GSC Holdings Corp.
GameStop, Inc.
$300,000,000 Senior Floating Rate
Notes Due 2011
$650,000,000 8.0% Senior Notes Due 2012
CITIGROUP
GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
c/o CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013
GSC
HOLDINGS CORP., a Delaware corporation (the “ Company
”), GAMESTOP, INC., a Minnesota corporation (“
GameStop ” and, together with the Company, the “
Issuers ”), and each of the subsidiary guarantors (the
“ Initial Guarantors ”) listed on Schedule
I-A , hereby confirm their agreement with you as
representatives (the “ Representatives ”) of the
initial purchasers listed on Schedule II hereto (the
“ Initial Purchasers ”), as set forth
below.
1.
The Securities . Subject to the terms and conditions herein
contained, the Issuers propose to sell to the Initial Purchasers
$300,000,000 aggregate principal amount of the Issuers’
Senior Floating Rate Notes Due 2011 (the “ Senior Floating
Rate Notes ”) and $650,000,000 aggregate principal amount
of the Issuers’ 8.0% Senior Notes Due 2012 ( the “
Senior Notes ” and, together with the Senior Floating
Rate Notes, the “ Notes ”). The Notes will be
unconditionally guaranteed on an unsecured senior basis (i) on
the Closing Date (as defined below) by the Initial Guarantors (the
“ Initial Guarantees ”) and (ii) on the
date of the consummation of the Mergers (as defined below) (the
“ Merger Date ”) by each of the subsidiary
guarantors (the “ EB Guarantors ” and, together
with the Initial Guarantors, the “ Guarantors ”)
listed on Schedule I-B (the “ EB
Guarantees ” and, together with the Initial Guarantees,
the “ Guarantees ”). The Guarantees and the
Notes shall be collectively referred to as the “
Securities ”. The Securities will be issued under an
indenture (the “ Indenture ”) dated as of
September 28, 2005, by and among the Issuers, the Initial
Guarantors and Citibank N.A., as trustee (the “
Trustee ”).
The
Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as
amended (the “ Securities Act ”), to qualified
institutional buyers (as such term is defined under Rule 144A
of the Securities Act (“ Rule 144A ”)) (each a
“ QIB ”) in compliance with the exemption from
registration provided by Rule 144A and in offshore
transactions in reliance on Regulation S under the Securities
Act (“ Regulation S ”).
The
Securities are being offered in connection with (i) the
consummation of the mergers (the “ Mergers ”)
contemplated by that certain Agreement and Plan of Merger (the
“ Merger Agreement ”), dated as of
April 17, 2005, by and among the Company, GameStop Corp.,
GameStop, Cowboy Subsidiary LLC, Eagle Subsidiary LLC and
Electronics Boutique Holdings Corp. and (ii) the
Company’s entry into a new asset-based senior secured
revolving credit facility (the “ ABF Facility ”)
pursuant to an agreement by and among the Issuers, the Guarantors,
affiliates of the Initial Purchasers and other lenders party
thereto (the “ ABF Agreement ”). On the Closing
Date (as defined in Section 3 hereof), there will be delivered
to Citibank N.A., as escrow agent (the “ Escrow Agent
”) the Escrow Funds (as defined in Section 3
hereof).
On
the Closing Date, the Issuers, the Trustee and the Escrow Agent
will enter into an escrow agreement (the “ Escrow
Agreement ”), pursuant to which (i) the Initial
Purchasers will deposit with the Escrow Agent in an escrow account
(the “ Escrow Account ”) the gross proceeds of
the offering of the Notes and (ii) the Issuers will deposit
additional funds (the “Additional Funds”) such that the
Additional Funds and the gross proceeds of the offering of the
Notes are in an amount sufficient to redeem the Notes on the
Special Mandatory Redemption Date (as such term will be defined in
the Escrow Agreement) as set forth therein and in the Indenture and
to pay accrued but unpaid interest on the Notes through such date.
On a Business Day (the “ Release Date ”) on or
before the Deadline (as defined below) that shall be designated by
the Issuers, (a) the Escrow Funds (less the Discount (as
defined below) and the Facility Commitment Fee (as defined below))
will be released (the “ Release ”) to the
Issuers, to be used as described in the Final Memorandum (as
defined below), (b) $13,555,000 shall be released to Citigroup
Global Markets Inc. on behalf of the Initial Purchasers, with such
dollar amount representing the Initial Purchasers’ fee
relating to the offering of the Notes (the “ Discount
”) and (c) an amount equal to the Facility Commitment
Fee (as defined in the facility fee letter (the “ Fee
Letter ”), dated as of April 17, 2005, among
GameStop Corp., Citicorp North America, Inc., Citigroup Global
Markets Inc., Banc of America Securities LLC, Banc of America
Bridge LLC, Merrill Lynch Capital Corporation and Merrill Lynch,
Pierce, Fenner & Smith Incorporated) shall be released to
Citicorp North America, Inc. on behalf of itself and the other
parties to the Fee Letter.
If
the conditions to Release are not satisfied on or before the
earliest of (i) October 31, 2005 or (ii) the date of
termination of the Merger Agreement (the earliest such date, the
“ Deadline ”), then the Indenture will require
that the Issuers redeem all of the Notes at 100% of their initial
purchase price, plus accrued and unpaid interest thereon on a
Business Day designated by the Issuers that is not more than 10
Business Days following the Deadline and the Release Date shall not
occur.
In
connection with the sale of the Securities, the Issuers and the
Guarantors have prepared a preliminary offering memorandum dated
September 12, 2005 (the “ Preliminary Memorandum
”) and a final offering memorandum dated September 21,
2005, as supplemented or amended (the “ Final
Memorandum ”; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a “
Memorandum ”) setting forth or including, among other
things, a description of the terms of the Notes, the Guarantees,
the terms of the offering of the Notes and a description of the
Issuers and the Guarantors.
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The
Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the registration rights set forth in
the registration rights agreement (the “ Registration
Rights Agreement ”), to be dated as of the Closing Date,
for so long as such Securities constitute “ Transfer
Restricted Securities ” (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement
and the Joinder Agreement (as defined below), the Issuers and the
Guarantors will agree, among other things, to file a registration
statement under the Securities Act with the Securities and Exchange
Commission (the “ Commission ”) registering
(i) an issue of senior floating rate notes and senior notes
identical in all material respects to the Senior Floating Rate
Notes and the Senior Notes, respectively (collectively, the “
Exchange Notes ”), to be offered in exchange for the
Notes (such offer to exchange being referred to as the “
Exchange Offer ”), (ii) the guarantees of the
Guarantors to be endorsed on the Exchange Notes and/or, if
applicable, (iii) the Securities under a shelf registration
statement pursuant to Rule 415 under the Securities Act (a
“ Shelf Registration Statement ” and, together
with (i) and (ii), each a “ Registration
Statement ”).
Concurrently
with the consummation of the Mergers, the EB Guarantors shall enter
into the Joinder Agreement, substantially in the form of
Exhibit A (the “ Joinder Agreement
”) pursuant to which each of the EB Guarantors will observe
and perform all of the rights, obligations and liabilities of a
Guarantor as provided in this Agreement and the Registration Rights
Agreement, and the EB Guarantors will execute a supplemental
indenture to the Indenture (the “ Supplemental
Indenture ”) pursuant to which they will become parties
thereto, dated as of the Merger Date, by and among the EB
Guarantors, the Issuers and the Trustee.
2.
Representations and Warranties of the Issuers and the
Guarantors . The Issuers and the Guarantors represent and
warrant to and agree with each of the Initial Purchasers
that:
(a) The
Preliminary Memorandum, at the date thereof, did not contain 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. The Final
Memorandum, as of its date, does not, and at the Closing Date, as
it may then be supplemented and amended, will not, contain 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;
provided , however , that the Issuers and the
Guarantors make no representation or warranty as to the information
contained in or omitted from the Preliminary Memorandum or the
Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion
therein.
(b) Neither the
Issuers, any of the Guarantors nor their Affiliates, or any person
acting on behalf of any of them (other than the Initial Purchasers
as to which the Issuers and the Guarantors make no representation
or warranty), has, directly or indirectly, made offers or sales of
any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities
under the Securities Act.
-3-
(c) Neither the
Issuers, any of the Guarantors nor their Affiliates, or any person
acting on behalf of any of them (other than the Initial Purchasers
as to which the Issuers and the Guarantors make no representation
or warranty), has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United
States.
(d) The Securities
satisfy the eligibility requirements of Rule 144A(d)(3) under
the Securities Act.
(e) The Issuers
and the Guarantors have not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of
the Issuers or the Guarantors (except as contemplated in this
Agreement).
(f) Neither the
Issuers, any of the Guarantors nor their Affiliates, or any person
acting on behalf of any of them (other than the Initial Purchasers
as to which the Issuers and the Guarantors make no representation
or warranty), has engaged in any “directed selling
efforts” with respect to the Securities, and the Issuers and
the Guarantors have complied with the “offering
restrictions” requirement of Regulation S. Terms used in
this paragraph have the meanings given to them by
Regulation S.
(g) No securities
of the Issuers are of the same class (within the meaning of Rule
144A) as any of the Securities and (i) listed on a national
securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”) or (ii) quoted in a U.S.
automated inter-dealer quotation system.
(h) None of the
transactions contemplated by this Agreement (including, without
limitation, the use of the proceeds from the sale of the
Securities), 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 or X of
the Board of Governors of the Federal Reserve System.
(i) (i) All
of the outstanding shares of capital stock of the Issuers and each
Guarantor that are corporations are duly authorized and validly
issued, fully paid and nonassessable and have not been issued in
violation of any preemptive or similar rights; and (ii) all of
the outstanding shares of capital stock or other equity interests
of the Company and of each of the subsidiaries of the Company
immediately following the consummation of the Mergers (each a
“ Subsidiary ” and together, the “
Subsidiaries ”) will be, upon consummation of the
Mergers, free and clear of all liens, encumbrances, equities and
claims, other than (A) as disclosed in the Final Memorandum
and (B) the pledges of such capital stock or other equity
interests made in connection with the ABF Agreement.
(j) Each of the
Issuers and the Guarantors has been duly incorporated or formed,
validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or formation and has all
requisite corporate, limited liability company or partnership power
and authority to own its properties and conduct its
business
-4-
as now
conducted as described in the Final Memorandum; each of the Issuers
and the Guarantors that is a corporation has been duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in
the aggregate, reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise),
properties or results of operations of the Company and the
Subsidiaries taken as a whole (any such event, a “
Material Adverse Effect ”).
(k) Each Issuer
and Guarantor has all requisite corporate, limited liability
company or partnership power and authority to execute, deliver and
perform each of their applicable obligations under the Securities.
The Securities, when issued, will be in the form contemplated by
the Indenture.
(l) The Notes have
been duly and validly authorized by the Issuers and, when executed
by the Issuers, and authenticated by the Trustee in accordance with
the provisions of the Indenture and delivered to the Initial
Purchasers in accordance with the terms hereof, will constitute
valid and legally binding obligations of the Issuers, entitled to
the benefits of the Indenture, and enforceable against the Issuers
in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(m) The Exchange
Notes have been duly and validly authorized by the Issuers and,
when issued and authenticated by the Trustee in accordance with the
terms of the Indenture and delivered in accordance with the terms
of the Registration Rights Agreement, will constitute valid and
legally binding obligations of the Issuers, entitled to the
benefits of the Indenture, and enforceable against the Issuers in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(n) The Guarantees
have been duly and validly authorized by the Guarantors, and, when
executed by the Guarantors, and authenticated by the Trustee in
accordance with the terms of the Indenture and delivered to the
Initial Purchasers in accordance with the terms hereof, will
constitute valid and legally binding obligations of the Guarantors,
entitled to the benefits of the Indenture, and enforceable against
each of the Guarantors in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
-5-
(o) The guarantees
of the Guarantors to be endorsed on the Exchange Notes (the “
Exchange Guarantees ”) have been duly and validly
authorized by the Guarantors, and, when executed by the Guarantors,
and authenticated by the Trustee in accordance with the terms of
the Indenture and delivered in accordance with the terms of the
Registration Rights Agreement, will constitute valid and legally
binding obligations of the Guarantors, entitled to the benefits of
the Indenture, and enforceable against each of the Guarantors in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(p) The Issuers
and the Guarantors have all requisite corporate, limited liability
company or partnership power and authority to execute, deliver and
perform their obligations under the Indenture. The Indenture has
been duly and validly authorized by the Issuers and the Guarantors,
and when executed and delivered by the Issuers and the Guarantors,
and assuming the due authorization, execution and delivery by the
Trustee, will constitute the valid and legally binding agreement of
the Issuers and the Guarantors enforceable against each of them in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(q) The Issuers
and the Guarantors have all requisite corporate, limited liability
company or partnership power and authority, as the case may be, to
execute, deliver and perform their applicable obligations under the
Registration Rights Agreement. The Registration Rights Agreement
has been duly and validly authorized by the Issuers and the
Guarantors and, when executed and delivered by the Issuers and the
Guarantors, will constitute the valid and legally binding agreement
of the Issuers and the Guarantors enforceable against each of them
in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(r) The Issuers
have all requisite corporate, limited liability company or
partnership power and authority to execute, deliver and perform
their applicable obligations under the Escrow Agreement. The Escrow
Agreement has been duly and validly authorized by the Issuers and,
when executed and delivered by the Issuers, will constitute the
valid and legally binding agreement of the Issuers enforceable
against each of them in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing. If and when
executed and delivered by the Issuers, the Escrow Agreement will be
effective
-6-
on that date to
create in favor of the Trustee, for its benefit and the benefit of
the holders of the Notes, a valid security interest in all rights
of the Issuers in (a) such Escrow Account, (b) all
“security entitlements” (as such term is defined in
Section 8-102(a) of the Uniform Commercial Code of New York
(“ UCC ”)) with respect to all “financial
assets” (as such term is defined in Section 8-102(a) of
the UCC) held in the Escrow Account and (c) all
“proceeds” (as such term is defined in
Section 9-102(a) of the UCC) of such security entitlements, in
each case, securing the Notes. Such security interests will
constitute first priority perfected security interests in the
Collateral (as defined in the Escrow Agreement) free and clear of
all liens and security interests, other than the liens and security
interests granted under the Escrow Agreement.
(s) The Issuers
and the Guarantors have all requisite corporate, limited liability
company or partnership power and authority, as the case may be, to
execute, deliver and perform their obligations under this Agreement
and to consummate the transactions contemplated hereby. This
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by each of the Issuers
and the Guarantors. This Agreement has been duly executed and
delivered by each of the Issuers and the Guarantors.
(t) No consent,
approval, authorization, filing with or order of any court or
governmental agency or body, or third party is required for the
issuance by the Issuers and the Guarantors of the Securities to the
Initial Purchasers on the Closing Date, except such as have been
obtained and such as may be required under state securities or
“Blue Sky” laws in connection with the offer and sale
of the Securities and by federal and state securities laws with
respect to the Issuers’ and Guarantors’ obligations
under the Registration Rights Agreement. The execution, delivery
and performance by the Issuers and the Guarantors of this
Agreement, the Indenture and the Registration Rights Agreement, and
the consummation of the transactions contemplated hereby and
thereby will not conflict with or constitute or result in a breach
of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any
of (i) the certificate of incorporation or bylaws (or limited
liability company agreement, limited partnership agreement or
similar organizational document in the case of limited liability
companies and limited partnerships, as applicable) of the Issuers
or the Guarantors, (ii) any statute, judgment, decree, order,
rule or regulation applicable to the Issuers, the Guarantors or any
of their respective properties or assets, or (iii) the terms
or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any
of the Issuers or the Guarantors is a party or to which any of them
or their respective properties or assets are subject (collectively,
“ Contracts ”), except (A) in each case,
that any rights to indemnity and contribution may be limited by
federal and state securities laws and public policy considerations
and (B) in the case of clauses (ii) and (iii), for such
breaches, violations or defaults as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(u) None of the
Issuers or Guarantors are (i) in violation of its certificate
of incorporation or bylaws (or limited liability company agreement,
limited partnership
-7-
agreement or
similar organizational document in the case of limited liability
companies and limited partnerships, as applicable), (ii) in
breach or violation of any statute, judgment, decree, order, rule
or regulation applicable to the Issuers, the Guarantors or any of
their respective properties or assets, or (iii) in breach of
or default under (nor has any event occurred which, with notice or
passage of time or both, would constitute a default under) or in
violation of any of the terms or provisions of any Contract, except
(A) in each case, that any rights to indemnity and
contribution may be limited by federal and state securities laws
and public policy considerations and (B) in the case of
clauses (ii) and (iii), for such breaches, violations or
defaults as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(v) Assuming the
accuracy of the representations and warranties of the Initial
Purchasers in Section 4 hereof and compliance by the Initial
Purchasers with their agreements hereunder, it is not necessary in
connection with the offer, sale and delivery of the Securities to
the Initial Purchasers in the manner contemplated by this Agreement
to qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(w) The combined
audited and unaudited historical financial statements included in
the Final Memorandum present fairly in all material respects the
financial position, results of operations and cash flows of the
entities to which they relate at the dates and for the periods to
which they relate (subject in the case of unaudited interim
financial statements to normal year-end adjustments) and, with
respect to the audited financial statements, have been prepared in
accordance with generally accepted accounting principles in the
United States applied on a consistent basis (except as otherwise
stated therein). The summary and selected financial data in the
Final Memorandum present fairly in all material respects, on the
basis stated in the Final Memorandum, the information shown therein
and have been prepared on a basis consistent with the audited
financial statements included therein, except as otherwise stated
therein. The assumptions used in preparing the pro forma financial
statements included in the Final Memorandum provide a reasonable
basis for presenting the significant effects directly attributable
to the transactions or events described therein, the related pro
forma adjustments give appropriate effect to those assumptions in
all material respects, and the pro forma columns therein reflect
the proper application of those adjustments in all material
respects to the corresponding historical financial statement
amounts.
(x) To the
knowledge of GameStop Corp. and its subsidiaries, BDO Seidman, LLP
is an independent public accounting firm with respect to GameStop
Corp. and its subsidiaries under Rule 101 of the American
Institute of Certified Public Accountants’ Code of
Professional Conduct and its interpretations and rulings. To the
knowledge of Electronics Boutique Holdings Corp. and its
subsidiaries, KPMG LLP is an independent public accounting firm
with respect to Electronics Boutique Holdings Corp. and its
subsidiaries under Rule 101 of the American Institute of Certified
Public Accountants’ Code of Professional Conduct and its
interpretations and rulings.
(y) Except as set
forth in the Final Memorandum, there is not pending or, to the
knowledge of the Issuers and the Guarantors, threatened any action,
suit, proceeding,
-8-
inquiry or
investigation to which the Company or any of the Subsidiaries is a
party, or to which the property or assets of the Company or any of
the Subsidiaries are subject, before or brought by any court,
arbitrator or governmental agency or body which would, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Notes or the consummation of the transactions contemplated
hereby.
(z) Since the date
of the most recent financial statements appearing in the Final
Memorandum, except as set forth therein and as contemplated by the
Merger Agreement, (i) none of the Company or the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, or
entered into or agreed to enter into any transactions or Contracts
(written or oral) which liabilities, obligations, transactions or
Contracts would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (ii) there
shall not have been any change in the capital stock or long-term
indebtedness of the Company or the Subsidiaries which would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(aa) Each of the
Company and the Subsidiaries has filed all necessary federal, state
and foreign income and franchise tax returns, and has paid all
taxes shown as due thereon, except where the failure to file such
returns or pay such taxes would not, individually or in the
aggregate, have a Material Adverse Effect. Other than tax
deficiencies which the Company or any Subsidiary is contesting in
good faith and for which the Company or such Subsidiary, as
applicable, has provided adequate reserves, there is no tax
deficiency that has been asserted against the Company or any of the
Subsidiaries that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse
Effect.
(bb) There are no
stamp or other issuance or transfer taxes or duties or other
similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by
the Issuers and the Guarantors of the Securities.
(cc) After giving
effect to the Mergers, each of the Company and the Subsidiaries
will have good and marketable title to all real property and good
title to all personal property described in the Final Memorandum as
being owned by it and good and marketable title to a leasehold
estate in the real and personal property described in the Final
Memorandum as being leased by it free and clear of all liens,
charges, encumbrances or restrictions, except (i) as described
in the Final Memorandum, (ii) pursuant to the ABF Agreement,
or (iii) or to the extent the failure to have such title or
the existence of such liens, charges, encumbrances or restrictions
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. After giving effect to the
Mergers, except as set forth in the Final Memorandum, the Company
and the Subsidiaries will own or possess adequate licenses or other
rights to use all material patents, trademarks, service marks,
trade names, copyrights and know-how necessary to conduct the
businesses in the manner as described in the Final Memorandum, and
none
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of the Company
or the Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
patents, trademarks, service marks, trade names, copyrights or
know-how which, if such assertion of infringement or conflict were
sustained, would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(dd) Except as set
forth in the Final Memorandum, except as would not, individually or
in the aggregate, have a Material Adverse Effect (i) each of
the Company and the Subsidiaries is in compliance with and not
subject to liability under applicable Environmental Laws (as
defined below), (ii) each of the Company and the Subsidiaries
has made all filings and provided all notices required under any
applicable Environmental Law, and has been and is in compliance
with all permits required under any applicable Environmental Laws
and each of them is in full force and effect, (iii) there is
no civil, criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or
demand letter or request for information pending or threatened
against the Company or any of the Subsidiaries under any
Environmental Law, (iv) no lien, charge, encumbrance or restriction
has been recorded under any Environmental Law with respect to any
assets, facility or property owned, operated, leased or controlled
by the Company or any of the Subsidiaries, (v) none of the
Company or the Subsidiaries has received notice that it has been
identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“ CERCLA ”) or any
comparable state law, (vi) no property or facility of the
Company or any of the Subsidiaries is (A) listed or proposed
for listing on the National Priorities List under CERCLA or is
(B) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated
pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of
this Agreement, “Environmental Laws” means the common
law and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder, relating to
pollution or protection of the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials into the environment
(including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment,
storage, disposal, transport or handling of hazardous materials,
and (iii) underground and above ground storage tanks and
related piping, and emissions, discharges, releases or threatened
releases therefrom.
(ee) Except as set
forth in the Final Memorandum and as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect there is no strike, labor dispute or work stoppage with the
employees of the Company or any of the Subsidiaries which is
pending or, to the knowledge of the Issuers and the Guarantors,
threatened.
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(ff) Each of the
Company and the Subsidiaries carries or is covered by insurance in
such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective
properties that insures against such losses and risks as is
adequate in their respective business judgments to protect the
value of their businesses.
(gg) The minimum
funding standard under Section 302 of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (“ ERISA
”), has been satisfied by each “pension plan” (as
defined in Section 3(2) of ERISA) which has been established
or maintained by the Company and/or one or more of its
Subsidiaries, and the trust forming part of each such plan which is
intended to be qualified under Section 401 of the Code is so
qualified; each of the Company and its Subsidiaries has fulfilled
its obligations, if any, under Section 515 of ERISA; neither
the Company nor any of its Subsidiaries maintains or is required to
contribute to a “welfare plan” (as defined in
Section 3(1) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other than
“continuation coverage” (as defined in Section 602
of ERISA)); each pension plan and welfare plan established or
maintained by the Company and/or one or more of its Subsidiaries is
in compliance in all material respects with the currently
applicable provisions of ERISA; and neither the Company nor any of
its Subsidiaries has incurred or could reasonably be expected to
incur any withdrawal liability under Section 4201 of ERISA,
any liability under Section 4062, 4063, or 4064 of ERISA, or
any other liability under Title IV of ERISA.
(hh) None of the
Issuers or the Guarantors are, or, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Final Memorandum will be, an
“investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
(ii) After giving
effect to the issuance by the Company of shares of its capital
stock pursuant to an effective registration statement on Form S-4
in connection with the Mergers as described in the Final Memorandum
and contemplated by the Merger Agreement, the Company will be
subject to Section 13 or Section 15(d) of the Exchange
Act.
(jj) The
Securities will conform in all material respects to the
descriptions thereof in the Final Memorandum.
(kk) No holder of
securities of the Issuers or the Guarantors will be entitled to
have such securities registered under any Registration Statement
required to be filed by the Issuers and the Guarantors pursuant to
the Registration Rights Agreement other than as expressly permitted
thereby.
(ll) None of the
Issuers or Guarantors has taken, nor will any of them take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities.
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(mm) The Company
and each of its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles in the United States and to maintain
asset accountability; (iii) access to assets is permitted only
in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(nn) The
statements in the Final Memorandum under the headings
“Certain United States Federal Income Tax
Consequences,” “Description of the Notes” and
“Exchange Offer; Registration Rights” fairly summarize
in all material respects the matters therein described.
(oo) The Company
has been advised by the NASD’s PORTAL Market that the
Securities have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(pp) None of the
Company, its Subsidiaries or, to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company or
any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such
Persons of Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “ FCPA
”), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to
give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA; and the Company, its Subsidiaries and, to the knowledge of
the Company, its Affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance
therewith.
(qq) None of the
Company, any of its Subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee or Affiliate of the
Company 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. Department of the Treasury (“ OFAC ”);
and the Company will not directly or indirectly use the proceeds of
the offering of the Securities hereunder, 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.
3.
Purchase, Sale and Delivery of the Securities . On the basis
of the representations, warranties, agreements and covenants herein
contained and subject to the terms and
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conditions
herein set forth, the Issuers agree to sell to the Initial
Purchasers, and the Initial Purchasers, acting severally and not
jointly, agree to purchase from the Issuers, Notes in the
respective amounts set forth on Schedule II hereto, at
98.125% of the principal amount of the Senior Floating Rate Notes
and 97.468% of the principal amount of Senior Notes. An aggregate
amount of $951,123,694.44 (the “ Escrow Funds ”)
shall be deposited in the Escrow Account, re
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