Exhibit 10.2
$325,000,000
CHAPARRAL ENERGY, INC.
8 7 / 8
% Senior Notes due
2017
Purchase Agreement
January 10, 2007
J.P. Morgan Securities
Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
Chaparral Energy, Inc., a Delaware
corporation (the “ Company ”), proposes to issue
and sell to the several Initial Purchasers listed in Schedule 1
hereto (the “ Initial Purchasers ”), for whom
you are acting as representative (the “ Representative
”), $325,000,000 principal amount of its 8
7
/ 8 % Senior Notes due 2017 (the “
Securities ”). The Securities will be issued pursuant
to an Indenture to be dated as of January 18, 2007 (the
“ Indenture ”) among the Company, the guarantors
listed in Schedule 2 hereto (the “ Guarantors
”) and Wells Fargo Bank, National Association, as trustee
(the “ Trustee ”) and will be guaranteed on an
unsecured senior basis by each of the Guarantors (the “
Guarantees ”).
The Securities will be sold to the
Initial Purchasers in a transaction not 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
January 9, 2007 (the “ Preliminary Offering
Memorandum ”) and will prepare an offering memorandum
dated the date hereof (the “ Offering Memorandum
”) setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by
the Company to the Initial Purchasers pursuant to the terms of this
Agreement. The Company hereby confirms that it has authorized the
use of the Preliminary Offering Memorandum, the other Time of Sale
Information (as defined below) and the Offering Memorandum in
connection with the
offering and resale of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement.
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Preliminary Offering
Memorandum.
At or prior to the time when sales
of the Securities were first made (the “Time of Sale”),
the following information shall have been prepared (collectively,
the “Time of Sale Information”): the Preliminary
Offering Memorandum, as supplemented and amended by the written
communications listed on Annex A hereto.
Holders of the Securities (including
the Initial Purchasers and their direct and indirect transferees)
will be entitled to the benefits of a Registration Rights
Agreement, to be dated the Closing Date (as defined below) and
substantially in the form attached hereto as Exhibit A (the “
Registration Rights Agreement ”), pursuant to which
the Company and the 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.
The Company hereby confirms its
agreement with the several Initial Purchasers concerning the
purchase and resale of the Securities, as follows:
1. Purchase and Resale of the
Securities . (a) The Company agrees to issue and sell the
Securities to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, agrees, severally and not
jointly, to purchase from the Company, in each case, on the basis
of the representations, warranties and agreements set forth herein
and subject to the conditions set forth herein, the respective
principal amount of Securities set forth opposite such Initial
Purchaser’s name in Schedule 1 hereto at a price equal to
97.178% of the principal amount thereof plus accrued interest, if
any, from January 10, 2007 to the Closing Date. The Company
will not be obligated to deliver any of the Securities except upon
payment for all the Securities to be purchased as provided
herein.
(b) The Company understands that the
Initial Purchasers intend to offer the Securities for resale on the
terms set forth in the Time of Sale Information and the Offering
Memorandum. Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) it is a qualified institutional
buyer within the meaning of Rule 144A under the Securities Act (a
“ QIB ”) and an accredited investor within the
meaning of Rule 501(a) under the Securities Act;
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(ii) neither it nor any Person
acting on its behalf has solicited offers for, or offered or sold,
or will solicit offers for, or offer or sell, the Securities by
means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the
Securities Act (“ Regulation D ”) or in any
manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and
(iii) it has not solicited offers
for, or offered or sold, and will not solicit offers for, or offer
or sell, the Securities as part of their initial offering
except:
(A) within the United States to
persons whom it reasonably believes to be QIBs in transactions
pursuant to Rule 144A under the Securities Act (“ Rule
144A ”) and in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
the Securities is aware that such sale is being made in reliance on
Rule 144A; or
(B) in accordance with the
restrictions set forth in Annex C hereto.
(c) Each Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the
“no registration” opinions to be delivered to the
Initial Purchasers pursuant to Sections 6(g) and 6(h), Andrews
Kurth LLP as counsel for the Company, and Cahill Gordon &
Reindel LLP
as counsel for the Initial
Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers, and
compliance by the Initial Purchasers with their agreements,
contained in paragraph (b) above (including Annex C
hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The Company acknowledges and
agrees that the Initial Purchasers may offer and sell Securities to
or through any affiliate of an Initial Purchaser and that any such
affiliate may offer and sell Securities purchased by it to or
through any Initial Purchaser.
(e) The Company acknowledges and
agrees that the Initial Purchasers are acting solely in the
capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of Securities contemplated
hereby (including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company or any other person. Additionally, no Initial
Purchaser is advising the Company or any other person as to any
legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making their
own independent investigation and appraisal of the transactions
contemplated hereby, and the Initial Purchasers shall have no
responsibility or liability to the Company with respect thereto.
Any review by the Initial Purchasers of the Company, the
transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the
Initial Purchasers and shall not be on behalf of the
Company.
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2. Payment and Delivery
.
(a) Payment for and delivery of the
Securities will be made at the offices of Cahill Gordon &
Reindel LLP
at 10:00 A.M., New York City time,
on January 18, 2007, or at such other time or place on the
same or such other date, not later than the fourth business day
thereafter, as the Representative and the Company may agree upon in
writing. The time and date of such payment and delivery is referred
to herein as the “ Closing Date .”
(b) Payment for the Securities shall
be made by wire transfer in immediately available funds to the
account(s) specified by the Company to the Representative against
delivery to the nominee of The Depository Trust Company (“
DTC ”), for the account of the Initial Purchasers, of
one or more global notes representing the Securities (collectively,
the “ Global Note ”), with any transfer taxes
payable in connection with the sale of the Securities duly paid by
the Company. The Global Note will be made available for inspection
by the Representative not later than 1:00 P.M., New York City time,
on the business day prior to the Closing Date.
3. Representations and Warranties
of the Company and the Guarantors . The Company and the
Guarantors jointly and severally represent and warrant to each
Initial Purchaser that:
(a) Preliminary Offering
Memorandum, Time of Sale Information and Offering Memorandum.
The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the
Closing Date, will not, and, the Offering Memorandum, in the form
first used by the Initial Purchasers to confirm sales of the
Securities does not and as of the Closing Date, will not, contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the Company and the Guarantors
make no representation or warranty with respect to any statements
or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through the
Representative expressly for use in the Time of Sale Information or
the Offering Memorandum.
(b) Additional Written
Communications . The Company (including its agents and
representatives, other than the Initial Purchasers in their
capacity as such) has not prepared, made, used, authorized,
approved or referred to and will not prepare, make, use, authorize,
approve or refer to any written communication that constitutes an
offer to sell or solicitation
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of an offer to buy the Securities (each such
communication by the Company or its agents and representatives
(other than a communication referred to in clauses (i),
(ii) and (iii) below) an “Issuer Written
Communication”) other than (i) the Preliminary Offering
Memorandum, (ii) the Offering Memorandum, (iii) the
document listed on Annex A hereto, including a term sheet
substantially in the form of Annex B hereto, which constitutes part
of the Time of Sale Information, and (iv) any electronic road
show or other written communications, in each case used in
accordance with Section 4(c). Each such Issuer Written
Communication, when taken together with the Time of Sale
Information, did not, and at 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 makes no
representation and warranty with respect to any statements or
omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any
Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through the Representative expressly for use in
any Issuer Written Communication. Each Issuer Written Communication
does not conflict with the Time of Sale Information or the Offering
Memorandum.
(c) Financial Statements. The
historical financial statements and the related notes thereto of
the Company and its consolidated subsidiaries included in each of
the Time of Sale Information and the Offering Memorandum present
fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in
conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods
covered thereby; the assumptions used in preparing the pro
forma financial information (including the related notes
thereto) included in each of the Time of Sale Information and the
Offering Memorandum provide a reasonable basis for presenting the
significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give
appropriate effect to those assumptions and the pro forma data
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts; the other
financial information included in each of the Time of Sale
Information and the Offering Memorandum has been derived from the
accounting records of the Company and its subsidiaries and presents
fairly the information shown thereby; and the “Summary
selected consolidated financial data” and “Selected
consolidated financial data” set forth in each of the Time of
Sale Information and the Offering Memorandum is accurately
presented in all material respects and prepared on a basis
consistent with the audited and unaudited historical consolidated
financial statements from which it has been derived.
(d) No Material Adverse
Change. Except as disclosed in the Time of Sale Information and
the Offering Memorandum, since the date of the most recent
financial statements
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of the Company included in each of the Time of
Sale Information and the Offering Memorandum, (i) there has
not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries (other than borrowings under the
Senior Credit Agreement (as defined below)), or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties,
consolidated 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 other than in the
ordinary course of business; and (iii) neither the Company nor
any of its subsidiaries has sustained any loss or interference
(including any liability or obligation) with its business,
including from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor disturbance or dispute
or any action, order or decree of any court or arbitrator or
governmental or regulatory authority that is material to the
Company and its subsidiaries, taken as a whole.
(e) Organization and Good
Standing. The Company and each of its subsidiaries have been
duly organized and are validly existing and in good standing under
the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each
other jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to
own or lease their respective properties and to conduct the
businesses in which they are engaged, except where the failure to
be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, properties, consolidated financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole or on the performance by the
Company and the Guarantors of their obligations under the
Securities and the Guarantees (a “ Material Adverse
Effect ”). The subsidiaries listed in Schedule 2 to this
Agreement are the only direct or indirect subsidiaries of the
Company other than Oklahoma Ethanol L.L.C. and Pointe Vista
Development, LLC, which will not be Guarantors. The Company does
not own, directly or indirectly, equity securities of any entity
other than its interests in such subsidiaries.
(f) Capitalization. The
Company has an authorized capitalization as set forth in each of
the Time of Sale Information and the Offering Memorandum under the
heading “Capitalization.” The limited partnership
agreements or limited liability company agreements governing all
outstanding limited partnership interests or limited liability
company interests of each Guarantor have been validly executed and
delivered, and all capital contributions required under such
limited partnership agreements or limited liability company
agreements have been paid in full; and, except as otherwise
described in each of the Time of Sale Information and the Offering
Memorandum, the limited partnership interests or limited
liability
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company interests of each Guarantor are owned
directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance or security interest, except as otherwise
described in the Time of Sale Information and the Offering
Memorandum, including without limitation for liens under or
permitted by the Company’s Seventh Restated Credit Agreement,
dated October 31, 2006, as amended (the “ Senior
Credit Agreement ”).
(g) Due Authorization. The
Company and each of the Guarantors have full right, power and
authority to execute and deliver this Agreement, the Securities,
the Indenture (including each Guarantee set forth therein), the
Exchange Securities and the Registration Rights Agreement
(collectively, the “ Transaction Documents ”)
and to perform their respective obligations hereunder and
thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery of each of the
Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.
(h) The Indenture . The
Indenture has been duly authorized by the Company and each of the
Guarantors and, when duly executed and delivered in accordance with
its terms by each of the parties thereto, will constitute a valid
and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the
Guarantors in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors’
rights generally or by general equitable principles regardless of
whether enforcement is sought in law or equity (collectively, the
“ Enforceability Exceptions ”); and on the
Closing Date, the Indenture will conform in all material respects
to the requirements of the Trust Indenture Act of 1939, as amended
(the “ Trust Indenture Act ”), and the rules and
regulations of the Commission applicable to an indenture that is
qualified thereunder.
(i) The Securities and the
Guarantees . The Securities have been duly authorized by the
Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided
herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Securities have
been duly executed, authenticated, issued and delivered as provided
in the Indenture and paid for as provided herein, will be valid and
legally binding obligations of each of the Guarantors, enforceable
against each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(j) The Exchange Securities .
On the Closing Date, the Exchange Securities (including the related
guarantees) will have been duly authorized by the Company and each
of the
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Guarantors and, when duly executed,
authenticated, issued and delivered in accordance with the
Indenture and as contemplated by the Registration Rights Agreement,
will constitute valid and legally binding obligations of the
Company, as issuer, and each of the Guarantors, as guarantor,
enforceable against the Company and each of the Guarantors in
accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the
Indenture.
(k) Purchase and Registration
Rights Agreements. This Agreement has been duly authorized,
executed and delivered by the Company and each of the Guarantors;
and the Registration Rights Agreement has been duly authorized by
the Company and each of the Guarantors and, when duly executed and
delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of
the Company and each of the Guarantors enforceable against the
Company and each of the Guarantors in accordance with its terms,
subject to the Enforceability Exceptions, and except that rights to
indemnity and contribution thereunder may be limited by applicable
law and public policy.
(l) Descriptions of Certain
Documents . Each of the Securities, the Indenture, the
Guarantees and the Registration Rights Agreement conforms in all
material respects to the descriptions thereof contained in each of
the Time of Sale Information 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 similar organizational
documents; (ii) in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant
or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority having jurisdiction over it or
its properties, 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.
(n) No Conflicts. The
execution, delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents to which each is a
party, the issuance and sale of the Securities (and the Guarantees)
and the consummation of the transactions contemplated by the
Transaction Documents will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust,
8
loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational
documents of the Company or any of its subsidiaries or
(iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict,
breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(o) No Consents Required . No
consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or
regulatory authority is required for the execution, delivery and
performance by the Company and each of the Guarantors of each of
the Transaction Documents to which each is a party, the issuance
and sale of the Securities (and the Guarantees) and the
consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations,
orders and registrations or qualifications (i) as may be
required under applicable state securities laws in connection with
the purchase and resale of the Securities by the Initial
Purchasers, (ii) with respect to the Exchange Securities (and
the related guarantees) as may be required under the Securities Act
and applicable state securities laws as contemplated by the
Registration Rights Agreement, (iii) which have been, or prior
to the Closing Date will be, obtained and (iv) which, if not
obtained, would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) Legal Proceedings. Except
as described in each of the Time of Sale Information and the
Offering Memorandum, there are no legal, governmental or
regulatory, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be
the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect; to the
Company’s and each of the Guarantors’ knowledge, no
such actions, suits or proceedings are threatened or contemplated
by any governmental or regulatory authority or threatened by
others.
(q) Independent Accountants.
Grant Thornton LLP, who have certified certain financial statements
of the Company and its subsidiaries in each of the Time of Sale
Information and the Offering Memorandum, are independent public
accountants with respect to the Company and its subsidiaries and
are independent public accountants 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.
(r) Title to Real and Personal
Property. The Company and its subsidiaries have (1) good
and defensible title to oil and gas properties owned by the Company
and its subsidiaries,
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(2) good and indefeasable title in fee
simple to all other real property owned by the Company and its
subsidiaries and (3) good title to all items of personal
property owned by the Company and its subsidiaries , in each case
that are material to the respective businesses of the Company and
its subsidiaries, free and clear of all liens, encumbrances, claims
and defects and imperfections of title, except (i) those that
are described in the each of the Time of Sale Information and the
Offering Memorandum, (ii) those under the Senior Credit
Agreement, (iii) those under oil and gas leases, options to
lease, operating agreements, utilization and pooling agreements,
participation and drilling concessions agreements and gas sales
contracts, securing payment of amounts not yet due and payable and
of a scope and nature customary in the oil and gas industry,
(iv) those that do not materially interfere with the use made
and proposed to be made of such property by the Company and its
subsidiaries or (v) those that could not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made or proposed
to be made of such real property and buildings by the Company or
its subsidiaries.
(s) Title to Intellectual
Property. The Company and its subsidiaries own or possess or
are licensed to use adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their
respective businesses, except where the failure to own, possess or
license such rights would not, individually or in the aggregate,
have a Material Adverse Effect; the Company and its subsidiaries
have not received any notice of any claim of infringement of or
conflict with any such rights of others.
(t) 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 each of the
Time of Sale Information and the Offering Memorandum none of them
will be, 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 ”).
(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 to the extent that such taxes have become
due and are not being contested in good faith with such exceptions
as would not, individually or in the aggregate, result in a
Material Adverse Effect; and except as otherwise disclosed in each
of the Time of Sale Information and the Offering Memorandum, there
is no tax deficiency that has been asserted against the Company or
any of its subsidiaries or any of their respective properties or
assets, which has had, nor does the
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Company have any knowledge of any tax
deficiency, which if determined adversely to the Company or its
subsidiaries might, individually or in the aggregate, 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, the conduct of their respective businesses as described
in each of the Time of Sale Information and the Offering
Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in each of the Time of Sale
Information 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 for notices, modifications or non-renewals
as would not, individually or in the aggregate, 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 the Guarantors, is contemplated or threatened, which
disturbance or dispute would have a Material Adverse
Effect.
(x) Compliance With Environmental
Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to
the protection of human health and safety and the environment
including without limitation those imposing liability or standards
of conduct concerning any hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “ Environmental
Laws ”); (ii) have received and are in compliance
with all permits, licenses or other approvals currently required of
them under applicable Environmental Laws to conduct their
respective businesses; (iii) have not received notice of any
actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except in any such case as
described in each of the Time of Sale Information and the Offering
Memorandum or for any such failure to comply with, or failure to
receive required permits, licenses or approvals, or liability as
would not, individually or in the aggregate, have a Material
Adverse Effect. None of the Company or any of its subsidiaries has
received notice that it has been identified as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“
CERCLA ”), or any comparable state law; and
(v) no property or facility of the Company or any of its
subsidiaries is (x) listed or, to the Company’s or any
subsidiary’s knowledge, proposed for listing on the National
Priorities List under CERCLA or is
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(y) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System
List promulgated pursuant to CERCLA, or on any comparable list
maintained by any state or local governmental authority.
(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 affiliates for
employees or former employees of the Company and its affiliates has
been maintained in all material respects 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; and
for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no
“accumulated funding deficiency” as defined in
Section 412 of the Code has been incurred, whether or not
waived, 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.
(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 permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for
a
