Whitley Penn LLP and the audit committee of the board of
directors of the Company, there have been no significant changes in internal controls or in other
factors that could materially affect the Company’s internal controls.
(ee) There is and has been no failure on the part of the Company and, to the Company’s
knowledge, any of the Company’s directors or officers, in their capacities as such, to
comply in all material respects with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith.
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(ff) Since the date of the latest audited financial statements included in the Pricing
Disclosure Package and the Offering Memorandum, except as disclosed or contemplated in the Pricing
Disclosure Package and the Offering Memorandum, neither the Company, the Guarantors nor any of
their respective subsidiaries has (i) sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or court or governmental action, order or decree, (ii) issued or granted any
securities, (iii) incurred any material liability or obligation, direct or contingent, other than
liabilities and obligations that were incurred in the ordinary course of business, (iv) entered
into any material transaction not in the ordinary course of business and (v) declared or paid any
dividend on its capital stock; and since such date, there has not been any change in the capital
stock, partnership or limited liability interests, as applicable, or long-term debt of the Company,
the Guarantors or any of their respective subsidiaries or any adverse change, or any development
involving a prospective adverse change, in or affecting the condition (financial or otherwise),
results of operations, stockholders’ equity, properties, management, business or prospects of the
Company and its subsidiaries, taken as a whole, in each case except as could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(gg) The Company, the Guarantors and each of their respective subsidiaries has 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 and clear of all liens, encumbrances and defects, except
such liens, encumbrances and defects as are described in the Pricing Disclosure Package and the
Offering Memorandum and such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company, the
Guarantors or any of their respective subsidiaries. All assets held under lease by the Company,
the Guarantors or any of their respective subsidiaries are held by them under valid, subsisting and
enforceable leases, except where the failure to hold such leases could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(hh) The Company and each of its subsidiaries have such permits, licenses, patents,
franchises, certificates of need and other approvals or authorizations of governmental or
regulatory authorities (“Permits”) as are necessary under applicable law to own their properties
and conduct their businesses in the manner described in the Pricing Disclosure Package and the
Offering Memorandum, except for any of the foregoing that could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect. The Company and each of its subsidiaries have
fulfilled and performed all of its obligations with respect to the Permits, and no event has
occurred that allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other impairment of the rights of the holder or any such Permits, except
for any of the foregoing that could not reasonably be expected to have a Material Adverse Effect.
Neither the Company, nor any of its subsidiaries has received written notice of any revocation or
modification of any such Permits that are material to the business or has any reason to believe
that any such Permits that are material to the business will not be renewed in the ordinary course.
-10-
(ii) The Company and each of its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, know-how, software, systems and
technology (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the conduct of their respective
businesses except where the failure to own or possess such rights could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company and each of its subsidiaries
have no reason to believe that the conduct of their respective businesses will conflict with, and
have not received any notice of any claim of conflict with, any such rights of others.
(jj) Except as described in the Pricing Disclosure Package and the Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or any of its subsidiaries is the subject
that could, in the aggregate, reasonably be expected to have a Material Adverse Effect or could, in
the aggregate, reasonably be expected to have a material adverse effect on the performance by the
Company and the Guarantors of the performance of this Agreement, the Indenture, the Notes, the
Guarantees, the Security Documents, the Intercreditor Agreement or the consummation of any of the
transactions contemplated hereby. To the Company’s and each Guarantors’ knowledge, no such
proceedings are threatened or contemplated in writing by governmental authorities or others.
(kk) The Company, the Guarantors and each of their respective subsidiaries carry, or are
covered by, insurance from insurers of recognized financial responsibility covering such risks as
the Company has determined is adequate for the conduct of their respective businesses and the value
of their respective properties. All policies of insurance of the Company, the Guarantors and their
respective subsidiaries are in full force and effect; the Company, the Guarantors and each of their
respective subsidiaries are in compliance with the terms of such policies in all material respects;
and neither the Company, the Guarantors nor any of their respective subsidiaries has received
notice from any insurer or agent of such insurer that capital improvements or other expenditures
are required or necessary to be made in order to continue such insurance.
(ll) No relationship, direct or indirect, that would be required to be described in a
registration statement of the Company pursuant to Item 404 of Regulation S-K, exists between or
among the Company or any Guarantor and their respective subsidiaries, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or any Guarantor and their
respective subsidiaries, on the other hand, that has not been described in the Pricing Disclosure
Package and the Offering Memorandum.
(mm) No labor disturbance by or dispute with any organized group of employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company or any Guarantor, is imminent
that could reasonably be expected to have a Material Adverse Effect.
(nn) Neither the Company nor any of its subsidiaries (i) is in violation of its charter or
by-laws (or similar organizational documents), (ii) is in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant, condition or other obligation contained in any indenture,
mortgage, deed of trust, loan agreement, license or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is subject, or (iii) is
in violation of any statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over it or its property or assets or has failed to obtain any
license, permit, certificate, franchise or other governmental authorization or permit necessary to
the ownership of its property or to the conduct of its business, except in the case of clauses (ii)
and (iii), to the extent any such conflict, breach, violation or default could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
-11-
(oo) Except as described in the Pricing Disclosure Package and the Offering Memorandum or as
would not, in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) there
are no proceedings that are pending, or known to be contemplated, against the Company or any of its
subsidiaries under any laws, regulations, ordinances, rules, orders, judgments, decrees, permits or
other legal requirements of any governmental authority, including without limitation any
international, foreign, national, state, provincial, regional, or local authority, relating to
pollution, the protection of human health or safety, the environment, or natural resources, or to
use, handling, storage, manufacturing, transportation, treatment, discharge, disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
the Company, the Guarantors and their respective subsidiaries are not aware of any issues regarding
compliance with Environmental Laws, including any pending or proposed Environmental Laws, or
liabilities or other obligations under Environmental Laws or concerning hazardous or toxic
substances or wastes, pollutants or contaminants, and (iii) none of the Company, the Guarantors and
their respective subsidiaries anticipates material capital expenditures relating to Environmental
Laws.
(pp) The Company, the Guarantors and each of their respective subsidiaries have filed all
material federal, state, local and foreign tax returns required to be filed through the date
hereof, subject to permitted extensions, and have paid all taxes due, and no tax deficiency has
been determined adversely to the Company, the Guarantors or any of their respective subsidiaries,
nor does the Company or any Guarantor have any knowledge of any tax deficiencies that have been, or
could reasonably be expected to be asserted against the Company, the Guarantors and each of their
respective subsidiaries, that could, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(qq) Except as would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect, (i) each “employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Security Act of 1974, as amended (“ERISA”)) for which the Company or any member of its
“Controlled Group” (defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended
(the “Code”)) would have any liability (each a “Plan”) has been maintained in compliance with its
terms and with the requirements of all applicable statutes, rules and regulations including ERISA
and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to
a statutory or administrative exemption; (iii) with respect to each Plan subject to Title IV of
ERISA (A) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur, (B) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred or is
reasonably expected to occur, and (C) neither the Company or any member of its Controlled Group has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the
Pension Benefit Guaranty Corporation in the ordinary course and without default) in respect of
a Plan (including a “multiemployer plan”, within the meaning of Section 4001(c)(3) of ERISA); and
(iv) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
-12-
(rr) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on such subsidiary’s capital
stock, from repaying to the Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the Pricing Disclosure Package and the Offering
Memorandum.
(ss) The statistical and market-related data included in the Pricing Disclosure Package and
the Offering Memorandum and the consolidated financial statements of the Company and its
subsidiaries included in the Pricing Disclosure Package and the Offering Memorandum are based on or
derived from sources that the Company believes to be reliable in all material respects.
(tt) Neither the Company, the Guarantors nor any of their respective subsidiaries is, and
after giving effect to the offer and sale of the Notes and the application of the proceeds
therefrom as described under “Use of Proceeds” in each of the Pricing Disclosure Package and the
Offering Memorandum will be, an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(uu) Immediately after the consummation of the Transactions, the Company will be Solvent. As
used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such
date (i) the present fair market value (or present fair saleable value) of the assets of the
Company are not less than the total amount required to pay the probable liabilities of the Company
on its total existing debts and liabilities (including contingent liabilities) as they become
absolute and matured, (ii) the Company is able to realize upon its assets and pay its debts and
other liabilities, contingent obligations and commitments as they mature and become due in the
normal course of business, (iii) the Company is not engaged in any business or transaction, and is
not about to engage in any business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the prevailing practice in the
industry in which the Company is engaged, and (iv) the Company is not a defendant in any civil
action that would result in a judgment that the Company is or would become unable to satisfy. In
computing the amount of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that would be reasonably expected to become an actual
or matured liability.
(vv) Except as described in the Pricing Disclosure Package and the Offering Memorandum, there
are no contracts, agreements or understandings between the Company, any Guarantor and any person
granting such person the right to require the Company or any Guarantor to file a registration
statement under the Securities Act with respect to any securities of the Company or any Guarantor
(other than the Registration Rights Agreement) owned or to be owned by
such person or to require the Company or any Guarantor to include such securities in the
securities registered pursuant to the Registration Rights Agreement or in any securities being
registered pursuant to any other registration statement filed by the Company or any Guarantor under
the Securities Act.
-13-
(ww) Neither the Company nor any of its subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement and other than as contemplated by the
Company’s consulting fee agreement with Xxxxxxx Xxxxxx Xxxxxxxxx LLC as disclosed in the Pricing
Disclosure Package and the Offering Memorandum) that could give rise to a valid claim against any
of them or the Initial Purchasers for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Notes.
(xx) None of the transactions contemplated by this Agreement (including, without limitation,
the use of the proceeds from the sale of the Notes), will violate or result in a violation of
Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System.
(yy) The Company and its affiliates have not taken, directly or indirectly, any action
designed to or that has constituted or that could reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company or the Guarantors in
connection with the offering of the Notes.
(zz) [Reserved].
(aaa) Neither the Company nor any of its subsidiaries is in violation of or has received
notice of any violation with respect to any federal or state law relating to discrimination in the
hiring, promotion or pay of employees, nor any applicable federal or state wage and hour laws, nor
any state law precluding the denial of credit due to the neighborhood in which a property is
situated, the violation of any of which could reasonably be expected to have a Material Adverse
Affect.
(bbb) Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company
and the Guarantors, any director, officer, agent, employee or other person acting on behalf of the
Company, the Guarantors or any of their respective subsidiaries, has (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(ccc) Except for the embezzlement matter described in the Pricing Disclosure Package and the
Offering Memorandum, the operations of the Company and its subsidiaries are and have been conducted
at all times in compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding
by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.
-14-
(ddd) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or controlled affiliate of the Company, excluding portfolio
companies of Xxxxxxx Xxxxxx Xxxxxxxxx LLC, other than the Company and its subsidiaries, or any of
its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered by
OFAC.
(eee) The New ABL Facility has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery and, assuming due authorization, execution and
delivery by the lenders party thereto, will constitute the valid and legally binding agreement of
the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms, subject to the Enforceability Exceptions.
3. Purchase of the Notes by the Initial Purchasers, Agreements to Sell, Purchase and Resell.
(a) The Company and the Guarantors, jointly and severally hereby agree, on the basis of the
representations, warranties, covenants and agreements of the Initial Purchasers contained herein
and subject to all the terms and conditions set forth herein, to issue and sell to the Initial
Purchasers and, upon the basis of the representations, warranties and agreements of the Company and
the Guarantors herein contained and subject to all the terms and conditions set forth herein, each
Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 96.942% of the principal amount thereof, the principal amount of Notes set forth opposite
the name of such Initial Purchaser in Schedule I hereto. The Company and the Guarantors shall not
be obligated to deliver any of the securities to be delivered hereunder except upon payment for all
of the securities to be purchased as provided herein.
(b) Each of the Initial Purchasers, severally and not jointly hereby represents and warrants
to the Company that it will offer the Notes for sale upon the terms and conditions set forth in
this Agreement and in the Pricing Disclosure Package. Each of the Initial Purchasers, severally
and not jointly, hereby represents and warrants to, and agrees with, the Company, on the basis of
the representations, warranties and agreements of the Company and the Guarantors, that such Initial
Purchaser: (i) is a QIB with such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the Notes; (ii) is
purchasing the Notes pursuant to a private sale exempt from registration under the Securities Act;
(iii) in connection with the Exempt Resales, will solicit offers to buy the Notes only from, and
will offer to sell the Notes only to, the Eligible Purchasers in accordance with this Agreement and
on the terms contemplated by the Pricing Disclosure Package; and (iv) will not offer or sell the
Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any form of general
solicitation or general advertising (within the meaning of Regulation D, including, but
not limited to, advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general advertising) and
will not engage in any directed selling efforts within the meaning of Rule 902 under the Securities
Act, in connection with the offering of the Notes. The Initial Purchasers have advised the Company
that they will offer the Notes to Eligible Purchasers at a price initially equal to 99.442% of the
principal amount thereof, plus accrued interest, if any, from the date of issuance of the Notes.
Such price may be changed by the Initial Purchasers at any time without notice.
-15-
(c) The Initial Purchasers have not nor, prior to the later to occur of (A) the Closing Date
and (B) completion of the distribution of the Notes, will not, use, authorize use of, refer to or
distribute any material in connection with the offering and sale of the Notes other than (i) the
Preliminary Offering Memorandum, the Pricing Disclosure Package, the Offering Memorandum, (ii) any
written communication that contains no “issuer information” (as defined in Rule 433(h)(2) under the
Act) that was not included (including through incorporation by reference) in the Preliminary
Offering Memorandum or any Free Writing Offering Document listed on Schedule IV hereto, (iii) the
Free Writing Offering Documents listed on Schedule IV hereto, (iv) any written communication
prepared by such Initial Purchaser and approved by the Company in writing, or (v) any written
communication relating to or that contains the terms of the Notes and/or other information that was
included (including through incorporation by reference) in the Preliminary Offering Memorandum, the
Pricing Disclosure Package or the Offering Memorandum.
(d) Each of the Initial Purchasers hereby acknowledges that upon original issuance thereof,
and until such time as the same is no longer required under the applicable requirements of the
Securities Act, the Notes (and all securities issued in exchange therefore or in substitution
thereof) shall bear legends substantially in the forms as set forth in the “Notice to Investors”
section of the Pricing Disclosure Package and Offering Memorandum (along with such other legends as
the Company and its counsel deem necessary).
Each of the Initial Purchasers understands that the Company and, for purposes of the opinions
to be delivered to the Initial Purchasers pursuant to Sections 7(c) and 7(d) hereof, counsel to the
Company and counsel to the Initial Purchasers, will rely upon the accuracy and truth of the
foregoing representations, warranties and agreements, and the Initial Purchasers hereby consent to
such reliance.
4. Delivery of the Notes and Payment Therefor. Delivery to the Initial Purchasers of and
payment for the Notes shall be made at the office of Xxxxxx Xxxxxx & Xxxxxxx LLP, at 10:00 A.M.,
New York City time, on February 17, 2011 (the “Closing Date”). The place of closing for the Notes
and the Closing Date may be varied by agreement between the Initial Purchasers and the Company.
The Notes will be delivered to the Initial Purchasers, or the Trustee as custodian for The
Depository Trust Company (“DTC”), against payment by or on behalf of the Initial Purchasers of the
purchase price therefor by wire transfer in immediately available funds, by causing DTC to credit
the Notes to the account of the Initial Purchasers at DTC. The Notes will be evidenced by one or
more global securities in definitive form (the “Global Notes”) and will be registered in the name
of Cede & Co. as nominee of DTC. The Notes to be delivered to the Initial
Purchasers shall be made available to the Initial Purchasers in New York City for inspection
and packaging not later than 10:00 A.M., New York City time, on the business day next preceding the
Closing Date.
-16-
5. Agreements of the Company and the Guarantors. The Company and the Guarantors, jointly and
severally, agree with each of the Initial Purchasers as follows:
(a) The Company and the Guarantors will furnish to the Initial Purchasers, without charge,
within one business day of the date of the Offering Memorandum, such number of copies of the
Offering Memorandum as may then be amended or supplemented as they may reasonably request.
(b) The Company and the Guarantors will prepare the Offering Memorandum in a form approved by
the Initial Purchasers and will not make any amendment or supplement to the Pricing Disclosure
Package or to the Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which they shall reasonably object after being so advised.
(c) The Company and each of the Guarantors consents to the use of the Pricing Disclosure
Package and the Offering Memorandum in accordance with the securities or Blue Sky laws of the
jurisdictions in which the Notes are offered by the Initial Purchasers and by all dealers to whom
Notes may be sold, in connection with the offering and sale of the Notes.
(d) If, at any time prior to completion of the distribution of the Notes by the Initial
Purchasers to Eligible Purchasers, any event occurs or information becomes known that, in the
judgment of the Company or any of the Guarantors or in the opinion of counsel for the Initial
Purchasers, should be set forth in the Pricing Disclosure Package or the Offering Memorandum so
that the Pricing Disclosure Package or the Offering Memorandum, as then amended or supplemented,
does not include any untrue statement of material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the Pricing Disclosure Package
or the Offering Memorandum in order to comply with any law, the Company and the Guarantors will
forthwith prepare an appropriate supplement or amendment thereto, and will expeditiously furnish to
the Initial Purchasers and dealers a reasonable number of copies thereof.
(e) None of the Company nor any Guarantor will make any offer to sell or solicitation of an
offer to buy the Notes that would constitute a Free Writing Offering Document without the prior
consent of the Representatives, which consent shall not be unreasonably withheld or delayed. If at
any time following issuance of a Free Writing Offering Document any event occurred or occurs as a
result of which such Free Writing Offering Document conflicts with the information in the
Preliminary Offering Memorandum, the Pricing Disclosure Package or the Offering Memorandum or, when
taken together with the information in the Preliminary Offering Memorandum, the Pricing Disclosure
Package or the Offering Memorandum, includes an untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, as promptly as practicable after becoming aware
thereof, the Company will give notice thereof to the Initial Purchasers through the Representatives
and, if requested by the Representatives, will prepare and
furnish without charge to each Initial Purchaser a Free Writing Offering Document or other
document which will correct such conflict, statement or omission.
-17-
(f) Promptly from time to time to take such action as the Initial Purchasers may reasonably
request to qualify the Notes for offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers 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 Notes; provided that in connection therewith the Company shall
not be required to (i) qualify as a foreign corporation in any jurisdiction in which it would not
otherwise be required to so qualify, (ii) file a general consent to service of process in any such
jurisdiction, or (iii) subject itself to taxation in any jurisdiction in which it would not
otherwise be subject.
(g) For a period commencing on the date hereof and ending on the 90th day after the date of
the Offering Memorandum, the Company and the Guarantors agree not to, directly or indirectly, (i)
offer for sale, sell, or otherwise dispose of (or enter into any transaction or device that is
designed to, or would be expected to, result in the disposition by any person at any time in the
future of) any debt securities of the Company substantially similar to the Notes or securities
convertible into or exchangeable for such debt securities of the Company, or sell or grant options,
rights or warrants with respect to such debt securities of the Company or securities convertible
into or exchangeable for such debt securities of the Company, (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such debt securities of the Company, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of debt securities of the
Company or other securities, in cash or otherwise, (iii) file or cause to be filed a registration
statement, including any amendments, with respect to the registration of debt securities of the
Company substantially similar to the Notes or securities convertible, exercisable or exchangeable
into debt securities of the Company, or (iv) publicly announce an offering of any debt securities
of the Company substantially similar to the Notes or securities convertible or exchangeable into
such debt securities, in each case without the prior written consent of Barclays Capital Inc., on
behalf of the Initial Purchasers, except in exchange for the Exchange Notes and the Exchange
Guarantees in connection with the Exchange Offer.
(h) So long as any of the Notes are outstanding, the Company and the Guarantors will, furnish
at their expense to the Initial Purchasers, and, upon reasonable request, to the holders of the
Notes and prospective purchasers of the Notes the information required by Rule 144A(d)(4) under the
Securities Act (if any).
(i) The Company and the Guarantors will apply the net proceeds from the sale of the Notes to
be sold by it hereunder substantially in accordance with the description set forth in the Pricing
Disclosure Package and the Offering Memorandum under the caption “Use of Proceeds.”
(j) The Company shall take such actions as it and the Representatives deem appropriate under
applicable laws to cause the Notes to be secured by perfected liens on the Notes Collateral (it
being understood that the Notes shall be secured by perfected second priority liens on the ABL
Collateral) to the extent and in the manner provided for in the Indenture and the Security
Documents and as described in the Pricing Disclosure Package and the Offering
Memorandum.
-18-
(k) The Company, the Guarantors and their respective affiliates will not take, directly or
indirectly, any action designed to or that has constituted or that reasonably could be expected to
cause or result in the stabilization or manipulation of the price of any security of the Company or
the Guarantors in connection with the offering of the Notes.
(l) The Company and the Guarantors will use their best efforts to permit the Notes to be
eligible for clearance and settlement through DTC.
(m) The Company and the Guarantors will not, and will not permit any of their respective
affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Notes that have
been acquired by any of them, except for Notes purchased by the Company, the Guarantors or any of
their respective affiliates and resold in a transaction registered under the Securities Act.
(n) The Company and the Guarantors agree not to sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be
integrated with the sale of the Notes in a manner that would require the registration under the
Securities Act of the sale to the Initial Purchasers or the Eligible Purchasers of the Notes. The
Company and the Guarantors will take reasonable precautions designed to insure that any offer or
sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under
the Securities Act), of any Notes or any substantially similar security issued by the Company or
any Guarantor, within six months subsequent to the date on which the distribution of the Notes has
been completed (as notified to the Company by the Initial Purchasers), is made under restrictions
and other circumstances reasonably designed not to affect the status of the offer and sale of the
Notes in the United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act, including any sales pursuant to Rule
144A under, or Regulations D or S of, the Securities Act.
(o) The Company and the Guarantors agree to comply in all material respects with all the terms
and conditions of the Registration Rights Agreement and all agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the approval of the
Notes by DTC for “book entry” transfer.
(p) The Company and the Guarantors will do and perform all things required or necessary to be
done and performed under this Agreement by them prior to the Closing Date, and to satisfy all
conditions precedent to the Initial Purchasers’ obligations hereunder to purchase the Notes.
-19-
6. Expenses. Whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated, the Company and the Guarantors, jointly and severally, agree, to
pay all expenses, costs, fees and taxes incident to and in connection with: (a) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum, the Pricing Disclosure
Package and the Offering Memorandum (including, without limitation, financial statements and
exhibits) and all amendments and supplements thereto (including
the fees, disbursements and expenses of the Company’s and the Guarantors’ accountants and
counsel, but not, however, legal fees and expenses of the Initial Purchasers’ counsel incurred in
connection therewith); (b) the preparation, printing (including, without limitation, word
processing and duplication costs) and delivery of this Agreement, the Indenture, the Registration
Rights Agreement, the Security Documents, the Intercreditor Agreement, all Blue Sky memoranda and
all other agreements, memoranda, correspondence and other documents printed and delivered in
connection therewith and with the Exempt Resales (but not, however, legal fees and expenses of the
Initial Purchasers’ counsel incurred in connection with any of the foregoing other than fees of
such counsel plus reasonable disbursements incurred in connection with the preparation, printing
and delivery of such Blue Sky memoranda); (c) the issuance and delivery by the Company of the Notes
and by the Guarantors of the Guarantees and any taxes payable in connection therewith; (d) the
qualification of the Notes and Exchange Notes for offer and sale under the securities or Blue Sky
laws of the several states and any foreign jurisdictions as the Initial Purchasers may designate
(including, without limitation, the reasonable fees and disbursements of the Initial Purchasers’
counsel relating to such registration or qualification); (e) the furnishing of such copies of the
Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering Memorandum, and
all amendments and supplements thereto, as may be reasonably requested for use in connection with
the Exempt Resales; (f) the preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof); (g) the approval of the Notes by DTC for “book-entry”
transfer (including fees and expenses of counsel for the Initial Purchasers); (h) the rating of the
Notes and the Exchange Notes; (i) the obligations of the Trustee, any agent of the Trustee and the
counsel for the Trustee in connection with the Indenture, the Notes, the Guarantees, the Exchange
Notes, the Exchange Guarantees, the Security Documents and the Intercreditor Agreement; (j) the
performance by the Company and the Guarantors of their other obligations under this Agreement; (k)
all fees, costs and expenses (including the out-of-pocket fees and disbursements of counsel for the
Initial Purchasers related thereto) of creating and perfecting security interests and liens on the
Collateral, including all filing, recording and post-closing fees and expenses, related taxes and
title insurances premiums and fees with respect thereto, as set forth in the Security Documents;
and (l) all travel expenses (including expenses related to chartered aircraft) of each Initial
Purchaser and the Company’s officers and employees and any other expenses of each Initial Purchaser
and the Company in connection with attending or hosting meetings with prospective purchasers of the
Notes, and expenses associated with any electronic road show.
7. Conditions to Initial Purchasers’ Obligations. The respective obligations of the Initial
Purchasers hereunder are subject to the accuracy, when made and on and as of the Closing 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 respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Initial Purchasers shall not have discovered and disclosed to the Company on or prior
to the Closing Date that the Pricing Disclosure Package or the Offering Memorandum, or any
amendment or supplement thereto, contains an untrue statement of a fact which, in the opinion of
Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel to the Initial Purchasers, is material or omits to state a
fact which, in the opinion of such counsel, is material and is necessary in order to make the
statements therein, in the light of the circumstances then prevailing, not misleading.
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(b) All corporate proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees,
the Registration Rights Agreement, the Indenture, the Security Documents, the Intercreditor
Agreement, the Pricing Disclosure Package and the Offering Memorandum, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Initial Purchasers, and the Company and
the Guarantors shall have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(c) Xxxxxxxxxx Xxxxxxx PC and the General Counsel of the Company shall have furnished to the
Initial Purchasers their written opinions, as counsel to the Company and the Guarantors, addressed
to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers, substantially in the forms of Exhibit B and Exhibit C hereto,
respectively.
(d) The Initial Purchasers shall have received from Xxxxxx Xxxxxx & Xxxxxxx LLP, counsel for
the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Notes, the Pricing Disclosure Package, the Offering Memorandum and other
related matters as the Initial Purchasers may reasonably require, and the Company shall have
furnished to such counsel such documents and information as such counsel reasonably requests for
the purpose of enabling them to pass upon such matters.
(e) At the time of execution of this Agreement, the Initial Purchasers shall have received
from each of Whitley Penn LLP, the current independent registered accountant of the Company and the
old independent registered accountant of Voyager, Xxxxx Xxxxxxxx LLP, the old independent
registered accountant of VSS-Cambium Holdings, LLC (“VSS”), and Ernst & Young LLP, the predecessor
independent registered accountant of VSS, letters, in form and substance reasonably satisfactory to
the Initial Purchasers, addressed to the Initial Purchasers and dated the date hereof (i)
confirming that they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or,
with respect to matters involving changes or developments since the respective dates as of which
specified financial information is given in the Pricing Disclosure Package, as of a date not more
than three days prior to the date hereof), the conclusions and findings of such firm with respect
to the financial information and (iii) covering such other matters as are ordinarily covered by
accountants’ “comfort letters” to underwriters in connection with registered public offerings.
(f) With respect to the letters of Whitley Penn LLP, Xxxxx Xxxxxxxx LLP and Ernst & Young LLP
referred to in the preceding paragraph and delivered to the Initial Purchasers concurrently with
the execution of this Agreement (the “initial letter”), the Company shall have furnished to the
Initial Purchasers a “bring-down letter” of such accountants, addressed to the Initial Purchasers
and dated the Closing Date (i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the Closing Date (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
each of the Pricing Disclosure Package or the Offering Memorandum, as of a date not more than
three days prior to the date of the Closing Date), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial letter, and (iii)
confirming in all material respects the conclusions and findings set forth in the initial letter.
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(g) (i) Neither the Company, any Guarantor nor any of their respective subsidiaries shall have
sustained, since the date of the latest audited financial statements included in the Pricing
Disclosure Package and the Offering Memorandum, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, or (ii) since such date, there shall not
have been any change in the capital stock or long-term debt of the Company, any Guarantor or any of
their respective subsidiaries or any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), results of operations, stockholders’ equity,
properties, management, business or prospects of the Company, the Guarantors and their respective
subsidiaries, taken as a whole, the effect of which, in any such case described in clause (i) or
(ii), is, individually or in the aggregate, in the judgment of the Representatives, so material and
adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of
the Notes being delivered on the Closing Date on the terms and in the manner contemplated in the
Pricing Disclosure Package and the Offering Memorandum.
(h) Except as otherwise provided for in the Security Documents, the Intercreditor Agreement,
the Indenture or the other documents entered into pursuant to the Transactions, the Representatives
and the Collateral Agent shall have received each of the Security Documents and the Intercreditor
Agreement and all other certificates, agreements or instruments necessary to perfect the Collateral
Agent’s security interest in all of the Collateral, including but not limited to, control
agreements, stock certificates accompanied by instruments of transfer and stock powers undated and
endorsed in blank, Uniform Commercial Code financing statements in appropriate form for filing and
filings with the United States Patent and Trademark Office in appropriate form for filing; each
such document executed by the Company and each other party thereto, and each such document shall be
in full force and effect and evidence that all of the liens on the Collateral other than Permitted
Liens have been released. The Representatives shall also have received (i) certified copies of
Uniform Commercial Code financing statements, tax and judgment lien searches and lien search with
the U.S. Patent and Trademark Office, or equivalent reports or searches, each of a recent date
listing all effective financing statements, lien notices or comparable documents that name the
Company or any Guarantor as debtor and that are filed in those state jurisdictions in which the
Company or Guarantors are organized or maintain their chief executive office and such other
searches that the Representatives deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Security Documents (other than Permitted Liens)
and (ii) acceptable evidence of payment or arrangements for payment by the Company and the
Guarantors of all applicable recording taxes, fees, charges, costs and expenses required for the
recording of the Security Documents.
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(i) The Company and each Guarantor shall have furnished or caused to be furnished to the
Initial Purchasers dated as of the Closing Date a certificate of the Chief Executive Officer and
Chief Financial Officer of the Company and each Guarantor, or other officers satisfactory to the
Initial Purchasers, as to such matters as the Representatives may reasonably request, including,
without limitation, a statement that:
(i) The representations, warranties and agreements of the Company and the
Guarantors in Section 2 are true and correct in all material respects (except to the
extent such representation and warranty is qualified as to materiality, in which
case such representation and warranty shall be accurate in all respects) on and as
of the Closing Date, and the Company has complied in all material respects (except
to the extent such representation and warranty is qualified as to materiality, in
which case such representation and warranty shall be accurate in all respects) with
all its agreements contained herein and satisfied all the conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date; and
(ii) They have examined the Pricing Disclosure Package and the Offering
Memorandum, and, in their opinion, (A) the Pricing Disclosure Package, as of the
Applicable Time, and the Offering Memorandum, as of its date and as of the Closing
Date, did not and do not contain any untrue statement of a material fact and did not
and do not omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and (B)
since the date of the Pricing Disclosure Package and the Offering Memorandum, no
event has occurred which should have been set forth in a supplement or amendment to
the Pricing Disclosure Package and the Offering Memorandum.
(j) Subsequent to the earlier of the Applicable Time and the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the Company’s debt
securities 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, 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 Company’s debt securities.
(k) The Notes shall be eligible for clearance and settlement through DTC.
(l) The Company and the Guarantors shall have executed and delivered the Registration Rights
Agreement, and the Initial Purchasers shall have received an original copy thereof, duly executed
by the Company and the Guarantors.
(m) The Company, the Guarantors and the Trustee shall have executed and delivered the
Indenture, and the Initial Purchasers shall have received an original copy thereof, duly executed
by the Company, the Guarantors and the Trustee.
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(n) Subsequent to the execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange, the
NASDAQ or the NYSE Amex Equities or in the over-the-counter market, (ii) trading in any securities
of the Company on any exchange or in the over-the-counter market, in each case shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (iii) a general moratorium on commercial banking
activities shall have been declared by federal or state authorities, (iv) the United States
shall have become engaged in hostilities, there shall have been an escalation in hostilities
involving the United States, or there shall have been a declaration of a national emergency or war
by the United States, or (v) there shall have occurred such a material adverse change in general
economic, political or financial conditions, including, without limitation, as a result of
terrorist activities after the date hereof (or the effect of international conditions on the
financial markets in the United States shall be such), as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the offering or delivery of the Notes
being delivered on the Closing Date on the terms and in the manner contemplated in the Offering
Memorandum or that, in the judgment of the Representatives, could materially and adversely affect
the financial markets or the markets for the Notes and other debt securities.
(o) Concurrently with or prior to the issue and sale of the Notes by the Company, the Company
shall have entered into the New ABL Facility, in form and substance reasonably satisfactory to the
Representatives; the Representatives shall have received conformed counterparts thereof and all
other documents and agreements entered into and received thereunder in connection with the closing
of the New ABL Facility in form and substance reasonably satisfactory to the Representatives.
(p) There shall exist at and as of the Closing Date no condition that would constitute a
default (or an event that with notice or the lapse of time, or both, would constitute a default)
under the Indenture or the New ABL Facility as in effect at the Closing Date (or an event that with
notice or lapse of time, or both, would constitute such a default or material breach). On the
Closing Date, the New ABL Facility shall be in full force and effect, shall conform in all material
respects to the description thereof contained in the Pricing Disclosure Package and the Offering
Memorandum and shall not have been modified.
(q) The Company shall have furnished to the Initial Purchasers a certificate, dated as of the
Closing Date, of the Chief Financial Officer of the Company as to the Solvency of the Company
following the consummation of the Transactions.
(r) On or prior to the Closing Date, the Company and the Guarantors shall have furnished to
the Initial Purchasers such further certificates and documents as the Initial Purchasers may
reasonably request.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Initial Purchasers.
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8. Indemnification and Contribution.
(a) The Company and each Guarantor, hereby agree, jointly and severally, to indemnify and hold
harmless each Initial Purchaser, its affiliates, directors, officers and employees and each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Notes), to which that Initial
Purchaser, affiliate, director, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Free Writing Offering Document, the Preliminary Offering Memorandum, the
Pricing Disclosure Package or the Offering Memorandum or in any amendment or supplement thereto,
(B) in any Blue Sky application or other document prepared or executed by the Company or any
Guarantor (or based upon any written information furnished by the Company or any Guarantor)
specifically for the purpose of qualifying any or all of the Notes under the securities laws of any
state or other jurisdiction (any such application, document or information being hereinafter called
a “Blue Sky Application”), or (C) in any materials or information provided to investors by, or with
the approval of, the Company or any Guarantor in connection with the marketing of the offering of
the Notes (“Marketing Materials”), including any road show or investor presentations made to
investors by the Company (whether in person or electronically), or (ii) the omission or alleged
omission to state in any Free Writing Offering Document, the Preliminary Offering Memorandum, the
Pricing Disclosure Package or the Offering Memorandum, or in any amendment or supplement thereto,
or in any Blue Sky Application or in any Marketing Materials, any material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Initial Purchaser and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser, director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend 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, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Offering Memorandum, the Pricing Disclosure
Package or Offering Memorandum, or in any such amendment or supplement thereto, or in any Blue Sky
Application or in any Marketing Materials, in reliance upon and in conformity with written
information concerning such Initial Purchaser furnished to the Company through the Representatives
by or on behalf of any Initial Purchaser specifically for inclusion therein, which information
consists solely of the information specified in Section 8(e). The foregoing indemnity agreement is
in addition to any liability that the Company or the Guarantors may otherwise have to any Initial
Purchaser or to any affiliate, director, officer, employee or controlling person of that Initial
Purchaser.
(b) Each Initial Purchaser, severally and not jointly, hereby agrees to indemnify and hold
harmless the Company, each Guarantor, their respective officers and employees, each of their
respective directors, and each person, if any, who controls the Company or any Guarantor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the
Company, any Guarantor or any such director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Free Writing Offering Document, Preliminary Offering Memorandum,
the Pricing Disclosure Package or the Offering Memorandum or in any amendment or supplement
thereto, (B) in any Blue Sky Application, or (C) in any Marketing Materials, or (ii) the omission
or alleged omission to state in any Free Writing Offering Document, Preliminary Offering
Memorandum, the Pricing Disclosure Package or the Offering
Memorandum, or in any amendment or supplement thereto, or in any Blue Sky Application or in
any Marketing Materials any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information concerning such Initial Purchaser
furnished to the Company through the Representatives by or on behalf of that Initial Purchaser
specifically for inclusion therein, which information is limited to the information set forth in
Section 8(e). The foregoing indemnity agreement is in addition to any liability that any Initial
Purchaser may otherwise have to the Company, any Guarantor or any such director, officer, employee
or controlling person.
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(c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim
or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability that it may have under this
Section 8 except to the extent it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure and; provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability that it may have to an indemnified
party otherwise than under this Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the indemnifying party shall
not be liable to the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Initial Purchasers shall have the
right to employ counsel to represent jointly the Initial Purchasers and their respective directors,
officers, employees and controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Initial Purchasers against the Company or
any Guarantor under this Section 8, if (i) the Company, the Guarantors and the Initial Purchasers
shall have so mutually agreed; (ii) the Company and the Guarantors have failed within a reasonable
time to retain counsel reasonably satisfactory to the Initial Purchasers; (iii) the Initial
Purchasers and their respective directors, officers, employees and controlling persons shall have
reasonably concluded, based on the advice of counsel, that there may be legal defenses available to
them that are different from or in addition to those available to the Company and the Guarantors;
or (iv) the named parties in any such proceeding (including any impleaded parties) include both the
Initial Purchasers or their respective directors, officers, employees or controlling persons, on
the one hand, and the Company and the Guarantors, on the other hand, and representation of both
sets of parties by the same counsel would present a conflict due to actual or potential differing
interests between them, and in any such event the fees and expenses of such separate counsel shall
be paid by the Company and the Guarantors. No indemnifying party shall (x) without the prior
written consent of the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or potential parties
to such claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out of such claim,
action, suit or proceeding and does not include a statement as to, or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party, or (y) be liable for any
settlement of any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a
final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by reason of such
settlement or judgment.
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(d) If the indemnification provided for in this Section 8 shall for any reason be unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of
any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other, from the offering of the Notes, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to the statements or omissions that resulted in such loss, claim, damage or liability, or
action 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 Initial Purchasers,
on the other, with respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes purchased under this Agreement (before deducting
expenses) received by the Company and the Guarantors, on the one hand, and the total underwriting
discounts and commissions received by the Initial Purchasers with respect to the Notes purchased
under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the
Notes under this Agreement as set forth on the cover page of the Offering Memorandum. The relative
fault shall be determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company, the Guarantors, or the Initial Purchasers, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
statement or omission. For purposes of the preceding two sentences, the net proceeds deemed to be
received by the Company shall be deemed to be also for the benefit of the Guarantors, and
information supplied by the Company shall also be deemed to have been supplied by the Guarantors.
The Company, the Guarantors, and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section 8(d) shall be deemed
to include, for purposes of this Section 8(d), 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 Section 8(d), no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the net proceeds
from the sale to Eligible Purchasers of the Notes initially purchased by it exceeds the amount
of any damages that such Initial Purchaser has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Initial Purchasers’ obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective purchase obligations and not joint.
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(e) The Initial Purchasers severally confirm and the Company and the Guarantors acknowledge
and agree that the statements with respect to the offering of the Notes by the Initial Purchasers
set forth in the sixth paragraph and in the fourth sentence of the seventh paragraph of the section
entitled “Plan of Distribution” in the Pricing Disclosure Package and the Offering Memorandum are
correct and constitute the only information concerning such Initial Purchasers furnished in writing
to the Company or any Guarantor by or on behalf of the Initial Purchasers specifically for
inclusion in the Preliminary Offering Memorandum, the Pricing Disclosure Package and the Offering
Memorandum or in any amendment or supplement thereto.
9. Defaulting Initial Purchasers.
(a) If, on the Closing Date, any Initial Purchaser defaults in its obligations to purchase the
Notes that it has agreed to purchase under this Agreement, the remaining non-defaulting Initial
Purchasers may in their discretion arrange for the purchase of such Notes by the non-defaulting
Initial Purchasers or other persons satisfactory to the Company on the terms contained in this
Agreement. If, within 36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Notes, then the Company shall be
entitled to a further period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Initial Purchasers to purchase such Notes on such terms. In the event that within
the respective prescribed periods, the non-defaulting Initial Purchasers notify the Company that
they have so arranged for the purchase of such Notes, or the Company notifies the non-defaulting
Initial Purchasers that it has so arranged for the purchase of such Notes, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Pricing Disclosure Package, the Offering
Memorandum or in any other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Pricing Disclosure Package or the Offering Memorandum that effects
any such changes. As used in this Agreement, the term “Initial Purchaser” includes, for all
purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule
I hereto that, pursuant to this Section 9, purchases Notes that a defaulting Initial Purchaser
agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting
Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Notes that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Notes, then
the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the
principal amount of Notes that such Initial Purchaser agreed to purchase hereunder plus such
Initial Purchaser’s pro rata share (based on the principal amount of Notes that
such Initial Purchaser agreed to purchase hereunder) of the Notes of such defaulting Initial Purchaser
or Initial Purchasers for which such arrangements have not been made; provided that the
non-defaulting Initial Purchasers shall not be obligated to purchase more than 110% of the
aggregate principal amount of Notes that it agreed to purchase on the Closing Date pursuant to the
terms of Section 3.
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(c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting
Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Notes that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the Notes, or if the
Company shall not exercise the right described in paragraph (b) above, then this Agreement shall
terminate without liability on the part of the non-defaulting Initial Purchasers. Any termination
of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company
or the Guarantors, except that the Company and each of the Guarantors will continue to be liable
for the payment of expenses as set forth in Sections 6 and 11 and except that the provisions of
Section 8 shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it
may have to the Company, the Guarantors or any non-defaulting Initial Purchaser for damages caused
by its default.
10. Termination. The obligations of the Initial Purchasers hereunder may be terminated by the
Initial Purchasers by notice given to and received by the Company prior to delivery of and payment
for the Notes if, prior to that time, any of the events described in Sections 7(g), (j) or (n)
shall have occurred or if the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement.
11. Reimbursement of Initial Purchasers’ Expenses. If (a) the Company for any reason fails to
tender the Notes for delivery to the Initial Purchasers, or (b) the Initial Purchasers shall
decline to purchase the Notes for any reason permitted under this Agreement (other than solely
resulting from a failure to satisfy the condition under clause 7(n)(i), (iii), (iv) or (v)), the
Company and the Guarantors shall reimburse the Initial Purchasers for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel for the Initial Purchasers)
incurred by the Initial Purchasers in connection with this Agreement and the proposed purchase of
the Notes, and upon demand the Company and the Guarantors shall pay the full amount thereof to the
Initial Purchasers. If this Agreement is terminated pursuant to Section 9 by reason of the default
of one or more Initial Purchasers, the Company and the Guarantors shall not be obligated to
reimburse any Initial Purchaser on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to any Initial Purchaser, shall be delivered or sent by hand delivery, mail, telex,
overnight courier or facsimile transmission to Barclays Capital Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Registration with a copy to Xxxxxx Xxxxxx & Xxxxxxx LLP, 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx (Fax: 000-000-0000), and with a
copy, in the case of any notice pursuant to Section 8(c), to the Director of
Litigation, Office of the General Counsel, Barclays Capital Inc., 000 Xxxxxxx Xxx., Xxx Xxxx,
Xxx Xxxx 00000;
-29-
(b) if to the Company or any Guarantor, shall be delivered or sent by mail, telex, overnight
courier or facsimile transmission to Cambium Learning Group, Inc. at 00000 X. Xxxxxx Xxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000, Attention: Xxxx X. Xxxxxxxx, General Counsel (Fax: 000-000-0000), with a
copy to Xxxxxxxxxx Xxxxxxx PC, 1251 Avenue of the Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx X. Xxxxxxx (Fax: 000-000-0000); provided, however, that any notice to an Initial Purchaser
pursuant to Section 8(c) shall be delivered or sent by hand delivery, mail, telex or facsimile or
electronic transmission to such Initial Purchaser at its address set forth in its acceptance telex
to Barclays Capital Inc., which address will be supplied to any other party hereto by Barclays
Capital Inc. upon request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Initial Purchasers by Barclays Capital
Inc.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, 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 the representations, warranties, indemnities and agreements of the
Company and the Guarantors contained in this Agreement shall also be deemed to be for the benefit
of directors, officers and employees of the Initial Purchasers and each person or persons, if any,
controlling any Initial Purchaser within the meaning of Section 15 of the Securities Act. Nothing
in this Agreement is intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, rights of contribution, representations, warranties
and agreements of the Company, the Guarantors and the Initial Purchasers 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 Notes and shall remain in full force and effect, regardless of
any termination of this Agreement or any investigation made by or on behalf of any of them or any
person controlling any of them.
15. Definition of the Terms “Business Day”, “Affiliate”, and “Subsidiary”. For purposes of
this Agreement, (a) “business day” means any day on which the New York Stock Exchange, Inc. is open
for trading, and (b) “affiliate” and “subsidiary” have the meanings set forth in Rule 405 under the
Securities Act.
16. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
17. Waiver of Jury Trial. The Company and each of the Initial Purchasers hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in
any legal proceeding arising out of or relating to this Agreement or the transactions contemplated
hereby.
-30-
18. No Fiduciary Duty. The Company and the Guarantors acknowledge and agree that in
connection with this offering, or any other services the Initial Purchasers may be deemed to be
providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between
the parties or any oral representations or assurances previously or subsequently made by the
Initial Purchasers: (a) no fiduciary or agency relationship between the Company, any Guarantor and
any other person, on the one hand, and the Initial Purchasers, on the other, exists; (b) the
Initial Purchasers are not acting as advisors, expert or otherwise, to the Company or the
Guarantors, including, without limitation, with respect to the determination of the purchase price
of the Notes, and such relationship between the Company and the Guarantors, on the one hand, and
the Initial Purchasers, on the other, is entirely and solely commercial, based on arms-length
negotiations; (c) any duties and obligations that the Initial Purchasers may have to the Company
and the Guarantors shall be limited to those duties and obligations specifically stated herein; (d)
the Initial Purchasers and their respective affiliates may have interests that differ from those of
the Company and the Guarantors; and (e) the Company and the Guarantors have consulted their own
legal and financial advisors to the extent they deemed appropriate. The Company and the Guarantors
hereby waive any claims that the Company and the Guarantors may have against the Initial Purchasers
with respect to any breach of fiduciary duty in connection with the Notes.
19. 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.
20. 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.
-31-
If the foregoing correctly sets forth the agreement between the Company, the Guarantors, and
the Initial Purchasers, please indicate your acceptance in the space provided for that purpose
below.
| Very truly yours, CAMBIUM LEARNING GROUP, INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| GUARANTORS: VSS-CAMBIUM HOLDINGS II CORP. |
||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | President | |||
| VSS-CAMBIUM HOLDINGS, LLC | ||||
| By: | VSS-Cambium Holdings II Corp., its sole member | |||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | President | |||
| VSS-CAMBIUM HOLDINGS IV, LLC | ||||
| By: | VSS-Cambium Holdings, LLC, its sole member | |||
| By: VSS-Cambium Holdings II Corp., its sole member | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | President | |||
| CAMBIUM LEARNING, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
-32-
| KURZWEIL/INTELLITOOLS, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
| CAMBIUM EDUCATION, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
| LAZEL, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
-33-
Accepted:
BARCLAYS CAPITAL INC.
BMO CAPITAL MARKETS CORP.
BMO CAPITAL MARKETS CORP.
By BARCLAYS CAPITAL INC., as Authorized Representative
By |
||||||
| Name: | ||||||
| Title: | ||||||
| By BMO CAPITAL MARKETS CORP., as Authorized Representative | ||||||
By |
||||||
| Name: | ||||||
| Title: | ||||||
-34-
SCHEDULE I
| Principal | ||||
| Amount of | ||||
| Notes | ||||
| to be | ||||
| Initial Purchasers | Purchased | |||
Barclays Capital Inc. |
$ | 105,000,000 | ||
BMO Capital Markets Corp. |
$ | 70,000,000 | ||
Total |
$ | 175,000,000 | ||
Schedule I-1
SCHEDULE II
LIST OF GUARANTORS
VSS-Cambium Holdings II Corp.
VSS-Cambium Holdings, LLC
VSS-Cambium Holdings IV, LLC
Cambium Learning, Inc.
Kurzweil/Intellitools, Inc.
Cambium Education, Inc.
LAZEL, Inc.
VSS-Cambium Holdings, LLC
VSS-Cambium Holdings IV, LLC
Cambium Learning, Inc.
Kurzweil/Intellitools, Inc.
Cambium Education, Inc.
LAZEL, Inc.
Schedule II-1
SCHEDULE IV
A. Insert list of each document provided as an amendment or supplement to the Preliminary
Offering Memorandum.
(i) Pricing term sheet substantially in the form attached hereto as Schedule III.
B. Insert list of any “road show” materials that are Free Writing Offering Documents.
(i) None
Schedule IV-1
Exhibit A
Form of Registration Rights Agreement
Exhibit A-1
Exhibit B
[Xxxxxxxxxx Xxxxxxx PC Form of Opinion]
Xxxxxxxxxx Xxxxxxx PC shall have furnished to the Initial Purchasers its written opinion, as
counsel to the Company and the Guarantors, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the Representatives, to the effect
that:
(a) Each of the Company and the Guarantors is validly existing and in good standing as a
corporation or other business entity under the laws of its jurisdiction of organization. Each of
the Company and the Guarantors is duly qualified to do business and in good standing as a foreign
corporation or other business entity in each jurisdiction listed on Annex I to the opinion. Each
of the Company and the Guarantors has all power and authority necessary to own or hold its
properties and to conduct the businesses as described in the Pricing Disclosure Package and the
Offering Memorandum;
(b) No registration under the Securities Act of the Notes or the Guarantees, and no
qualification of the Indenture under the Trust Indenture Act with respect thereto, is required for
the sale of the Notes and the Guarantees to you as contemplated hereby or for the initial resale of
Notes by you in the Exempt Resales, assuming (i) the accuracy of the Initial Purchasers’
representations in this Agreement and (ii) the accuracy of the Company’s and the Guarantors’
representations in this Agreement;
(c) The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Registration Rights Agreement, the Indenture, the
Notes, the Exchange Notes, the Security Documents and the Intercreditor Agreement (the “Transaction
Documents”) and to issue and sell the Notes and the Exchange Notes. Each Guarantor has all
requisite corporate power and authority to execute, deliver and perform its obligations under this
Agreement, the Registration Rights Agreement, the Indenture, the Guarantees, the Exchange
Guarantees, the Security Documents and the Intercreditor Agreement;
(d) This Agreement has been duly authorized, executed and delivered by the Company and each of
the Guarantors;
(e) The Indenture has been duly authorized by all necessary corporate action of the Company,
has been duly executed and delivered by the Company, and is the legally valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms;
(f) The Indenture has been duly authorized by all necessary corporate action of each of the
Guarantors, and has been duly executed and delivered by each of the Guarantors. The Indenture,
including the Guarantee contained therein, is the legally valid and binding agreement of each of
the Guarantors, enforceable against each of them in accordance with its terms;
(g) The Notes have been duly authorized by all necessary corporate action of the Company and,
when executed, issued and authenticated in accordance with the terms of the Indenture and delivered
to and paid for by you in accordance with the terms of the Agreement, will
be the legally valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms;
Exhibit B-1
(h) The Exchange Notes have been duly authorized by the Company;
(i) The Guarantees of the Exchange Notes have been duly authorized by the Guarantors;
(j) The Registration Rights Agreement has been duly authorized, executed and delivered by the
Company and each of the Guarantors and, assuming the due authorization, execution and delivery
thereof by the Initial Purchasers, is the legally valid and binding agreement of the Company and
each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance
with its terms;
(k) Each of the Security Documents has been duly authorized by the Company or the applicable
Guarantor, as appropriate, and when executed and delivered by the Company or the applicable
Guarantor and, the Collateral Agent, will constitute the legal, valid, binding and enforceable
agreement of the Company or the applicable Guarantor;
(l) The Intercreditor Agreement has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery, assuming due authorization, execution and delivery
by the Collateral Agent and the Administrative Agent, will constitute the valid and legally binding
agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in
accordance with its terms;
(m) The execution, delivery and performance by the Company and each Guarantor of the
Transaction Documents, the Guarantees and the Exchange Guarantees to which each is a party and the
issuance and sale of the Notes and the Guarantees by the Company and the Guarantors to the Initial
Purchasers pursuant to this Agreement will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or, other than pursuant to the
Security Documents, result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of the Guarantors pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument listed on Annex I hereto,
(ii) result in any violation of the provisions of the certificate of incorporation, by-laws,
certificate of formation or limited liability company agreement of the Company or any of the
Guarantors or (iii) result in the violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority of which we have
knowledge, except in the case of clauses (i) and (iii) above, for any such conflict, breach,
violation, default, lien, charge or encumbrance that would not, singly or in the aggregate, have a
Material Adverse Effect;
(n) No consent, approval, authorization or order of, or filing, registration or qualification
with any court or governmental agency or body having jurisdiction over the Company and the
Guarantors is required for the issue and sale of the Notes and the Guarantees, the execution,
delivery and performance by the Company and the Guarantors of each of the Transaction Documents,
the Guarantees and the Exchange Guarantee, the granting of the security interest in the Collateral
and the consummation of the transactions contemplated hereby and thereby, except for
(i) the filing of a registration statement by the Company with the Commission pursuant to the
Securities Act as required by the Registration Rights Agreement, (ii) such consents, approvals,
authorizations, orders, filings, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of the Notes by the
Initial Purchasers and (iii) the filing of financing statements under the Uniform Commercial Code
as from time to time in effect in the relevant jurisdictions and any filing to be made in the
United States Patent and Trademark Office or the United States Copyright Office.
Exhibit B-2
(o) The Security Documents, when executed and delivered in connection with the sale of the
Notes, will be effective to create in favor of the Collateral Agent for the benefit of the Secured
Parties, the security interests in the Collateral owned by the Company and the Guarantors in which
security interests may be created under Article 9 of the Uniform Commercial Code as in effect in
the State of New York (“New York Article 9”);
(p) Upon the proper filing of the financing statements attached hereto as Exhibit
_____
(collectively, the “Financing Statements”) in the office of the Secretary of State of the State of
Delaware (the “Delaware Filing Office”), the security interest in favor of the Collateral Agent of
the benefit of the Secured Parties in the Collateral granted by the Company and the Guarantors
under the Security Documents will be perfected to the extent a security interest in such Collateral
can be perfected under Article 9 of the Uniform Commercial Code of the State of Delaware (“Delaware
Article 9”) by the filing of a financing statement in the Delaware Filing Office;
(q) Upon the proper filing of the financing statements attached hereto as Exhibit
_____
(the
“Financing Statement”) in the office of the Secretary of State of the State of Colorado (the
“Colorado Filing Office”), the security interest in favor of the Collateral Agent of the benefit of
the Secured Parties in the Collateral granted by the Company and the Guarantors under the Security
Documents will be perfected to the extent a security interest in such Collateral can be perfected
under Article 9 of the Uniform Commercial Code of the State of Colorado (“Colorado Article 9”) by
the filing of a financing statement in the Colorado Filing Office;
(r) Assuming that the certificates evidencing the Pledged Equity Interests (as defined in the
Security Agreement), consisting of the outstanding capital stock of the Guarantors and listed on
Exhibit
_____
to the Security Agreement, that constitute “certificated securities” (within the meaning
of Section 8-102(a)(4) of the UCC) indorsed by an appropriate person in blank or accompanied by
instruments of transfer or assignment in blank duly executed by an appropriate person, have been
delivered on or prior to the date hereof to the Collateral Agent, and have been continuously held
by the Collateral Agent since such delivery, in each case in the State of New York, (i) the
security interest in favor of the Collateral Agent of the benefit of the Secured Parties in such
Pledged Equity Interests is perfected to the extent it can be under the UCC, (ii) the Collateral
Agent has, for the benefit of the Secured Parties (as defined in the Security Agreement), control
(within the meaning of Section 8-106 of the UCC) of such Pledged Equity Interests and (iii)
assuming the absence of notice of any adverse claim (within the meaning of Section 8-102(a)(1) of
the UCC) thereto on the part of any Secured Party and the Secured Parties have given value (within
the meaning of Section 1-201(44) of the UCC), the Collateral Agent will be a protected purchaser
(within the meaning of Section 8-303(a) of the UCC) of such security interest in such Pledged
Equity Interests;
Exhibit B-3
(s) Neither the consummation of the transactions contemplated by the Agreement nor the sale,
issuance, execution or delivery of the Notes will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System;
(t) Neither the Company nor any Guarantor is, and after giving effect to the offer and sale of
the Notes and the application of the proceeds therefrom as described under “Use of Proceeds” in
each of the Pricing Disclosure Package and the Offering Memorandum will be, an “investment company”
or a company “controlled” by an “investment company” within the meaning of the Investment Company
Act of 1940, as amended, and the rules and regulations of the Commission thereunder;
(u) The statements contained in the Pricing Disclosure Package and the Offering Memorandum
under the captions “Description of Certain Indebtedness” insofar as they purport to constitute
summaries of the terms of contracts and other documents, fairly summarize the terms of such
contracts and other documents in all material respects; and the Offering Memorandum under the
caption “Description of Notes” and “Exchange Offer; Registration Rights” insofar as they purport to
constitute a summary of the terms of the Indenture, the Notes, the Guarantees, the Registration
Rights Agreement, the Security Documents and the Intercreditor Agreement fairly summarize such
documents in all material respects; and
(v) The statements contained in the Pricing Disclosure Package or the Offering Memorandum
under the caption “Certain U.S. Federal Income Tax Considerations,” insofar as they purport to
constitute summaries of matters of United States federal tax law or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all material respects.
Such counsel shall also have furnished to the Initial Purchasers a written statement,
addressed to the Initial Purchasers and dated the applicable Closing Date, in form and substance
satisfactory to the Initial Purchasers, to the effect that (y) such counsel has acted as special
counsel to the Company in connection with the sale to Barclays Capital Inc. and the several Initial
Purchasers for whom Barclays Capital Inc. and BMO Capital Markets Corp. are acting as
representatives by the Company of $175,000,000 in aggregate principal amount of the Notes and the
Guarantees by the Guarantors pursuant to the Agreement, and (z) based on its participation, review
and reliance as described in such written statement, no facts came to the attention of such counsel
that caused it to believe that:
(a) the Pricing Disclosure Package, as of the Applicable Time, contained an untrue
statement of a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; or
Exhibit B-4
(b) the Offering Memorandum, as of its date or as of the Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading,
except that in each case such counsel need express no opinion with respect to the financial
statements or other financial data contained in or omitted from the Pricing Disclosure Package and
the Offering Memorandum. The foregoing opinion and statement may be qualified by a statement to
the effect that such counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Pricing Disclosure Package or the Offering Memorandum,
except to the extent set forth in paragraphs (u) and (v) above.
Exhibit B-5
Exhibit C
[General Counsel of the Company Form of Opinion]
[“Guarantor” as used herein, refers solely to Cambium Education, Inc., a Colorado corporation.]
Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions
set forth herein, I am of the opinion that:
(a) The Guarantor is validly existing and in good standing as a corporation or other business
entity under the laws of its jurisdiction of organization. The Guarantor is duly qualified to do
business and in good standing as a foreign corporation or other business entity in each
jurisdiction listed on Annex I. The Guarantor has all power and authority necessary to own or hold
its properties and to conduct the businesses as described in the Pricing Disclosure Package and the
Offering Memorandum.
(b) The Guarantor has all requisite corporate power and authority to execute, deliver and
perform its obligations under the Purchase Agreement, the Registration Rights Agreement, the
Indenture, the Guarantee, the Exchange Guarantee, the applicable Security Documents and the
Intercreditor Agreement.
(c) The Purchase Agreement has been duly authorized, executed and delivered by the Guarantor.
(d) The Indenture has been duly authorized by all necessary corporate action of the Guarantor,
and has been duly executed and delivered by the Guarantor. The Indenture, including the Guarantee
contained therein, is the legally valid and binding agreement of the Guarantor.
(e) The Guarantee of the Exchange Notes has been duly authorized by the Guarantor.
(f) The Registration Rights Agreement has been duly authorized, executed and delivered by the
Guarantor and, assuming the due authorization, execution and delivery thereof by the Initial
Purchasers, is the legally valid and binding agreement of the Guarantor.
(g) Each of the applicable Security Documents has been duly authorized by the Guarantor, as
appropriate, and when executed and delivered by the Guarantor and, the Collateral Agent, will
constitute the legal, valid and binding agreement of the Guarantor.
(h) The Intercreditor Agreement has been duly and validly authorized by the Guarantor, and
upon its execution and delivery, assuming due authorization, execution and delivery by the
Collateral Agent and the Administrative Agent, will constitute the valid and legally binding
agreement of the Guarantor.
Exhibit C-1
(i) The execution, delivery and performance by the Guarantor of the Transaction Documents, the
Guarantee and the Exchange Guarantee to which Guarantee is a party and the issuance and sale of the
Guarantee by the Guarantor to the Initial Purchasers pursuant to the
Purchase Agreement will not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or, other than pursuant to the Transaction
Documents, result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Guarantor pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument listed on Annex II hereto, (ii) result in any violation
of the provisions of the certificate of incorporation, by-laws, certificate of formation or limited
liability company agreement of Guarantor or (iii) result in the violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority of which I have knowledge, except in the case of clauses (i) and (iii) above, for any
such conflict, breach, violation, default, lien, charge or encumbrance that would not, singly or in
the aggregate, have a Material Adverse Effect.
(j) No consent, approval, authorization or order of, or filing, registration or qualification
with any court or governmental agency or body having jurisdiction over the Guarantor is required
for the issue and sale of the Guarantee, the execution, delivery and performance by the Guarantor
of each of the Transaction Documents, the Guarantee and the Exchange Guarantee, the granting of the
security interest in the Collateral and the consummation of the transactions contemplated hereby
and thereby, except for (i) the filing of a registration statement by the Company with the
Commission pursuant to the Securities Act as required by the Registration Rights Agreement, (ii)
such consents, approvals, authorizations, orders, filings, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Initial Purchasers and (iii) the filing of financing statements
under the Uniform Commercial Code as from time to time in effect in the relevant jurisdictions and
any filing to be made in the United States Patent and Trademark Office or the United States
Copyright Office.
Exhibit C-2
