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Exhibit 1.1
1,150,000
Gulfport Energy
Corporation
Common
Stock
UNDERWRITING
AGREEMENT
July 20, 2007
JOHNSON RICE & COMPANY
L.L.C.
639 Loyola Avenue, Suite 2775
New Orleans, Louisiana 70113
Ladies and Gentlemen:
Introductory. Gulfport
Energy Corporation, a Delaware corporation (the “
Company ”), proposes to issue and sell to Johnson
Rice & Company L.L.C. (the “ Underwriter
”) an aggregate of 1,000,000 shares (the “ Firm
Shares ”) of its common stock, par value $.01 per share
(the “ Shares ”). In addition, Liddell
Investments LLC (the “ Selling Stockholder ”)
has granted to the Underwriter an option to purchase up to 150,000
Shares (the “ Optional Shares ”), as provided in
Section 3. The Firm Shares and, if and to the extent such
option is exercised, the Optional Shares are collectively called
the “ Offered Shares .”
The Company has prepared and
filed with the Securities and Exchange Commission (the “
Commission ”) a shelf registration statement on
Form S-3 (File No. 333-143659), including a base
prospectus (the “ Base Prospectus ”) to be used
in connection with the public offering and sale of the Offered
Shares. Such registration statement in the form in which it was
declared effective by the Commission under the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “ Securities Act
”), including all documents incorporated or deemed to be
incorporated by reference therein and any information deemed to be
a part thereof at the time of effectiveness pursuant to
Rule 430B under the Securities Act or the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the “ Exchange Act ”),
is called the “ Registration Statement .” The
prospectus supplement to be filed promptly after the date hereof
describing the Offered Shares and the offering thereof (the “
Prospectus Supplement ”), together with the Base
Prospectus, in the form first used by the Underwriter to confirm
sales of the Offered Shares or in the form first made available to
the Underwriter by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act, is referred to
herein as the “ Prospectus .” As used herein,
“ Applicable Time ” is 8:30 a.m. (New York time)
on July 20, 2007. As used herein, “ free writing
prospectus ” has the meaning set forth in Rule 405 under
the Securities Act, and “ Time of Sale Prospectus
” means the Base Prospectus, as amended or supplemented
immediately prior to the Applicable Time, together with the free
writing prospectuses, if any, identified on Schedule A and
the information agreed to in writing by the Company and the
Underwriter as the information to be conveyed orally by the
Underwriter to purchasers of the Offered Shares at the Applicable
Time, as set forth on Schedule B . As used herein, the terms
“ Registration Statement ,” “ Base
Prospectus ,” “ Time of Sale Prospectus
” and “ Prospectus ” shall include the
documents incorporated and deemed to be incorporated
by reference therein. All references in
this Agreement to amendments or supplements to the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus or the
Prospectus shall be deemed to mean and include the filing of any
document under the Exchange Act which is or is deemed to be
incorporated by reference in the Registration Statement, the Base
Prospectus, the Time of Sale Prospectus or the Prospectus, as the
case may be. All references in this Agreement to (i) the
Registration Statement, the Base Prospectus, the Time of Sale
Prospectus or the Prospectus, or any amendments or supplements to
any of the foregoing, shall include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“ EDGAR ”) and (ii) the
Prospectus shall be deemed to include the “ electronic
Prospectus ” provided for use in connection with the
offering of the Offered Shares as contemplated by Section 4(n)
of this Agreement. All references in this Agreement to financial
statements and schedules and other information that are “
contained ,” “ included ” or
“ stated ” in the Registration Statement, the
Base Prospectus, the Time of Sale Prospectus or the Prospectus (and
all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other
information that are or are deemed to be incorporated by reference
in the Registration Statement, the Base Prospectus, the Time of
Sale Prospectus or the Prospectus, as the case may be.
The Company and the Selling
Stockholder hereby confirm their agreements with the Underwriter as
follows:
Section 1.
Representations and Warranties of the Company .
The Company hereby represents, warrants and covenants to each
Underwriter as follows:
(a) Compliance with
Registration Requirements . The Registration Statement has
been declared effective by the Commission under the Securities Act.
The Company has complied with all requests of the Commission for
additional or supplemental information. No stop order suspending
the effectiveness of the Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending
or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
The Prospectus when filed
complied in all material respects with the Securities Act and, if
filed by electronic transmission pursuant to EDGAR (except as may
be permitted by Regulation S-T under the Securities Act), was
identical to the copy thereof delivered to the Underwriter for use
in connection with the offer and sale of the Offered Shares. The
Registration Statement and any post-effective amendment thereto, at
the time it became effective and at the First Closing Date (as
defined in Section 3) and, if applicable, as of each Option
Closing Date (as defined in Section 3), complied and will
comply in all material respects with the Securities 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 to make the statements therein not misleading. As of the
Applicable Time, the Time of Sale Prospectus did not, and at the
time of each sale of the Offered Shares and at the First Closing
Date, the Time of Sale Prospectus, as then amended or supplemented
by the Company, if applicable, will not, contain any 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. The
Prospectus, as amended or supplemented, as of its date and at the
First Closing Date and, if applicable, as of each Option Closing
Date, did not and 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. The representations and
warranties set forth in the three immediately preceding sentences
do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the
Prospectus or Time of Sale Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein, it being
understood and agreed that the only such information furnished by
the Underwriter to the Company consists of the
information
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described in Section 10(c) below.
There are no contracts or other documents required to be described
in the Time of Sale Prospectus or the Prospectus or to be filed as
exhibits to the Registration Statement which have not been
described or filed as required.
The Company meets, and at the
time the Registration Statement was originally declared effective
the Company met, the applicable requirements for use of Form S-3
under the Securities Act.
The documents incorporated or
deemed to be incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied
or will comply, as applicable, in all material respects with the
applicable requirements of the Exchange Act.
The Company is not an
“ineligible issuer” (as defined in Rule 405 under the
Securities Act) in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 under the Securities Act.
Any free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will
be, filed with the Commission in accordance with the requirements
of the Securities Act. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or on behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and
each such free writing prospectus, as of its issue date and at the
First Closing Date and, if applicable, as of each Option Closing
Date, did not, does not and will not, as applicable, include any
information that conflicted, conflicts with or will conflict with
the information contained in the Registration Statement, the Time
of Sale Prospectus or the Prospectus, including any document
incorporated by reference therein. Except for the free writing
prospectuses, if any, identified on Schedule A , the Company
has not prepared, used or referred to, and will not, without the
Underwriter’s prior consent, prepare, use or refer to, any
free writing prospectus.
(b) Offering Materials
Furnished to Underwriter . The Company has delivered to
the Underwriter one complete manually signed copy of the
Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits), Time of Sale Prospectus,
the Prospectus, as amended or supplemented, and any free writing
prospectuses reviewed and consented to by the Underwriter, in such
quantities and at such places as the Underwriter has reasonably
requested.
(c) Distribution of
Offering Material By the Company . The Company has not
distributed and will not distribute, prior to the later of
(i) the expiration or termination of the option granted to the
Underwriter in Section 3 and (ii) the completion of the
Underwriter’s distribution of the Offered Shares, any
offering material in connection with the offering and sale of the
Offered Shares other than a Time of Sale Prospectus, the Prospectus
or the Registration Statement or any other document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of
the Securities Act or Rule 134 under the Securities Act.
(d) Independent
Accountants . Grant Thornton LLP (i) was listed as an
independent registered public accounting firm with the Public
Company Accounting Oversight Board as of the date hereof and, to
the knowledge of the Company, continues to hold this status and
(ii) to the knowledge of the Company, is, with respect to the
Company, in compliance with subsections (g) through
(l) of Section 10A of the Exchange Act.
(e) Financial
Statements . The financial statements filed with the
Commission as a part of or incorporated by reference into the
Registration Statement, the Prospectus and Time of Sale Prospectus
present fairly in all material respects the financial condition of
the Company as of and at the dates indicated, and the statements of
operations, stockholders’ equity and comprehensive income and
cash flows of the Company for the periods specified; such financial
statements have been prepared in
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conformity with generally accepted
accounting principles in the United States of America (“
GAAP ”) applied on a consistent basis throughout the
periods involved except to the extent disclosed in the notes
thereto. The selected historical financial data and the summary
financial data included in the Prospectus present fairly, in all
material respects, the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included or incorporated by reference into the
Registration Statement. The other financial and statistical data
set forth in the Registration Statement and included in either the
Prospectus or the Time of Sale Prospectus are accurately presented
and prepared on a basis consistent with the financial statements
and books and records of the Company. There are no financial
statements (historical or pro forma) that are required to be
included in the Registration Statement and either the Prospectus or
the Time of Sale Prospectus that are not included as required. The
Company has not engaged in or effected any transaction or
arrangement that would constitute an “off-balance sheet
arrangement” (as defined in Item 303 of Regulation S-K
of the Commission (“ Regulation S-K ”)). All
non-GAAP financial measures (as defined in Regulation G of the
Commission) and ratios derived using non-GAAP financial measures
have been presented in compliance with Item 10 of Regulation
S-K.
(f) Reserve Report
Data . The oil and gas reserve estimates of the Company
contained or incorporated by reference into the Registration
Statement and included in the Prospectus and Time of Sale
Prospectus have been prepared by independent reserve engineers in
accordance with Commission guidelines applied on a consistent basis
throughout the periods involved, and the Company has no reason to
believe that such estimates do not fairly reflect the oil and gas
reserves of the Company at the dates indicated. Other than
production of the reserves in the ordinary course of business and
intervening product price fluctuations described in the
Registration Statement, Prospectus and Time of Sale Prospectus, the
Company is not aware of any facts or circumstances that would cause
a Material Adverse Change in the reserves or the present value of
future net cash flows therefrom as described in the Registration
Statement, Prospectus or Time of Sale Prospectus.
(g) No Material Adverse
Change in Business . Except as disclosed in the Time of
Sale Prospectus, subsequent to the respective dates as of which
information is given in the Time of Sale Prospectus, there has been
no (i) material adverse change in the condition, financial or
otherwise, results of operations or prospects of the Company taken
as a whole (the “ Enterprise ”), whether or not
arising in the ordinary course of business (a “ Material
Adverse Change ”), (ii) transaction which is
material to the Enterprise, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred
by the Company, which is material to the Enterprise,
(iv) change in the capital stock of the Company,
(v) material change in the outstanding indebtedness of the
Company or (vi) dividend or distribution of any kind declared,
paid or made on the capital stock of the Company.
(h) Good Standing of the
Company . The Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the State of Delaware and has the requisite corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement and Time of
Sale Prospectus and to enter into and perform its obligations under
this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not result in a Material Adverse Change. Except as
otherwise set forth in the Registration Statement, the Prospectus
or the Time of Sale Prospectus, the Company does not own or
control, directly or indirectly, any corporation, association or
other entity.
(i) Capitalization
. The authorized capital stock of the Company and the issued
and outstanding capital stock of the Company as of July 19,
2007, are as set forth on Schedule C . The shares of issued
and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable
and none of the outstanding shares of capital stock of the Company
was
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issued in violation of the preemptive or
similar rights of any security holder of the Company. The
description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights
granted thereunder, as described in the Registration Statement or
in the Time of Sale Prospectus accurately and fairly present in all
material respects the information required to be shown with respect
to such plans, arrangements, options and rights.
(j) Other Securities
. Except as disclosed in the Time of Sale Prospectus, there
are no outstanding (i) securities or obligations of the
Company convertible into or exchangeable for any equity interests
of the Company, (ii) warrants, rights or options to subscribe
for or purchase from the Company any equity interests or any such
convertible or exchangeable securities or obligations, or
(iii) obligations of the Company to issue any equity
interests, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(k) Stock Exchange
Listing . The Shares are registered pursuant to
Section 12(b) of the Exchange Act and are listed on The Nasdaq
Global Select Market and the Company has taken no action designed
to, or likely to have the effect of, terminating the registration
of the Shares under the Exchange Act or delisting the Shares from
The Nasdaq Global Select Market, nor has the Company received any
notification that the Commission or The Nasdaq Global Select Market
is contemplating terminating such registration of
listing.
(l) Authorization of
Agreement and Binding Effect . This Agreement has been
duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms except as enforcement may
be limited by bankruptcy, insolvency or other laws or court
decisions relating to or affecting creditor’s rights
generally, and except to the extent that enforcement of the
indemnification and contribution obligations provided for herein
may be limited by federal or state securities laws or the public
policies underlying such laws.
(m) Authorization and
Description of Firm Shares . The Firm Shares have been
duly authorized for issuance and sale to the Underwriter pursuant
to this Agreement. When the Company issues and delivers the Firm
Shares pursuant to this Agreement against payment of the
consideration set forth herein, the Firm Shares will be validly
issued, fully paid and non-assessable; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Time of Sale Prospectus, and such
descriptions conform in all material respects to the rights set
forth in the instruments defining the same; the issuance by the
Company of the Firm Shares is not subject to preemptive or other
similar rights of any security holder of the Company; and the
Company has authorized and available a sufficient number of Shares
for issuance of the Firm Shares pursuant to this Agreement and for
issuance upon the exercise, conversion or exchange of all
outstanding options and other securities of the Company that are
convertible into or exchangeable for Shares.
(n) Absence of Defaults
and Conflicts . The Company is not (i) in violation
of its certificate of incorporation or by-laws, or (ii) in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which it is a party or by
which it may be bound, or to which any of the property or assets of
the Company is subject (collectively, “ Agreements and
Instruments ”) except, in the case of clause (ii), for
any defaults which, singularly or in the aggregate, would not
result in a Material Adverse Change; and the execution, delivery
and performance of this Agreement, the consummation of the
transactions contemplated by this Agreement and in the Time of Sale
Prospectus including the issuance and sale of the Offered Shares
and the use of the proceeds from the sale of the Offered Shares as
described therein, and the compliance by the Company with its
obligations under this Agreement (except as contemplated by the
Time of Sale Prospectus) do not and will not, whether with or
without the giving of notice or passage of time or both, conflict
with or
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constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the
properties or assets of the Company pursuant to the Agreements and
Instruments except for such conflicts, breaches, defaults, liens,
charges or encumbrances which, singularly or in the aggregate,
would not result in a Material Adverse Change, nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its assets,
properties or operations. As used herein, a “ Repayment
Event ” means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company.
(o) Absence of Labor
Dispute . No labor dispute with the employees of the
Company exists or to the knowledge of the Company is imminent, and
the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal operators,
contractors, suppliers or customers, which, in either case, would
result in a Material Adverse Change. The Company is not aware that
any key employee or significant group of employees of the Company
plans to terminate employment with the Company.
(p) Absence of
Proceedings . There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting
the Company, which is required to be disclosed in the Registration
Statement (other than as disclosed in the Time of Sale Prospectus),
or which might result in a Material Adverse Change, or which might
materially and adversely affect the properties or assets of the
Enterprise or the consummation of the transactions contemplated in
this Agreement or the performance by the Company of its obligations
hereunder; the aggregate of any and all pending legal or
governmental proceedings to which the Company is a party or of
which any of its property or assets is the subject which are not
described in the Time of Sale Prospectus, including ordinary
routine litigation incidental to the business, could not result in
a Material Adverse Change.
(q) Accuracy of
Exhibits . There are no contracts or documents which are
required to be described in the Registration Statement or the
Prospectus pursuant to Form S-3 or to be filed as exhibits to
the Registration Statement pursuant to Item 601 of Regulation
S-K or incorporated by reference therein which have not been so
described, filed or incorporated as required.
(r) Possession of
Intellectual Property . The Company owns or possesses, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property
(collectively, “Intellectual Property”) necessary to
carry on the business now operated by it, except where the failure
to own or possess, or have the ability to acquire on reasonable
terms such Intellectual Property would not, singularly or in the
aggregate, cause a Material Adverse Change. The Company has not
received any notice and is not otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect
the interest of the Company therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Change.
(s) Absence of Further
Requirements . No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations
hereunder, or in connection
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with the offering, issuance or sale of
the Offered Shares under this Agreement or the consummation of the
transactions contemplated by this Agreement except such as have
been already obtained or as may be required under the Securities
Act or the regulations promulgated thereunder or state securities
laws or by the National Association of Securities Dealers, Inc.
(the “ NASD ”).
(t) No Price Stabilization
or Manipulation; Compliance with Regulation M . The
Company has not taken, directly or indirectly, any action designed
to or that would be reasonably expected to cause or result in
stabilization or manipulation of the price of the Shares or any
other “reference security” (as defined in Rule 100 of
Regulation M under the Exchange Act (“ Regulation M
”)) whether to facilitate the sale or resale of the Offered
Shares or otherwise, and has taken no action which would directly
or indirectly violate Regulation M. The Company acknowledges that
the Underwriter may engage in passive market making transactions in
the Offered Shares on the Nasdaq National Market in accordance with
Regulation M.
(u) Possession of Licenses
and Permits . The Company possesses such permits,
licenses, certificates, approvals, consents and other
authorizations (collectively, “ Governmental Licenses
”) issued by appropriate federal, state, local or foreign
regulatory bodies necessary for the ownership of its assets and to
conduct the business now operated by it, except where the failure
to have obtained the same would not cause a Material Adverse
Change; the Company is in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure to so
comply would not singly or in the aggregate cause a Material
Adverse Change; all of the Governmental Licenses are valid and in
full force and effect, except where the invalidity or the failure
to be in full force and effect would not singly or in the aggregate
cause a Material Adverse Change; and the Company has not received
any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding would result in a Material Adverse Change.
(v) Properties
. Except as otherwise set forth in the Registration Statement,
the Prospectus or the Time of Sale Prospectus or such as in the
aggregate does not now cause or will in the future cause a Material
Adverse Change, the Company has title to its properties as follows:
(a) with respect to its wells (including leasehold interests
and appurtenant personal property) and its non-producing oil and
gas properties (including undeveloped locations on leases held by
production and those leases not held by production), such title is
good and free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and restrictions, (b) with
respect to its non-producing properties in exploration prospects,
such title was investigated in accordance with customary industry
procedures prior to the Company’s acquisition thereof;
(c) with respect to its real property other than oil and gas
interests, such title is good and marketable free and clear of all
liens, security interests, pledges, charges, encumbrances,
mortgages and restrictions; and (d) with respect to its
personal property other than that appurtenant to its oil and gas
interests, such title is free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and
restrictions. No real property owned, leased, licensed, or used by
the Company lies in an area which is, or to the knowledge of the
Company will be, subject to restrictions which would prohibit, and
no statements of facts relating to the actions or inaction of
another person or entity or his or its ownership, leasing,
licensing, or use of any real or personal property exists or will
exist which would prevent, the continued effective ownership,
leasing, licensing, exploration, development or production or use
of such real property in the business of the Company as presently
conducted or as the Registration Statement, the Prospectus or the
Time of Sale Prospectus indicates it contemplates conducting,
except as may be properly described in the Registration Statement,
the Prospectus or the Time of Sale Prospectus or such as in the
aggregate do not now cause and will not in the future cause a
Material Adverse Change.
(w) Insurance
. Except as otherwise set forth in the Registration Statement,
the Prospectus or the Time of Sale Prospectus, the Company is
insured by insurers of recognized financial
responsibility
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against such losses and risks and in
such amounts as are adequate for the conduct of its businesses and
as are customary for the business in which it is engaged; all such
policies of insurance insuring the Company are in full force and
effect and the Company has no reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business.
(x) Taxes . The
Company has filed on a timely basis all foreign, federal, state and
local tax returns that are required to be filed or have requested
extensions thereof (except in any case in which the failure so to
file would not cause a Material Adverse Change) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it to the extent due and payable, except for
any such assessment, fine or penalty that is currently being
contested in good faith or would not cause a Material Adverse
Change.
(y) Investment Company
Act . The Company is not required, and upon the issuance
and sale of the Offered Shares as herein contemplated and the
application of the net proceeds therefrom as described in the Time
of Sale Prospectus will not be required, to register as an
“investment company” within the meaning of such term
under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission promulgated
thereunder.
(z) Environmental Laws
. There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
hazardous substances or hazardous wastes by the Company (or, to the
knowledge the Company or any of its predecessors in interest), at,
upon or from any of the property now or previously owned, leased or
operated by the Company in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit that
would require the Company to undertake any remedial action under
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action that
would not, individually or in the aggregate with all such
violations and remedial actions, cause a Material Adverse Change.
Except for abandonment and similar costs incurred or to be incurred
in the ordinary course of business of the Company, there has been
no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto any property now or previously
owned, leased or operated by the Company or into the environment
surrounding such property of any hazardous substances or hazardous
wastes due to or caused by the Company (or, to the knowledge of the
Company, any of its predecessors in interest), except for any such
spill, discharge, leak, emission, injection, escape, dumping or
release that would not, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, result in a Material Adverse Change; and the
terms “hazardous substances,” and “hazardous
wastes” shall be construed broadly to include such terms and
similar terms, all of which shall have the meanings specified in
any applicable local, state and federal laws or regulations with
respect to environmental protection. Except as set forth in the
Time of Sale Prospectus, the Company has not been named as a
“potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(aa) Registration
Rights . There are no persons with registration rights or
other similar rights to have any securities of the Company
registered pursuant to the Registration Statement or sold in the
offering contemplated by this Agreement with respect to the Offered
Shares included in the Registration Statement, except for such
rights as have been duly waived.
(bb) Internal
Accounting . Subject to such exceptions, if any, as could
not reasonably be expected to cause a Material Adverse Change, the
Company 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 authorizations,
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets,
8
(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.
(cc) Disclosure Controls
and Procedures . The Company has established and maintains
disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)), which (i) are designed to
ensure that material information relating to the Company is made
known to the Company’s principal executive officer and its
principal financial officer by others within the Company,
particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared; (ii) have
been evaluated for effectiveness as of a date within 90 days prior
to the earlier of the date that the Company filed its most recent
annual or quarterly report with the Commission and the date of the
Time of Sale Prospectus; and (iii) are effective in all
material respects to perform the functions for which they were
established. Based on the most recent evaluation of its disclosure
controls and procedures, (i) the Company is not aware of
material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely
affect the registrant’s ability to record, process, summarize
and report financial information, (ii) the Company’s
audit committee of the Company’s board of directors and the
Company’s independent registered public accounting firm have
been made aware of any significant deficiencies in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial
information and (iii) the Company is not aware of any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting. The Company is not aware
of any change in its internal control over financial reporting that
has occurred during its most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.
(dd) Certain Relationships
and Related Transactions . No relationship, direct or
indirect, exists between or among the Company on the one hand, and
the directors, officers, stockholders, customers or suppliers of
the Company on the other hand, which is required to be described or
incorporated by reference in the Prospectus and which is not so
described or incorporated. The Time of Sale Prospectus contains in
all material respects the same description of the matters set forth
in the preceding sentence contained in the Prospectus.
(ee) Brokers
. The Company is not a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company or the Underwriter for a brokerage commission,
finder’s fee or like payment in connection with the offering
and sale of the Offered Shares.
(ff) Sarbanes-Oxley Act of
2002 . The Company is in compliance, in all material
respects, with all applicable provisions of the Sarbanes-Oxley Act
of 2002 and all rules and regulations promulgated thereunder or
implementing the provisions thereof.
(gg) Certain Payments
. Neither the Company nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company, (i) has
used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity, made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds, (ii) violated or is in violation of any provisions of
the Foreign Corrupt Practices Act of 1977, or (iii) made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(hh) ERISA . The
minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder
9
(“ ERISA ”), has been
satisfied by each “pension plan” (as defined in
Section 3(2) of ERISA) which has been established or
maintained by the Company, and the trust forming part of each such
plan which is intended to be qualified under Section 401 of
the Internal Revenue Code of 1986, as amended, is so qualified; the
Company has fulfilled its obligations, if any, under
Section 515 of ERISA; the Company does not maintains and is
not required to contribute to a “welfare plan” (as
defined in Section 3(1) of ERISA) which provides retiree or
other post-employment welfare benefits or insurance coverage (other
than “continuation coverage” (as defined in
Section 602 of ERISA)); each pension plan and welfare plan
established or maintained by the Company is in compliance with the
currently applicable provisions of ERISA, except where the failure
to comply would not cause a Material Adverse Change; and the
Company has not incurred or could reasonably be expected to incur
any withdrawal liability under Section 4201 of ERISA, any
liability under Section 4062, 4063, or 4064 of ERISA, or any
other liability under Title IV of ERISA.
(ii) Corporate Records
. The minute book of the Company has been made available to
the Underwriter and counsel for the Underwriter, and such book
(i) reflects all meetings and actions of the board of
directors (including each board committee) and stockholders of the
Company since the time of its respective organization through the
date of the latest meeting and action, and (ii) accurately in
all material respects reflect all transactions referred to in such
minutes.
(jj) Margin Securities
. The Company does not own any “margin securities”
as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the “ Federal Reserve
Board ”), and none of the proceeds of the sale of the
Offered Shares will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the
purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for
any other purpose which might cause any of the Offered Shares to be
considered a “purpose credit” within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(kk) Prospectus
Statements . The statements set forth in the Time of Sale
Prospectus under the captions “Risk Factors,”
“Prospectus Summary” and “Business,”
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate and complete in all
material respects.
(ll) Transfer Taxes
. There are no transfer taxes or other similar fees or charges
under federal law or 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 Company or the
sale by the Company of the Offered Shares.
Any certificate signed by any
officer of the Company that is delivered to the Underwriter or to
counsel for the Underwriter pursuant to this Agreement shall be
deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
Section 2.
Representations and Warranties of the Selling Stockholder
. The Selling Stockholder represents, warrants and
covenants to the Underwriter as follows:
(a) Authorization of
Agreement and Binding Effect . This Agreement has been
duly authorized, executed and delivered by the Selling Stockholder
and constitutes a valid and binding obligation of the Selling
Stockholder enforceable in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or other laws
or court decisions relating to or affecting creditor’s rights
generally, and except to the extent that enforcement of the
indemnification and contribution obligations provided for herein
may be limited by federal or state securities laws or the public
policies underlying such laws.
10
(b) Ownership of Optional
Shares . The Selling Stockholder is the beneficial owner
of the Optional Shares free and clear of all liens, encumbrances,
equities and claims and, where applicable, has duly endorsed the
Optional Shares in blank, and, assuming that the Underwriter
acquires its interest in the Optional Shares without notice of any
adverse claim (within the meaning of the Uniform Commercial Code of
the State of New York (“ UCC ”)), the
Underwriter that has purchased the Optional Shares delivered on the
First Closing Date (or the applicable Option Closing Date), to The
Depository Trust Company or other securities intermediary by making
payment therefor as provided herein, and that has had the Optional
Shares credited to the securities account or accounts of the
Underwriters maintained with The Depository Trust Company or such
other securities intermediary will have acquired a security
entitlement (within the meaning of Section 8-102(a)(17) of the
UCC) to the Optional Shares purchased by the Underwriter, and no
action based on an adverse claim (within the meaning of
Section 8-105 of the UCC) may be asserted against the
Underwriter with respect to the Optional Shares.
(c) Title and Delivery of
the Optional Shares . The Selling Stockholder has the
legal right and power to sell, transfer and deliver all of the
Optional Shares and to comply with its other obligations hereunder.
Delivery of the Optional Shares will pass good and valid title to
the Optional Shares, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or other adverse
claim.
(d) No Price Stabilization
or Manipulation; Compliance with Regulation M . The
Selling Stockholder has not taken, directly or indirectly, any
action designed to or that would be reasonably expected to cause or
result in stabilization or manipulation of the price of the Shares
or any other reference security, whether to facilitate the sale or
resale of the Optional Shares or otherwise, and has taken no action
which would directly or indirectly violate any provision of
Regulation M.
(e) Absence of Further
Requirements . No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary or
required for the performance by the Selling Stockholder of its
obligations hereunder, or in connection with the offering or sale
of the Optional Shares under this Agreement or the consummation of
the transactions contemplated by this Agreement except such as have
been already obtained or as may be required under the Securities
Act or the regulations promulgated thereunder, state securities
laws or by the NASD.
(f) Absence of Defaults
and Conflicts . Neither the sale of the Optional Shares by
the Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by the Selling Stockholder or the
fulfillment of the terms hereof by the Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter, limited liability company
agreement or similar organizational documents of the Selling
Stockholder, or the terms of any indenture or other agreement or
instrument to which the Selling Stockholder is a party or bound, or
any judgment, order or decree applicable to the Selling Stockholder
of any court, regulatory body
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