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EXHIBIT 10.1
EXECUTION COPY
THE GREENBRIER COMPANIES, INC.,
AUTOSTACK COMPANY
LLC,
GREENBRIER-CONCARRIL, LLC,
GREENBRIER LEASING COMPANY LLC,
GREENBRIER LEASING LIMITED PARTNER, LLC,
GREENBRIER MANAGEMENT SERVICES, LLC,
GREENBRIER LEASING, L.P.,
GREENBRIER RAILCAR LLC,
GUNDERSON LLC,
GUNDERSON MARINE LLC,
GUNDERSON RAIL SERVICES LLC AND
GUNDERSON SPECIALTY PRODUCTS, LLC.
$60,000,000
8-3/8% Senior Notes due 2015
PURCHASE AGREEMENT
dated November 16, 2005
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
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PURCHASE AGREEMENT
November 16, 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 Schedule A
of a $60,000,000 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
Initial Purchasers in connection with the
offering and sale of the Notes (the
"Offering").
The Notes will
be issued pursuant to an indenture, 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
November 21, 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 Company LLC, an Oregon
limited liability company,
Greenbrier-Concarril, LLC, a Delaware limited
liability company, Greenbrier Leasing
Company LLC, an Oregon limited liability
company, 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 LLC, an Oregon limited liability
company, Gunderson LLC, an Oregon
limited liability company, Gunderson Marine
LLC, an Oregon limited liability
company, Gunderson Rail Services, LLC, a
Oregon limited liability company 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 will deliver to the Initial Purchasers, a copy
of the Offering Memorandum, dated, November
16, 2005 describing the terms of the
Notes, for use by such Initial Purchasers
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 November 16,
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 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.
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
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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
the Initial Purchasers as follows:
(a) 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 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. 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 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 the Offering Memorandum, except as
disclosed in the Offering Memorandum
and for a dividend declared by the Company
on November 2, 2005, the Company has
not declared, paid or made any dividends 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 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,
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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" within 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 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
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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 and the Guarantors have the corporate, limited
liability company or limited partnership
(as applicable) 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 Notes, 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
the
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 (except for any consent
previously obtained) 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.
(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
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execution, delivery and performance of this
Agreement or the 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 Purchasers
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 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.
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(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 B
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.
(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
current 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.
(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.
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(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 Purchasers
for a brokerage commission, finder's 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
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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 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 the insurer has issued a
reservation of rights letter in the
litigation pending in Tarrant County, Texas
that is described in the Offering
Memorandum
9
<PAGE>
through Item 3, Legal Proceedings, in the
Company's Annual Report on Form 10-K
for the year ended August 31, 2005, which
is incorporated by reference therein.
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,
2005, 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 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 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
10
<PAGE>
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
the 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 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
11
<PAGE>
governmental agency or body, foreign or
domestic, except (in the case of 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 and
have disclosed to the Initial
Purchasers (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, 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 (as incorporated by
reference therein from the Company's
Annual Report on Form 10-K for the fiscal
year ended August 31, 2005) 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
accounting policies"), (ii) judgments
and uncertainties affecting the application
of critical accounting policies and
(iii) 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
12
<PAGE>
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 (as incorporated
by reference therein from the
Company's Annual Report on Form 10-K for
the fiscal year ended August 31, 2005)
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 Indenture is 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
Pricing Date, the Indenture complies,
and on the Closing Date, the Indenture will
comply, in each case, in all
material respects, with the requirements of
the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act, " which
term as used herein includes the
rules and regulations of the Commission
promulgated thereunder), 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.
(ss) 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
13
<PAGE>
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
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.
(tt) 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). The Offering
Memorandum contains a summary of the terms
of the Notes, which is accurate in
all material respects.
(uu) The Guarantees of the Notes have been duly authorized by each
of
the Guarantors and, when issued 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). The Offering
Memorandum contains a summary of the terms
of the Guarantees, which is accurate
in all material respects.
(vv) 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).
(xx) 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 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
14
<PAGE>
principles of equity (regardless of whether
such enforceability is considered in
a proceeding in equity or at law).
(yy) 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 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. The Indenture has been qualified
under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"),
and the rules and regulations of the
Commission thereunder.
(zz) 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.
(aaa) 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.
(bbb) 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.
(ccc) The Company and the Guarantors acknowledge and agree that
(A)
the terms of this Agreement and the
Offering (including the price of the Notes)
were negotiated at arm's length between
sophisticated parties represented by
counsel; (B) no fiduciary, advisory or
agency relationship between the Company
and the Guarantors, on one hand, and the
Initial Purchasers, on the other, has
been created as a result of any of the
transactions contemplated by this
Agreement or the process leading to such
transactions, irrespective of whether
any Initial Purchaser has advised or is
advising any such party on other
matters, (C) the Initial Purchasers'
obligations to the Company and the
Guarantors in respect of the Offering are
set forth in this
15
<PAGE>
Agreement in their entirety; and (D) they
have obtained such legal, tax,
accounting and other advice as it deems
appropriate with respect to this
Agreement and the transactions contemplated
hereby and any other activities
undertaken in connection therewith, and
they are not relying on the Initial
Purchasers with re
