Exhibit 1.1
EXECUTION COPY
$600,000,000
QUICKSILVER RESOURCES
INC.
11¾% Senior Notes due
2016
Underwriting
Agreement
June 18, 2009
Credit Suisse
Securities (USA) LLC
Deutsche Bank
Securities Inc.
J.P. Morgan
Securities Inc.
As
Representatives of the
several
Underwriters listed
c/o Credit
Suisse Securities (USA) LLC
Eleven Madison
Avenue
New York, New
York 10010
Ladies and
Gentlemen:
Quicksilver Resources Inc.
, a Delaware corporation (the
“Company”), proposes to issue and sell to the several
Underwriters listed in Schedule 1 hereto (the
“Underwriters”), for whom you are acting as
representatives (the “Representatives”), $600,000,000
principal amount of its 11¾% Senior Notes due 2016 (the
“Securities”). The Securities will be issued
pursuant to an Indenture dated as of December 22, 2005, as
supplemented by a Seventh Supplemental Indenture (collectively, as
supplemented through the Closing Date (as defined below), the
“Indenture”) between the Company and The Bank of New
York Mellon Trust Company, N.A., as successor trustee (the
“Trustee”), and will be guaranteed on an unsecured
senior basis by each of the guarantors listed in Schedule 2 hereto
(the “Guarantors” and such guarantees, the
“Guarantees”).
The Company hereby confirms its agreement with
the several Underwriters concerning the purchase and sale of the
Securities, as follows:
1. Registration
Statement . The Company has prepared and filed with
the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities Act”), a registration
statement on Form S-3 (File No. 333-160046), including a
prospectus, relating to the Securities. Such
registration statement, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be
part of the registration statement at the time of its effectiveness
(“Rule 430 Information”), is referred to herein as the
“Registration Statement.” The base
prospectus included in the Registration Statement (the “Base
Prospectus”), as supplemented by the preliminary prospectus
supplement dated June 17, 2009 relating to the Securities and
used prior to the filing of the Prospectus (as defined below) (the
“Preliminary Prospectus Supplement”), is hereinafter
referred to as the “Preliminary
Prospectus.” The Base Prospectus, as supplemented
by the prospectus supplement relating to the Securities in the form
first used (or made available upon request of purchasers pursuant
to Rule 173 under the Securities Act) in connection with
confirmation of sales of the Securities (the “Prospectus
Supplement”) is hereinafter referred to as the
“Prospectus.” If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the “Rule 462 Registration
Statement”), then any reference herein to the term
“Registration Statement” shall be deemed to include
such Rule 462 Registration Statement. Any reference in
this Agreement to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the effective
date of the Registration Statement or the date of such Preliminary
Prospectus or the Prospectus, as the case may be and any reference
to “amend,” “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively,
the “Exchange Act”) that are deemed to be incorporated
by reference therein. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the
Registration Statement and the Prospectus.
At or prior to the time when sales of the
Securities were first made (the “Time of Sale”), the
Company had prepared the following information (collectively, the
“Time of Sale Information”): the Preliminary Prospectus
Supplement and each “free-writing prospectus” (as
defined pursuant to Rule 405 under the Securities Act) listed on
Annex B hereto.
2. Purchase of the
Securities by the Underwriters . (a) The
Company agrees to issue and sell the Securities to the several
Underwriters as provided in this Agreement, and each Underwriter,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the
respective principal amount of Securities set forth opposite such
Underwriter’s name in Schedule 1 hereto at a price equal to
94.717% of the principal amount thereof plus accrued interest, if
any, from June 25, 2009 to the Closing Date (as defined
below). 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 Underwriters intend to make a public offering
of the Securities and initially to offer the Securities on the
terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell
Securities to or through any affiliate of an Underwriter and that
any such affiliate may offer and sell Securities purchased by it to
or through any Underwriter.
(c) Payment for and
delivery of the Securities will be made at the offices of Cravath,
Swaine & Moore LLP, 825 Eighth Avenue, New York, New York, at
10:00 a.m., New York City time, on June 25, 2009, or at such other
time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representatives 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.”
(d) Payment for the
Securities shall be made by wire transfer in immediately available
funds to the account(s) specified by the Company to the
Representatives against delivery to the nominee of The Depository
Trust Company, for the account of the Underwriters, 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 Representatives not later than 1:00 p.m., New
York City time, on the business day prior to the Closing
Date.
(e) The Company and
the Guarantors acknowledge and agree that the Underwriters are
acting solely in the capacity of an arm’s length contractual
counterparty to the Company and the Guarantors 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, the
Guarantors or any other person. Additionally, neither
Representative nor any other Underwriter is advising the Company,
the Guarantors or any other person as to any legal, tax,
investment, accounting or regulatory matters in any
jurisdiction. The Company and the Guarantors shall
consult with their own advisors concerning such matters and shall
be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the
Company or the Guarantors with respect thereto. Any
review by the Underwriters of the Company, the Guarantors the
transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company or the
Guarantors.
3. Representations
and Warranties of the Company and the Guarantors
. The Company and the Guarantors jointly and severally
represent and warrant to each Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the
use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act
and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company and the Guarantors make no
representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in
any Preliminary Prospectus, it being understood and agreed that the
only such information is that described in
Section 7(b).
(b) Time of Sale
Information . The Time of Sale Information, at the
Time of Sale 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 and the Guarantors
make no representation and warranty with respect to any statements
or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly
for use in such Time of Sale Information, it being understood and
agreed that the only such information is that described in
Section 7(b).
(c) Issuer Free
Writing Prospectus. Other than the Preliminary
Prospectus and the Prospectus, the Company (including its agents
and representatives, other than the Underwriters in their capacity
as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or
refer to any “written communication” (as defined in
Rule 405 under the Securities Act) that constitutes an offer to
sell or solicitation 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 clause (i) below) an
“Issuer Free Writing Prospectus”) other than (i) any
document not constituting a prospectus pursuant to
Section 2(a)(10)(a) of the Securities Act or Rule 134 under
the Securities Act or (ii) the documents listed on Annex B hereto
and other written communications approved in writing in advance by
the Representatives. Each such Issuer Free Writing
Prospectus complied in all material respects with the Securities
Act, has been or will be (within the time periods specified in Rule
433 under the Securities Act) filed in accordance with the
Securities Act (to the extent required thereby) and, when taken
together with the Preliminary Prospectus accompanying, or delivered
prior to delivery of, such Issuer Free Writing Prospectus, 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 and the Guarantors make no representation and warranty
with respect to any statements or omissions made in each such
Issuer Free Writing Prospectus in reliance upon and in conformity
with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives
expressly for use in any Issuer Free Writing Prospectus, it being
understood and agreed that the only such information is that
described in Section 7(b).
(d) Registration
Statement and Prospectus. The Registration
Statement is an “automatic shelf registration
statement” as defined under Rule 405 of the Securities
Act that has been filed with the Commission not earlier than three
years prior to the date hereof; and no notice of objection of the
Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2)
under the Securities Act has been received by the
Company. No order suspending the effectiveness of the
Registration Statement has been issued by the Commission and no
proceeding for that purpose or pursuant to Section 8A of the
Securities Act against the Company or related to the offering has
been initiated or, to the knowledge of the Company, threatened by
the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with
the Securities Act and the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the “Trust Indenture Act”), and did not
and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
and as of the date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date, the Prospectus will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company and the Guarantors make no
representation and warranty with respect to (i) that part of the
Registration Statement that constitutes the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the
Trust Indenture Act or (ii) any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration
Statement and the Prospectus and any amendment or supplement
thereto, it being understood and agreed that the only such
information is that described in Section 7(b).
(e) Incorporated
Documents. The documents incorporated by reference
in the Registration Statement, the Prospectus and the Time of Sale
Information, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when such documents
become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(f) Financial
Statements. The financial statements and the
related notes thereto included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly, in all material respects, the
financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations and the changes
in their cash flows for the periods specified; except as disclosed
therein, such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a
consistent basis throughout the periods covered thereby, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly, in all material respects,
the information required to be stated therein; the assumptions used
in preparing the pro forma financial statements included in each of
the Registration Statement, the Time of Sale Information and the
Prospectus 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 columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts; and the other
financial information included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus has been derived from the accounting records of the
Company and its subsidiaries and presents fairly, in all material
respects, the information shown thereby.
(g) No Material
Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by
reference in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) there has not been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries listed on Schedule 3 hereto (the
“Subsidiaries”), or any dividend or distribution of any
kind declared, set aside for payment, paid or made by the Company
on any class of capital stock, or any material adverse change, or
any development involving a prospective material adverse change, in
or affecting the business, properties, management, financial
position, results of operations or prospects of the Company and its
subsidiaries taken as a whole; (ii) neither the Company nor any of
its Subsidiaries has entered into any transaction or agreement that
would reasonably be expected to have a Material Adverse Effect (as
defined below); and (iii) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference with
its business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator
or governmental or regulatory authority, except in each case as
otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus.
(h) Organization
and Good Standing. The Company and each of the
Subsidiaries have been duly organized and are validly existing and,
where applicable to entities of the relevant type, in good standing
under the laws of their respective jurisdictions of organization,
are duly qualified to do business and, where applicable to entities
of the relevant type, are in good standing in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they
are engaged, except where the failure to be so qualified, in good
standing, or have such power or authority would not, individually
or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, results of
operations or prospects of the Company and its subsidiaries taken
as a whole or on the performance by the Company and the Guarantors
of their obligations under the Securities and the Guarantees (a
“Material Adverse Effect”). The subsidiaries
listed in Exhibit 21.1 to the Company’s Annual Report on Form
10-K for the year ended December 31, 2008 are the only significant
subsidiaries of the Company.
(i)
Capitalization. The Company has an authorized
capitalization as set forth in the Registration Statement, the Time
of Sale Information and the Prospectus under the heading
“Capitalization” (other than subsequent issuances, if
any, of capital stock of the Company pursuant to conversion of its
1.875% Convertible Subordinated Debentures due 2024, pursuant to
employee benefit plans described in the Prospectus or upon issuance
of outstanding options described in the Prospectus) and all the
outstanding shares of capital stock or other equity interests of
each Subsidiary of the Company have been duly and validly
authorized and issued, and, except for general partner and limited
liability company interests, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and clear of
any lien, charge, encumbrance, security interest, restriction on
voting or transfer or any other claim of any third party other than
those securing the Obligations (as defined in the Intercreditor
Agreement dated as of August 8, 2008, among the Company, the
Guarantors, JPMorgan Chase Bank, N.A., as first lien collateral
agent, and Credit Suisse, as collateral agent (as the same may be
amended, supplemented or otherwise modified from time to time prior
to the date hereof, the “Intercreditor
Agreement”)).
(j) Due
Authorization. The Company and each of the
Guarantors have the requisite corporate or partnership power and
authority to execute and deliver this Agreement, the Securities,
and the Indenture (including each Guarantee set forth therein)
(collectively, the “Transaction Documents”) and to
perform their obligations hereunder and thereunder; and all
corporate or partnership 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.
(k) The
Indenture. The Indenture has been duly authorized
by the Company and each of the Guarantors and, upon effectiveness
of the Registration Statement, was or will have been duly qualified
under the Trust Indenture Act 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 each of them in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally or by equitable
principles relating to enforceability (collectively, the
“Enforceability Exceptions”).
(l) 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.
(m) Underwriting
Agreement . This Agreement has been duly authorized,
executed and delivered by the Company and each of the
Guarantors.
(n) Descriptions of
the Transaction Documents . Each Transaction
Document conforms in all material respects to the description
thereof contained in the Registration Statement, the Time of Sale
Information and the Prospectus.
(o) No Violation or
Default. Neither the Company nor any of its
Subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound
or to which any of the property or assets of the Company or any of
its Subsidiaries is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the
case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) No
Conflicts. The execution, delivery and performance
by the Company and each of the Guarantors of the Transaction
Documents to which it is a party, the issuance and sale of the
Securities, the issuance of the Guarantees and compliance by the
Company and each of the Guarantors with its obligations thereunder
and the consummation of the transactions contemplated by the
Transaction Documents will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or any of its Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound
or to which any of the property or assets of the Company or any of
its Subsidiaries is subject, (ii) result in any violation of
the provisions of the charter or by-laws or similar organizational
documents of the Company or any of its Subsidiaries or
(iii) result in the violation of any law or statute or any
judgment, order, 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,
violation, default, lien, charge or encumbrance that would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(q) 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 or any of
the Guarantors of the Transaction Documents, the issuance and sale
of the Securities, the issuance of the Guarantees and compliance by
the Company and each of the Guarantors with the terms of the
Transaction Documents to which it is a party or the consummation of
the transactions contemplated by the Transaction Documents, except
for the registration of the Securities (including the Guarantees)
under the Securities Act, the qualification of the Indenture under
the Trust Indenture Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may
be required under applicable state securities laws in connection
with the purchase and distribution of the Securities (including the
Guarantees) by the Underwriters.
(r) Legal
Proceedings. Except as disclosed in the
Registration Statement, the Time of Sale Information and the
Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the
Company or any of its Subsidiaries is or may be a party or to which
any property 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, would
reasonably be expected to have a Material Adverse Effect; to the
knowledge of the Company and the Guarantors no such investigations,
actions, suits or proceedings are threatened or contemplated and
(i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under
the Securities Act to be described in the Registration Statement or
the Prospectus that are not so described in the Registration
Statement, the Time of Sale Information and the Prospectus and
(ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as
exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus that are not so filed as
exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(s) Independent
Accountants . Deloitte & Touche LLP, who have
certified certain financial statements of the Company and its
subsidiaries, are an independent registered public accounting firm
with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the
Public Company Accounting Oversight Board (United States) and as
required by the Securities Act.
(t) Title to Real
and Personal Property. Except as disclosed in the
Registration Statement, the Time of Sale Information and the
Prospectus, the Company and its Subsidiaries have good and valid
title to, or have valid rights to lease or otherwise use, all items
of real and personal property that are material to the business of
the Company and its Subsidiaries taken as a whole, in each case
free and clear of all liens, encumbrances, claims and defects and
imperfections of title except, in each case, those that (i) do
not materially interfere with the use made and proposed to be made
of such property by the Company and its Subsidiaries
(ii) secure the Obligations (as defined in the Intercreditor
Agreement) or (iii) would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse
Effect.
(u) Title to
Intellectual Property. (i) The Company and its
Subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of
their respective businesses taken as a whole; and (ii) the
conduct of their businesses will not conflict in any material
respect with any such rights of others, and the Company and its
Subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others, except in
the case of each of clauses (i) and (ii) as would not reasonably
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(v) No Undisclosed
Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on
the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company or any of its subsidiaries, on the
other, that is required by the Securities Act to be described in
the Registration Statement or the Prospectus and that is not so
described in such documents and in the Time of Sale
Information.
(w) Investment
Company Act. Each of the Company and its
Subsidiaries is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof
as described in the Registration Statement, the Time of Sale
Information and the Prospectus, will not be an “investment
company” or an entity “controlled” by an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, the
“Investment Company Act”).
(x)
Taxes. The Company and its Subsidiaries have
paid all Federal, state, local and foreign taxes and filed all tax
returns required to be paid or filed through the date hereof except
where the failure to so pay or file would not, individually or in
the aggregate, have a Material Adverse Effect; and except as
otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus, there is no material tax deficiency
that has been, or to the Company’s knowledge would reasonably
be expected to be, asserted against the Company or any of its
Subsidiaries or any of their respective properties or
assets.
(y) Licenses and
Permits. The Company and its Subsidiaries possess
all licenses, certificates, permits and other authorizations issued
by, and have made all declarations and filings with, the
appropriate Federal, state, local or foreign governmental or
regulatory authorities that are necessary for the ownership or
lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement,
the Time of Sale Information and the Prospectus, except where the
failure to possess or make the same would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect; and except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, neither
the Company nor any of its Subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit
or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed
in the ordinary course except where such revocation, modification
or non-renewal would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse
Effect.
(z) 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 and to the knowledge of the Company and the Guarantors
there is no existing or imminent labor disturbance by, or dispute
with, the employees of any of its or its Subsidiaries’
principal suppliers, contractors or customers, except as would not
have a Material Adverse Effect.
(aa) Compliance With
Environmental Laws. (i) The Company and its
Subsidiaries (x) are in compliance with any and all applicable
Federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“Environmental Laws”); (y) have received and are
in compliance with all permits, licenses, certificates or other
authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and
(z) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or
release of, or human exposure to, hazardous or toxic substances or
wastes, pollutants or contaminants (collectively, “Hazardous
Materials”) and (ii) there are no costs or liabilities
associated with Environmental Laws of or relating to the Company or
its Subsidiaries for any such failure to comply, or failure to
receive required permits, licenses or approvals, or cost or
liability related to Hazardous Materials, except in the case of
each of clauses (i) and (ii) above, for any such failure to comply,
failure to receive permits, licenses, certificates, authorizations
or approvals, liabilities or costs, as would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(bb) Disclosure
Controls . Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, the
Company and its Subsidiaries maintain an effective system of
“disclosure controls and procedures” (as defined in
Rule 13a-15(e) of the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and
procedures designed to provide reasonable assurance that such
information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding
required disclosure. The Company and its Subsidiaries
have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of
the Exchange Act.
(cc) Accounting
Controls. Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, the
Company and its Subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule
13a-15(f) of the Exchange Act) that comply with the requirements of
the Exchange Act and have been designed by, or under the
supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences. Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, there
are no material weaknesses in the Company’s internal
controls.
(dd)
Insurance. The Company and its Subsidiaries have
insurance covering their respective properties, operations,
personnel and businesses, which insurance is in amounts and insures
against such losses and risks as are customary in the industry to
protect the Company and its Subsidiaries and their respective
businesses; and neither the Company nor any of its Subsidiaries has
(i) received notice from any insurer or agent of such insurer
that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or
(ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires
or to obtain replacement insurance adequate for the conduct of its
business and the value of their respective properties at a cost
that would not reasonably be expected to have a Material Adverse
Effect.
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