<PAGE>
EXHIBIT 4.12
Execution Copy
LAND O'LAKES, INC.
$175,000,000
9% Senior Secured Notes due 2010
Purchase Agreement
December 12, 2003
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Land O'Lakes, Inc., a Minnesota cooperative corporation (the
"Company"), proposes to issue and sell to
J.P. Morgan Securities Inc. (the
"Initial Purchaser") $175,000,000 principal
amount of its 9% Senior Secured
Notes due 2010 (the "Securities"). The
Securities will be issued pursuant to an
Indenture to be dated as of December 23,
2003 (the "Indenture") among the
Company, each entity listed on Schedule 2
hereto (collectively, the "Subsidiary
Guarantors") and U.S. Bank National
Association, as trustee (the "Trustee"), and
will be guaranteed on a senior secured
basis by each of the Subsidiary
Guarantors (the "Subsidiary
Guarantees").
The Securities will be offered and sold to the Initial
Purchaser
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 December 7, 2003 (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 Purchaser
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
Purchaser in accordance with the
terms and conditions of this Agreement.
Capitalized terms used but not defined
herein shall have the meanings given to
such terms in the Offering Memorandum.
Holders of the Securities (including the Initial Purchaser and
its
direct and indirect transferees) will be
entitled to the benefits of a
Registration Rights Agreement,
substantially in the form attached hereto as
Exhibit A (the "Registration Rights
Agreement"), pursuant to which the Company
and the Subsidiary Guarantors 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.
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2
In connection with the issue and sale of the Securities, the
Company
will enter into amendments (the "Credit
Agreement Amendments") with respect to
(i) the Credit Agreement, dated October 11,
2001, among the Company, JPMorgan
Chase Bank (formerly known as The Chase
Manhattan Bank), as administrative agent
and collateral agent, and the lenders party
thereto, and documents related
thereto (collectively, as amended, the
"Term Credit Agreement") and (ii) the
Amended and Restated Five-Year Credit
Agreement dated as of October 11, 2001,
among the Company, JPMorgan Chase Bank
(formerly known as The Chase Manhattan
Bank), as administrative agent, CoBank,
ACB, as co-administrative agent and the
lenders party thereto, and documents
related thereto (collectively, as amended,
the "Revolving Credit Agreement" and
together with the Term Credit Agreement,
the "Credit Agreements"), in each case,
permitting the issuance of the
Securities and the granting of the second
priority liens on the Collateral (as
defined below). The Securities are being
issued to refinance certain
indebtedness outstanding under the Credit
Agreements.
Pursuant to (I) the Lien Subordination and Intercreditor Agreement
to
be dated as of the Closing Date (as defined
below) among the Company, JPMorgan
Chase Bank, as collateral agent (the
"Credit Facilities Collateral Agent"), the
Trustee and the Subsidiary Guarantors (the
"Intercreditor Agreement"), (II) the
Second Priority Collateral Agreement to be
dated as of the Closing Date among
the Company, the Subsidiary Guarantors and
U.S. Bank National Association, as
collateral agent (in such capacity, the
"Collateral Agent") (the "Second
Priority Collateral Agreement"), and (III)
the mortgages or deeds of trust with
respect to each of the following
properties: (i) Route 3, Orland, California;
(ii) 1525 E. Bardsley, Tulare, California;
(iii) 400 S "M" Street, Tulare,
California; (iv) 1125 Paulson Road,
Turlock, California; (v) 890 North Prairie
Industrial Parkway, Mulberry, Florida; (vi)
1711 S. 2300 East, Gooding, Idaho;
(vii) 812 First Street S., Nampa, Idaho;
(viii) 2472 West State Road 28,
Frankfort, Indiana; (ix) 505 North 4th
Street, Richmonds NW Industrial Park,
Richmond, Indiana; (x) 1025 190th Street,
Webster City, Iowa; (xi) 223 West 63rd
Street, Shreveport, Louisiana; (xii) 11671
Hopewell Road, Hagerstown, Maryland;
(xiii) 4001 Lexington Avenue N., Arden
Hills, Minnesota; (xiv) 3901 Hiawatha
Avenue South, Minneapolis, Minnesota; (xv)
206 2nd Street NE, Pine Island,
Minnesota; (xvi) 3562 Highway MM, Gray
Summit, Missouri; (xvii) 173 McNess Road,
Statesville, North Carolina; (xviii) 2001
Mogadore Road, Kent, Ohio; (xix) 1111
N. Cole Street, Lima, Ohio; (xx) 635
Collins Boulevard, Orrville Industrial
Park, Orrville, Ohio; (xxi) 15840 N.
Simmons Road, Portland, Oregon; (xxii) 1609
S. E. 8th Avenue, Portland, Oregon; (xxiii)
405 Park Drive, Carlisle,
Pennsylvania; (xxiv) 475 St. Johns Church
Road, Harrisburg, Pennsylvania; (xxv)
1501 East 4th Street, Fort Worth, Texas;
(xxvi) 1402 East Sarah Dewitt Drive,
Gonzales, Texas; (xxvii) 201 East Municipal
Drive, Lubbock, Texas; (xxiii) 305
Wall Street, Denmark, Wisconsin; (xxix) 423
Main Street, Greenwood, Wisconsin;
(xxx) 927 Eighth, Kiel, Wisconsin; (xxxi)
1002 E. Washington Street, Madison,
Wisconsin; (xxxii) 306 Park Street,
Spencer, Wisconsin (collectively, the
"Mortgages" and together with the
Intercreditor Agreement and the Second
Priority Collateral Agreement, the
"Security Documents"), the Securities and the
Subsidiary Guarantees will be, on the
Closing Date, secured on a second-priority
basis (subject to Permitted Collateral
Liens (as defined in the Offering
Memorandum)) by certain collateral as
described in the Offering Memorandum (the
"Collateral"). The Security Documents will
grant a second-priority security
interest (subject to Permitted Collateral
Liens) in the Collateral for the
benefit of the Trustee, the Collateral
Agent and each holder of the Securities
and the successors and assigns of the
foregoing (collectively, the "Secured
Parties"). Pursuant to the Credit
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3
Agreements and the security documents
relating thereto, the collateral agent for
the lenders under the Credit Agreements
holds first-priority security interests
in the Collateral.
The Company hereby confirms its agreement with the Initial
Purchaser
concerning the purchase and resale of the
Securities, as follows:
1. Purchase and Resale of the Securities. (a) The Company agrees
to
issue and sell the Securities to the
Initial Purchaser as provided in this
Agreement, and the Initial Purchaser, on
the basis of the representations,
warranties and agreements set forth herein
and subject to the conditions set
forth herein, agrees to purchase from the
Company the principal amount of
Securities set forth in Schedule 1 hereto
at a price equal to 100% of the
principal amount thereof plus accrued
interest, if any, from December 23, 2003
to the date of payment and delivery. In
connection with the issuance and sale of
the Securities, the Company agrees to pay
to the Initial Purchaser a commission
equal to 1.575% of the principal amount of
Securities set forth in Schedule 1
hereto, which commission may be offset
against the purchase price set forth in
the immediately preceding sentence. 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 Purchaser intends to
offer
the Securities for resale on the terms and
subject to the conditions set forth
herein and in the Offering Memorandum. The
Initial Purchaser represents,
warrants and agrees that:
(i) it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities by
means
of any form of general solicitation or general advertising within
the
meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering
within
the meaning of Section 4(2) of the Securities Act;
(ii) 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 qualified institutional buyers, as
defined in Rule 144A under the Securities Act ("Rule 144A") (a
"QIB"), in
transactions pursuant to 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;
(iii) it is a QIB; and
(iv) it is purchasing the Securities pursuant to a private
sale exempt from registration under the Securities Act.
(c) The Initial Purchaser acknowledges and agrees that the Company
and,
for purposes of the opinions to be
delivered to the Initial Purchaser pursuant
to Sections 5(f) and 5(g), counsel for the
Company and for the Initial
Purchaser, respectively, may rely upon the
accuracy of the
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4
representations and warranties of the
Initial Purchaser and its compliance with
its agreements contained in paragraph (b)
above (including Annex A hereto), and
the Initial Purchaser hereby consents to
such reliance.
(d) The Company and each of the Subsidiary Guarantors acknowledges
and
agrees that the Initial Purchaser may offer
and sell Securities to or through
any affiliate of the Initial Purchaser and
that any such affiliate may offer and
sell Securities purchased by it to or
through the Initial Purchaser.
(e) The Initial Purchaser agrees that, prior to or essentially
simultaneously with the confirmation of
sale by the Initial Purchaser to any
purchaser of the Securities purchased by
the Initial Purchaser from the Company
pursuant thereto, the Initial Purchaser
shall furnish to that purchaser a copy
of the Offering Memorandum (and any
amendment or supplement thereto that the
Company shall have furnished to the Initial
Purchaser prior to the date of such
confirmation of sale where required by
applicable law).
2. Payment and Delivery, (a) Payment for and delivery of the
Securities
will be made at the offices of Faegre &
Benson LLP, Minneapolis, MN at 9:00
A.M., Minneapolis time, on December 23,
2003, or at such other time on the same
or such other date, not later than the
fifth Business Day thereafter, as the
Initial Purchaser 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". As
used herein, the term "Business Day" means
any day other than a day on which
banks are permitted or required to be
closed in New York City.
(b) Payment for the Securities shall be made by wire transfer
in
immediately available funds to the account
specified by the Company to the
Initial Purchaser against delivery to the
nominee of The Depository Trust
Company, for the account of the Initial
Purchaser, 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 Initial
Purchaser not later than 12:00 P.M.,
Minneapolis time, on the Business Day prior
to the Closing Date.
3. Representations and Warranties of the Company and the
Subsidiary
Guarantors. The Company and the Subsidiary
Guarantors jointly and severally
represent and warrant to the Initial
Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as of
its
date, did not, and the Offering Memorandum,
in the form first used by the
Initial Purchaser to confirm sales of the
Securities and on 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 Subsidiary Guarantors make
no representation or warranty with
respect to any statements or omissions made
in reliance upon and in conformity
with information relating to the Initial
Purchaser furnished to the Company in
writing by the Initial Purchaser expressly
for use in the Preliminary Offering
Memorandum and the Offering Memorandum.
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5
(b) Financial Statements. The financial statements and the
related
notes thereto included in the Preliminary
Offering Memorandum and the Offering
Memorandum present fairly the financial
position of the Company and its
Subsidiaries (as defined below), Land
O'Lakes Farmland Feed LLC and its
subsidiaries, Land O'Lakes Feed Division
and Agriliance, LLC 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, subject to year-end
audit adjustments in the case of interim
unaudited financial statements; and
such financial statements have been
prepared in conformity with generally
accepted accounting principles applied on a
consistent basis. For purposes of
this Agreement, the term "Subsidiary" means
any corporation, association,
partnership or other business entity of
which more than 50% of the total voting
power of capital stock or other such
interests (including partnership interests)
entitled (without regard to the occurrence
of any contingency) to vote in the
election of directors, managers or trustees
thereof is at the time owned or
controlled, directly or indirectly, by the
Company, the Company and its
Subsidiaries or the Company's
Subsidiaries.
(c) No Material Adverse Change. Except as stated in the
Offering
Memorandum, since the date of the most
recent financial statements of the
Company included in the Offering
Memorandum, (i) there has not been any change
in the capital stock or long-term debt of
the Company or its Subsidiaries, or
any dividend or distribution of any kind
declared, paid or made by the Company
or its Subsidiaries on any class of capital
stock, or any material adverse
change, or any development involving a
prospective material adverse change, in
or affecting the general affairs, business,
properties, management, financial
position, stockholders' equity or results
of operations of the Company and its
Subsidiaries taken as a whole; (ii) neither
the Company nor any of its
Subsidiaries has entered into any
transaction or agreement that is material to
the Company and Subsidiaries taken as a
whole (whether or not in the ordinary
course of business) or incurred any
liability or obligation, direct or
contingent, that is material to the Company
and its Subsidiaries taken as a
whole (other than in the ordinary course of
business); and (iii) the Company and
its Subsidiaries taken as a whole have not
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 dispute or any action,
order or decree of any court or arbitrator
or governmental or regulatory
authority.
(d) Incorporation and Good Standing. The Company and each of
the
Subsidiary Guarantors have been duly
incorporated or organized, as the case may
be, and are validly existing as
corporations or other business entities, as the
case may be, in good standing under the
laws of their respective jurisdictions
of incorporation or organization, as the
case may be, are duly qualified to do
business and are in good standing as
foreign entities 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 (corporate and other) 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 does not or would
not, individually or in the aggregate, have
a material adverse effect on the
general affairs, business, properties,
management, financial position,
stockholders' equity or results of
operations of the Company and its Subsidiary
Guarantors taken as a whole or on the
performance by the Company of its
obligations under the Securities (a
"Material Adverse Effect"). The Company does
not own or control, directly or indirectly,
any corporation, association or
other entity other than the subsidiaries
listed in Schedule 3 to this Agreement.
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6
(e) Capitalization. The Company has an authorized capitalization as
set
forth in the Offering Memorandum under the
heading "Capitalization"; and except
as set forth in Schedule 3, all the
outstanding shares of capital stock,
membership interests or other equity
interests of each Subsidiary of the Company
have been duly and validly authorized and
issued, are fully paid and
nonassessable 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, other than liens granted
pursuant to the Credit Agreements, the
Indenture or the Security Documents.
Schedule 3 lists the governance and
economic interests of the Company in each of
its Subsidiaries.
(f) Due Authorization. The Company and each of the Subsidiary
Guarantors had full corporate or other
organizational right, power and authority
to execute and deliver each of the Credit
Agreement Amendments to which they
were a party and to perform their
respective obligations thereunder; the Company
and each of the Subsidiary Guarantors
signatory thereto have full corporate or
other organizational right, power and
authority to execute and deliver this
Agreement, the Securities, the Indenture
(including each Subsidiary Guarantee
set forth therein), the Exchange
Securities, the Security Documents and the
Registration Rights Agreement
(collectively, together with the Credit Agreement
Amendments, the "Transaction Documents")
and to perform their respective
obligations hereunder and thereunder; and
all corporate or other organizational
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 have been
duly and validly taken.
(g) The Indenture. The Indenture has been duly authorized by
the
Company and each of the Subsidiary
Guarantors and, when duly executed and
delivered in accordance with its terms by
each of the parties thereto, will
constitute a valid and legally binding
agreement of the Company and each of the
Subsidiary Guarantors enforceable against
the Company and each of the Subsidiary
Guarantors in accordance with its terms,
except as enforceability may be limited
by applicable bankruptcy, insolvency,
reorganization or similar laws now or
hereafter in effect relating to or
affecting the enforcement of creditors'
rights generally or by equitable principles
relating to enforceability (whether
considered a proceeding in equity or at
law) (collectively, the "Enforceability
Exceptions"); and on the Closing Date, the
Indenture will conform in all
material respects to the requirements of
the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and
the rules and regulations of the
Commission applicable to an indenture that
is qualified thereunder.
(h) The Securities and the Guarantees. The Securities have been
duly
authorized by the Company and, when duly
executed, authenticated, issued and
delivered as provided in the Indenture
(assuming the Indenture is a valid and
legally binding obligation of the Trustee)
and paid for as provided herein, will
be duly and validly issued and outstanding
and will constitute valid and legally
binding obligations of the Company
enforceable against the Company in accordance
with their terms, subject to the
Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the
Guarantees have been duly authorized
by each of the Subsidiary Guarantors and,
when the Securities have been duly
executed, authenticated, issued and
delivered as provided in the Indenture
(assuming the Indenture is a valid and
legally binding obligation of the
Trustee) and paid for as provided herein,
will be valid and legally binding
obligations of each of the Subsidiary
Guarantors, enforceable against each of
the Subsidiary
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7
Guarantors in accordance with their terms,
subject to the Enforceability
Exceptions, and will be entitled to the
benefits of the Indenture.
(i) The Exchange Securities. On the Closing Date, the Exchange
Securities (including the related
Subsidiary Guarantees) will have been duly
authorized by the Company, or by each of
the Subsidiary Guarantors in the case
of the related Subsidiary Guarantees, 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 of the Exchange Securities, and
each of the Subsidiary Guarantors, as
guarantor, enforceable against the Company
and each of the Subsidiary Guarantors, as
the case may be, in accordance with
their terms, subject to the Enforceability
Exceptions, and will be entitled to
the benefits of the Indenture.
(j) Purchase and Registration Rights Agreements. This Agreement
has
been duly authorized, executed and
delivered by the Company and each of the
Subsidiary Guarantors; and the Registration
Rights Agreement has been duly
authorized by the Company and each of the
Subsidiary Guarantors and, when duly
executed and delivered in accordance with
its terms by each of the parties
thereto, will constitute a valid and
legally binding agreement of the Company
and each of the Subsidiary Guarantors
enforceable against the Company and each
of the Subsidiary Guarantors in accordance
with its terms, subject to the
Enforceability Exceptions, and except that
rights to indemnity and contribution
may be limited by applicable law and public
policy.
(k) Other Transaction Documents. Each of the Security Documents and
the
Credit Agreement Amendments has been, or as
of the Closing Date will be, duly
authorized, executed and delivered by the
Company and each of the Subsidiary
Guarantors (to the extent party thereto)
and constitutes, or as of the Closing
Date will constitute, a valid and legally
binding agreement of the Company and
such Subsidiary Guarantors enforceable
against the Company and such Subsidiary
Guarantors in accordance with its terms,
subject to the Enforceability
Exceptions.
(1) Descriptions of Transaction Documents. On the Closing Date,
each
Transaction Document will conform in all
material respects to the description
thereof contained in the Preliminary
Offering Memorandum and the Offering
Memorandum.
(m) No Violation or Default. Neither the Company nor any of its
Subsidiaries is (i) in violation of its
charter or by-laws (or other comparable
organizational documents); (ii) in default
in any material respect, 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 in any
material respect of any law or statute or
any judgment, order or regulation of any
court or arbitrator or governmental or
regulatory authority to which it or its
property or assets may be subject,
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.
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8
(n) No Conflicts With Existing Instruments; No Consents Required.
The
execution, delivery and performance by the
Company and each of the Subsidiary
Guarantors of each of the Transaction
Documents to which each is a party, the
issuance and sale of the Securities and
compliance by the Company and each of
the Subsidiary Guarantors with the terms
thereof and the consummation of the
transactions contemplated by the
Transaction Documents will not conflict with or
result in a breach or violation of any of
the terms or provisions of, or
constitute a default under, or result in
the creation or imposition of any lien,
charge or encumbrance (except liens,
charges or encumbrances created or imposed
under the Transaction Documents) upon any
property or assets of the Company or
any of its Subsidiaries pursuant to, any
material indenture, mortgage, deed of
trust, loan agreement or other material
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, nor will any such action result
in any violation of the provisions of the
charter or by-laws of the Company or
any of its Subsidiaries or any law or
statute or any judgment, order or
regulation of any court or arbitrator or
governmental or regulatory authority
having jurisdiction over the Company or any
of its Subsidiaries or any of their
respective properties or assets; and,
assuming the accuracy of the
representations, warranties and agreements
of the Initial Purchaser herein, no
consent, approval, authorization, order,
registration or qualification of or
with any such court or arbitrator or
governmental or regulatory authority is
required for the execution, delivery and
performance by the Company and each of
the Subsidiary Guarantors of each of the
Transaction Documents to which each is
a party, the issuance and sale of the
Securities and compliance by the Company
and each of the Subsidiary Guarantors with
the terms thereof and the
consummation of the transactions
contemplated by the Transaction Documents,
except for such consents, approvals,
authorizations, orders and registrations or
qualifications as may be required (i) under
applicable state securities laws in
connection with the purchase and resale of
the Securities by the Initial
Purchaser and (ii) with respect to the
Exchange Securities under the Securities
Act and applicable state securities laws as
contemplated by the Registration
Rights Agreement.
(o) Legal Proceedings. Except as specifically described in
Offering
Memorandum (or, if the Offering Memorandum
is not in existence, the most recent
Preliminary Offering Memorandum), there are
no legal, governmental or regulatory
investigations, actions, suits or
proceedings pending or threatened to which the
Company or any of its Subsidiaries is or
would be a party or to which any
property of the Company or any of its
Subsidiaries is or would 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 to the knowledge of the
Company and each of the Subsidiary
Guarantors, no such investigations,
actions, suits or proceedings are threatened
or contemplated by any governmental or
regulatory authority or threatened by
others.
(p) Independent Accountants. KPMG LLP, who have certified
certain
financial statements of the Company and its
Subsidiaries, Land O'Lakes Farmland
Feed LLC and its subsidiaries, Land O'Lakes
Feed Division and Agriliance, LLC
and its subsidiaries, are independent
public accountants with respect to each of
the foregoing 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.
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9
(q) 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 for those
incurred to secure amounts outstanding
under the Credit Agreements, other than
Permitted Liens (as defined in the
Offering Memorandum), and 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.
(r) 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;
and the conduct of their respective
businesses will not conflict in any material
respect with, and the Company and its
Subsidiaries have not received any notice
of any claim of conflict with, any such
rights of others, except as could not
reasonably be expected to have Material
Adverse Effect.
(s) 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
Preliminary Offering Memorandum and 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").
(t) 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.
(u) 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 except for
taxes being contested in good faith for
which adequate reserves have been provided;
and except as otherwise specifically
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, which had, or could
reasonably be expected to have, a Material
Adverse Effect.
(v) 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, reasonably be expected to have a
Material Adverse Effect; and except as
<PAGE>
10
specifically 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, except where
the revocation or modification of any such
license, certificate, authorization
or permit or the failure to renew any such
license, certificate, authorization
or permit could not, individually or in the
aggregate, reasonably be expected to
have a Material Adverse Effect.
(w) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its
subsidiaries exists or, to the knowledge
of the Company and each of the Subsidiary
Guarantors, is threatened that, in the
aggregate, could reasonably be expected to
result in a Material Adverse Effect.
(x) Compliance With Environmental Laws. Except as described in
the
Offering Memorandum, the Company and its
Subsidiaries (i) are in compliance with
any and all applicable federal, state,
local and foreign laws and regulations
relating to the protection of human health
and safety, the environment or
hazardous or toxic substances or wastes,
pollutants or contaminants
(collectively, "Environmental Laws"), and
none of them has received notice of
any outstanding violations of any
Environmental Laws; (ii) have received all
permits, licenses or other approvals
required of them under applicable
Environmental Laws to conduct their
respective businesses; and (iii) are in
compliance with all terms and conditions of
any such permit, license or
approval, except for any such failure to
comply, or to receive required permits,
licenses or approvals, as would not,
individually or in the aggregate, have a
Material Adverse Effect.
(y) 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 Subsidiaries for
employees or former employees of the
Company and its Subsidiaries 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. 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, 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, except where such deficiency
or failure to exceed could not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect.
(z) 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
<PAGE>
11
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.
(aa) Insurance. The Company and its Subsidiaries have insurance
covering their respective properties,
operations, personnel and businesses,
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, except, in either
case, as would not be expected to have
a Material Adverse Effect.
(bb) No Unlawful Payments. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the
Company and each of the Subsidiary
Guarantors, 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 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.
(cc) Margin Rules. Neither the issuance, sale and delivery of
the
Securities nor the application of the
proceeds thereof by the Company as
described in the Preliminary Offering
Memorandum and the Offering Memorandum
will violate Regulation T, U or X of the
Board of Governors of the Federal
Reserve System or any other regulation of
such Board of Governors.
(dd) Solvency. On and immediately after the Closing Date, the
Company
and each of the Subsidiary Guarantors
(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
fair value of the assets of each of the
Company and the Subsidiary Guarantors,
at a fair valuation, will exceed its debts
and liabilities, subordinated,
contingent or otherwise; (ii) the present
fair saleable value of the property of
each of the Company and the Subsidiary
Guarantors will be greater than the
amount that will be required to pay the
probable liability of its debts and
other liabilities, subordinated, contingent
or otherwise, as such debts and
other liabilities become absolute and
matured; (iii) each of the Company and the
Subsidiary Guarantors will be able to pay
its debts and liabilities,
subordinated, contingent or otherwise, as
such debts and liabilities become
absolute and matured; and (iv) each of the
Company and the Subsidiary Guarantors
will not have unreasonably small capital
with which to conduct the business in
which it is engaged as such business is now
conducted and is proposed to be
conducted following the Closing Date.
(ee) Patronage Payments. All claims by members for cash payments
of
patronage dividends, revolvements and
redemptions under applicable laws,
including bankruptcy, insolvency,
receivership or similar laws now or hereafter
in effect, are claims in respect of
equity
<PAGE>
12
interests and will rank junior in right of
payment to all obligations under this
Agreement, the Indenture, the Securities
and the Exchange Securities.
(ff) 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 the Company
or any of its Subsidiaries or the Initial
Purchaser for a brokerage commission,
finder's fee or like payment in connection
with the offering and sale of the
Securities.
(gg) Rule 144A Eligibility. The Securities satisfy the
eligibility
requirements of Rule 144A(d)(3) under the
Securities Act, and each of 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.
(hh) 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 negotiated in
respect of, any security (as defined in the
Securities Act), that is or will be
integrated with the sale of the Securities
in a manner that would require
registration of the Securities under the
Securities Act.
(ii) No General Solicitation or Directed Selling Efforts. Assuming
the
accuracy of the representations and
warranties of the Initial Purchaser
contained in Section l(b) (including Annex
A hereto) and its compliance with its
agreements set forth therein, none of the
Company or any of its affiliates or
any other person acting on its or their
behalf has (i) solicited offers for, or
offered or sold, the Securities by means of
any form of general solicitation or
general advertising within the meaning of
Rule 502(c) of Regulation D or in any
manner involving a public offering within
the meaning of Section 4(2) of the
Securities Act or (ii) engaged in any
directed selling efforts within the
meaning of Regulation S under the
Securities Act ("Regulation S"), and all such
persons have complied with the offering
restrictions requirement of Regulation
S.
(jj) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the
Initial Purchaser contained in Section
l(b) (including Annex A hereto) and its
compliance with its agreements set forth
therein, it is not necessary, in connection
with the issuance and sale of the
Securities to the Initial Purchaser and the
offer, resale and delivery of the
Securities by the Initial Purchaser in the
manner contemplated by this Agreement
and the Offering Memorandum, to register
the Securities under the Securities Act
or to qualify the Indenture under the Trust
Indenture Act.
(kk) No Stabilization. Neither the Company nor any of the
Subsidiary
Guarantors has taken, d
