Exhibit
10.1
$95,000,000
EVERGREEN ENERGY INC.
8.00% Convertible Secured Notes Due August 1,
2012
PURCHASE AGREEMENT
July 25, 2007
CREDIT SUISSE SECURITIES (USA) LLC,
As Representative of the Several
Purchasers
Eleven Madison Avenue
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1.
Introductory . Evergreen Energy Inc., a
Delaware corporation (the “ Company
”), proposes, subject to the terms and conditions stated
herein, to issue and sell to the several initial purchasers named
in Schedule A hereto (the “ Purchasers
”) $95,000,000 principal amount of its 8.00% Convertible
Secured Notes due August 1, 2012 (the “
Notes ”) to be issued under an indenture
dated as of July 30, 2007 (the “ Indenture
”), among the Company, Evergreen Operations, LLC, a Delaware
limited liability company, KFx Plant, LLC, a Wyoming limited
liability company, KFx Operations, LLC, a Wyoming limited liability
company, Landrica Development Company, a South Dakota corporation,
and Buckeye Industrial Mining Company, an Ohio corporation
(collectively, the “ Guarantors ”) and
U.S. Bank, as trustee (the “ Trustee
”) on a private placement basis pursuant to an exemption
under Section 4(2) of the United States Securities Act of
1933, as amended (the “ Securities Act
”). The payment of principal, premium and
Additional Interest (as defined in the Indenture), if any, and
interest on the Notes will be fully and unconditionally guaranteed
(the “ Guarantees ”) on a secured
basis, by the Guarantors. The Notes and the Guarantees
will be secured by a first-priority lien on the Collateral (as
defined in the Indenture) (the “ Collateral
”) pursuant to a security agreement (the “
Security Agreement ”). The Notes
and Guarantees are herein collectively referred to as the “
Offered Securities ”.
The holders of
the Offered Securities will be entitled to the benefits of a
Registration Rights Agreement of even date herewith among the
Company and the Purchasers (the “ Registration Rights
Agreement ”), pursuant to which the Company agrees
to file a registration statement with the Securities and Exchange
Commission (the “ Commission ”)
registering the resale of the Offered Securities and the Underlying
Shares, as hereinafter defined, under the Securities
Act.
The Company
hereby agrees with the several Purchasers as follows:
2.
Representations and Warranties of the Company and the
Guarantors . The Company and the Guarantors,
jointly and severally, represent and warrant to, and agree with,
the several Purchasers that:
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(a) A preliminary offering circular and an offering
circular relating to the Offered Securities has been prepared by
the Company. Such preliminary offering circular (the “
Preliminary Offering Circular ”) and
offering circular (the “ Offering Circular
”), as supplemented as of the date of this Agreement,
together with the pricing term sheet, dated as of the date of this
agreement (the “ Pricing Term Sheet ”)
attached hereto as Schedule B, are hereinafter collectively
referred to as the “ Offering Document
”. As used herein, the terms Preliminary Offering Circular,
Offering Circular and Offering Document shall include the documents
incorporated by reference therein. The terms
“supplement,”
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“amendment” and “amend,” as used herein,
shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”) that
are deemed to be incorporated by reference therein. On the date of
this Agreement at 9:20 a.m. (the “ Applicable
Time ”), the Offering Document does not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in
or omissions from the Offering Document based upon written
information furnished to the Company by or on behalf of any
Purchaser through Credit Suisse Securities (USA) LLC (“
Credit Suisse ”) specifically for use
therein, it being understood and agreed that the only such
information is that described as such in Section 7(b)
hereof. Except as disclosed in the Offering Document, on
the date of this Agreement at the Applicable Time, the Company's
Annual Report on Form 10-K most recently filed with the
Securities and Exchange Commission (the “
Commission ”) and all subsequent reports
(collectively, the “ Exchange Act Reports
”) which have been filed by the Company with the Commission
or sent to stockholders pursuant to the Exchange Act at the time of
such filing did not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
thereunder.
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(b) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Offering Document; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where
such failure to qualify would not have a material adverse effect on
the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
(" Material Adverse Effect ").
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(c) Each Guarantor has been duly incorporated or formed
and is an existing corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation or
formation, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Offering Document; and each Guarantor is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where
such failure to qualify would not have a Material Adverse Effect;
all of the issued and outstanding capital stock or membership
interests, as the case may be, of each Guarantor has been duly
authorized and validly issued and is fully paid and nonassessable;
and the capital stock or membership interests, as the case may be,
of each Guarantor is owned by the Company, directly or indirectly
through subsidiaries, free from liens, encumbrances and
defects.
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(d) The Indenture has been duly authorized by the
Company and each Guarantor; the Offered Securities have been duly
authorized by the Company and each Guarantor; and when the Offered
Securities are delivered and paid for pursuant to this Agreement on
the Closing Date (as defined below), the Indenture will have been
duly executed and delivered by the Company and each Guarantor, such
Offered Securities will have been duly executed, authenticated,
issued and delivered by the Company and each Guarantor and will
conform in all material respects to the description thereof
contained in the Offering Document and (assuming the due
authorization, execution and delivery thereof by the other parties
thereto) the Indenture and such Offered Securities will constitute
valid and binding obligations of the Company and each Guarantor,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity
principles.
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(e) When the Offered Securities are delivered and paid
for pursuant to this Agreement on the Closing Date, such Offered
Securities will be convertible into the shares of common stock, par
value $.001 per share (“ Underlying Shares
”) of the Company in accordance with the terms of the
Indenture; the Underlying Shares initially issuable upon conversion
of such Offered Securities have been duly authorized and reserved
for issuance upon such conversion, will conform in all material
respects to the information in the Offering Document and will
conform in all material respects to the description of such Offered
Securities contained in the Offering Circular; the authorized
equity capitalization of the Company is as set forth in the
Offering Document; all outstanding shares of capital stock of the
Company are, and when issued upon conversion the Underlying Shares
will be, validly issued, fully paid and nonassessable; the
outstanding Underlying Shares have been duly authorized and validly
issued, are fully paid and nonassessable and conform in all
material respects to the description thereof contained in the
Offering Document; and the stockholders of the Company have no
preemptive rights with respect to the Offered Securities or the
Underlying Shares.
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(f) The Security Agreement has been duly authorized by
the Company and each Guarantor; and on the Closing Date (as defined
below), the Security Agreement will have been duly executed and
delivered by the Company and each Guarantor and, (assuming the due
authorization, execution and delivery thereof by the other parties
thereto) will constitute valid and binding obligations of the
Company and each Guarantor, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; the Security Agreement, when duly
executed and delivered, will create valid and perfected security
interests in the Collateral to which they relate, subject to no
prior liens other than Permitted Liens (as defined in the
Indenture); and each of the representations and warranties made by
the Company and the Guarantors in the Security Agreement will be
true and correct in all material respects as of the
Closing Date. On the Closing Date, the Security
Agreement will conform in all material respects as to legal matters
to the descriptions thereof in the Offering Document.
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(g) Except as disclosed in the Offering Document, there
are no contracts, agreements or understandings between the Company
or any Guarantor and any person that would give rise to a valid
claim against the Company or any Purchaser for a brokerage
commission, finder’s fee or other like payment in connection
with transactions contemplated hereby.
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(h) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement, the Security Agreement and the Registration Rights
Agreement in connection with the issuance and sale of the Offered
Securities by the Company and the Guarantors, as applicable, except
for the order of the Commission declaring the Shelf Registration
Statement (as defined in the Registration Rights Agreement)
effective.
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(i) The execution, delivery and performance of this
Agreement, the Security Agreement and the Registration Rights
Agreement, and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under (1) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of
the Company or any of their properties, or (2) any agreement or
instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is
subject, or (3) the charter or by-laws of the Company or any such
subsidiary, except in the case of (1) and (2) for any such breach,
violation or default which would not have a Material Adverse
Effect, and
the Company and each Guarantor has full power and authority to
authorize, issue and sell the Offered Securities as contemplated by
this Agreement.
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(j) This Agreement has been duly authorized, executed
and delivered by the Company and each Guarantor. The
Registration Rights Agreement has been duly authorized by the
Company and each Guarantor, and when executed and delivered on the
Closing Date, (assuming the due authorization, execution and
delivery thereof by the other parties thereto) will be a valid and
binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights
and to general equity principles.
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(k) Except as disclosed in the Offering Document, the
Company and the Guarantors have good and marketable title to all
real properties and all other properties and assets owned by them,
in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with
the use made or to be made thereof by them; and except as disclosed
in the Offering Document, the Company and the Guarantors hold any
leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use
made or to be made thereof by them.
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(l) The Company and the Guarantors possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business
now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to
the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
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(m) No labor dispute with the employees of the Company
or any subsidiary exists or, to the knowledge of the Company, is
imminent that might have a Material Adverse Effect.
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(n) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property
(collectively, “ intellectual property
rights ”) necessary to conduct the business
now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights
that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
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(o) Except as disclosed in the Offering Document,
neither the Company nor any of its subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic
substances (collectively, “
environmental laws ”), owns
or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or
in the aggregate have a Material Adverse Effect; and the Company is
not aware of any pending investigation which might lead to such a
claim.
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(p) Except as disclosed in the Offering Document, there
are no pending actions, suits or proceedings against or affecting
the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect
the ability of the Company to perform its obligations under the
Indenture, this Agreement or the Registration Rights Agreement, or
which are otherwise material in the context of the sale of
the
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Offered Securities; and no such actions, suits or proceedings are
threatened or, to the Company's knowledge,
contemplated.
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(q) The financial statements included in the Offering
Document present fairly the financial position of the Company and
its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States
applied on a consistent basis throughout the periods covered
thereby, except as may be expressly stated in the related notes and
supporting schedules thereto.
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(r) Except as disclosed in the Offering Document, since
the date of the most recent financial statements included in the
Offering Document there has been no material adverse change, nor
any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken
as a whole, and, except as disclosed in or contemplated by the
Offering Document, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock.
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(s) Any third-party statistical and market-related data
included in a Preliminary Offering Circular or the Offering
Circular are based on or derived from sources that the Company
believes to be reliable and accurate in all material
respects.
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(t) Except as set forth in the Offering Document, the
Company, its subsidiaries and the Company’s Board of
Directors (the “ Board ”) are in
compliance with Sarbanes-Oxley Act of 2002 (“
Sarbanes-Oxley ”) and the applicable rules
of the New York Stock Exchange. The Company maintains a
system of internal controls, including, but not limited to,
disclosure controls and procedures, internal controls over
accounting matters and financial reporting, an internal audit
function, and legal and regulatory compliance controls
(collectively, “ Internal Controls ”),
that comply with the Securities Laws. The Internal
Controls are overseen by the Audit Committee (the “
Audit Committee ”) of the Board in
accordance with Exchange Rules. The Company has not
publicly disclosed or reported to the Audit Committee or the Board
a significant deficiency, material weakness, change in Internal
Controls or fraud involving management or other employees who have
a significant role in Internal Controls, any violation of, or
failure to comply with, the Securities Laws, or any matter which,
if determined adversely, would have a Material Adverse
Effect. As used herein, “ Securities
Laws ” means collectively, Sarbanes-Oxley, the
Securities Act, the Rules and Regulations, the Exchange Act and the
rules and regulations of the Commission thereunder, the auditing
principles, rules, standards and practices applicable to auditors
of “issuers” (as defined in Sarbanes-Oxley) promulgated
or approved by the Public Company Accounting Oversight Board and
the applicable rules of the New York Stock Exchange.
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(u) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Offering Document, will
not be an “investment company” as defined in the United
States Investment Company Act of 1940 (the “
Investment Company Act ”).
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(v) No securities of the same class (within the meaning
of Rule 144A(d)(3) under the Securities Act) as the Offered
Securities are listed on any national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system.
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(w) The offer and sale of the Offered Securities by the
Company and the Guarantors to the several Purchasers in the manner
contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2)
thereof; and it is not
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necessary to qualify an indenture in respect of the Offered
Securities under the United States Trust Indenture Act of 1939, as
amended (the “ Trust Indenture Act
”).
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(x) Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf (other than the Initial
Purchasers, as to the Company makes no representation or warranty)
(i) has, within the six-month period prior to the date hereof,
offered or sold in the United States or to any U.S. person (as such
terms are defined in Regulation S under the Securities Act)
the Offered Securities or any security of the same class or series
as the Offered Securities or (ii) has offered or will offer or sell
the Offered Securities (A) in the United States by means of
any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) with
respect to any securities sold in reliance on Rule 903 of
Regulation S, by means of any directed selling efforts within
the meaning of Rule 902(c) of
Regulation S. The Company has not entered and will
not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for this
Agreement.
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3.
Purchase, Sale and Delivery of Offered Securities
. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to
purchase from the Company, at a purchase price of 95.00% of the
principal amount thereof plus accrued interest from July 30, 2007
to the Closing Date (as hereinafter defined) the respective
principal amounts set forth opposite the names of the several
Purchasers in Schedule A hereto.
The Company will
deliver against payment of the purchase price the Offered
Securities in the form of one or more permanent global Securities
in definitive form (the “ Offered
Global Securities ”)
deposited with the Trustee as custodian for The Depository Trust
Company (“ DTC ”) and registered in
the name of Cede & Co., as nominee for DTC. Interests in any
permanent global Securities will be held only in book-entry form
through DTC, except in the limited circumstances described in the
Offering Document. Payment for the Offered Securities shall be made
by the Purchasers in Federal (same day) funds by official check or
checks or wire transfer to an account at a bank acceptable to
Credit Suisse drawn to the order of Evergreen Energy Inc. at the
office of Davis Polk & Wardwell, 450 Lexington Avenue, New
York, New York 10017 at 10:00 A.M. (New York time), on
July 30, 2007, or at such other time not later than four full
business days thereafter as Credit Suisse and the Company
determine, such time being herein referred to as the “
Closing Date ”, against delivery to the
Trustee as custodian for DTC of the Offered Global Securities
representing all of the Offered Securities. The Offered Global
Securities will be made available for checking at the above office
of Davis Polk & Wardwell at least 24 hours prior to the Closing
Date.
4.
Representations by Purchasers; Resale by Purchasers
.
(a) Each Purchaser severally represents and warrants to
the Company that it is an “accredited investor” within
the meaning of Regulation D under the Securities
Act.
(b) Each Purchaser severally acknowledges that the
Offered Securities have not been registered under the Securities
Act and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except pursuant to
an exemption from the registration requirements of the Securities
Act. Each Purchaser severally represents and agrees that
it has offered and sold the Offered Securities and will offer and
sell the Offered Securities (i) as part of their distribution
at any time and (ii) otherwise until the later of the
commencement of the offering and the Closing Date, only in
accordance with Rule 144A (“ Rule 144A
”) under the Securities Act.
(c) Each Purchaser severally agrees that it and each of
its affiliates has not entered and will not enter into any
contractual arrangement with respect to the distribution of the
Offered Securities except for any such
arrangements with the other Purchasers or affiliates of the other
Purchasers or with the prior written consent of the
Company.
(d) Each Purchaser severally agrees that it and each of
its affiliates will not offer or sell the Offered Securities by
means of any form of general solicitation or general advertising,
within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article,
notice or other communication published in any newspaper, magazine
or similar media or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. Each
Purchaser severally agrees, with respect to resales made in
reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act
provided by Rule 144A.
5.
Certain Agreements of the Company . The Company
agrees with the several Purchasers that:
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(a) The Company will advise Credit Suisse promptly of
any proposal to amend or supplement the Offering Document and will
not effect such amendment or supplementation without Credit
Suisse’s consent. If, at any time prior to the completion of
the resale of the Offered Securities by the Purchasers any event
occurs as a result of which the Offering Document as then amended
or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, the Company promptly will
notify Credit Suisse of such event and promptly will prepare, at
its own expense, an amendment or supplement which will correct such
statement or omission. Neither Credit Suisse’s
consent to, nor the Purchaser’ delivery to offerees or
investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section
6.
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(b) The Company represents and agrees that, unless it
obtains the prior consent of Credit Suisse it has not made and will
not make any offer relating to the Offered Securities that would
constitute an Issuer Communication. As used herein,
“ Issuer Communication ” means a
written communication prepared by or on behalf of the Company, used
or referred to by the Company that constitutes an offer to sell or
a solicitation of an offer to buy the Offered Securities and is
made by means other than the Preliminary Offering Circular, Pricing
Term Sheet or the Offering Circular.
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(c) The Company will furnish to Credit Suisse copies of
any preliminary offering circular, the Offering Document and all
amendments and supplements to such documents, in each case as soon
as available and in such quantities as Credit Suisse requests, and
the Company will furnish to Credit Suisse on the date hereof three
copies of the Offering Document signed by a duly authorized officer
of the Company, one of which will include the independent
accountants’ reports therein manually signed by such
independent accountants. At any time when the Company is not
subject to Section 13 or 15(d) of the Exchange Act and, upon
request of holders and prospective purchasers of the Offered
Securities, to such holders and purchasers, copies of the
information required to be delivered to holders and prospective
purchasers of the Offered Securities pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the
Offered Securities. The Company will pay the expenses of
printing and distributing to the Purchasers all such
documents.
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(d) The Company will arrange for the qualification of
the Offered Securities for sale and the determination of their
eligibility for investment under the laws of such states in the
United States as Credit Suisse designates and will continue such
qualifications in effect so long as required for the resale of the
Offered Securities by the Purchaser provided that the
Company will not be required to qualify as a foreign corporation or
to file a general consent to service of process or become subject
to taxation as a foreign corporation in any such
state.
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(e) During the period of two years after the Closing
Date, the Company will, upon request, furnish to Credit Suisse,
each of the other Purchasers and any holder of Offered Securities a
copy of the restrictions on transfer applicable to the
Securities.
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(f) During the period of two years after the Closing
Date, the Company will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act)
to, resell any of the Offered Securities that have been reacquired
by any of them.
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(g) During the period of two years after the Closing
Date, the Company will not be or become, an open-end investment
com
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