Note Purchase Agreement

 

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                                                                    EXHIBIT 4.12

 

 

                       THE GOODYEAR TIRE & RUBBER COMPANY

 

                 $450,000,000 11% Senior Secured Notes due 2011

            $200,000,000 Senior Secured Floating Rate Notes due 2011

 

                             Note Purchase Agreement

 

                                                                  March 12, 2004

 

The Investors Listed on

   Annex A Hereto

 

Ladies and Gentlemen:

 

         The Goodyear Tire & Rubber Company, an Ohio corporation (the

"COMPANY"), proposes to issue and sell $450,000,000 aggregate principal amount

of its 11% Senior Secured Notes due 2011 (the "FIXED RATE SECURITIES") and

$200,000,000 aggregate principal amount of its Senior Secured Floating Rate

Notes due 2011 (the "FLOATING RATE SECURITIES," and together with the Fixed Rate

Securities, "SECURITIES"). The Securities will be issued pursuant to an

Indenture (the "INDENTURE") to be dated as of the Closing Date (as defined

below), among the Company, the guarantors listed in Schedule 1 hereto (the

"GUARANTORS") and Wells Fargo Bank, N.A., as trustee (the "TRUSTEE"), and will

be guaranteed on a senior secured basis by each of the Guarantors identified on

Schedule 1 as a grantor and on a senior basis by each of the remaining

Guarantors (collectively, the "GUARANTEES").

 

         The Securities will be sold to the Investors listed in Annex A hereto

(the "INVESTORS") without being registered under the Securities Act of 1933, as

amended (the "SECURITIES ACT"), in reliance upon exemptions from the

registration requirements thereof. Capitalized terms used but not defined herein

shall have the meanings given to such terms in the Indenture.

 

         Holders of the Securities will be entitled to the benefits of a

registration rights agreement, to be dated the Closing Date (the "REGISTRATION

RIGHTS AGREEMENT"). The Registration Rights Agreement will be in the form

attached hereto as Exhibit A. Pursuant to the Registration Rights Agreement, the

Company and the Guarantors will agree to file a registration statement with

respect to the Securities with the Securities and Exchange Commission (the

"COMMISSION") providing for the registration under the Securities Act of the

Securities or the Exchange Securities referred to (and as defined) in the

Registration Rights Agreement.

 

         The Securities and the Guarantees of the Guarantors indicated on

Schedule 1 as grantors will be secured by certain collateral (the "COLLATERAL"),

as more fully described and set forth in the Indenture and (a) the Intercreditor

Agreement, dated as of the Closing Date (the "INTERCREDITOR AGREEMENT"), among

the Company, the Guarantors party thereto, JPMorgan Chase Bank, as Credit Agent,

and the Trustee, (b) the Collateral Agreement, dated as of the Closing Date (the

"COLLATERAL AGREEMENT"), among the Company, the Guarantors party thereto and

Wells Fargo Bank, N.A., as collateral agent (in such capacity, the "COLLATERAL

AGENT"), (c) the Canadian Security Agreement, dated as of the Closing Date (the

"CANADIAN SECURITY AGREEMENT"), among the Company, Goodyear Canada Inc. and the

Collateral Agent, (d) a

 

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mortgage with respect to 1144 East Market Street, Akron, Ohio (the "CORPORATE

HEADQUARTERS"), to the extent that such property does not constitute a

"manufacturing facility" as defined in the Bond Agreement dated as of March 17,

1986 between the Company and Union Bank of Switzerland, Credit Suisse, Swiss

Bank Corporation and Morgan Stanley S.A. or a "Restricted Property" under (i)

the Indenture dated as of March 15, 1996 between the Company and Chemical Bank,

as trustee, as supplemented on December 3, 1996, March 11, 1998 and March 17,

1998, (ii) the Indenture dated as of March 11, 1998 between the Company and The

Chase Manhattan Bank, as trustee, as supplemented on March 14, 2000 and August

15, 2001 or (iii) the Fiscal Agency Agreement dated June 6, 2000 among the

Company, Citibank and Banque Internationale a Luxembourg and (e) foreign pledge

agreements dated as of the Closing Date between the Company and the Collateral

Agent with respect to the capital stock of each of the subsidiaries of the

Company listed on Schedule 2 hereto (the "FOREIGN PLEDGE AGREEMENTS"). The

Collateral Agreement, the Canadian Security Agreement, the mortgage on the

Corporate Headquarters, any Foreign Pledge Agreements and any other instruments

or documents entered into or delivered in connection with any of the foregoing,

or that grant or perfect a security interest in the Collateral pursuant to the

Indenture, are collectively referred to as the "SECURITY DOCUMENTS." The

Security Documents grant a security interest in the Collateral for the benefit

of the Trustee, the Collateral Agent and each holder of the Securities and any

future Other Pari Passu Lien Obligations and the successors and assigns of the

foregoing (the "SECURED PARTIES"). Pursuant to the Intercreditor Agreement, such

security interest will rank junior in priority to the security interest in the

Collateral securing any Priority Lien Obligations.

 

         The proceeds of the Securities will be used on the Closing Date (i) to

prepay all of the Company's U.S. Term Loan Facility in the amount of $246.5

million, (ii) to prepay part or all of the borrowings and permanently reduce

commitments under the Company's U.S. Revolving Credit Facility and (iii) for

general corporate purposes, which may include, among other things, contributions

to the Company's pension plans, the temporary repayment of the Company's U.S.

Revolving Credit Facility and the revolving portions of the Company's ABL

Facilities and European Credit Facilities, and prepayment or repurchase of debt,

whether through negotiated or open-market purchases, tender offers or other

available means.

 

         The Company hereby confirms its agreement with the several Investors

concerning the purchase and resale of the Securities, as follows:

 

         1.        Purchase of the Securities. (a) The Company agrees to issue

and sell the Securities to the several Investors as provided in this Agreement,

and each Investor, on the basis of the representations, warranties and

agreements set forth herein and subject to the conditions set forth herein,

agrees, severally and not jointly, to purchase from the Company the respective

principal amount of Securities set forth on such Investor's signature page to

this Agreement at a price equal to 99.413% of the principal amount thereof with

respect to the Fixed Rate Securities and 100% of the principal amount thereof

with respect to the Floating Rate Securities. The Company will not be obligated

to deliver any of the Securities except upon payment for all the Securities to

be purchased as provided herein.

 

         (b)       Each Investor severally and not jointly, represents, warrants

to the Company and the Guarantors and agrees that:

 

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                  (i)       It is an accredited investor within the meaning of

         Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

                  (ii)      It is purchasing Securities for its own account and

         not with a view to the distribution thereof; provided that the

         disposition of their property (including the Securities) shall at all

         times be within their control.

 

                  (iii)     It acknowledges that the Securities have not been

         registered under the Securities Act and may be resold only if

         registered pursuant to the provisions of the Securities Act or if an

         exemption from registration is available.

 

                   (iv)      It is (A) a sophisticated investor and has such

         knowledge and experience in financial and business matters and

         expertise in assessing credit risk, (B) capable of evaluating the

         merits, risks and suitability of investing in the Securities, (C) has

         been afforded the opportunity to ask questions of and receive answers

         from the Company regarding the Company and its affiliates, (D) aware

         that there may be material non-public information with respect to the

         Securities and the Company that the Company would be willing to provide

         to the Investor and that the Investor has either received or decided in

         its sole discretion not to request and (E) able to bear the economic

         risks of, and an entire loss of, its investment in the Securities.

 

                  (v)       It has determined, based on its own independent

         review and such professional advice as it has deemed appropriate under

         the circumstances, that its acquisition of the Securities (A) is fully

         consistent with its (or if such Investor is acquiring the Securities in

         a fiduciary capacity, the beneficiary's) financial need, objectives and

         condition, (B) complies and is fully consistent with all investment

         policies, guidelines and restrictions applicable to such Investor

         (whether acquiring the Securities as principal or in a fiduciary

         capacity), and (C) is a proper and suitable investment for such

         Investor (or if such Investor is acquiring the Securities in a

         fiduciary capacity, for the beneficiary), notwithstanding the risks

         inherent in investing in or holding the Securities.

 

                  (vi)      It has not solicited offers for, or offered or sold,

         and will not solicit offers for, or offer or sell, the Securities by

         means of any form of general solicitation or general advertising within

         the meaning of Rule 502(c) of Regulation D under the Securities Act

         ("REGULATION D") or in any manner involving a public offering within

         the meaning of Section 4(2) of the Securities Act.

 

                  (vii)     It will offer, sell or transfer Securities only in

         accordance with the restrictions set forth in Annex B hereto.

 

         (c)       Each Investor acknowledges and agrees that the Company and,

for purposes of the opinions to be delivered to the Investors pursuant to

Sections 5(e), counsel for the Company, may rely upon the accuracy of the

representations and warranties of the Investors, and compliance by the Investors

with their agreements, contained in paragraph (b) above (including Annex B

hereto), and each Investor hereby consents to such reliance.

 

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         (d)       The Company acknowledges and agrees that the Investors may

offer and sell Securities to or through any affiliate of an Investor and that

any such affiliate may offer and sell Securities purchased by it to or through

any Investor; provided that any such offers or sales shall be made in accordance

with this Agreement.

 

         (e)       Each Investor agrees to maintain the confidentiality of any

Information (as defined below) it receives except that Information may be

disclosed (i) to its and its affiliates' directors, officers, employees and

agents, including accountants, legal counsel and other advisors (it being

understood that the persons to whom such disclosure is made will be informed of

the confidential nature of such Information and instructed to keep such

Information confidential in accordance with the terms of this Section 1(e) and

such Investor will be responsible for any breach by any such persons of the

provisions of this Section 1(e)), (ii) to the extent requested or demanded by

any regulatory authority having jurisdiction over such Investor or its

affiliates, (iii) to the extent required by applicable laws or regulations or by

any subpoena or similar legal process, (iv) in connection with the exercise of

any remedies hereunder or any suit, action or proceeding relating to this

Agreement or the Securities or the enforcement of rights hereunder or

thereunder, (v) with the written consent of the Company or (vi) to the extent

such Information (A) becomes publicly available other than as a result of a

breach of this paragraph (e) or (B) becomes available to the Investor on a

nonconfidential basis from a source other than the Company. For the purposes of

this paragraph (e), "Information" means all information received from the

Company, if any, relating to the Company or its business, other than any such

information that is available to any Investor on a nonconfidential basis prior

to disclosure by the Company; provided that in the case of information received

from the Company after the date hereof, such information is clearly identified

at the time of delivery as confidential.

 

         (f)       Each Investor, severally and not jointly, represents and

warrants that the purchase, holding and/or transfer of the Securities will not

give rise to a transaction described in Section 406 of the Employee Retirement

Income Security Act of 1974, as amended ("ERISA") or Section 4975(c)(1) of the

Internal Revenue Code of 1986, as amended (the "CODE") for which a statutory or

administrative exemption is unavailable and will not violate any provisions of

any applicable Federal, state, local, non-United States or other laws, rules or

regulations that are similar to such provisions of ERISA and the Code.

 

         2.        Payment and Delivery. (a) Payment for and delivery of the

Securities will be made at the offices of Covington & Burling at 9:00 a.m., New

York City time or as soon thereafter as practicable, on March 12, 2004, or at

such other time or place on the same or such other date as the Investors and the

Company may agree upon. The time and date of such payment and delivery is

referred to herein as the "CLOSING DATE".

 

         (b)       Payment for the Securities shall be made by wire transfer in

immediately available funds to the account(s) specified by the Company to the

Investors against delivery to the Investors of the certificates representing the

Securities, with any transfer taxes payable in connection with the sale of the

Securities by the Company to the Investors duly paid by the Company. Upon

delivery, the Securities shall be in definitive form, registered in such names

and in such denominations as each Investor shall have requested in writing not

less than two business days prior to the Closing Date. The Company agrees to

make one or more specimen certificates

 

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evidencing the Securities available for inspection by the Investors not later

than 2:00 P.M., New York City time, on the business day prior to the Closing

Date.

 

         3.        Representations and Warranties of the Company and the

Guarantors. The Company and the Guarantors jointly and severally represent and

warrant to each Investor that:

 

         (a)       No Material Adverse Change. Since the Company's Quarterly

Report for the quarter ended September 30, 2003 (the "THIRD QUARTER REPORT"),

except as disclosed in the Offering Memorandum dated March 9, 2004 (including

any documents incorporated therein by reference and as supplemented or amended

prior to the date hereof, the "OFFERING MEMORANDUM"), including the results of

the pending internal investigation and investigation by the Commission described

therein, (i) there has not been any change in the capital stock or long-term

debt of the Company or any of its subsidiaries that is material to the Company

and its subsidiaries taken as a whole, or any dividend or distribution of any

kind declared, set aside for payment, paid or made by the Company on any class

of its capital stock, or any material adverse change (or change that would

reasonably be expected to have a material adverse change) in the business,

properties, financial position or results of operations of the Company and its

subsidiaries taken as a whole; (ii) neither the Company nor any of its

subsidiaries has entered into any transaction or agreement that is material to

the Company and its subsidiaries taken as a whole or incurred any liability or

obligation, direct or contingent, that is material to the Company and its

subsidiaries taken as a whole, in each case other than in the ordinary course of

business; and (iii) neither the Company nor any of its subsidiaries has

sustained any loss or interference with its business that is material to the

Company and its subsidiaries taken as a whole from fire, explosion, flood or

other calamity, whether or not covered by insurance, or from any labor

disturbance or dispute or any action, order or decree of any court or arbitrator

or governmental or regulatory authority.

 

         (b)       Organization and Good Standing. The Company and each of the

Guarantors have been duly organized and are validly existing and in good

standing under the laws of their respective jurisdictions of organization, are

duly qualified to do business and are in good standing in each jurisdiction in

which their respective ownership or lease of property or the conduct of their

respective businesses requires such qualification, and have all requisite power

and authority necessary to own or hold their respective properties and to

conduct the businesses in which they are engaged, except where the failure to be

so qualified, in good standing or have such power or authority would not,

individually or in the aggregate, have a material adverse effect on the

business, properties, financial position or results of operations of the Company

and its subsidiaries taken as a whole or on the performance by the Company and

the Guarantors of their obligations under the Securities and the Guarantees (a

"MATERIAL ADVERSE EFFECT"). As of December 31, 2002, there were no subsidiaries

of the Company that were significant subsidiaries, other than those listed in

Schedule 3 to this Agreement.

 

         (c)       Capitalization. The Company's authorized capital stock is as

set forth in the Offering Memorandum; and all the outstanding shares of capital

stock or other equity interests of each Guarantor and significant subsidiary of

the Company have been duly and validly authorized and issued, are fully paid and

non-assessable (except, in the case of any foreign subsidiary, for directors'

qualifying shares) and the capital stock or other equity interests of each

Guarantor and

 

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each significant subsidiary of the Company owned directly or indirectly by the

Company, is owned free and clear of any lien, charge, encumbrance or security

interest, other than (i) Permitted Liens or (ii) any such lien, charge,

encumbrance or security interest securing Priority Lien Obligations.

 

         (d)       Due Authorization. The Company and each of the Guarantors have

full right, power and authority to execute and deliver this Agreement, the

Securities, the Indenture (including each Guarantee set forth therein), the

Exchange Securities, the Registration Rights Agreement, the Security Documents

and the Intercreditor Agreement (collectively, the "TRANSACTION DOCUMENTS") and

to perform their respective obligations hereunder and thereunder; and all action

required to be taken for the due and proper authorization, execution and

delivery of each of the Transaction Documents and the consummation of the

transactions contemplated thereby has been duly and validly taken.

 

         (e)       The Indenture. The Indenture has been duly authorized by the

Company and each of the Guarantors and, when duly executed and delivered in

accordance with its terms by each of the parties thereto, will constitute a

valid and legally binding agreement of the Company and each of the Guarantors

enforceable against the Company and each of the Guarantors in accordance with

its terms, except as enforceability may be limited by applicable bankruptcy,

insolvency, reorganization, moratorium or similar laws affecting the enforcement

of creditors' rights generally or by equitable principles relating to

enforceability, regardless of whether considered in a proceeding in equity or at

law (collectively, the "ENFORCEABILITY EXCEPTIONS"); and on the Closing Date,

the Indenture will conform in all material respects to the requirements of the

Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), and the

rules and regulations of the Commission applicable to an indenture that is

qualified thereunder.

 

         (f)       The Securities and the Guarantees. The Securities have been

duly authorized by the Company and, when duly executed, authenticated, issued

and delivered as provided in the Indenture and paid for as provided herein, will

be duly and validly issued and outstanding and will constitute valid and legally

binding obligations of the Company enforceable against the Company in accordance

with their terms, subject to the Enforceability Exceptions, and will be entitled

to the benefits of the Indenture; and the Guarantees have been duly authorized

by each of the Guarantors and, when the Securities have been duly executed,

authenticated, issued and delivered as provided in the Indenture and paid for as

provided herein, will be valid and legally binding obligations of each of the

Guarantors, enforceable against each of the Guarantors in accordance with their

terms, subject to the Enforceability Exceptions, and will be entitled to the

benefits of the Indenture.

 

         (g)       The Exchange Securities. On the Closing Date, the Exchange

Securities (including the related guarantees) will have been duly authorized by

the Company and each of the Guarantors and, when duly executed, authenticated,

issued and delivered as contemplated by the Registration Rights Agreement, will

be duly and validly issued and outstanding and will constitute valid and legally

binding obligations of the Company, as issuer, and each of the Guarantors, as

guarantor, enforceable against the Company and each of the Guarantors in

accordance with their terms, subject to the Enforceability Exceptions, and will

be entitled to the benefits of the Indenture.

 

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         (h)       Purchase and Registration Rights Agreement. This Agreement has

been duly authorized, executed and delivered by the Company and each of the

Guarantors; and the Registration Rights Agreement has been duly authorized by

the Company and each of the Guarantors and, when duly executed and delivered in

accordance with its terms by each of the parties thereto, will constitute a

valid and legally binding agreement of the Company and each of the Guarantors

enforceable against the Company and each of the Guarantors in accordance with

its terms, subject to the Enforceability Exceptions, and except that rights to

indemnity and contribution thereunder may be limited by applicable law and

public policy.

 

          (i)       Other Transaction Documents. Each of the Security Documents

and the Intercreditor Agreement have been duly authorized by the Company and

each of the Guarantors (to the extent a party thereto), and on the Closing Date,

will be duly executed and delivered by the Company and each of the Guarantors

(to the extent a party thereto) and, when duly executed and delivered in

accordance with its terms by each of the parties thereto, will constitute a

valid and legally binding agreement of the Company and each of the Guarantors

(to the extent a party thereto) enforceable against the Company and each of the

Guarantors (to the extent a party thereto) in accordance with its terms, subject

to the Enforceability Exceptions.

 

         (j)       No Violation or Default. Neither the Company nor any of its

subsidiaries is (i) in violation of its charter or by-laws or similar

organizational documents; (ii) 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 or condition contained in any

indenture, mortgage, deed of trust, loan agreement or other agreement or

instrument to which the Company or any of its subsidiaries is a party or by

which the Company or any of its subsidiaries is bound or to which any of the

property or assets of the Company or any of its subsidiaries is subject; or

(iii) in violation of any law or statute or any judgment, order, rule or

regulation of any court or arbitrator or governmental or regulatory authority,

except, in the case of clauses (i) (solely with respect to subsidiaries that are

not Guarantors or Material Foreign Subsidiaries), (ii) and (iii) above, for any

such default or violation that would not, individually or in the aggregate, have

a Material Adverse Effect.

 

         (k)       No Conflicts. The execution, delivery and performance by the

Company and each of the Guarantors of each of the Transaction Documents to which

each is a party, the issuance and sale of the Securities (including the

Guarantees) and compliance by the Company and each of the Guarantors with the

terms thereof and the consummation of the transactions contemplated by the

Transaction Documents 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 result in the creation or imposition of any lien, charge or encumbrance

(except liens, charges or encumbrances created or imposed under the Transaction

Documents) upon any property or assets of the Company or any of its subsidiaries

pursuant to, any indenture, mortgage, deed of trust, loan agreement or other

agreement or instrument to which the Company or any of its subsidiaries is a

party or by which the Company or any of its subsidiaries is bound or to which

any of the property or assets of the Company or any of its subsidiaries is

subject, (ii) result in any violation of the provisions of the charter or

by-laws or similar organizational documents of the Company or any of its

subsidiaries 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, except, in the case of clauses (i)

 

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(solely with respect to subsidiaries that are not Guarantors or Material Foreign

Subsidiaries), (ii) and (iii) above, for any such conflict, breach or violation

that would not, individually or in the aggregate, reasonably be expected to have

a Material Adverse Effect.

 

         (l)       No Consents Required. No consent, approval, authorization,

order, registration or qualification of or with any court or arbitrator or

governmental or regulatory authority is required for the execution, delivery and

performance by the Company and each of the Guarantors of each of the Transaction

Documents to which each is a party, the issuance and sale of the Securities

(including the Guarantees) and compliance by the Company and each of the

Guarantors with the terms thereof and the consummation of the transactions

contemplated by the Transaction Documents, except for such consents, approvals,

authorizations, orders and registrations or qualifications as may be required

(i) under applicable state securities laws in connection with the purchase and

resale of the Securities by the Investors, (ii) with respect to the Exchange

Securities (including the related guarantees) under the Securities Act and

applicable state securities laws as contemplated by the Registration Rights

Agreement and (iii) that if not obtained or made, would not, individually or in

the aggregate, reasonably be expected to have a Material Adverse Effect.

 

         (m)       Legal Proceedings. Except as disclosed in the Offering

Memorandum, there are no legal, governmental or regulatory investigations,

actions, suits or proceedings pending to which the Company or any of its

subsidiaries is a party or to which any property of the Company or any of its

subsidiaries is the subject as to which there is a reasonable possibility of an

adverse determination and that, if adversely determined would reasonably be

expected, individually or in the aggregate, to have a Material Adverse Effect;

and, to the knowledge of the Company, no such investigations, actions, suits or

proceedings are threatened or contemplated by any governmental or regulatory

authority or threatened by others.

 

         (n)       Independent Accountants. PricewaterhouseCoopers LLP, who have

certified certain consolidated financial statements of the Company and its

consolidated subsidiaries are, to the Company's knowledge after consultation

with PricewaterhouseCoopers LLP, independent public accountants with respect to

the Company and its subsidiaries within the meaning of Rule 101 of the Code of

Professional Conduct of the American Institute of Certified Public Accountants

and its interpretations and rulings thereunder.

 

         (o)       Title to Real and Personal Property. Except as disclosed in

the Offering Memorandum, the Company and its subsidiaries have good and

marketable title in fee simple to, or have valid rights to lease or otherwise

use, all items of real and personal property of the Company and its

subsidiaries, except any failures that (i) do not materially interfere with the

use made and proposed to be made of such property by the Company and its

subsidiaries or (ii) would not reasonably be expected, individually or in the

aggregate, to have a Material Adverse Effect. There are no Liens on the

Collateral other than (i) Liens existing on the Closing Date and set forth on

Schedule 4 and (ii) Permitted Collateral Liens (other than those specified in

Section (4) of the definition thereof).

 

         (p)       Title to Intellectual Property. The Company and its

subsidiaries own, license or otherwise possess adequate rights to use all

material patents, patent applications, trademarks, service marks, trade names,

trademark registrations, service mark registrations, copyrights, licenses and

know-how (including trade secrets and other unpatented and/or unpatentable

 

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proprietary or confidential information, systems or procedures) necessary for

the conduct of their respective businesses, except where the failure to own,

license or otherwise possess such rights would not reasonably be expected to

have a Material Adverse Effect; and the conduct of their respective businesses

will not conflict in any material respect with any such rights of others, and

the Company and, to the Company's knowledge, its subsidiaries, have not received

written notice of any claim of infringement of or conflict with any such rights

of others, except such conflicts or infringements that, if adversely determined

against the Company or any of its subsidiaries, would not reasonably be expected

to have a Material Adverse Effect.

 

         (q)       Investment Company Act and Holding Company Status. Neither the

Company nor any of the Guarantors is, and after giving effect to the offering

and sale of the Securities and the application of the proceeds thereof as

described in this Agreement none of them will be, an "investment company" or an

entity "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 (collectively, "INVESTMENT COMPANY Act"). Neither the

Company nor any of the Guarantors is, and after giving effect to the offering

and sale of the Securities and the application of the proceeds thereof as

described in this Agreement none of them will be, a "holding company" as defined

in, or subject to regulation under, the Public Utility Holding Company Act of

1935, as amended.

 

         (r)       Taxes. (i) The Company and its subsidiaries have paid all

federal, state, local and foreign taxes (except for such taxes that are not yet

delinquent or that are being contested in good faith and by proper proceedings)

and filed all tax returns required to be paid or filed through the date hereof,

except in each case where the failure to pay or file would not reasonably be

expected to have a Material Adverse Effect; and (ii) except as would not

reasonably be expected to have a Material Adverse Effect, there is no tax

deficiency that has been, or would reasonably be expected to be, asserted

against the Company or any of its subsidiaries or any of their respective

properties or assets.

 

         (s)       Licenses and Permits. The Company and its subsidiaries possess

all licenses, certificates, permits and other authorizations issued by, and have

made all declarations and filings with, the appropriate federal, state, local or

foreign governmental or regulatory authorities that are necessary for the

ownership or lease of their respective properties or the conduct of their

respective businesse