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EXHIBIT 10.2
EXECUTION COPY
THE GREENBRIER COMPANIES, INC.,
AUTOSTACK
CORPORATION,
GREENBRIER-CONCARRIL, LLC,
GREENBRIER LEASING CORPORATION,
GREENBRIER LEASING LIMITED PARTNER, LLC,
GREENBRIER MANAGEMENT SERVICES, LLC,
GREENBRIER LEASING, L.P.,
GREENBRIER RAILCAR, INC.,
GUNDERSON, INC.,
GUNDERSON MARINE, INC.,
GUNDERSON RAIL SERVICES, INC. AND
GUNDERSON SPECIALTY PRODUCTS, LLC.
$175,000,000
8-3/8% Senior Notes due 2015
PURCHASE AGREEMENT
dated May
5, 2005
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
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PURCHASE AGREEMENT
May 5, 2005
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
As Initial Purchasers
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Ladies and Gentlemen:
Introductory. The Greenbrier Companies, Inc., a Delaware
corporation (the
"Company"), proposes to issue and sell to
the several Initial Purchasers named
in Schedule A (the "Initial Purchasers"),
acting severally and not jointly, the
respective amounts set forth in such
Schedule A of an $175,000,000 aggregate
principal amount of the Company's 8-3/8%
Senior Notes due 2015 (the "Notes").
Banc of America Securities LLC and Bear,
Stearns & Co. Inc. have agreed to act
as the several Initial Purchasers in
connection with the offering and sale of
the Notes (the "Offering").
The Notes
will be issued pursuant to an indenture, to be dated as of May
11, 2005 (the "Indenture"), among the
Company, the Guarantors (as defined below)
and U.S. Bank National Association, as
trustee (the "Trustee"). Notes will be
issued only in book-entry form in the name
of Cede & Co., as nominee of The
Depository Trust Company (the "Depositary")
pursuant to a letter of
representations, to be dated on or before
the Closing Date (as defined in
Section 2 hereof) among the Company, the
Guarantors, the Trustee and the
Depositary.
The
holders of the Notes will be entitled to the benefits of a
registration rights agreement, to be dated
as of May 11, 2005 (the "Registration
Rights Agreement"), among the Company, the
Guarantors and the Initial
Purchasers, pursuant to which the Company
and the Guarantors will agree to file
with the Commission (as defined below),
under the circumstances set forth
therein, (i) a registration statement under
the Securities Act (as defined
below) relating to another series of debt
securities of the Company with terms
substantially identical to the Notes (the
"Exchange Notes") to be offered in
exchange for the Notes (the "Exchange
Offer") and (ii) to the extent required by
the Registration Rights Agreement, a shelf
registration statement pursuant to
Rule 415 of the Securities Act relating to
the resale by certain holders of the
Notes, and in each case, to use its best
efforts to cause such registration
statements to be declared effective.
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The
payment of principal of, premium and Liquidated Damages (as defined
in
the Registration Rights Agreement), if any,
and interest on the Notes and the
Exchange Notes will be fully and
unconditionally guaranteed on a senior
unsecured basis, jointly and severally by
(i) Autostack Corporation, an Oregon
corporation, Greenbrier-Concarril, LLC, a
Delaware limited liability company,
Greenbrier Leasing Corporation, a Delaware
corporation, Greenbrier Leasing
Limited Partner, LLC, a Delaware limited
liability company, Greenbrier
Management Services, LLC, a Delaware
limited liability company, Greenbrier
Leasing, L.P., a Delaware limited
partnership, Greenbrier Railcar, Inc., a
Delaware corporation, Gunderson, Inc., an
Oregon corporation, Gunderson Marine,
Inc., a Oregon corporation, Gunderson Rail
Services, Inc., a Oregon corporation
and Gunderson Specialty Products, LLC, a
Delaware limited liability company and
(ii) any subsidiary of the Company formed
or acquired after the Closing Date
that executes an additional guarantee in
accordance with the terms of the
Indenture, and their respective successors
and assigns (collectively, the
"Guarantors"), pursuant to their guarantees
(the "Guarantees"). The Notes and
the Guarantees endorsed thereon are herein
collectively referred to as the
"Notes"; and the Exchange Notes and the
Guarantees endorsed thereon are herein
collectively referred to as the "Exchange
Notes".
The
Company understands that the Initial Purchasers propose to make
an
offering of the Notes on the terms and in
the manner set forth herein and in the
Offering Memorandum (as defined below) and
agrees that the Initial Purchasers
may resell, subject to the conditions set
forth herein, all or a portion of the
Notes to purchasers (the "Subsequent
Purchasers") at any time after the date of
this Agreement. The Notes are to be offered
and sold to or through the Initial
Purchasers without being registered with
the Securities and Exchange Commission
(the "Commission") under the Securities Act
of 1933 (as amended, the "Securities
Act," which term, as used herein, includes
the rules and regulations of the
Commission promulgated thereunder), in
reliance upon exemptions therefrom.
Pursuant to the terms of the Notes and the
Indenture, investors who acquire
Notes shall be deemed to have agreed that
Notes may only be resold or otherwise
transferred, after the date hereof, if such
Notes are registered for sale under
the Securities Act or if an exemption from
the registration requirements of the
Securities Act is available (including the
exemptions afforded by Rule 144A
under the Securities Act ("Rule 144A") or
Regulation S under the Securities Act
("Regulation S")).
The
Company has prepared and delivered to each Initial Purchaser copies
of
a Preliminary Offering Memorandum, dated
April 26, 2005 (the "Preliminary
Offering Memorandum"), and has prepared and
will deliver to each Initial
Purchaser, copies of the Offering
Memorandum, dated May 5, 2005 describing the
terms of the Notes, each for use by such
Initial Purchaser in connection with
its solicitation of offers to purchase the
Notes. As used herein, "Offering
Memorandum" shall mean, with respect to any
date or time referred to in this
Agreement, the Company's Offering
Memorandum, dated May 5, 2005 including
amendments or supplements thereto, any
exhibits thereto and the Incorporated
Documents (as defined in Section 1 hereof),
in the most recent form that has
been prepared and delivered by the Company
to the Initial Purchasers in
connection with their solicitation of
offers to purchase the Notes. Further, any
reference to the Preliminary Offering
Memorandum or the Offering Memorandum
shall be deemed to refer to and include any
Additional Issuer Information (as
defined in Section 3 hereof) furnished by
the Company prior to the completion of
the distribution of the Notes.
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All
references in this Agreement to financial statements and schedules
and
other information which is "contained,"
"included" or "stated" in the Offering
Memorandum (or other references of like
import) shall be deemed to mean and
include all such financial statements and
schedules and other information which
are incorporated by reference in the
Offering Memorandum; and all references in
this Agreement to amendments or supplements
to the Offering Memorandum shall be
deemed to mean and include the filing of
any document under the Securities
Exchange Act of 1934 (as amended, the
"Exchange Act", which term, as used
herein, includes the rules and regulations
of the Commission promulgated
thereunder) which is incorporated or deemed
to be incorporated by reference in
the Offering Memorandum.
SECTION 1.
Representations and Warranties. Each of the Company and the
Guarantors, jointly and severally, hereby
represents, warrants and covenants to
each Initial Purchaser as follows:
(a) The
Preliminary Offering Memorandum as of its date and the
Offering Memorandum as of its date and as
of the Closing Date does not and will
not, and any supplement or amendment
thereto will not, contain any untrue
statement of a material fact or omit to
state any material fact required to be
stated therein or necessary in order to
make the statements therein, in light of
the circumstances under which they were
made, not misleading, except that the
representations and warranties contained in
this paragraph shall not apply to
statements in or omissions from and the
Offering Memorandum made in reliance
upon and in conformity with information (as
set forth in Section 8(b)) relating
to the Initial Purchasers furnished to the
Company and the Guarantors in writing
by the Initial Purchasers expressly for use
therein. No stop order preventing
the use of the Offering Memorandum, or any
order asserting that any of the
transactions contemplated by this Agreement
are subject to the registration
requirements of the Act, has been issued.
Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as
of its date, contains all the
information specified in, and meeting the
requirements of, Rule 144A. The
Company has not distributed and will not
distribute, prior to the later of the
Closing Date and the completion of the
Initial Purchasers' distribution of the
Notes, any offering material in connection
with the offering and sale of the
Notes other than the Preliminary Offering
Memorandum or the Offering Memorandum.
(b) Deloitte & Touche LLP, which certified the financial
statements
and supporting schedules and information of
the Company and its subsidiaries
that are included or incorporated by
reference in the Offering Memorandum, is an
independent registered public accounting
firm with respect to the Company as
required by the Securities Act, the
Exchange Act and the rules and regulations
of the Commission (the "Rules and
Regulations").
(c) Subsequent to the respective dates as of which information
is
given in Offering Memorandum, except as
disclosed in the Offering Memorandum,
the Company has not declared, paid or made
any dividends (other than the
dividend declared and paid by the Company
during its third quarter) or other
distributions of any kind on or in respect
of its capital stock and there has
been no material adverse change or effect
or any development involving a
prospective material adverse change or
effect, whether or not arising from
transactions in the ordinary course of
business, in or affecting (i) the
business, condition (financial or
otherwise), results of operations,
stockholders' equity, properties or
prospects of the Company and each subsidiary
of the Company (the "Subsidiaries"), taken
as a whole, (ii) the long-term debt
or capital stock of the
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Company or any of its Subsidiaries or (iii)
the Offering or any other
transaction contemplated by this Agreement
or the Offering Memorandum (a
"Material Adverse Effect"). Since the date
of the latest balance sheet presented
or incorporated by reference in the
Offering Memorandum, neither the Company nor
any Subsidiary has incurred or undertaken
any liability or obligation, whether
direct or indirect, liquidated or
contingent, matured or unmatured, or entered
into any transaction, including any
acquisition or disposition of any business
or asset, which is material to the Company
and the Subsidiaries individually or
taken as a whole, except for liabilities,
obligations and transactions which are
disclosed in the Offering Memorandum or the
acquisition, disposition or leasing
of railcars in the ordinary course of
business.
(d) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering
Memorandum in the column headed "Actual"
under the caption "Capitalization" and,
after giving effect to the Offering and
the other transactions contemplated by this
Agreement, the Registration Rights
Agreement, the Indenture and the Offering
Memorandum, will be as set forth in
the column headed "As Adjusted" under the
caption "Capitalization." All of the
issued and outstanding shares of capital
stock of the Company are fully paid and
nonassessable and have been duly authorized
and validly issued, in compliance
with all applicable state, federal and
foreign securities laws and not in
violation of or subject to any preemptive
or similar right that does or will
entitle any person, upon the issuance or
sale of any security, to acquire from
the Company or any Subsidiary any capital
stock or other security of the Company
or any Subsidiary or any security
convertible into, or exercisable or
exchangeable for, capital stock or any
other such security (any "Relevant
Security"), except for such rights as may
have been fully satisfied or waived
prior to the date of the Offering
Memorandum.
(e) The Subsidiaries listed in Exhibit A are the only
subsidiaries
(within the meaning of Rule 405 under the
Securities Act) or joint ventures of
the Company, except for entities that when
taken together would not constitute a
"significant subsidiary" with the meaning
of Rule 102 of Regulation S-X. Except
for the Subsidiaries and as otherwise
disclosed in the Offering Memorandum, the
Company holds no ownership or other
interest, nominal or beneficial, direct or
indirect, in any corporation, partnership,
joint venture or other business
entity. All of the issued shares of capital
stock of or other ownership
interests in each Subsidiary have been duly
authorized and validly issued and
are fully paid and nonassessable. All of
the issued shares of capital stock or
other ownership interests in each
Subsidiary or in the case of the entities
listed on Exhibit B, such shares or
ownership interest representing the
percentage of the voting control of the
Subsidiary set forth next to the name of
the Subsidiary on Exhibit B, are owned
directly or indirectly by the Company
free and clear of any lien, charge,
mortgage, pledge, security interest, claim,
equity, trust or other encumbrance,
preferential arrangement, defect or
restriction of any kind whatsoever (any
"Lien").
(f) Each of the Company and the Subsidiaries has been duly
organized
or formed and validly exists as a
corporation, partnership or limited liability
company in good standing under the laws of
its jurisdiction of organization or
formation. Each of the Company and the
Subsidiaries is duly qualified to do
business and is in good standing as a
foreign corporation, partnership or
limited liability company in each
jurisdiction in which the character or
location of its properties (owned, leased
or licensed) or the nature or conduct
of its business makes such qualification
necessary, except for those failures to
be so qualified or in good
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standing which (individually and in the
aggregate) could not reasonably be
expected to have a Material Adverse Effect.
Each of the Company and the
Subsidiaries has all requisite corporate
(or other entity) power and authority,
and, except as could not reasonably be
expected to have a Material Adverse
Effect, all necessary consents, approvals,
authorizations, orders,
registrations, qualifications, licenses,
filings and permits of, with and from
all judicial, regulatory and other legal or
governmental agencies and bodies and
all third parties, foreign and domestic
(collectively, the "Consents"), to own,
lease and operate its properties and
conduct its business as it is now being
conducted and as disclosed in the Offering
Memorandum, and each such Consent is
valid and in full force and effect, and
neither the Company nor any Subsidiary
has received notice of any investigation or
proceedings which has resulted in
or, if decided adversely to the Company or
any Subsidiary, could reasonably be
expected to result in, the revocation of,
or imposition of a materially
burdensome restriction on, any such
Consent. Each of the Company and the
Subsidiaries is in compliance with all
applicable laws, rules, regulations,
ordinances, directives, judgments, decrees
and orders, foreign and domestic,
except where failure to be in compliance
could not reasonably be expected to
have a Material Adverse Effect. No Consent
contains a materially burdensome
restriction not adequately disclosed in the
Offering Memorandum.
(g) The Company has the corporate right, power and authority to
execute and deliver this Agreement, to
perform its obligations hereunder and to
consummate the transactions contemplated by
this Agreement, the Registration
Rights Agreement, the Indenture and the
Offering Memorandum. This Agreement and
the transactions contemplated by this
Agreement, the Registration Rights
Agreement, the Indenture and the Offering
Memorandum have been duly authorized
by the Company. This Agreement has been
duly executed and delivered by the
Company and constitutes the legal, valid
and binding obligation of the Company,
enforceable in accordance with its terms,
except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
similar laws affecting creditors' rights
generally and except as enforceability
may be subject to general principles of
equity (regardless of whether such
enforceability is considered in a
proceeding in equity or at law).
(h) The execution, delivery, and performance of this Agreement
and
consummation of the transactions
contemplated by this Agreement, the
Registration Rights Agreement, the
Indenture and the Offering Memorandum do not
and will not (A) conflict with, require
consent under or result in a breach of
any of the terms and provisions of, or
constitute a default (or an event which
with notice or lapse of time, or both,
would constitute a default) under, or
result in the creation or imposition of any
Lien upon any property or assets of
the Company or any Subsidiary pursuant to,
any indenture, mortgage, deed of
trust, loan agreement or other agreement,
instrument, franchise, license or
permit to which the Company or any
Subsidiary is a party or by which the Company
or any Subsidiary or their respective
properties, operations or assets may be
bound, (B) violate or conflict with any
provision of the certificate or articles
of incorporation, by-laws, certificate of
formation, limited liability company
agreement or other organizational documents
of the Company or any Subsidiary or
(C) violate or conflict with any law, rule,
regulation, ordinance, directive,
judgment, decree or order of any judicial,
regulatory or other legal or
governmental agency or body, domestic or
foreign, except (in the case of clauses
(A) and (C) above) as could not reasonably
be expected to have a Material
Adverse Effect.
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(i) No Consent of, with or from any judicial, regulatory or
other
legal or governmental agency or body or any
third party, foreign or domestic, is
required for the execution, delivery and
performance of this Agreement or
consummation of the transactions
contemplated by this Agreement, the
Registration Rights Agreement, the
Indenture and the Offering Memorandum,
including the issuance, sale and delivery
of the Notes to be issued, sold and
delivered hereunder except for such Consent
as may be required (i) under
applicable state securities laws in
connection with the purchase and resale of
the Notes by the Initial Purchaser and (ii)
with respect to the Exchange Notes
(including the Guarantees of the Exchange
Notes) under the Securities Act and
applicable state securities laws as
contemplated by the Registration Rights
Agreement.
(j) Except as disclosed in the Offering Memorandum, there is no
judicial, regulatory, arbitral or other
legal or governmental proceeding or
other litigation or arbitration, domestic
or foreign, pending to which the
Company or any Subsidiary is a party or of
which any property, operations or
assets of the Company or any Subsidiary is
the subject which, individually or in
the aggregate, if determined adversely to
the Company or any Subsidiary, could
reasonably be expected to have a Material
Adverse Effect; to the best of the
Company's knowledge, no such proceeding,
litigation or arbitration is threatened
or contemplated; and the defense of all
such proceedings, litigation and
arbitration against or involving the
Company or any Subsidiary could not
reasonably be expected to have a Material
Adverse Effect.
(k) The financial statements, including the notes thereto, and
the
supporting schedules included or
incorporated by reference in the Offering
Memorandum present fairly the financial
position as of the dates indicated and
the cash flows and results of operations
for the periods specified of the
Company and its consolidated subsidiaries
and the other entities for which
financial statements are included or
incorporated by reference in the Offering
Memorandum; except as otherwise stated in
the Offering Memorandum, said
financial statements have been prepared in
conformity with United States
generally accepted accounting principles
("GAAP") applied on a consistent basis
throughout the periods involved; and the
supporting schedules included in the
Offering Memorandum present fairly the
information required to be stated
therein. No other financial statements or
supporting schedules which would be
required by the Securities Act, the
Exchange Act or the Rules and Regulations to
be included in the Offering Memorandum if
the Offering Memorandum were a
prospectus included in a registration
statement on Form S-1, have not been so
included. The other financial and
statistical information included or
incorporated by reference in the Offering
Memorandum present fairly the
information included therein and, except
for non-GAAP financial measures (as
such term is defined in Item 10(e) of
Regulation S-K of the Rules and
Regulations), non-financial operating data
(which are addressed below in this
Section 1(k)) and market and industry data
(which are addressed below in Section
1(m)), have been prepared on a basis
consistent with that of the financial
statements that are included or
incorporated by reference in the Offering
Memorandum and the books and records of the
respective entities presented
therein. The non-GAAP financial measures
and non-financial operating data (which
terms do not include market or industry
data) included or incorporated by
reference in the Offering Memorandum have
been derived from, and are consistent
with, the books and records of the Company
and its subsidiaries.
(l) There are no pro forma or as adjusted financial statements
which
would be required by the Securities Act,
the Exchange Act or the Rules and
Regulations to be included in
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the Offering Memorandum if the Offering
Memorandum were a prospectus included in
a registration statement on Form S-1, which
have not been so included.
(m) The
statistical, industry-related and market-related data
included in the Offering Memorandum (i) are
based on or derived from sources
which the Company reasonably and in good
faith believes are reliable and
accurate, and such data agree with the
sources from which they are derived, or
(ii) with respect to the items set forth in
Exhibit C hereto, represent the
Company's reasonable estimates determined
in good faith.
(n) The Company is subject to the reporting requirements of
Section
13 or 15(d) of the Exchange Act and files
reports with the Commission on EDGAR.
The common stock of the Company is
registered pursuant to Section 12 of the
Exchange Act and its outstanding shares of
common stock are listed on the New
York Stock Exchange (the "NYSE"), and the
Company has taken no action designed
to, or likely to have the effect of,
terminating the registration of its common
stock under the Exchange Act or de-listing
its common stock from the NYSE, nor
has the Company received any notification
that the Commission or the NYSE is
contemplating terminating such registration
or listing.
(o) The Company and its Subsidiaries maintain a system of
internal
accounting and other controls sufficient to
provide reasonable assurances 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 United States generally
accepted accounting principles and to
maintain accountability for assets, (iii)
access to assets is permitted only in
accordance with management's general or
specific authorization and (iv) the
recorded accounting for assets is compared
with existing assets at reasonable
intervals and appropriate action is taken
with respect to any differences.
(p) Neither the Company nor any of its "Affiliates" (as defined
under Rule 144 under the Securities Act)
has taken, directly or indirectly, any
action which constitutes or is designed to
cause or result in, or which could
reasonably be expected to constitute, cause
or result in, the stabilization or
manipulation of the price of any security
to facilitate the sale or resale of
the Notes, provided that this
representation and warranty does not cover any
actions of the estate of Alan James (the
"Estate") or any representatives or
agents acting on behalf of the Estate
(collectively with the Estate, the "James
Group").
(q) Neither the Company nor any of its Affiliates has, prior to
the
date hereof, made any offer or sale of any
securities which could be
"integrated" for purposes of the Securities
Act or the Rules and Regulations
with the offer and sale of the Notes
pursuant to the Offering Memorandum. Except
as disclosed in the Offering Memorandum,
neither the Company nor any of its
Affiliates has sold or issued any Relevant
Security during the six-month period
preceding the date of the Offering
Memorandum, including but not limited to any
sales pursuant to Rule 144A or Regulation D
or S under the Securities Act, other
than shares of its common stock issued
pursuant to employee benefit plans,
qualified stock option plans or the
employee compensation plans or pursuant to
outstanding options, rights or warrants as
described in the Offering Memorandum.
The representations and warranties in this
paragraph 1(q) do not cover any
actions of the James Group.
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(r) Except as disclosed in the Offering Memorandum, no holder of
any
Relevant Security has any rights to require
registration of any Relevant
Security as part or on account of, or
otherwise in connection with, the offer
and sale of the Notes contemplated hereby,
and any such rights so disclosed have
either been fully complied with by the
Company or effectively waived by the
holders thereof, and any such waivers
remain in full force and effect.
(s) The documents incorporated or deemed to be incorporated by
reference in the Offering Memorandum (the
"Incorporated Documents"), at the time
they were or hereafter are filed with the
Commission, complied and will comply
in all material respects with the
requirements of the Securities Act, the
Exchange Act and the Rules and Regulations,
and, when read together with the
other information in the Offering
Memorandum, do not contain an untrue statement
of a material fact or omit to state a
material fact required to be stated
therein or necessary to make the statements
therein, in light of the
circumstances under which they were made,
not misleading.
(t) The Company is not and, at all times up to and including
consummation of the transactions
contemplated by this Agreement, the
Registration Rights Agreement, the
Indenture and the Offering Memorandum, and
after giving effect to application of the
net proceeds of the Offering as
contemplated by the Offering Memorandum,
will not be, subject to registration as
an "investment company" under the
Investment Company Act of 1940, as amended,
and is not and will not be an entity
"controlled" by an "investment company"
within the meaning of such act.
(u) There are no contracts or other documents (including,
without
limitation, any voting agreement), which
would be required by the Securities
Act, the Exchange Act or the Rules and
Regulations to be described in the
Offering Memorandum if the Offering
Memorandum were a prospectus included in a
registration statement on Form S-1, which
have not been so described.
(v) No relationship, direct or indirect, exists between or among
any
of the Company or any Affiliate of the
Company, on the one hand, and any
director, officer, stockholder, customer or
supplier of the Company or any
Affiliate of the Company, on the other
hand, which would be required by the
Securities Act, the Exchange Act or the
Rules and Regulations to be described in
the Offering Memorandum if the Offering
Memorandum were a prospectus included in
a registration statement on Form S-1, which
have not been so described. There
are no outstanding loans, advances (except
normal advances for business expenses
in the ordinary course of business) or
guarantees of indebtedness by the Company
to or for the benefit of any of the
officers or directors of the Company or any
of their respective family members, except
as disclosed in the Offering
Memorandum and except for one salary
advance that is immaterial in amount. The
Company has not, in violation of the
Sarbanes-Oxley Act, directly or indirectly,
including through a Subsidiary, extended or
maintained credit, arranged for the
extension of credit, or renewed an
extension of credit, in the form of a
personal loan to or for any director or
executive officer of the Company.
(w) Except as disclosed in the Offering Memorandum, there are
no
contracts, agreements or understandings
between the Company and any person that
would give rise to a valid claim against
the Company or any Initial Purchaser
for a brokerage commission, finder's
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fee or other like payment in connection
with the transactions contemplated by
this Agreement, the Registration Rights
Agreement, the Indenture and the
Offering Memorandum.
(x) The Company and each Subsidiary owns or leases all such
properties as are necessary to the conduct
of its business as presently operated
and as proposed to be operated as described
in the Offering Memorandum. The
Company and the Subsidiaries have good and
marketable title in fee simple to all
real property and good and marketable title
to all personal property owned by
them, in each case free and clear of all
Liens except such as are described in
the Offering Memorandum or such as do not
(individually or in the aggregate)
materially affect the value of such
property or interfere with the use made or
proposed to be made of such property by the
Company and the Subsidiaries; and
any real property and buildings held under
lease or sublease by the Company and
the Subsidiaries are held by them under
valid, subsisting and enforceable leases
with such exceptions as are not material
to, and do not interfere with, the use
made and proposed to be made of such
property and buildings by the Company and
the Subsidiaries. Neither the Company nor
any Subsidiary has received any notice
of any claim adverse to its ownership of
any real or personal property or of any
claim against the continued possession of
any real property, whether owned or
held under lease or sublease by the Company
or any Subsidiary.
(y) The Company and each Subsidiary (i) own or possess adequate
right to use all patents, patent
applications, trademarks, service marks, trade
names, trademark registrations, service
mark registrations, copyrights,
licenses, formulae, customer lists, and
know-how and other intellectual property
(including trade secrets and other
unpatented and/or unpatentable proprietary or
confidential information, systems or
procedures, "Intellectual Property")
necessary for the conduct of their
respective businesses as being conducted and
as described in the Offering Memorandum and
(ii) have no reason to believe that
the conduct of their respective businesses
does or will conflict with any such
right of others. To the best of the
Company's knowledge, all material technical
information developed by and belonging to
the Company which has not been
patented has been kept confidential. Except
as described in the Offering
Memorandum, neither the Company nor any
Subsidiary has granted or assigned to
any other person or entity any right to
manufacture, have manufactured, assemble
or sell the current products and services
of the Company and its Subsidiaries or
those products and services described in
the Offering Memorandum. Except as
would, if determined adversely to the
Company or its Subsidiaries, not have
individually or in the aggregate, a
Material Adverse Effect, the Company is not
aware of any infringement by third parties
of any such Intellectual Property;
there is no pending or, to the Company's
knowledge, threatened action, suit,
proceeding or claim by others challenging
the Company's or any Subsidiary's
rights in or to any such Intellectual
Property, and the Company is unaware of
any facts which would form a reasonable
basis for any such claim; and there is
no pending or, to the Company's knowledge,
threatened action, suit, proceeding
or claim by others that the Company or any
Subsidiary infringes or otherwise
violates any patent, trademark, copyright,
trade secret or other proprietary
rights of others, and the Company is
unaware of any other fact which would form
a reasonable basis for any such claim.
(z) The Company and the Subsidiaries maintain insurance in such
amounts and covering such risks as the
Company reasonably considers adequate for
the conduct of its business and the value
of its properties and as is customary
for companies engaged in similar
9
<PAGE>
businesses in similar industries, all of
which insurance is in full force and
effect, except where the failure to
maintain such insurance could not reasonably
be expected to have a Material Adverse
Effect. There are no material claims by
the Company or any Subsidiary under any
such policy or instrument as to which
any insurance company is denying liability
or defending under a reservation of
rights clause, except (i) that insurance
liability has been denied with respect
to the litigation filed by Mr. James and
described under "Recent Developments --
Settlement with the Estate of Alan James"
in the Offering Memorandum, and (ii)
the insurer is defending under a
reservation of rights in the litigation pending
in Tarrant County, Texas that is described
under "Business -- Legal Matters" in
the Offering Memorandum. The Company
reasonably believes that it will be able to
renew its existing insurance as and when
such coverage expires or will be able
to obtain replacement insurance adequate
for the conduct of the business and the
value of its properties at a cost that
would not have a Material Adverse Effect.
(aa) The Company has in effect insurance covering the Company,
its
directors and officers for liabilities or
losses arising in connection with this
Offering, including, without limitation,
liabilities or losses arising under the
Securities Act, the Exchange Act, the Rules
and Regulations and applicable
foreign securities laws.
(bb) Each of the Company and the Subsidiaries has accurately
prepared and timely filed (including
through permitted extensions) all federal,
state, foreign and other tax returns that
are required to be filed by it, except
where the failure to file would not have a
Material Adverse Effect, and has paid
or made provision for the payment of all
taxes, assessments, governmental or
other similar charges, including without
limitation, all sales and use taxes and
all taxes which the Company or any
Subsidiary is obligated to withhold from
amounts owing to employees, creditors and
third parties, with respect to the
periods covered by such tax returns
(whether or not such amounts are shown as
due on any tax return), except to the
extent that any of such taxes, assessments
or charges are being contested in good
faith. No deficiency assessment with
respect to a proposed adjustment of the
Company's or any Subsidiary's federal,
state, local or foreign taxes is pending
or, to the best of the Company's
knowledge, threatened. The accruals and
reserves on the books and records of the
Company and the Subsidiaries in respect of
tax liabilities for any taxable
period not finally determined are adequate
to meet any assessments and related
liabilities for any such period and, since
August 31, 2004, the Company and the
Subsidiaries have not incurred any
liability for taxes other than in the
ordinary course of its business. There is
no tax lien, whether imposed by any
federal, state, foreign or other taxing
authority, outstanding against the
assets, properties or business of the
Company or any Subsidiary.
(cc) No labor disturbance by the employees of the Company or
any
Subsidiary exists or, to the best of the
Company's knowledge, is imminent and
the Company is not aware of any existing or
imminent labor disturbances by the
subcontracted labor at the Company's
facility in Sahagun, Mexico or the
employees of any of its or any Subsidiary's
principal suppliers, manufacturers,
customers or contractors, which, in either
case (individually or in the
aggregate), could reasonably be expected to
have a Material Adverse Effect.
(dd) No nonexempt "prohibited transaction" (as defined in
either
Section 406 of the Employee Retirement
Income Security Act of 1974, as amended,
including the regulations and published
interpretations thereunder ("ERISA") or
Section 4975 of the Internal Revenue
10
<PAGE>
Code of 1986, as amended from time to time
(the "Code")), has occurred with
respect to any employee benefit plan for
which the Company or any Subsidiary
would have any liability; each employee
benefit plan for which the Company or
any Subsidiary would have any liability is
in compliance in all material
respects with applicable law, including
(without limitation) ERISA and the Code;
neither the Company nor any Subsidiary has
nor has it maintained any employee
benefit plans as such term is defined in
Section 3(3) of ERISA that are subject
to Title IV of ERISA; and each plan for
which the Company would have any
liability that is intended to be qualified
under Section 401(a) of the Code has
received a favorable determination letter
from the IRS as to its qualification
is so qualified and nothing has occurred,
whether by action or by failure to
act, which would reasonably be expected to
cause the loss of such qualification.
(ee) The execution, delivery, and performance of this Agreement
and
consummation of the transactions
contemplated by this Agreement, the
Registration Rights Agreement, the
Indenture and the Offering Memorandum do not
and will not involve any prohibited
transaction within the meaning of Section
406 of ERISA or Section 4975 of the
Internal Revenue Code of 1986.
(ff) Except as disclosed in the Offering Memorandum with respect
to
the Portland Harbor Superfund Site and the
ongoing soil and groundwater
remediation at the Gunderson, Portland
facility, and except as could not
reasonably be expected to have a Material
Adverse Effect,
(i) Neither the Company nor any Subsidiary has unlawfully
released any hazardous substance in a
manner likely to give rise to any
liability under any applicable law, rule,
regulation, order, judgment, decree or
permit relating to pollution or protection
of human health and safety and
environment ("Environmental Law").
(ii) Neither the Company nor any Subsidiary has agreed
contractually to indemnify any past or
current owner or operator of any property
currently owned or operated by the Company
or any Subsidiary, for liability
related to such prior ownership or
operation of such property, under any
Environmental Law, including any obligation
for cleanup or remedial action.
(iii) There is no pending or, to the best of the Company's
knowledge, threatened administrative,
regulatory or judicial action, claim or
notice of noncompliance or violation,
investigation or proceedings relating to
any Environmental Law against the Company
or any Subsidiary.
(gg) Neither the Company, any Subsidiary nor, to the Company's
knowledge, any of its employees or agents
has at any time during the last five
years (i) made any unlawful contribution to
any candidate for foreign office, or
failed to disclose fully any contribution
in violation of law or (ii) made any
payment to any federal or state
governmental officer or official, or other
person charged with similar public or
quasi-public duties, other than payments
required or permitted by the laws of the
United States of any jurisdiction
thereof.
(hh) Neither the Company nor any Subsidiary (i) is in violation
of
its certificate or articles of
incorporation, by-laws, certificate of formation,
limited liability company
11
<PAGE>
agreement or other organizational
documents, (ii) is in default under, and no
event has occurred which, with notice or
lapse of time, or both, would
constitute a default under or result in the
creation or imposition of any Lien
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 it is a party or by
which it is bound or to which any of its
property or assets is subject or (iii) is
in violation in any respect of any
law, rule, regulation, ordinance,
directive, judgment, decree or order of any
judicial, regulatory or other legal or
governmental agency or body, foreign or
domestic, except (in the case clauses (ii)
and (iii) above) violations or
defaults that could not (individually or in
the aggregate) reasonably be
expected to have a Material Adverse Effect
and except (in the case of clause
(ii) alone) for any Lien disclosed in the
Offering Memorandum;
(ii) The Company is in compliance with applicable provisions of
the
Sarbanes-Oxley Act that are effective.
(jj) The Company has implemented the "disclosure controls and
procedures" (as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act)
required in order for the Chief Executive
Officer and Chief Financial Officer of
the Company to engage in the review and
evaluation process mandated by the
Exchange Act. The Company's "disclosure
controls and procedures" are reasonably
designed to ensure that all information
(both financial and non-financial)
required to be disclosed by the Company in
the reports that it files or submits
under the Exchange Act is recorded,
processed, summarized and reported within
the time periods specified in the Rules and
Regulations, and that all such
information is accumulated and communicated
to the Company's management as
appropriate to allow timely decisions
regarding required disclosure and to make
the certifications of the Chief Executive
Officer and Chief Financial Officer of
the Company required under the Exchange Act
with respect to such reports.
(kk) Deloitte & Touche LLP and the audit committee of the
Company's
Board of Directors have been advised of (i)
all significant deficiencies and
material weaknesses in the design or
operation of internal controls over
financial reporting (as defined in Rules
13a-15(f) and 15d-15(f) of the Exchange
Act) which are reasonably likely to
adversely affect the Company's ability to
record, process, summarize and report
financial information and (ii) any fraud,
whether or not material, that involves
management or other employees who have a
significant role in the registrant's
internal controls over financial reporting.
The Chief Executive Officer and Chief
Financial Officer have indicated in the
Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 2004
and its Quarterly Reports on Form 10-Q for
the fiscal quarters ended November
30, 2004 and February 28, 2005 any change
in the Company's internal controls
over financial reporting that occurred
during the Company's most recent fiscal
quarter reported on in such Annual Report
or Quarterly Report that has
materially affected, or is reasonably
likely to materially affect, the Company's
internal control over financial
reporting.
(ll) The section entitled "Management's Discussion and Analysis
of
Financial Condition and Results of
Operation - Critical Accounting Policies" in
the Offering Memorandum accurately and
fully describes in accordance with
applicable SEC rules (i) accounting
policies which the Company believes are the
most important in the portrayal of the
financial condition and results of
operations of the Company and its
consolidated subsidiaries and which require
management's most difficult, subjective or
complex judgments ("critical
12
<PAGE>
accounting policies"), (ii) judgments and
uncertainties affecting the
application of critical accounting policies
and (iii) explanation of the
likelihood that materially different
amounts would be reported under different
conditions or using different
assumptions.
(mm) The Company's board of directors, senior management and
audit
committee have reviewed and agreed with the
selection, application and
disclosure of critical accounting policies
and have consulted with their legal
advisers and independent accountants with
regard to such disclosure.
(nn) The section entitled "Management's Discussion and Analysis
of
Financial Condition and Results of
Operations - Liquidity and Capital Resources"
in the Offering Memorandum accurately and
fully describes in accordance with
applicable SEC rules (i) all material
trends, demands, commitments, events,
uncertainties and risks, and the potential
effects thereof, that the Company
believes would materially affect liquidity
and are reasonably likely to occur
and (ii) all off-balance sheet arrangements
that have or are reasonably likely
to have a current or future effect on the
financial condition, changes in
financial condition, revenues or expenses,
results of operations, liquidity,
capital expenditures or capital resources
of the Company and the Subsidiaries
taken as a whole.
(oo) Except as disclosed in the Offering Memorandum, there are
no
outstanding guarantees or other contingent
obligations (other than under product
warranties given in the ordinary course of
business) of the Company or any
Subsidiary that could reasonably be
expected to have a Material Adverse Effect.
(pp) The Company and its Subsidiaries have all material
certifications required by the Association
of American Railroads ("AAR") as a
railcar builder, repair and refurbishment
facility and component manufacturer,
and products sold and leased by the Company
and its Subsidiaries in North
America meet applicable AAR, Transport
Canada and Federal Railroad
Administration standards.
(qq) No event or circumstance has occurred or arisen that could
reasonably be expected to give rise to a
requirement that the Company make
additional disclosure on Form 8-K and has
not been so disclosed.
(rr) The Settlement Agreement between the Company and the estate
of
Alan James dated April 20, 2005 (the
"Settlement Agreement"), has been duly
executed and delivered by the Company and,
to the Company's knowledge, each
other party thereto, and constitutes the
legal, valid and binding obligation of
the Company, and, to the Company's
knowledge, each other party thereto,
enforceable in accordance with its terms,
except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
similar laws affecting creditors' rights
generally and except as enforceability
may be subject to general principles of
equity (regardless of whether such
enforceability is considered in a
proceeding in equity or at law). The
Settlement Agreement is in full force and
effect, and neither the Company nor,
to the Company's knowledge, any other party
thereto, is in breach of, or default
under, the Settlement Agreement, and no
event has occurred that with notice or
lapse of time or both would constitute such
a breach or default thereunder by
the Company or, to the Company's knowledge,
any other party thereto. There is no
pending or, to the Company's knowledge,
threatened action,
13
<PAGE>
suit, proceeding or claim by any person or
any judicial, regulatory or other
legal or governmental agency or body
challenging the validity, enforcement or
other aspect of the Settlement Agreement,
and the Company is unaware of any
facts which would form a reasonable basis
for any such claim. No governmental
entity having competent jurisdiction has
taken any action or issued any order
restraining, enjoining or otherwise
prohibiting the transactions contemplated by
the Settlement Agreement.
(ss) The Stock Purchase Agreement among the Company, William
Furman,
George Chelius, as Executor of the Will and
Estate of Alan James and as Trustee
and Eric Epperson, as Executor of the Will
and Estate of Alan James and as
Trustee dated April 20, 2005 (the "Stock
Purchase Agreement"), has been duly
executed and delivered by the Company and,
to the Company's knowledge, each
other party thereto, and constitutes the
legal, valid and binding obligation of
the Company, and, to the Company's
knowledge, each other party thereto,
enforceable in accordance with its terms,
except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
similar laws affecting creditors' rights
generally and except as enforceability
may be subject to general principles of
equity (regardless of whether such
enforceability is considered in a
proceeding in equity or at law). The Stock
Purchase Agreement is in full force and
effect, and neither the Company nor, to
the Company's knowledge, any other party
thereto, is in breach of, or default
under, the Stock Purchase Agreement, and no
event has occurred that with notice
or lapse of time or both would constitute
such a breach or default thereunder by
the Company or, to the Company's knowledge,
any other party thereto. There is no
pending or, to the Company's knowledge,
threatened action, suit, proceeding or
claim by any person or any judicial,
regulatory or other legal or governmental
agency or body challenging the validity,
enforcement or other aspect of the
Stock Purchase Agreement, and the Company
is unaware of any facts which would
form a reasonable basis for any such
claim.
(tt) The Indenture has been duly authorized by the Company and
each
Guarantor and, when duly executed and
delivered by the Company and each
Guarantor, will be the legal, valid and
binding agreement of the Company and
each Guarantor, enforceable against each of
them in accordance with its terms,
except as enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting creditors' rights generally
and except as enforceability may be subject
to general principles of equity
(regardless of whether such enforceability
is considered in a proceeding in
equity or at law). On the Closing Date, the
Indenture will comply in all
material respects with 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 which
is qualified thereunder. The
Offering Memorandum contains a summary of
the terms of the Indenture, which is
accurate in all material respects.
(uu) The Registration Rights Agreement has been duly authorized
by
the Company and each Guarantor and, when
duly executed and delivered by the
Company and each Guarantor, will be the
legal, valid and binding obligation of
the Company and each Guarantor, enforceable
against each of them in accordance
with its terms, except as enforceability
may be limited by applicable
bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting
creditors' rights generally, except as
enforceability may be subject to general
principles of equity (regardless of whether
such enforceability is considered in
a proceeding in equity or at
14
<PAGE>
law) and except that rights to indemnity
and contribution thereunder may be
limited by applicable law and public
policy. The Offering Memorandum contains a
summary of the terms of the Registration
Rights Agreement, which is accurate in
all material respects.
(vv) The Notes have been duly authorized by the Company for
issuance
and sale to the Initial Purchasers pursuant
to this Agreement and, when
executed, authenticated and issued in
accordance with the terms of the Indenture
and delivered against payment therefor in
accordance with the terms hereof and
thereof, the Notes will be the legal, valid
and binding obligations of the
Company, enforceable against it in
accordance with their terms and entitled to
the benefits of the Indenture, except as
enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting creditors' rights generally and
except as enforceability may be
subject to general principles of equity
(regardless of whether such
enforceability is considered in a
proceeding in equity or at law).
(ww) The Guarantees of the Notes have been duly authorized by
each
of the Guarantors and, when executed and
delivered in accordance with the terms
of the Indenture and when the Notes have
been executed, authenticated and issued
in accordance with the terms of the
Indenture and delivered against payment
therefor in accordance with the terms
hereof and thereof, the Guarantees of the
Notes will be the legal, valid and binding
obligations of each of the
Guarantors, enforceable against each of
them in accordance with their terms and
entitled to the benefits of the Indenture,
except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
similar laws affecting creditors' rights
generally and except as enforceability
may be subject to general principles of
equity (regardless of whether such
enforceability is considered in a
proceeding in equity or at law).
(xx) The Exchange Notes have been duly authorized for issuance
by
the Company and, when issued, authenticated
and delivered in accordance with the
terms of the Exchange Offer and the
Indenture, the Exchange Notes will be the
legal, valid and binding obligations of the
Company, enforceable against it in
accordance with their terms and entitled to
the benefits of the Indenture,
except as enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting creditors' rights generally
and except as enforceability may be subject
to general principles of equity
(regardless of whether such enforceability
is considered in a proceeding in
equity or at law).
(yy) The Guarantees of the Exchange Notes have been duly
authorized
by each of the Guarantors and, when issued,
authenticated and delivered in
accordance with the terms of the Indenture
and when the Exchange Notes have been
issued and authenticated in accordance with
the terms of the Exchange Offer and
the Indenture, the Guarantees of the
Exchange Notes will be the legal, valid and
binding obligations of each of the
Guarantors, enforceable against each of them
in accordance with their terms and entitled
to the benefits of the Indenture,
except as enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting creditors' rights generally
and except as enforceability may be subject
to general principles of equity
(regardless of whether such enforceability
is considered in a proceeding in
equity or at law).
(zz) Subject to compliance by the Initial Purchasers with Sections
2
and 7 hereof, it is not necessary in
connection with the offer, sale and
delivery of the Notes to the
15
<PAGE>
Initial Purchasers and to each Subsequent
Purchaser in the manner contemplated
by this Agreement and the Offering
Memorandum to register the Notes under the
Securities Act or, until such time as the
Exchange Notes are issued pursuant to
an effective registration statement, to
qualify the Indenture under the Trust
Indenture Act of 1939 (the "Trust Indenture
Act," which term, as used herein,
includes the rules and regulations of the
Commission promulgated thereunder).
(aaa) None of the Company, its Affiliates, or any person acting
on
its or any of their behalf (other than the
Initial Purchasers, as to whom the
Company makes no representation or
warranty) has engaged or will engage, in
connection with the offering of the Notes,
in any form of general solicitation
or general advertising within the meaning
of Rule 502 under the Securities Act.
With respect to those Notes sold in
reliance upon Regulation S, (i) none of the
Company, its Affiliates or any person
acting on its or their behalf (other than
the Initial Purchasers, as to whom the
Company makes no representation or
warranty) has engaged or will engage in any
directed selling efforts within the
meaning of Regulation S and (ii) each of
the Company and its Affiliates and any
person acting on its or their behalf (other
than the Initial Purchasers, as to
whom the Company makes no representation or
warranty) has complied and will
comply with the offering restrictions set
forth in Regulation S. The Offering
Memorandum will contain the disclosure
required by Rule 902. The Company is a
"reporting issuer" as defined in Rule 902
under the Securities Act.
(bbb) The Notes are eligible for resale pursuant to Rule 144A
and
will not be, at the Closing Date, of the
same class as securities listed on a
national securities exchange registered
under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer
quotation system.
(ccc) Each of the Company and the Guarantors is, and
immediately
after the Closing Date will be, Solvent. As
used herein, the term "Solvent"
means, with respect to any person on a
particular date, that on such date (i)
the fair market value of the assets of such
person is greater than the total
amount of liabilities (including contingent
liabilities) of such person, (ii)
the present fair salable value of the
assets of such person is greater than the
amount that will be required to pay the
probable liabilities of such person on
its debts as they become absolute and
matured, (iii) such person is able to
realize upon its assets and pay its debts
and other liabilities, including
contingent obligations, as they mature and
(iv) such person does not have
unreasonably small capital.
Any
certificate signed by an officer of the Company or any Guarantor
and
delivered to the Initial Purchasers or to
counsel for the Initial Purchasers
shall be deemed to be a representation and
warranty by the Company or
