Units Representing Limited
Liability
Company Interests
EQUITY UNDERWRITING
AGREEMENT
RBC Capital
Markets Corporation
Citigroup Global Markets Inc.
Barclays Capital Inc.
As the Representatives of the
several underwriters named in Schedule I
hereto
c/o RBC Capital
Markets
3 World Financial Center
200 Vesey Street, 8 th Floor
New York, New York 10281
Barclays
Capital Inc.
745 Seventh Avenue
New York, New York 10019
Citigroup
Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Linn Energy, LLC,
a Delaware limited liability company (the “
Issuer ”), proposes to sell to the several
underwriters (the “ Underwriters ”) named
in Schedule I hereto for whom you are acting as
representatives (the “ Representatives ”)
an aggregate of 5,500,000 units (the “ Firm
Units ”) of the Issuer’s limited liability
company interests (the “ Units ”). The
respective amounts of the Firm Units to be so purchased by the
several Underwriters are set forth opposite their names in Schedule
I hereto. The Issuer also proposes to sell at the
Underwriters’ option an aggregate of up to 825,000 additional
Units of the Issuer’s limited liability company interests
(the “ Option Units ”) as set forth
below.
As the
Representatives, you have advised the Issuer (a) that you are
authorized to enter into this underwriting agreement (this “
Agreement ”) on behalf of the several
Underwriters, and (b) that the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers
of Firm Units set forth opposite their respective names in
Schedule I, plus their pro rata portion of the Option Units if
you elect to exercise the over-allotment option in whole or in part
for the accounts of the several Underwriters. The Firm Units and
the Option Units (to the extent the aforementioned option is
exercised) are herein collectively called the “ Offered
Units ”.
The Issuer has
prepared a registration statement on Form S-3ASR (File
No. 333-159125) with respect to the Offered Units pursuant to
the Securities Act of 1933, as amended (the “
Securities Act ”) in accordance with the rules
and regulations (the “ Rules and Regulations
”) of the United States Securities and Exchange Commission
(the “ Commission ”) thereunder. As used
in this Agreement, “ Effective Date ”
means any date as of which any part of such registration statement
relating to the Offered Units became, or is deemed to have become,
effective under the Securities Act in accordance with the Rules and
Regulations of the Commission; “ Preliminary
Prospectus ” means any preliminary prospectus
relating to the Offered Units included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Offered Units; “
Pricing Prospectus ” means the latest
Preliminary Prospectus included in the Registration Statement or
filed pursuant to Rule 424(b) prior to or on the date hereof
(including, for purposes hereof, any documents incorporated by
reference therein prior to or on the date hereof); “
Prospectus ” means the final prospectus
relating to the Offered Units, including any prospectus supplement
thereto relating to the Offered Units, as filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations; “
Registration Statement ” means, collectively,
the various parts of such registration statement, each as amended
as of the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration
statement; “ Free Writing Prospectus ”
means any “free writing prospectus” as defined in
Rule 405 under the Securities Act relating to the Offered
Units; “ Issuer Free Writing Prospectus ”
means any “issuer free writing prospectus” as defined
in Rule 433 under the Securities Act relating to the Offered
Units; and “ Applicable Time ” means 8:15
p.m. (Eastern time) on May 12, 2009, which time is prior to or
at the time when sales of Offered Units were first made.
Any reference to
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act as of the
date of such Preliminary Prospectus or the Prospectus, as the case
may be. Any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include any document filed under the Securities Exchange Act
of 1934, as amended (the “ Exchange Act
”), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in
such Preliminary Prospectus or the Prospectus, as the case may be;
and any reference to any amendment to the Registration Statement
shall be deemed to include any annual report of the Company on Form
10-K filed with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act after the Effective Date that is incorporated
by reference in the Registration Statement.
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In consideration
of the mutual agreements contained herein and of the interests of
the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the
Issuer .
The
Issuer represents and warrants to each of the Underwriters as
follows:
(a) (i) At
the time of initial filing of the Registration Statement,
(ii) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the Act
(whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Section 13 or 15(d) of
the Exchange Act or form of prospectus), and (iii) at the time
the Issuer or any person acting on its behalf (within the meaning,
for this clause only, of Rule 163(c)) made any offer relating
to the Offered Units in reliance on the exemption of Rule 163,
the Issuer was a “well known seasoned issuer” as
defined in Rule 405, including not having been an
“ineligible issuer” as defined in Rule 405. The
Registration Statement is an “automatic shelf registration
statement,” as defined in Rule 405, that initially
became effective within three years prior to the date of this
Agreement. Each Issuer Free Writing Prospectus conformed or will
conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations on the date of first
use, and the Issuer has complied with any filing requirements
applicable to such Issuer Free Writing Prospectus pursuant to the
Rules and Regulations. The Issuer has not made any offer relating
to the Offered Units that would constitute an Issuer Free Writing
Prospectus without the prior written consent of the
Representatives. The Issuer has retained in accordance with the
Rules and Regulations all Issuer Free Writing Prospectuses that
were not required to be filed pursuant to the Rules and
Regulations. The Issuer has paid or shall pay the required
Commission filing fees relating to the Offered Units within the
time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and
457(r).
(b) The
Registration Statement conforms, and any further amendments or
supplements to the Registration Statement will conform, in all
material respects to the requirements of the Securities Act and the
Rules and Regulations. The Pricing Prospectus conforms and the
Prospectus will conform, in all material respects on the Effective
Date and on the Closing Date (as defined below) and each Option
Closing Date (as defined below), if any, and any amendment to the
Registration Statement filed after the date hereof will conform in
all material respects when filed, to the requirements of the
Securities Act and the Rules and Regulations. As of the Effective
Date, the date hereof, the Closing Date and each Option Closing
Date, if any, (i) the Registration Statement does not and will
not, and any further amendments to the Registration Statement will
not, when they become effective, contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; as of its date and the date hereof; (ii) the
Prospectus does not, and as amended or supplemented on the Closing
Date and each Option Closing Date, if any, will not, contain an
untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iii) the Pricing Prospectus, as supplemented by the Issuer
Free Writing Prospectuses and other information listed in
Schedule II(a) hereto, taken together with the final pricing
information included on the cover page of the Prospectus
(collectively, the “ Disclosure Package
”), as of the Applicable Time did not include any
untrue
3
statement of a
material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; (iv) each Issuer
Free Writing Prospectus listed on Schedule II(a) or
Schedule II(b) hereto does not conflict with the information
contained in the Registration Statement; and (v) each such
Issuer Free Writing Prospectus (including, without limitation, any
road show that is a free writing prospectus under Rule 433),
as supplemented by and taken together with the Disclosure Package
as of the Applicable Time, did not include any untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties set forth in this
sentence do not apply to statements or omissions in the
Registration Statement, the Prospectus, the Pricing Prospectus or
any Issuer Free Writing Prospectus or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Issuer by any Underwriter through the
Representatives expressly for use therein, such information being
listed in Section 13 below. The documents incorporated
by reference in any Preliminary Prospectus or the Prospectus
conformed, and any further documents so incorporated will conform,
when filed with the Commission, in all material respects to the
requirements of the Exchange Act or the Securities Act, as
applicable, and the Rules and Regulations. The Issuer filed the
Registration Statement with the Commission before using any Issuer
Free Writing Prospectus and each Issuer Free Writing Prospectus was
preceded or accompanied by the most recent Preliminary Prospectus
satisfying the requirements of Section 10 under the Securities
Act, which Preliminary Prospectus included an estimated price
range.
(c) Each
of the statements made by the Issuer in such documents within the
coverage of Rule 175(b) of the Rules and Regulations, including
(but not limited to) any projections, results of operations or
statements with respect to future available cash or future cash
distributions of the Issuer or the anticipated ratio of taxable
income to distributions, was made or will be made with a reasonable
basis and in good faith. Notwithstanding the foregoing, this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with written
information concerning the Underwriters furnished to the Issuer by
or on behalf of any Underwriter specifically for inclusion in the
Registration Statement, the Pricing Prospectus or the
Prospectus.
(d) This
Agreement has been duly authorized, executed and delivered by the
Issuer, and constitutes a valid, legal, and binding obligation of
the Issuer, enforceable in accordance with its terms, except as
rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or affecting the rights of
creditors generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law), by public policy, by applicable law relating to
indemnification and contribution and by an implied covenant of good
faith and fair dealing. The Issuer has full power and authority to
enter into this Agreement and to authorize, issue and sell the
Offered Units as contemplated by this Agreement.
(e) The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of the Offered Units as
described in the Disclosure Package and the Prospectus will
not
4
(i) conflict with or result in a breach or
violation of any of the terms or provisions of, impose any lien,
charge or encumbrance upon any property or assets of the Issuer and
its Subsidiaries (as defined below), or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, license or
other agreement or instrument to which the Issuer or any of its
Subsidiaries is a party or by which the Issuer or any of its
Subsidiaries is bound or to which any of the property or assets of
the Issuer or any of its Subsidiaries is subject; (ii) result
in any violation of the provisions of the limited liability company
agreement, charter or bylaws (or similar organizational documents)
of the Issuer or any of its Subsidiaries; or (iii) result in
any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
the Issuer or any of its Subsidiaries or any of their properties or
assets, except (in the case of clauses (i) and
(iii) above) as could not reasonably be expected to have a
Material Adverse Effect.
(f) The
Issuer has been duly organized and is validly existing as a limited
liability company in good standing under the Delaware Limited
Liability Company Act with limited liability company power and
authority to own or lease its properties and conduct its business
as described in the Prospectus and the Disclosure Package. Each of
the subsidiaries of the Issuer, all of which are listed in
Exhibit A hereto (collectively, the “
Subsidiaries ”), has been duly organized and is
validly existing as a corporation, limited liability company or
limited partnership, as the case may be, in good standing under the
laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own or lease its properties and
conduct its business as described in the Prospectus and the
Disclosure Package. The Subsidiaries are the only subsidiaries,
direct or indirect, of the Issuer. The Issuer and each of the
Subsidiaries are duly qualified to transact business and are in
good standing in all jurisdictions in which the conduct of their
business requires such qualification; except where the failure to
be so qualified or in good standing could not, individually or in
the aggregate, reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), results of
operations, stockholders’ or members’ equity, prospects
or business of the Issuer and its Subsidiaries, taken as a whole (a
“ Material Adverse Effect ”).
(g) The
outstanding Units representing the Issuer’s limited liability
company interests have been duly authorized and validly issued and
are fully paid and non-assessable; the Offered Units to be issued
and sold by the Issuer have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully
paid and non-assessable (except as such nonassessability may be
affected by Section 18-607 of the Delaware Limited Liability
Company Act); and no preemptive rights of unitholders exist with
respect to any of the Offered Units or the issue and sale thereof.
Neither the filing of the Registration Statement nor the offering
or sale of the Offered Units as contemplated by this Agreement
gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any Units. The
outstanding shares of capital stock, membership interests or
partnership interests, as the case may be, of each of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable (except as such nonassessability may
be affected by Section 18-607 of the Delaware Limited
Liability Company Act, Sections 18-2030 and 18-2031 of the
Oklahoma Limited Liability Company Act or Sections 4-406 and
4-407 of the West Virginia Uniform Limited Liability Company Act,
as applicable) and are wholly owned by the Issuer or another
Subsidiary free and clear of all liens, encumbrances and equities
and claims except for (i) contractual restrictions on transfer
contained in the applicable constituent documents, the
5
Indenture,
dated as of June 27, 2008, among the Issuer, Linn Energy
Finance Corp., the subsidiary guarantors named therein and U.S.
Bank National Association, as trustee, the Fourth Amended and
Restated Credit Agreement dated as of April 28, 2009 among the
Issuer, BNP Paribas, as administrative agent, and the lenders and
agents party thereto (the “ Bank Credit
Facility ”), and the Indenture dated as of
May 18, 2009, among the Issuer, Linn Energy Finance Corp., the
guarantors named therein and U.S. Bank, National Association, as
trustee, and (ii) liens created under or pursuant to the Bank
Credit Facility and other liens permitted under the Bank Credit
Facility; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock, membership interests
or partnership interests, as the case may be, in the Subsidiaries
are outstanding.
(h) The
authorized capitalization of the Issuer is as set forth in the
Disclosure Package. All of the Offered Units conform to the
description thereof contained in the Prospectus and the Disclosure
Package. No holders of securities of the Issuer have rights to the
registration of such securities under the Registration Statement
that have not been waived.
(i) The
consolidated financial statements of the Issuer and the
Subsidiaries, together with related notes and schedules as set
forth or incorporated by reference in the Registration Statement,
the Prospectus and the Disclosure Package, present fairly in all
material respects the financial position and the results of
operations and cash flows of the Issuer and the consolidated
Subsidiaries, at the indicated dates and for the indicated periods.
Such financial statements and related schedules have been prepared
in accordance with U.S. generally accepted principles of
accounting, consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
summary financial and statistical data included in the Registration
Statement, the Prospectus and the Disclosure Package presents
fairly in all material respects the information shown therein and
such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of
the Issuer. The pro forma financial statements and other pro forma
financial information included in the Registration Statement,
Prospectus and the Disclosure Package present fairly the
information shown therein, have been prepared in accordance with
the Commission’s rules and guidelines with respect to pro
forma financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Issuer,
the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(j) The
Issuer maintains a system of internal accounting controls
sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
6
(k) KPMG
LLP, which has audited certain financial statements of the Issuer
and delivered its opinion with respect to the audited financial
statements and schedules incorporated by reference in the
Registration Statement and the Prospectus, is an independent
registered public accounting firm with respect to the Issuer within
the meaning of the Securities Act and the Rules and
Regulations.
(l) DeGolyer
and MacNaughton, who issued a report with respect to the
Issuer’s oil and natural gas reserves at December 31,
2008, was, as of the date of such report, and is, as of the date
hereof, an independent petroleum engineer with respect to the
Issuer;
(m) The
information underlying the estimates of reserves of the Issuer
included in the Disclosure Package, including, without limitation,
production, costs of operation and development, current prices for
production, agreements relating to current and future operations
and sales of production, was true and correct in all material
respects on the dates such estimates were made and such information
was supplied and was prepared in accordance with customary industry
practices; other than normal production of the reserves,
intervening market commodity price fluctuations, fluctuations in
demand for such products, adverse weather conditions,
unavailability or increased costs of rigs, equipment, supplies or
personnel, the timing of third party operations and other factors,
in each case as described in the Disclosure Package, the Issuer is
not aware of any facts or circumstances that would result in a
material adverse change in the aggregate net reserves, or the
present value of future net cash flows therefrom, as described in
the Disclosure Package; estimates of such reserves and present
values as described in the Disclosure Package comply in all
material respects with the applicable requirements of
Regulation S-X and Industry Guide 2 under the Securities
Act.
(n) The
pro forma reserve information included in the Disclosure Package
includes assumptions that provide a reasonable basis for presenting
the significant effects directly attributable to the transactions
and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to
the historical reserve information of the Issuer included or
incorporated by reference in the Disclosure Package.
(o) There
is no action, suit, claim or proceeding pending or, to the
knowledge of the Issuer, threatened against the Issuer or any of
the Subsidiaries before any court or administrative agency or
otherwise (1) that are required to be described in the
Registration Statement, the Prospectus or the Disclosure Package
and are not so described or (2) which, if determined adversely
to the Issuer or any of its Subsidiaries, could reasonably be
expected to have a Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby, except as set
forth in the Registration Statement, the Prospectus and the
Disclosure Package.
(p) No
labor disturbance or dispute with the employees of the Issuer or
the Subsidiaries exists or, to the Issuer’s knowledge, is
threatened or imminent, and the Issuer is not aware of any existing
or imminent labor disturbance by the employees of any of its or its
Subsidiaries’ principal suppliers, contractors or customers,
that could reasonably be expected to have a Material Adverse
Effect.
7
(q) The
Issuer and its Subsidiaries have good and marketable title to all
real property and to all personal property described in the
Disclosure Package as being owned by them and valid, legal and
defensible title to the interests in oil and gas properties
underlying the estimates of the Issuer’s proved reserves
described in the Disclosure Package, in each case free and clear of
all liens, encumbrances and defects except (i) such as are
described in the Disclosure Package, (ii) such as may arise in
connection with the Bank Credit Facility, (iii) such as do not
(individually or in the aggregate) materially interfere with the
use made or proposed to be made of such property by the Issuer and
the Subsidiaries or (iv) such as are not (individually or in
the aggregate) reasonably likely to result in a Material Adverse
Effect; any real property and buildings held under lease or
sublease by the Issuer and its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as
(A) do not materially interfere with, the use made and
proposed to be made of such property and buildings by the Issuer
and its Subsidiaries or (B) are not (individually or in the
aggregate) reasonably likely to result in a Material Adverse
Effect; and the working interests derived from oil, gas and mineral
leases or mineral interests which constitute a portion of the real
property held or leased by the Issuer and its Subsidiaries reflect
in all material respects the right of the Issuer and its
Subsidiaries to explore, develop or produce hydrocarbons from such
real property, and the care taken by the Issuer and its
Subsidiaries with respect to acquiring or otherwise procuring such
leases or mineral interests was generally consistent with standard
industry practices in the areas in which the Issuer and its
Subsidiaries operate for acquiring or procuring leases and
interests therein to explore, develop or produce
hydrocarbons.
(r) The
Issuer and the Subsidiaries have filed all federal, state, local
and foreign income and franchise tax returns which have been
required to be filed and have paid all taxes indicated by said
returns and all assessments received by them or any of them to the
extent that such taxes have become due, such taxes are not
reasonably likely to result in a Material Adverse Effect, or such
taxes are not being contested in good faith and for which an
adequate reserve for accrual has been established in accordance
with U.S. generally accepted accounting principles. No tax
deficiency has been determined adversely to the Issuer or any of
its Subsidiaries, nor does the Issuer have knowledge of any tax
deficiencies, in either case, that could, in the aggregate,
reasonably be expected to have a Material Adverse Effect. There are
no transfer taxes or other similar fees or charges under Federal
law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery
of this Agreement or the issuance by the Issuer or sale by the
Issuer of the Offered Units.
(s) Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective change which has had or is
reasonably likely to have a Material Adverse Effect, whether or not
occurring in the ordinary course of business, and there has not
been any material transaction entered into or any material
transaction that is probable of being entered into by the Issuer or
the Subsidiaries, other than transactions in the ordinary course of
business and changes and transactions described in the Prospectus
and the Disclosure Package. The Issuer and the Subsidiaries have no
material contingent obligations that are not disclosed in the
Issuer’s financial statements in the Registration Statement
and the Prospectus.
8
(t) Neither
the Issuer nor any Subsidiary (i) is in violation of its
charter or by-laws (or similar organizational documents);
(ii) is 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, license or other agreement or instrument to which it is
a party or by which it is bound or to which any of its properties
or assets is subject or (iii) is in violation of any statute
or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over it or its property or
assets or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business,
except in the case of clauses (ii) and (iii), to the extent
any such violation or default could not, in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(u) Except
as described in the Disclosure Package, neither the Issuer nor any
of its subsidiaries has sustained, since the date of the latest
audited financial statements included or incorporated by reference
in the Disclosure Package, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, and since such date, there
has not been any change in the capitalization or long-term debt of
the Issuer or any of its subsidiaries or any adverse change, or any
development involving a prospective adverse change, in or affecting
the condition (financial or otherwise), results of operations,
members’ equity, properties, management, business or
prospects of the Issuer and its subsidiaries taken as a whole, in
each case except as could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(v) Subsequent
to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the
Issuer’s debt securities by any “nationally recognized
statistical rating organization” (as that term is defined by
the Commission for purposes of Rule 436(g)(2) of the Rules and
Regulations), and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the
Issuer’s debt securities.
(w) Subsequent
to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the NYSE Amex Equities,
the NASDAQ Stock Market or in the over-the-counter market, or
trading in any securities of the Issuer on any exchange or in the
over-the-counter market, shall have been suspended or materially
limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established
on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have
been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war
by the United States or (iv) there shall have occurred such a
material adverse change in general economic, political or financial
conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international
conditions on the financial markets in the United States shall be
such), as to make it, in the judgment of the Representatives,
impracticable or inadvisable to
9
proceed with
the public offering or delivery of the Offered Units being
delivered on Closing Date or the Option Closing Date on the terms
and in the manner contemplated in the Prospectus.
(x) Since
the date as of which information is given in the Disclosure Package
and except as may otherwise be described in the Disclosure Package,
the Issuers has not (i) incurred any material liability or
obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business,
or (ii) entered into any material transaction not in the
ordinary course of business.
(y) Each
approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and
delivery by the Issuer of this Agreement and the consummation of
the transactions herein contemplated, including application of the
proceeds from the sale of the Offered Units as described in the
Disclosure Package (except such additional steps, if any, as may be
required by the Commission, the Financial Industry Regulatory
Authority (the “ FINRA ”) or such
additional steps as may be necessary to qualify the Offered Units
for public offering by the Underwriters under state securities or
Blue Sky laws) has been obtained or made and is in full force and
effect.
(z) Subject
to such qualifications as may be set forth in the Disclosure
Package, the Issuer and each of the Subsidiaries has all licenses,
certifications, permits, franchises, approvals, clearances and
other regulatory authorizations (“ Permits
”) from governmental authorities as are necessary to conduct
its businesses as currently conducted and to own, lease and operate
its properties in the manner described in the Prospectus and the
Disclosure Package, except for any of the foregoing that could not,
in the aggregate, reasonably be expected to have a Material Adverse
Effect. There is no claim, proceeding or controversy, pending or,
to the knowledge of the Issuer or any of the Subsidiaries,
threatened, involving the status of or sanctions under any of the
Permits. The Issuer and each of the Subsidiaries has fulfilled and
performed all of its obligations with respect to the Permits, and
no event has occurred which allows, or after notice or lapse of
time would allow, the revocation, termination, modification or
other impairment of the rights of the Issuer or any of the
Subsidiaries under such Permit, except for any of the foregoing
that could not reasonably be expected to have a Material Adverse
Effect.
(aa) To
the Issuer’s knowledge, there are no affiliations or
associations between any member of the FINRA and any of the
Issuer’s officers, directors or 5% or greater unitholders,
except as set forth in the Registration Statement.
(bb) Neither
the Issuer, nor to the Issuer’s knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization
or manipulation of the price of the Issuer’s Units to
facilitate the sale or resale of the Offered Units. The Issuer
acknowledges that the Underwriters may engage in passive market
making transactions in the Shares on The Nasdaq Global Select
Market in accordance with Regulation M under the Securities
Exchange Act.
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(cc) Neither
the Issuer nor any of the Subsidiaries is, and as of the Closing
Date after giving effect to the offer and sale of the Offered Units
and the application of the proceeds therefrom as described in the
Disclosure Package and the Prospectus none of them will be, an
“investment company” within the meaning of such term
under the Investment Issuer Act of 1940, and the rules and
regulations of the Commission thereunder (collectively, the “
1940 Act ”).
(dd) The
Issuer and each of the Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Issuer and
the Subsidiaries reasonably considers adequate for the conduct of
their respective businesses and the value of their respective
properties and as is reasonably customary for companies engaged in
similar industries. All policies of insurance insuring the Issuer
or any Subsidiary or any of their respective businesses, assets,
employees, officers and directors are in full force and effect, and
the Issuer and the Subsidiaries are in compliance with the terms of
such policies in all material respects. There are no material
claims by the Issuer or any Subsidiary under any such policy or
instrument as to which an insurance company is denying liability or
defending under a reservation of rights clause.
(ee) (i) There
exists no “employee benefit plan” (within the meaning
of Section 3(3) of the Employee Retirement Security Act of
1974, as amended (“ ERISA ”)) that is
subject to Title IV of ERISA or Section 412 of the Code (as
defined below) for which the Issuer or any member of its
“Controlled Group” (defined as any organization which
is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986,
as amended (the “ Code ”)) may have any
liability; and (ii) each plan that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which would
reasonably be expected to cause the loss of such qualification,
except where failure to be so qualified would not be reasonably
likely to result in a Material Adverse Effect. Neither the Issuer
nor any member of its Controlled Group has any withdrawal or other
liability to any “multiemployer plan”, within the
meaning of Section 4001(c)(3) of ERISA.
(ff) Other
than as contemplated by this Agreement, the Issuer has not incurred
any liability for any finder’s or broker’s fee, or
agent’s commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(gg) Other
than the Subsidiaries, the Issuer does not own, directly or
indirectly, any shares of capital stock and does not have any other
equity or ownership or proprietary interest in any corporation,
partnership, association, trust, limited liability company, joint
venture or other entity.
(hh) There
are no statutes, regulations, contracts or other documents
(including, without limitation, any voting agreement) that are
required to be described in the Registration Statement, the
Prospectus or the Disclosure Package or to be filed as exhibits to
the Registration Statement that are not described or filed as
required. Neither the Issuer nor any of the Subsidiaries has sent
or received any notice indicating the termination of or intention
to terminate any of the contracts or agreements referred to or
described in the Registration
11
Statement,
Prospectus or the Disclosure Package, or filed as an exhibit to the
Registration Statement, and no such termination has been threatened
by the Issuer, any Subsidiary or any oth
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