|
Exhibit
10.1
COMMON STOCK PURCHASE
AGREEMENT
between
CHAPARRAL ENERGY,
INC.,
ALTOMA
ENERGY
and
FISCHER INVESTMENTS,
L.L.C.
as Sellers
and
CHESAPEAKE ENERGY
CORPORATION,
as
Purchaser
dated as of
September 1,
2006
TABLE OF
CONTENTS
|
|
|
|
|
| |
|
|
|
Page |
| 1. Purchase and Sale. |
|
1 |
|
|
|
|
1.1
|
|
Consideration |
|
1 |
|
1.2
|
|
Authorization |
|
2 |
|
1.3
|
|
Stockholders Agreement |
|
2 |
|
|
| 2. The Closing |
|
2 |
|
|
|
|
2.1
|
|
Closing
Date |
|
2 |
|
2.2
|
|
Payment
and Delivery |
|
2 |
|
|
| 3. Representations and Warranties of
the Company |
|
3 |
|
|
|
|
3.1
|
|
Organization and Existence |
|
3 |
|
3.2
|
|
Capitalization: Ownership of Stock: Authorization |
|
3 |
|
3.3
|
|
No
Conflicts |
|
4 |
|
3.4
|
|
Authority; Enforceability |
|
5 |
|
3.5
|
|
Litigation; Contingencies |
|
5 |
|
3.6
|
|
Subsidiaries |
|
5 |
|
3.7
|
|
Title to
Assets |
|
6 |
|
3.8
|
|
Consents |
|
6 |
|
3.9
|
|
Proprietary Rights |
|
6 |
|
3.10
|
|
Reports;
Financial Statements |
|
7 |
|
3.11
|
|
Compliance with Laws; OSHA |
|
8 |
|
3.12
|
|
Labor
Matters |
|
8 |
|
3.13
|
|
ERISA |
|
8 |
|
3.14
|
|
Environmental Matters |
|
8 |
|
3.15
|
|
Permits
and Licenses |
|
10 |
|
3.16
|
|
Insurance |
|
10 |
|
3.17
|
|
Taxes |
|
10 |
|
3.18
|
|
Absence
of Certain Developments |
|
10 |
|
3.19
|
|
Fees |
|
11 |
|
3.20
|
|
Investment Company |
|
11 |
|
3.21
|
|
Forward
Looking Statements |
|
11 |
|
3.22
|
|
Disclosure Controls |
|
11 |
|
3.23
|
|
Affiliate
Transactions |
|
11 |
|
3.24
|
|
Exempt
Offering |
|
12 |
|
3.25
|
|
Disclosure |
|
12 |
|
3.26
|
|
Acknowledgement |
|
12 |
|
|
| 4. Representation and Warranties of the
Selling Stockholders |
|
12 |
|
|
|
|
4.1
|
|
Ownership
of SH Shares |
|
12 |
|
4.2
|
|
Certain
Interests |
|
12 |
|
4.3
|
|
Authority |
|
13 |
|
|
|
|
|
|
4.4
|
|
Prior
Obligations |
|
13 |
|
4.5
|
|
Litigation |
|
13 |
|
4.6
|
|
Consents
and Approvals |
|
13 |
|
4.7
|
|
No
Breach; Governmental Authorizations |
|
13 |
|
4.8
|
|
Powers of
Attorney |
|
14 |
|
|
| 5. Representations and Warranties of
the Purchaser |
|
14 |
|
|
|
|
5.1
|
|
Organization and Existence |
|
14 |
|
5.2
|
|
No
Conflict |
|
14 |
|
5.3
|
|
Authority; Enforceability |
|
14 |
|
5.4
|
|
Consents |
|
15 |
|
5.5
|
|
Investment Representations |
|
15 |
|
5.6
|
|
Purchaser
Filings and Reports |
|
15 |
|
5.7
|
|
Fees |
|
17 |
|
|
| 6. Nature and Survival of
Representations and Warranties; Indemnity |
|
17 |
|
|
|
|
6.1
|
|
Survival
of Representations and Warranties |
|
17 |
|
6.2
|
|
Indemnity
by the Company |
|
17 |
|
6.3
|
|
Indemnity
by the Selling Stockholders |
|
17 |
|
6.4
|
|
Indemnity
by the Purchaser |
|
17 |
|
6.5
|
|
Limitation of Liability |
|
18 |
|
6.6
|
|
Exclusive
Remedy |
|
18 |
|
|
| 7. Conditions Precedent |
|
19 |
|
|
|
|
7.1
|
|
Certain
Actions |
|
19 |
|
7.2
|
|
Representations and Warranties |
|
19 |
|
7.3
|
|
Related
Agreements |
|
19 |
|
7.4
|
|
Material
Adverse Change; Purchaser Material Adverse Change |
|
19 |
|
7.5
|
|
Company
Requirements |
|
20 |
|
7.6
|
|
Opinions
of Counsel |
|
20 |
|
7.7
|
|
Delivery
of Company Shares and Exchange Shares |
|
20 |
|
7.8
|
|
Evidence
of Authority; Good Standing |
|
20 |
|
7.9
|
|
HSR
Act |
|
20 |
|
|
| 8. Miscellaneous |
|
20 |
|
|
|
|
8.1
|
|
Financial
Statements and Other Information |
|
20 |
|
8.2
|
|
Expenses |
|
21 |
|
8.3
|
|
Notices |
|
21 |
|
8.4
|
|
Entire
Agreement; Amendments |
|
22 |
|
8.5
|
|
Assignment |
|
22 |
|
8.6
|
|
No Third
Party Rights |
|
23 |
|
8.7
|
|
Counterparts |
|
23 |
|
8.8
|
|
Headings:
Interpretation |
|
23 |
|
8.9
|
|
Governing
Law |
|
23 |
|
8.10
|
|
Arbitration |
|
23 |
ii
|
|
|
|
|
|
8.11
|
|
Attorney
Fees |
|
24 |
|
8.12
|
|
Severability |
|
24 |
|
8.13
|
|
JOINT
ACKNOWLEDGMENT |
|
24 |
iii
EXHIBITS
|
|
|
| Exhibit
A |
|
Selling
Stockholders – SH Shares |
| Exhibit
B |
|
Form of
Stockholders Agreement |
| Exhibit
C |
|
Form of
Amended and Restated Certificate of Incorporation |
| Exhibit
D |
|
Form of
Amended and Restated Bylaws |
| Exhibit
E |
|
Forms of
Opinions of Counsel to the Company and Sellers |
| Exhibit
F |
|
Form of
Opinion of Purchaser |
SCHEDULES
|
|
|
| Schedule
3.2 |
|
Phantom
Unit Plan |
| Schedule 3.6 |
|
Subsidiaries |
| Schedule 3.7(a) |
|
Liens
Against Assets |
| Schedule 3.10 |
|
Reports;
Financial Statements |
| Schedule 3.11 |
|
Compliance With Laws; OSHA |
| Schedule 3.13 |
|
ERISA |
| Schedule 3.18 |
|
Absence
of Certain Developments |
| Schedule 3.19 |
|
Brokerage
Fees |
| Schedule
5.6 |
|
Purchaser
Filings |
iv
COMMON STOCK PURCHASE
AGREEMENT
THIS COMMON STOCK PURCHASE
AGREEMENT is entered into this 1st day of September, 2006 (“
Agreement ”), between CHESAPEAKE ENERGY CORPORATION,
an Oklahoma corporation (the “ Purchaser ”) and
CHAPARRAL ENERGY, INC., a Delaware corporation (the “
Company ”), ALTOMA ENERGY, an Oklahoma general
partnership (“ Altoma ”), and FISCHER
INVESTMENTS, L.L.C. (the “ Fischer ” and
collectively with Altoma, the “ Selling Stockholders
” and collectively with Altoma and the Company, the “
Sellers ”).
BACKGROUND:
A. The Sellers desire to sell on the
terms and conditions set forth in this Agreement an aggregate of
361.2903226 shares (as defined below) of the Company’s common
stock, par value $0.01 per share (the “ Common Stock
”), of which 131.6129032 shares are being sold by the Company
and 229.6774194 shares are being sold by the Selling Stockholders
in accordance with the allocation set forth on Exhibit A
attached hereto.
B. The Purchaser desires to acquire the
Shares on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in
consideration of the premises and of the representations,
warranties and covenants herein contained, the parties hereby agree
as follows:
1. Purchase and Sale .
| |
1.1 |
Consideration . The Company hereby agrees to issue and
sell to the Purchaser 131.6129032 shares of Common Stock (together
with any shares of Common Stock issued or issuable after the date
hereof and prior to the Closing in connection with such shares
pursuant to a stock split or stock dividend, the “ Company
Shares ”), and the Purchaser hereby agrees to purchase
the Company Shares for a per share purchase price $775,000 per
current outstanding share and an aggregate purchase price of
$102,000,000 (the “ Company Purchase Price ”).
Each Selling Stockholder agrees to sell to the Purchaser the number
of shares of Common Stock set forth on Exhibit A for such
Selling Stockholder (together with any shares of Common Stock
issued or issuable after the date hereof and prior to the Closing
in connection with such shares pursuant to a stock split or stock
dividend, the “ SH Shares ” and, collectively
with the Company Shares, the “ Shares ”), and
the Purchaser hereby agrees to purchase the SH Shares for a per
share purchase price $775,000 per Share and an aggregate purchase
price of $178,000,000 (the “ SH Purchase Price ”
and collectively with the Company Purchase Price, the “
Purchase Price ”). The SH Purchase Price will be
allocated among the Selling Stockholders in accordance with
Exhibit A and $40,000,000.00 of the SH Purchase Price
payable to Altoma will be paid by delivery to Altoma of the number
of shares of the Purchaser’s common stock (“ CEC
Stock ”) determined by dividing $40,000,000.00 by the
Exchange Price (the “ Exchange Shares ”). The
“ Exchange Price ” will be determined by adding
the closing price of the CEC Stock as quoted on the New York Stock
Exchange as of the close of |
1
| |
|
business on the third (3 rd ) through the
twelfth (12 th ) business trading days preceding the
Closing Date and dividing the sum by ten (10). The Exchange Shares
portion of the SH Purchase Price will be delivered through The
Depository Trust Company or in such other manner as is mutually
agreed to by the Purchaser and Altoma. The cash portion of the
Purchase Price will be payable by wire transfer of immediately
available funds at the closing of the transactions contemplated by
this Agreement and the Related Agreements (as hereinafter defined)
by the parties hereto (the “ Closing
”). |
| |
|
(a) The Company agrees that the Company Shares to be issued and
sold by the Company to the Purchaser shall be duly authorized and
issued, and shall be fully paid and nonassessable, and upon
delivery to the Purchaser will vest full, valid and legal title to
the Company Shares in the Purchaser. |
| |
|
(b) Each Selling Stockholder agrees that the SH Shares to be
sold by such Selling Stockholder to the Purchaser have been duly
authorized and issued, and are fully paid and nonassessable, and
will not be subject to any fees, encumbrances, pledges or
“adverse claims” (as Section 8-102(a)(1) of the
Uniform Commercial Code of the State of Oklahoma defines that term)
created by such Selling Stockholder, and upon delivery to the
Purchaser will vest full, valid and legal title to the SH Shares in
the Purchaser. |
| |
|
(c) The Purchaser agrees that the Exchange Shares to be issued
and sold by the Purchaser to Altoma shall be duly authorized and
issued, and shall be fully paid and nonassessable, and upon
delivery to Altoma will vest full, valid and legal title to the
Exchange Shares in Altoma. |
| |
1.3 |
Stockholders Agreement . Simultaneously with the Closing
of the transactions contemplated by this Agreement, the Company,
the Selling Stockholders and the Purchaser will enter into a
Stockholders Agreement in substantially the form attached hereto as
Exhibit B (the “ Stockholders Agreement
”). |
2. The Closing .
| |
2.1 |
Closing Date . The Closing shall take place at the
offices of Chaparral Energy, Inc., 701 Cedar Lake Boulevard,
Oklahoma City, Oklahoma 73114 on the later of September 22,
2006 or five (5) business days after the date all of the
conditions precedent set forth in Section 7 of this Agreement
have been satisfied (the “ Closing Date
”). |
| |
2.2 |
Payment and Delivery . At the Closing: (a) the
Purchaser shall pay the Purchase Price (including the Exchange
Shares) to the Sellers in accordance with the allocations set forth
in Exhibit A ; (b) each Seller will deliver to the
Purchaser a certificate or certificates representing such
Seller’s Shares; and (c) all parties thereto will
execute and deliver the Stockholders Agreement and the other
documents to be executed and delivered pursuant to the terms of
this Agreement (the “ Related Agreements ”). The
certificates for Shares shall be subject to a |
2
| |
|
legend restricting transfer under the Securities Act, such
legend to be substantially as follows: |
| |
|
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AS TO THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION THAT SUCH REGISTRATION IS NOT REQUIRED
AND THAT ANY PROSPECTUS DELIVERY REQUIREMENTS ARE NOT
APPLICABLE. |
| |
|
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, VOTING AND OTHER MATTERS SET FORTH IN A
STOCKHOLDERS AGREEMENT DATED
, 2006. A COPY OF THIS AGREEMENT IS AVAILABLE UPON REQUEST TO THE
COMPANY. |
3. Representations and Warranties of
the Company . As an inducement to the Purchaser to enter into
this Agreement the Company represents and warrants to the Purchaser
that:
| |
3.1 |
Organization and Existence . The Company is a
corporation duly incorporated and validly existing and in good
standing under the laws of the State of Delaware and has all
requisite corporate power to carry on its business as now conducted
and is qualified to do business in those jurisdictions where its
lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify would not
have a material adverse effect on the business, operations, assets,
condition (financial or other) or results of operations of the
Company or any of its subsidiaries taken as whole (a “
Material Adverse Effect ”). The Company has delivered
to the Purchaser complete and correct copies of the Certificate of
Incorporation and Bylaws of the Company as in effect on the date
hereof. Copies of the forms of Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of the Company to be
in effect on the Closing Date are attached hereto as Exhibits C
and D , respectively. |
| |
3.2 |
Capitalization: Ownership of Stock: Authorization
. |
| |
|
(a) As of the date of this Agreement, the authorized capital of
the Company consists of 2,000 shares of Common Stock and no shares
of preferred stock. As of the date of this Agreement, the Company
had (a) 1,000 issued and outstanding shares of Common Stock;
(b) no shares of preferred stock outstanding; (c) no
treasury shares; and (d) no securities outstanding that may be
converted into underlying shares of Common Stock. As of
June 30, 2006, the Company had granted or was authorized to
grant awards of units under the Company’s Phantom |
3
| |
|
Unit Plan more particularly described in Schedule 3.2
(the “ Phantom Unit Plan ”). Other than the
registration rights to be granted to the Purchaser in accordance
with the transactions contemplated hereby and to the other parties
to the Stockholders’ Agreement as set forth therein, the
Company has not granted any registration rights that are currently
in effect, including demand or piggy-back registration rights.
Except as set forth in this Section 3.2 , there are no
outstanding or authorized subscriptions, options, warrants, rights,
conversion rights, phantom rights, preemptive rights, stock
appreciation rights, calls, commitments or any other understandings
or agreements entitling any person to receive equity of the
Company. Upon issuance of the Company Shares to the Purchaser and
the purchase of the SH Shares, the Purchaser will be the record and
beneficial owner of the Shares and the Shares will be duly
authorized, validly issued and outstanding, fully paid and
nonassessable. As a result of the issuance of the Company Shares,
the Company is not, nor will it become, obligated to issue any
additional shares of capital stock (preferred or common) to any
officer, director, stockholder or other person. |
| |
|
(b) As of the Closing Date, the authorized capital of the
Company will consist of 3,000,000 shares of Common Stock and
600,000 shares of preferred stock, issuable in series (the “
Preferred Stock ”). After the date of this Agreement
and prior to Closing, the Company shall effect a 775-for-1 stock
split in the form of a stock dividend of 774 shares of Common Stock
for each share of Common Stock outstanding on the date of this
Agreement. As of the Closing Date, the Company will have
(a) 877,000 issued and outstanding shares of Common Stock
(excluding shares of restricted stock which may be issued in
exchange for units issued under the Phantom Unit Plan); (b) no
shares of Preferred Stock outstanding; (c) no treasury shares;
and (d) no securities outstanding that may be converted into
underlying shares of Common Stock. As of or after the date of this
Agreement and prior to Closing, the Company may adopt an equity
incentive plan authorizing the Company to issue awards for a number
of shares of Common Stock up to an amount equal to 5% of the
fully-diluted shares of Common Stock, based upon (i) the
then-outstanding shares of Common Stock, (ii) the shares of
Common Stock to be issued by the Company pursuant to this Agreement
(as set forth on Exhibit A ) and (iii) such authorized
shares under the plan. A portion of these authorized shares may be
issued in exchange for units issued under the Phantom Unit Plan.
Upon consummation of the Closing of the transactions pursuant to
this Agreement, the Purchaser will own not less than 30.0% of the
Common Stock of the Company on a fully diluted basis, provided,
such fully diluted basis shall not include Common Stock which may
in the future be issued in exchange for or payment of awards
outstanding under the Company’s Phantom Unit
Plan. |
| |
3.3 |
No Conflicts . The execution and delivery of this
Agreement and the Related Agreements by the Company and performance
by the Company hereunder and thereunder, will not result in a
violation or breach of any term or provision of or constitute a
default or accelerate the performance required under the Articles
of Incorporation, Bylaws or other governance documents of the
Company or any of its subsidiaries or any material indenture,
mortgage, deed of trust or other contract or agreement to which the
Company or any of its subsidiaries is a party or by |
4
| |
|
which their respective assets are bound, or violate any
statute, rule, regulation, order, writ, injunction or decree of any
court, administrative agency or governmental body. |
| |
3.4 |
Authority; Enforceability . The Company has full right,
power and authority to execute and deliver this Agreement and the
Related Agreements and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement
and the Related Agreements and the consummation of the transactions
contemplated hereby to be performed by the Company have been duly
and validly authorized by all necessary corporate action on the
part of the Company, and no other corporate proceedings are
necessary to authorize the execution and delivery of this Agreement
and the Related Agreements by the Company or to consummate the
transactions contemplated hereby to be performed by the Company.
This Agreement and the Related Agreements constitute valid and
legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as that enforcement
may be limited by bankruptcy, insolvency, moratorium or similar
laws affecting the enforcement of creditors’ rights, by the
availability of injunctive relief or specific performance and by
general principles of equity and, in the case of the Stockholders
Agreement, any rights to indemnity or contribution thereunder may
be limited by federal and state securities laws and public policy
considerations. |
| |
3.5 |
Litigation; Contingencies . Except as described in the
Reports (as defined below), there is no action, suit or proceeding
pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries before any court, agency or
arbitrator that would result in any Material Adverse Effect or that
questions the validity of any action taken or to be taken pursuant
to or in connection with this Agreement or the Related
Agreements. |
| |
3.6 |
Subsidiaries . Except for the subsidiaries listed in
Schedule 3.6 attached hereto, the Company has no
subsidiaries or any material equity interests in any other
corporation, partnership, limited liability company, joint venture
or other entity (excluding joint ventures, joint operating or
ownership arrangements and tax partnerships entered into in the
ordinary course of business). Except as set forth on
Schedule 3.6 , the Company directly or indirectly owns
one hundred percent (100%) of all of the issued and
outstanding equity capital of each of the subsidiaries listed
Schedule 3.6 . Each subsidiary of the Company has been
duly organized and is in good standing under the laws of the
jurisdiction of its organization, with power and authority
(corporate and other) to own its properties and conduct its
business; and each subsidiary of the Company is duly qualified to
do business and is in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification; except where the failure to
be so qualified would not reasonably be expected to individually or
in the aggregate have a Material Adverse Effect. All of the issued
and outstanding capital stock or similar equity interests of each
subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable; and the capital stock
or similar equity interests of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects. |
5
| |
3.7 |
Title to Assets . Except as otherwise set forth in
Schedule 3.7(a) , the Company and its subsidiaries have
good and defensible title to all properties and assets owned by
them, including, without limitation, all oil and gas producing
properties of the Company and its subsidiaries, in each case free
from liens, encumbrances and defects that would materially affect
the value thereof or materially interfere with the use made or to
be made thereof by them; and the Company and its subsidiaries hold
any leased real or personal property, including, without
limitation, all oil and gas producing properties of the Company and
its subsidiaries, under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to
be made thereof by them. The Company and its subsidiaries have
maintained all their tangible personal properties material to the
business of the Company and its subsidiaries, taken as a whole, in
good repair, working order and operating condition, subject to
ordinary wear and tear, and all such assets are suitable for the
purposes for which they are presently being used. The Company and
its subsidiaries have all easements, rights-of-way and similar
authorizations required for the use of the real properties and all
other properties and assets owned by them and used in the conduct
of the business as heretofore conducted. No material properties or
assets of the Company and its subsidiaries, or any portion thereof,
has been condemned or otherwise taken by any public authority, and
neither the Company nor any of its subsidiaries has received
written notice that any such condemnation or taking is threatened
or contemplated. |
| |
3.8 |
Consents . The Company is not required to obtain any
consent from or approval of any court, governmental entity or any
other person in connection with the execution, delivery or
performance by the Company of this Agreement or the Related
Agreements and the transactions contemplated hereby and thereby,
except such filings as may be required to be made under the
Hart-Scott Rodino Act of 1976, as amended (the “ HSR
Act ”), or with the Securities and Exchange Commission
(“ SEC ”) or any state or foreign “blue
sky” or securities regulatory authority. The consummation of
the transactions contemplated by this Agreement will not require
the approval of any entity or person in order to prevent the
termination of any material right, privilege, license or agreement
of the Company. |
| |
3.9 |
Proprietary Rights . The Company and its subsidiaries
own or possess adequate licenses or other valid rights to use all
patents, patent rights, trademarks, trademark rights and
proprietary information used or held for use in connection with
their respective businesses as currently being conducted, except
where the failure to own or possess such licenses and other rights
would not have a Material Adverse Effect, and there are no
assertions or claims challenging the validity of any of the
foregoing that would have a Material Adverse Effect. The conduct of
the Company’s and its subsidiaries’ respective
businesses as currently conducted does not conflict with any
patents, patent rights, licenses, trademarks, trademark rights,
trade names, trade name rights or copyrights of others in any way
that would have a Material Adverse Effect. There is no infringement
of any proprietary right owned by or licensed by or to the Company
or any of its subsidiaries that would have a Material Adverse
Effect. |
6
| |
3.10 |
Reports; Financial Statements . The Company has filed
certain reports, schedules, forms, statements and other documents
with the SEC as set forth in Schedule 3.10 and had
certain correspondence with the SEC and has received certain
comments with respect to such filings (all of the foregoing
(including all exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference
therein and all comments and correspondence with respect thereto)
being herein referred to as the “ Filings ”).
The Company has made available to the Purchaser true and complete
copies of the Filings and has made available to the Purchaser the
audited consolidated financial statements of the Company for the
fiscal years ending December 31, 2004 and 2005 and the interim
financial statements for the six (6) months ending
June 30, 2006 (the “ Financial Statements ”
and collectively with the Filings, the “ Reports
”). As of their respective dates, the Filings complied in all
material respects with the requirements of the laws, rules and
regulations applicable to thereto. None of the Filings, at the time
they were filed with the SEC contained any untrue statement of a
material fact or omitted to state a 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. As of their respective dates, the Financial
Statements complied as to form in all material respects with
applicable accounting requirements and the published securities
laws, rules and regulations applicable thereto. The Financial
Statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the
Company and its subsidiaries as of the dates thereof and the
results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). All of the Financial Statements
present fairly in all material respects the financial position and
the results of operations of the Company and its subsidiaries as of
the dates and for the periods shown therein, and to the knowledge
of the Company, there has been no Material Adverse Effect on the
financial condition of the Company since June 30, 2006. Except
as disclosed in the Reports or as set forth on
Schedule 3.10 , neither the Company nor any of its
subsidiaries has any debt, liability or obligation, contingent or
otherwise, that would have a Material Adverse Effect. The
accounting firm that has expressed its opinion with respect to the
audited Financial Statements is independent of the Company pursuant
to the standards promulgated by the SEC in Rule 2-01 of
Regulation S-X and such firm was otherwise qualified to render
the audit opinion under applicable laws. There is no transaction,
arrangement or other relationship between the Company and an
unconsolidated or other off-balance-sheet entity that is required
to be disclosed by the Company in the Reports that has not been so
disclosed. |
7
| |
3.11 |
Compliance with Laws; OSHA . The Company and its
subsidiaries are in compliance with all applicable laws,
ordinances, statutes, rules, regulations and orders promulgated by
any court or federal, state or local governmental body or agency
relating to its assets and business, except for such violations or
failures to comply that would not result in a Material Adverse
Effect. Since January 1, 2003, neither the Company nor any of
its subsidiaries has received any notice, citation, claim,
assessment or proposed assessment alleging any violation of any
federal, state or local safety and health laws, except for any such
violations as would not result in a Material Adverse
Effect. |
| |
3.12 |
Labor Matters . There is no labor strike or labor
disturbance pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries. Neither the Company
nor any of its subsidiaries has experienced any work stoppage or
other material labor disturbance within the past three years.
Neither the Company nor any of its subsidiaries is a party to any
collective bargaining agreement with respect to its employees and,
to the knowledge of the Company, there are no current attempts to
organize its employees. |
| |
3.13 |
ERISA . Except as set forth in Schedule 3.13
, neither the Company nor any of its subsidiaries maintains or
sponsors any pension, retirement, savings, deferred compensation or
profit-sharing plan or any stock option, stock appreciation, stock
purchase, performance share, bonus or other incentive plan,
severance plan, health, group insurance or other welfare plan, or
other similar plan or any “employee benefit plan”
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ ERISA
”), under which the Company has any current or future
obligation or liability or under which any employee or former
employee (or beneficiary of any employee or former employee) of the
Company has or may have any current or future right to benefits on
account of employment with the Company (the term “plan”
shall include any contract, agreement, policy or understanding,
each such plan being hereinafter referred to individually as a
“ Plan ”). Each Plan intended to be qualified
under Sections 401(a) and 501(a) of the Internal Revenue Code
of 1986, as amended (the “ Code ”), is, and has
been determined by the Internal Revenue Service to be, qualified
under Sections 401(a) and 501(a) of the Code and, since such
determination, no amendments to or failure to amend any such Plan
or any other circumstances adversely affects its tax qualified
status. Neither the Company nor any of its subsidiaries has any
liability for (i) any prohibited transaction (within the
meaning of Section 4975 of the Code and Section 406 of
Title I of ERISA) or accumulated funding deficiency (within
the meaning of Section 412 of the Internal Revenue Code) with
respect to any Plan or (ii) any complete or partial withdrawal
liability (within the meaning of Sections 4203 and 4205 of
ERISA, respectively), with respect to any pension benefit plan
which is not a Plan but is subject to Title IV of ERISA, to which
the Company or any of its subsidiaries makes or ever has made a
contribution and in which any employee of the Company or any
subsidiary is or has ever been a participant. |
| |
3.14 |
Environmental Matters . The Company and each of its
subsidiaries have obtained all Environmental Permits (as defined
below) that are required with respect to |
8
| |
|
their respective businesses, operations and properties, either
owned or leased, and the Company, each of it subsidiaries, and
their respective properties are in compliance with all terms and
conditions of all applicable Requirements of Environmental Law and
Environmental Permits, in each case except as would not have a
Material Adverse Effect. Except as would not have a Material
Adverse Effect, there are no Environmental Claims pending or, to
the knowledge of the Company, threatened against the Company or any
of its subsidiaries. Neither the Company nor any of its
subsidiaries has received any notice from any governmental
authority of any unresolved violation or liability arising under
any Requirements of Environmental Law or Environmental Permit in
connection with its assets, businesses or operations, except for
any such violation or liability as would not have a Material
Adverse Effect. |
| |
|
“ Environmental Claim ” means any third
party (including governmental agencies and employees) |
|
