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EXHIBIT 10.15
EXECUTION COPY
NEBRASKA BOOK COMPANY, INC.
$175,000,000
8-5/8% Senior Subordinated Notes due 2012
Purchase Agreement
February 27, 2004
J.P. Morgan Securities Inc.
As Representative of the
several Initial Purchasers
listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Nebraska Book Company, Inc., a Kansas corporation (the
"Company"),
proposes to issue and sell to the several
Initial Purchasers listed in Schedule
1 hereto (the "Initial Purchasers"), for
whom you are acting as representative
(the "Representative"), $175,000,000
principal amount of its 8-5/8% Senior
Subordinated Notes due 2012 (the
"Securities"). The Securities will be issued
pursuant to an Indenture to be dated as of
March 4, 2004 (the "Indenture") among
the Company, Specialty Books, Inc. (the
"Guarantor") and BNY Midwest Trust
Company, as trustee (the "Trustee"), and
will be guaranteed on an unsecured
senior subordinated basis by the Guarantor
(the "Guarantee").
The Securities will be sold to the Initial Purchasers without
being
registered under the Securities Act of
1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom.
The Company has prepared a preliminary
offering memorandum dated February 19, 2004
(the "Preliminary Offering
Memorandum") and will prepare an offering
memorandum dated the date hereof (the
"Offering Memorandum") setting forth
information concerning the Company and the
Securities. Copies of the Preliminary
Offering Memorandum have been, and copies
of the Offering Memorandum will be,
delivered by the Company to the Initial
Purchasers pursuant to the terms of this
Agreement. The Company hereby confirms
that it has authorized the use of the
Preliminary Offering Memorandum and the
Offering Memorandum in connection with the
offering and resale of the Securities
by the Initial Purchasers in the manner
contemplated by this Agreement.
Capitalized terms used but not defined
herein shall have the meanings given to
such terms in the Offering Memorandum.
References herein to the Preliminary
Offering Memorandum and the Offering
Memorandum shall be deemed to refer to and
include any document incorporated by
reference therein.
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Holders of the Securities (including the Initial Purchasers and
their
direct and indirect transferees) will be
entitled to the benefits of a
Registration Rights Agreement, to be dated
the Closing Date (as defined below)
and substantially in the form attached
hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the
Company and the Guarantor will agree
to file one or more registration statements
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.
Concurrently with the consummation of the offering of the
Securities,
the Company, NBC Acquisition Corp.
("Holdings") and the Guarantor will enter
into a recapitalization transaction
pursuant to which (i) Weston Presidio
Capital and its affiliates (the "WPC
Funds") will make an equity investment of
approximately $27.5 million in NBC Holdings
Corp. a ("New Holdings"), (ii) WPC
Funds will contribute approximately 510,687
shares of Holdings to New Holdings,
(iii) WPC Funds will purchase approximately
38,179 shares of common stock of
Holdings from its holders, (iv) a merger
will occur, as a result of which the
outstanding shares of Holdings will convert
into the right to receive a portion
of the approximately $289.6 million in
merger consideration, and the shares of a
newly formed subsidiary will be converted
into a like number of shares of the
common stock of Holdings, (v) the Company
will repurchase or call for redemption
its $110,000,000 aggregate principal amount
of 8-3/4% Senior Subordinated Notes
due 2008 (the "Old Notes") and will issue
the Securities, (vi) Holdings will
repurchase or call for redemption its
$76,000,000 aggregate principal amount of
10-3/4% Senior Discount Debentures due 2009
(the "Old Debentures") and will
issue $77,000,000 principal amount at
maturity of new 11% Senior Discount Notes
due 2013 (the "Debentures") and (vii) all
indebtedness of the Company under the
Amended and Restated Credit Agreement,
dated as of February 13, 1998, as amended
and restated as of December 10, 2003 (the
"Existing Credit Agreement"), among
the Company, Holdings, the several banks
and other financial institutions or
entities from time to time parties thereto,
the eligible subsidiaries referred
to therein, JPMorgan Chase Bank, as
administrative agent, documentation agent
and collateral agent, and Citigroup Global
Markets Inc., as syndication agent,
will be refinanced and the Company, the
Guarantor and New Holdings will enter
into a new revolving credit facility in the
amount of $50.0 million and a new
term loan facility in the amount of $180.0
million pursuant to a credit
agreement (the "Credit Agreement"), among
the Company, the Guarantor and New
Holdings, JPMorgan Chase Bank and Citicorp
North America, Inc., as Arrangers,
Citigroup Global Markets, Inc., as
Syndication Agent, JPMorgan Chase Bank, as
Administrative Agent, Fleet National Bank
as Documentation Agent and the other
lenders party thereto, (the "Credit
Facility") (the foregoing, collectively
referred to herein as the "Transactions").
The proceeds from the sale of the
Securities and the Debentures, together
with the borrowings under the Credit
Facility, will be used (i) to repay
outstanding indebtedness of the Company
under its Existing Credit Agreement, (ii)
to purchase the Old Notes and Old
Debentures and (iii) to pay other related
fees and expenses.
The Company hereby confirms its agreement with the several
Initial
Purchasers concerning the purchase and
resale of the Securities, as follows:
1.
Purchase and Resale of the Securities. (a) Subject to the
Transactions occurring prior to or
concurrently with the closing of the offering
of the Securities, the Company agrees to
issue and sell the Securities to the
several Initial Purchasers as provided in
this Agreement, and each Initial
Purchaser, on the basis of the
representations, warranties and agreements set
forth
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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 opposite such Initial
Purchaser's name in Schedule 1 hereto
at a price equal to 97.50% of the principal
amount thereof plus accrued
interest, if any, from March 4, 2004 to the
Closing Date. 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) The
Company understands that the Initial Purchasers intend to
offer the Securities for resale on the
terms set forth in the Offering
Memorandum. Each Initial Purchaser,
severally and not jointly, represents,
warrants and agrees that:
(i) it is a
qualified institutional buyer within the
meaning of Rule 144A under the Securities Act (a "QIB") and an
accredited investor within the meaning of Rule 501(a) under the
Securities Act;
(ii)
neither it, nor any of its affiliates referenced in
Section 1(d) below, has 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; and
(iii) it
has not solicited offers for, or offered or sold,
and will not solicit offers for, or offer or sell, the Securities
as
part of their initial offering except:
(A) within the
United States to persons whom it
reasonably believes to be QIBs in transactions pursuant to
Rule 144A under the Securities Act ("Rule 144A") and in
connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance
on Rule 144A; or
(B) in
accordance with the restrictions set
forth in Annex A hereto.
(c) Each
Initial Purchaser acknowledges and agrees that the
Company and, for purposes of the opinions
to be delivered to the Initial
Purchasers pursuant to Sections 5(f) and
5(g), counsel for the Company and
counsel for the Initial Purchasers,
respectively, may rely upon the accuracy of
the representations and warranties of the
Initial Purchasers, and compliance by
the Initial Purchasers with their
agreements, contained in paragraph (b) above
(including Annex A hereto), and each
Initial Purchaser hereby consents to such
reliance.
(d) The
Company acknowledges and agrees that the Initial
Purchasers may offer and sell Securities to
or through any affiliate of an
Initial Purchaser and that any such
affiliate may offer and sell Securities
purchased by it to or through any Initial
Purchaser.
2.
Payment and Delivery. (a) Payment for and delivery of the
Securities will be made at the offices of
Simpson Thacher & Bartlett LLP at
10:00 A.M., New York City time, on March 4,
2004, or at such other time or place
on the same or such other date, not later
than the
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fifth business day thereafter, as the
Representative and the Company may agree
upon in writing. 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
Representative against delivery to the
nominee of The Depository Trust Company,
for the account of the Initial Purchasers,
of one or more global notes
representing the Securities (collectively,
the "Global Note"), with any transfer
taxes payable in connection with the sale
of the Securities duly paid by the
Company. The Global Note will be made
available for inspection by the
Representative not later than 1:00 P.M.,
New York City time, on the business day
prior to the Closing Date.
3.
Representations and Warranties of the Company and the
Guarantor. The Company and the Guarantor
jointly and severally represent and
warrant to each Initial Purchaser that:
(a) Offering
Memorandum. The Preliminary Offering Memorandum, as
of its date, did not, and the Offering
Memorandum, as of its date and as of the
Closing Date, will not, contain any untrue
statement of a material fact or omit
to state a material fact necessary in order
to make the statements therein, in
the light of the circumstances under which
they were made, not misleading;
provided that the Company and the Guarantor
make no representation or warranty
with respect to any statements or omissions
made in reliance upon and in
conformity with information relating to any
Initial Purchaser furnished to the
Company in writing by such Initial
Purchaser through the Representative
expressly for use in the Preliminary
Offering Memorandum and the Offering
Memorandum.
(b)
Incorporated Documents. The documents incorporated by
reference in the Preliminary Offering
Memorandum and the Offering Memorandum,
when filed with the Commission, conformed
or will conform, as the case may be,
in all material respects to the
requirements of the Exchange Act and the rules
and regulations of the Commission
thereunder, and did not and will not contain
any untrue statement of a material fact or
omit to state a material fact
required to be stated therein or necessary
in order to make the statements
therein, in the light of the circumstances
under which they were made, not
misleading.
(c) Financial
Statements. The financial statements and the related
notes thereto included or incorporated by
reference in the Preliminary Offering
Memorandum and the Offering Memorandum
present fairly the financial position of
the Company and its subsidiaries as of the
dates indicated and the results of
their operations and the changes in their
cash flows for the periods specified;
such financial statements have been
prepared in conformity with generally
accepted accounting principles applied on a
consistent basis throughout the
periods covered thereby; and the other
financial information included or
incorporated by reference in the
Preliminary Offering Memorandum and the
Offering Memorandum has been derived from
the accounting records of the Company
and its subsidiaries and presents fairly
the information shown thereby; and the
pro forma financial information and the
related notes thereto included or
incorporated by reference in the
Preliminary Offering Memorandum and the
Offering Memorandum has been prepared in
accordance with the Commission's rules
and guidance with respect to pro forma
financial information, and the
assumptions underlying such pro forma
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financial information are reasonable and
are set forth in the Preliminary
Offering Memorandum and the Offering
Memorandum.
(d) No
Material Adverse Change. Since the date of the most recent
financial statements of the Company
included or incorporated by reference in the
Preliminary Offering Memorandum and the
Offering Memorandum, excluding the
Transactions, (i) there has not been any
change in the capital stock or
long-term debt of the Company or any of its
subsidiaries (other than, in the
case of such long-term debt, the accrual of
interest in accordance with terms
thereof), or any dividend or distribution
of any kind declared, set aside for
payment, paid or made by the Company on any
class of capital stock, or any
material adverse change, or any development
involving a prospective material
adverse change, in or affecting the
business, properties, management, financial
position, results of operations or
prospects 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; and (iii) neither the Company
nor any of its subsidiaries has
sustained any material loss or interference
with its business from fire,
explosion, flood or other calamity, whether
or not covered by insurance, or from
any labor disturbance or dispute or any
action, order or decree of any court or
arbitrator or governmental or regulatory
authority, except in each case as
otherwise disclosed in the Preliminary
Offering Memorandum and the Offering
Memorandum.
(e)
Organization and Good Standing. The Company and each of its
subsidiaries 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 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 or have such power or authority
would not, individually or in the
aggregate, have a material adverse effect
on the business, properties,
management, financial position, results of
operations or prospects of the
Company and its subsidiaries taken as a
whole or on the performance by the
Company and the Guarantor of their
obligations under the Securities and the
Guarantee (a "Material Adverse Effect").
The Guarantor is the only subsidiary of
the Company.
(f)
Capitalization. The Company and Holdings have an authorized
capitalization as set forth in the
Preliminary Offering Memorandum and the
Offering Memorandum under the heading
"Capitalization"; all the outstanding
shares of capital stock or other equity
interests of each subsidiary of the
Company have been duly and validly
authorized and issued, are fully paid and
non-assessable and are owned directly or
indirectly by the Company, free and
clear of any lien, charge, encumbrance,
security interest, restriction on voting
or transfer or any other claim of any third
party; and the capital stock of the
Company and Holdings will conform in all
material respects to the description
thereof set forth in the Offering
Memorandum.
(g) Due
Authorization. The Company and the Guarantor 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 and any
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other agreement or instrument entered into
or to be entered into in connection
with the Transactions, contemplated hereby
or thereby, including, without
limitation, the Agreement and Plan of
Merger, Stock Purchase Agreement and
Credit 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.
(h) The
Indenture. The Indenture has been duly authorized by the
Company and the Guarantor 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 the Guarantor enforceable against
the Company and the Guarantor in accordance
with its terms, except as
enforceability may be limited by applicable
bankruptcy, insolvency or similar
laws affecting the enforcement of
creditors' rights generally or by equitable
principles relating to enforceability
(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.
(i) The
Securities and the Guarantee. 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
Guarantee has been duly authorized by
the Guarantor 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 the Guarantor,
enforceable against the Guarantor in
accordance with their terms, subject to the
Enforceability Exceptions, and will be
entitled to the benefits of the
Indenture.
(j) The
Exchange Securities. On the Closing Date, the Exchange
Securities (including the related
guarantee) will have been duly authorized by
the Company and the Guarantor 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
the Guarantor, as guarantor,
enforceable against the Company and the
Guarantor in accordance with their
terms, subject to the Enforceability
Exceptions, and will be entitled to the
benefits of the Indenture.
(k) Purchase
and Registration Rights Agreements. This Agreement
has been duly authorized, executed and
delivered by the Company and the
Guarantor; and the Registration Rights
Agreement has been duly authorized by the
Company and the Guarantor 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 the Guarantor enforceable against
the Company and the Guarantor 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.
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(l) Other
Transaction Documents. The Transaction Documents have
been duly authorized by the Company and the
Guarantor party thereto and, when
duly executed and delivered in accordance
with their terms by each of the
parties thereto, assuming that each of the
Transaction Documents is a valid and
legally binding obligation of each of the
parties thereto other than the Company
and the Guarantor, will constitute valid
and legally binding agreements of the
Company and the Guarantor enforceable
against the Company and the Guarantor in
accordance with its terms, subject to the
Enforceability Exceptions.
(m)
Descriptions of the Transaction Documents. Each Transaction
Document conforms in all material respects
to the description thereof contained
in the Preliminary Offering Memorandum and
the Offering Memorandum.
(n) 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 (ii) and
(iii) above, for any such default or
violation that would not, individually or
in the aggregate, have a Material
Adverse Effect.
(o) No
Conflicts. Subject to (A) the execution and delivery of the
supplemental indenture for the Old Notes as
contemplated by the Offer to
Purchase and Consent Solicitation Statement
of the Company dated February 4,
2004 (consents to which have already been
obtained), (B) the execution and
delivery of the supplemental indenture for
the Old Debentures as contemplated by
the Offer to Purchase and Consent
Solicitation Statement of Holdings dated
February 4, 2004 (consents to which have
already been obtained), and (C) the
refinancing of the Existing Credit
Agreement, the execution, delivery and
performance by the Company and the
Guarantor of each of the Transaction
Documents to which each is a party, the
issuance and sale of the Securities
(including the Guarantee) and compliance by
the Company and the Guarantor 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 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, decree,
rule or regulation of any court or
arbitrator or governmental or regulatory
authority, except, in the case of clauses
(i) and (iii) above, for any such
conflict, breach or violation that would
not, individually or in the aggregate,
have a Material Adverse Effect.
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(p) 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 the
Guarantor of each of the Transaction
Documents to which each is a party, the
issuance and sale of the Securities
(including the Guarantee) and compliance by
the Company and the Guarantor 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 Initial Purchasers,
(ii) to release existing liens in
connection with the refinancing of the
Existing Credit Agreement, and (iii) with
respect to the Exchange Securities
(including the related guarantee) under the
Securities Act and applicable state
securities laws as contemplated by the
Registration Rights Agreement.
(q) Legal
Proceedings. Except as described in the Preliminary
Offering Memorandum and 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 or may be a party or to which
any property or assets of the Company or
any of its subsidiaries is or may be
the subject that, individually or in the
aggregate, if determined adversely to
the Company or any of its subsidiaries,
could reasonably be expected to have a
Material Adverse Effect; and no such
investigations, actions, suits or
proceedings are threatened or, to the best
knowledge of the Company and the
Guarantor, contemplated by any governmental
or regulatory authority or
threatened by others.
(r)
Independent Accountants. Deloitte & Touche LLP, who have
certified certain financial statements of
the Company and its subsidiaries are
the 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.
(s) Title to
Real and Personal Property. 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 that
are material to the respective businesses
of the Company and its subsidiaries,
in each case free and clear of all liens,
encumbrances, claims and defects and
imperfections of title except those 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) could not reasonably
be expected, individually or in the
aggregate, to have a Material Adverse
Effect.
(t) Title to
Intellectual Property. The Company and its
subsidiaries own or 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 proprietary or confidential
information, systems or procedures)
necessary for the conduct of their
respective businesses except where the
failure to so own or possess such rights
would not, singularly or in the aggregate,
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 its subsidiaries
have not received any notice of any claim
of infringement of or conflict with
any
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such rights of others which would,
singularly or in the aggregate, have a
Material Adverse Effect.
(u) Investment
Company Act. Neither the Company nor any of its
subsidiaries is, and after giving effect to
the offering and sale of the
Securities and the application of the
proceeds thereof as described in the
Offering Memorandum 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").
(v) Public
Utility Holding Company Act. Neither the Company nor
any of its subsidiaries is a "holding
company" or a "subsidiary company" of a
holding company or an "affiliate" thereof
within the meaning of the Public
Utility Holding Company Act of 1935, as
amended.
(w) Taxes. The
Company and its subsidiaries have paid all federal,
state, local and foreign taxes and filed
all tax returns required to be paid or
filed through the date hereof; and except
as otherwise disclosed in the
Preliminary Offering Memorandum and the
Offering Memorandum, there is no tax
deficiency that has been, or could
reasonably be expected to be, asserted
against the Company or any of its
subsidiaries or any of their respective
properties or assets, except where the
failure to so file or make such payments
would not, singularly or in the aggregate,
have a Material Adverse Effect.
(x) 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 businesses as described in the
Preliminary Offering Memorandum and
the Offering Memorandum, except where the
failure to possess or make the same
would not, individually or in the
aggregate, have a Material Adverse Effect; and
except as described in the Preliminary
Offering Memorandum and the Offering
Memorandum, neither the Company nor any of
its subsidiaries has received notice
of any revocation or modification of any
such license, certificate, permit or
authorization or has any reason to believe
that any such license, certificate,
permit or authorization will not be renewed
in the ordinary course.
(y) No Labor
Disputes. No labor disturbance by or dispute with
employees of the Company or any of its
subsidiaries exists or, to the best
knowledge of the Company and the Guarantor,
is contemplated or threatened which
could, singularly or in the aggregate, have
a Material Adverse Effect.
(z) Compliance
With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any
and all applicable federal, state,
local and foreign laws, rules, regulations,
decisions and orders relating to the
protection of human health and safety, the
environment or hazardous or toxic
substances or wastes, pollutants or
contaminants (collectively, "Environmental
Laws"); (ii) have received and are in
compliance with all permits, licenses or
other approvals required of them under
applicable Environmental Laws to conduct
their respective businesses; and (iii) have
not received notice of any actual or
potential liability for the
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investigation or remediation of any
disposal or release of hazardous or toxic
substances or wastes, pollutants or
contaminants, except in any such case for
any such failure to comply with, or failure
to receive required permits,
licenses or approvals, or liability, as
would not, individually or in the
aggregate, have a Material Adverse
Effect.
(aa)
Compliance With ERISA. Each employee benefit plan, within the
meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained,
administered or contributed to by the
Company or any of its affiliates for
employees or former employees of the
Company and its affiliates has been
maintained in compliance with its terms and
the requirements of any applicable
statutes, orders, rules and regulations,
including but not limited to ERISA and the
Internal Revenue Code of 1986, as
amended (the "Code"); no prohibited
transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code,
has occurred with respect to any such
plan excluding transactions effected
pursuant to a statutory or administrative
exemption which could reasonably be
expected to have a Material Adverse Effect;
and for each such plan that is subject to
the funding rules of Section 412 of
the Code or Section 302 of ERISA, no
"accumulated funding deficiency" as defined
in Section 412 of the Code has been
incurred, whether or not waived, which could
reasonably be expected to have a Material
Adverse Effect and the fair market
value of the assets of each such plan
(excluding for these purposes accrued but
unpaid contributions) exceeds the present
value of all benefits accrued under
such plan determined using reasonable
actuarial assumptions.
(bb)
Accounting Controls. The Company and its subsidiaries maintain
systems 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 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.
(cc)
Insurance. The Company and its subsidiaries have insurance
covering their respective properties,
operations, personnel and businesses,
including business interruption insurance,
which insurance is in amounts and
insures against such losses and risks as
are adequate to protect the Company and
its subsidiaries and their respective
businesses; and neither the Company nor
any of its subsidiaries has (i) received
notice from any insurer or agent of
such insurer that capital improvements or
other expenditures are required or
necessary to be made in order to continue
such insurance or (ii) any reason to
believe that it will not be able to renew
its existing insurance coverage as and
when such coverage expires or to obtain
similar coverage at reasonable cost from
similar insurers as may be necessary to
continue its business.
(dd)
No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of
the Company and the Guarantor, any
director, officer, agent, employee or other
person associated with or acting on
behalf of the Company or any of its
subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift,
entertainment or other unlawful
expense relating to political activity;
(ii) made any direct or indirect
unlawful payment to any foreign or domestic
government official or employee from
corporate funds; (iii) violated or is
in
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violation of any provision of the Foreign
Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence
payment, kickback or other unlawful
payment.
(ee)
Solvency. On and immediately after the Closing Date, the
Company (after giving effect to the
issuance of the Securities and the other
transactions related thereto as described
in the Offering Memorandum) will be
Solvent. As used in this paragraph, the
term "Solvent" means, with respect to a
particular date, that on such date (i) the
present fair market value (or present
fair saleable value) of the assets of the
Company is not less than the total
amount required to pay the liabilities of
the Company on its total existing
debts and liabilities (including contingent
liabilities) as they become absolute
and matured; (ii) the Company is able to
realize upon its assets and pay its
debts and other liabilities, contingent
obligations and commitments as they
mature and become due in the normal course
of business; (iii) assuming
consummation of the issuance of the
Securities as contemplated by this Agreement
and the Offering Memorandum, the Company is
not incurring debts or liabilities
beyond its ability to pay as such debts and
liabilities mature; (iv) the Company
is not engaged in any business or
transaction, and does not propose to engage in
any business or transaction, for which its
property would constitute
unreasonably small capital after giving due
consideration to the prevailing
practice in the industry in which the
Company is engaged; and (v) the Company is
not a defendant in any civil action that
would result in a judgment that the
Company is or would become unable to
satisfy.
(ff)
No Restrictions on Subsidiaries. No subsidiary of the Company
is currently prohibited, directly or
indirectly, under any agreement or other
instrument to which it is a party or is
subject, from paying any dividends to
the Company, from making any other
distribution on such subsidiary's capital
stock, from repaying to the Company any
loans or advances to such subsidiary
from the Company or from transferring any
of such subsidiary's properties or
assets to the Company or any other
subsidiary of the Company.
(gg)
No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract,
agreement or understanding with any
person (other than this Agreement) that
would give rise to a valid claim against
any of them or any Initial Purchaser for a
brokerage commission, finder's fee or
like payment in connection with the
offering and sale of the Securities.
(hh)
Rule 144A Eligibility. On the Closing Date, the Securities
will not be of the same class as securities
listed on a national securities
exchange registered under Section 6 of the
Exchange Act or quoted in an
automated inter-dealer quotation system;
and each of the Preliminary Offering
Memorandum and the Offering Memorandum, as
of its respective date, contains or
will contain all the information that, if
requested by a prospective purchaser
of the Securities, would be required to be
provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under
the Securities Act.
(ii)
No Integration. Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D)
has, directly or through any agent,
sold, offered for sale, solicited offers to
buy or otherwise negot
