Exhibit 1.1
$300,000,000
PENN VIRGINIA
CORPORATION
(a Virginia corporation)
10.375% Senior Notes due
2016
Underwriting
Agreement
June 10, 2009
J.P. Morgan Securities
Inc.
270 Park Avenue
New York, New York 10017
As Representative of the
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
Penn Virginia Corporation, a
Virginia 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 representative (the “ Representative
”), $300,000,000 principal amount of its 10.375% Senior Notes
due 2016 (the “ Securities ”). The Securities
will be issued pursuant to an Indenture to be dated as of
June 15, 2009 (the “ Indenture ”) between
the Company, the Guarantors (defined below) and Wells Fargo Bank,
National Association, as trustee (the “ Trustee
”). The Company’s obligations under the Securities,
including the due and punctual payment of interest on the
Securities, will be unconditionally guaranteed (the “
Guarantees ”) by Penn Virginia Holding Corp., Penn
Virginia Oil & Gas Corporation, Penn Virginia
Oil & Gas GP LLC, Penn Virginia Oil & Gas LP LLC,
Penn Virginia Oil & Gas, L.P., Penn Virginia MC
Corporation, Penn Virginia MC Energy L.L.C. and Penn Virginia MC
Operating Company L.L.C. (together the “ Guarantors
”). As used herein, the term “Securities” shall
include the Guarantees, unless the context otherwise
requires.
The Company and the Guarantors
hereby confirm their agreement with the several Underwriters
concerning the purchase and sale of the Securities, as
follows:
1. Registration Statement .
The Company and the Guarantors have 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. 333-143852), including a
prospectus (the “ Basic Prospectus ”), relating
to securities to be issued from time to time by the Company. The
Company has also filed, or
proposes to file, with the Commission pursuant
to Rule 424 under the Securities Act a preliminary prospectus
supplement dated June 3, 2009 specifically relating to the
Securities (the “ Preliminary Prospectus Supplement
”). The registration statement, as amended at the date of
this Agreement, including the information, if any, deemed pursuant
to Rule 430A, 430B or 430C under the Securities Act to be part of
the registration statement (“ Rule 430 Information
”), is referred to herein as the “ Registration
Statement ”; and as used herein, the term “
Preliminary Prospectus ” means the Basic Prospectus as
supplemented by the Preliminary Prospectus Supplement and the term
“ Prospectus ” means the Basic Prospectus as
supplemented by the prospectus supplement specifically 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. 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. Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Registration Statement and
the Prospectus. References herein to the Registration Statement,
the 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 most recent effective date of the Registration
Statement or the date of the Preliminary Prospectus or the
Prospectus, as the case may be. The terms “supplement,”
“amendment” and “amend” as used herein with
respect to the Registration Statement, the Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any
documents filed by the Company under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder (the “ Exchange Act ”) subsequent to
the date of this Agreement which are deemed to be incorporated by
reference therein.
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 with the information referred to in the next
succeeding sentence, 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. If,
subsequent to the date of this Agreement, the Company and the
Underwriters have determined that such Time of Sale Information
included an untrue statement of a material fact or omitted a
statement of material fact necessary to make the information
therein, in the light of the circumstances under which it was made,
not misleading and have agreed to provide an opportunity to
purchasers of the Securities to terminate their old purchase
contracts and enter into new purchase contracts, then “Time
of Sale Information” will refer to the information available
to purchasers at the time of entry into the first such new purchase
contract.
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,
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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 such Securities set forth opposite such
Underwriter’s name in Schedule 1 hereto at a price equal to
94.253% of the principal amount thereof plus accrued interest, if
any, from June 15, 2009 to the Closing Date (as defined
below). The public offering price is not in excess of the price
recommended by UBS Securities LLC acting in its capacity as a
“qualified independent underwriter” within the meaning
of Rule 5110 (“ Rule 5110 ”) of the Conduct
Rules of the Financial Industry Regulatory Authority (the “
FINRA ”). 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 as
soon after the effectiveness of this Agreement as in the judgment
of the Representative is advisable, 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 Cahill Gordon &
Reindel LLP
at 10:00 A.M., New York City time,
on June 15, 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 Representative and the Company may agree upon in
writing. The time and date of such payment and delivery is referred
to herein as the “Closing Date.”
(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 Representative 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
Representative 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 each Underwriter is 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 the
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 its 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.
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3. Representations and Warranties
of the Company and the Guarantors . The Company and the
Guarantors jointly and severally represent and warrant to the
Underwriters that:
(a) Preliminary Prospectus .
No order preventing or suspending the use of the Preliminary
Prospectus has been issued by the Commission, and the 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 or through the
Representative expressly for use in the Preliminary
Prospectus.
(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 makes 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 or through the
Representative expressly for use in such Time of Sale Information.
No statement of material fact included in the Prospectus has been
omitted from the Time of Sale Information and no statement of
material fact included in the Time of Sale Information that is
required to be included in the Prospectus has been omitted
therefrom.
(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, (ii) the documents listed on Annex B
hereto and other written communications approved in writing in
advance by the Underwriters or (iii) any electronic roadshow.
Each such Issuer Free Writing Prospectus complied in all material
respects with the Securities Act, has been or will be (within the
time period specified in Rule 433) filed in accordance with the
Securities Act (to the extent required thereby) and, when taken
together with the Time of Sale Information accompanying, delivered
or filed prior to the first use of such Issuer Free Writing
Prospectus did
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not, and at the Closing Date will not, contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in each such Issuer Free Writing Prospectus in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
or through the Representative expressly for use in any Issuer Free
Writing Prospectus.
(d) Registration Statement and
Prospectus . The Registration Statement is an “automatic
effective 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 threatened by the Commission; as of the date of this Agreement
and any other 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
or through the Representative for use in the Registration Statement
and the Prospectus and any amendment or supplement
thereto.
(e) Incorporated Documents .
The documents incorporated by reference in the Registration
Statement, the Prospectus or 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,
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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 Securities 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 of the
Company and its consolidated subsidiaries 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 consolidated subsidiaries
as of the dates indicated and the results of their operations and
the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with United
States 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.
(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 material change in the
capital stock or material change in the long-term debt of the
Company or any of its subsidiaries, or any material dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, other than the
Company’s regular quarterly dividend declared on May 6,
2009 and payable on June 4, 2009, or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the business, properties, management,
financial position, stockholders’ equity, 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 is
material to the Company and its subsidiaries taken as a whole or
incurred any liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries taken as a whole; and
(iii) neither the Company nor any of its subsidiaries has
sustained any 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, in each case that is material to the Company
and its subsidiaries taken as a whole, 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, each of the Guarantors (which are
“significant subsidiaries” as such term is described in
Rule 1-02 of Regulation S-X under the Securities Act), Penn
Virginia GP Holdings, L.P. (“ PVG ”) and Penn
Virginia Resource Partners, L.P. (“ PVR ”) have
been duly organized or formed, as applicable,
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and are validly existing and in good standing
under the laws of their respective jurisdictions of organization,
are duly qualified to do business and are in good standing in each
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 or have such power or authority would not,
individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, properties, financial
position, stockholders’ equity, 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 (a “ Material Adverse
Effect ”). The Company does not own or control, directly
or indirectly, any corporation, association or other entity other
than the subsidiaries listed in Schedule 2 to this Agreement. The
subsidiaries listed in Schedule 3 to this Agreement are the only
significant subsidiaries of the Company (the “ Significant
Subsidiaries ”). For the avoidance of doubt, Schedule 3
does not include the significant subsidiaries of PVR, unless such
subsidiaries are also significant subsidiaries of the
Company.
(i) Ownership of PVG GP, LLC
. The Company owns a 100% membership interest in PVG GP, LLC
(“ GP ”); such membership interest has been duly
authorized and validly issued in accordance with the limited
liability company agreement of GP (the “ GP LLC
Agreement ”) and is fully paid (to the extent required
under the GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 18-607 and 18-804 of
the Delaware Limited Liability Company Act (the “ Delaware
LLC Act ”)); and the Company owns such membership
interest free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of
any third party.
(j) Ownership of PVG .
(i) GP is the sole general partner of PVG with a non-economic
general partner interest in PVG; such general partner interest has
been duly authorized and validly issued in accordance with the
Amended and Restated Agreement of Limited Partnership of PVG (the
“ PVG Partnership Agreement ”); and GP owns such
general partner interest free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer
or any other claim of any third party; and (ii) the Company
owns an 76.8% limited partner interest in PVG; such limited partner
interest has been duly authorized and validly issued in accordance
with the PVG Partnership Agreement and the Company owns such
limited partner interest free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer
or any other claim of any third party.
(k) Ownership of Penn Virginia
Resource GP, LLC . PVG owns a 100% membership interest in Penn
Virginia Resource GP, LLC (“ PVR GP ”); such
membership interest has been duly authorized and validly issued in
accordance with the limited liability company agreement of PVR GP
(the “ PVR GP Agreement ”) and is fully paid (to
the extent required under the PVR GP Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 18-607
and 18-804 of the Delaware LLC Act);
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and PVG and its affiliates own such membership
interest free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of
any third party.
(l) Ownership of PVR . PVR GP
is the sole general partner of PVR with a 2.0% general partner
interest in PVR; such general partner interest has been duly
authorized and validly issued in accordance with the Amended and
Restated Agreement of Limited Partnership of PVR (the “
PVR Partnership Agreement ”); and PVR GP owns such
general partner interest free and clear of any lien, charge,
encumbrance, security interest, restriction on voting or transfer
or any other claim of any third party.
(m) Capitalization . The
Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the
Prospectus; all the outstanding shares of capital stock of the
Company that will be outstanding immediately prior to the Closing
Date will have been duly and validly authorized and issued and will
be fully paid and non-assessable and will not be subject to any
pre-emptive or similar rights; except as described in or expressly
contemplated by the Time of Sale Information and the Prospectus,
there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock
or other equity interest in the Company or any of its subsidiaries,
or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus; all of the issued
partnership interests, limited liability company interests or
shares of capital stock, as applicable, of each Guarantor have been
duly authorized and validly issued in accordance with the
organizational documents of such Guarantor, and are (except for
general partner interests) fully paid (to the extent required under
such Guarantor’s organizational documents) and
non-assessable, except as such non-assessability may be affected by
Section 18-607 of the Delaware LLC Act, Sections 17-303 and
17-607 of the Delaware Revised Uniform Limited Partnership Act and
Sections 3-303 and 3-607 of the Texas Revised Limited Partnership
Act, as applicable; all shares of capital stock, limited liability
company interests or limited partnership interests (except for
directors’ qualifying shares or interests) of the Significant
Subsidiaries are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims other than
as described in loan or credit agreements filed as exhibits to the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2008 or Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2009.
(n) Due Authorization . The
Company and the Guarantors have the corporate power and authority
to execute and deliver this Agreement, the Securities, the
Guarantees and the Indenture (collectively, the “
Transaction Documents ”) and to perform their
obligations hereunder and thereunder; and all action required to be
taken for the due and proper authorization, execution and delivery
by them of each of the Transaction Documents and the consummation
by them of the transactions contemplated thereby has been duly and
validly taken.
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(o) The Indenture. The
Indenture has been duly authorized by the Company and 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 the Guarantors enforceable
against the Company and the Guarantors in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, fraudulent transfer or similar
laws affecting the enforcement of creditors’ rights generally
or by equitable principles (whether considered in a proceeding at
law or in equity) and an implied covenant of faith and fair dealing
(collectively, the “ Enforceability Exceptions
”).
(p) The Securities . 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.
(q) The Guarantees . Each
Guarantee has been duly authorized for issuance by each of the
Guarantors and, when such Guarantee has been duly executed and
delivered and the Securities have been validly issued, executed and
authenticated in accordance with the terms of the Indenture and
paid for as provided herein, such Guarantee will constitute a valid
and binding obligation of the Guarantors enforceable against the
Guarantors in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of
the Indenture.
(r) Underwriting Agreement .
This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors.
(s) 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.
(t) 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.
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(u) No Conflicts . The
execution, delivery and performance by the Company and the
Guarantors of each of the Transaction Documents, the issuance and
sale of the Securities and compliance by the Company with the terms
thereof, the issuance and sale of the Guarantees and compliance by
the Guarantors with the terms thereof and the consummation of the
transactions contemplated by each of 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 and, solely with respect to clause (i) and (iii),
except for such breach, violation, default lien, charge or
encumbrance that would not be reasonably expected to have a
Material Adverse Effect.
(v) No Consents Required . No
consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or
regulatory authority having jurisdiction over the Company or any
Guarantor is required for the execution, delivery and performance
by the Company and the Guarantors of each of the Transaction
Documents, the issuance and sale of the Securities and compliance
by the Company with the terms thereof, the issuance and sale of the
Guarantees and compliance by the Guarantors with the terms thereof
and the consummation of the transactions contemplated by each of
the Transaction Documents, except for the registration of the
Securities under the Securities Act and the qualification of the
Indenture under the Trust Indenture Act, 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 by the
Underwriters.
(w) Legal Proceedings .
Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) 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 and (ii) no such
investigations, actions, suits or proceedings are threatened or, to
the best knowledge of the Company and each of the Guarantors,
contemplated by any governmental or regulatory authority, in the
case of (i) or (ii) that individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the
Company to perform its obligations hereunder; (iii) there are
no current or pending legal, governmental or regulatory actions,
suits or proceedings that are required under
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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 (iv) 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.
(x) Independent Accountants .
KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries which are incorporated by reference in
the Registration Statement, the Time of Sale Information and the
Prospectus, 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.
(y) Title to Real and Personal
Property . Except as otherwise disclosed in the Registration
Statement, Time of Sale Information and the Prospectus, the Company
and its subsidiaries have good and marketable title to, or have
valid rights to lease or otherwise use, all items of real and
personal property that are material to the respective businesses of
the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of
title except those that (i) arise under loan or credit
agreements described in the Company’s Annual Report on Form
10-K for the year ended December 31, 2008 or filed as exhibits
to the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008 or Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2009, or (ii) would
not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(z) Title to Intellectual
Property . 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; and the
Company and its subsidiaries have not received any notice of any
claim of infringement or conflict with any such rights of
others.
(aa) 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 and the Prospectus and that is not so
described in such documents and in the Time of Sale
Information.
(bb) Investment Company Act .
Neither the Company nor any of the Guarantors is 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
11
Sale Information and the Prospectus, neither the
Company nor any of the Guarantors will 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, “ Investment Company Act
”).
(cc) Taxes . The Company and
its subsidiaries have paid all federal, state, local and foreign
taxes (other than those which are being contested in good faith and
for which appropriate reserves have been established or which, if
not paid, would not reasonably be expected to have a Material
Adverse Effect) and filed all tax returns required to be paid or
filed through the date hereof; and except as otherwise disclosed in
the Registration Statement, the Time of Sale Information and the
Prospectus, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any
of its subsidiaries or any of their respective properties or assets
that would reasonably be expected to have a Material Adverse
Effect.
(dd) 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, individually or in the aggregate,
reasonably be expected to have 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.
(ee) No Labor Disputes . No
labor disturbance by or dispute with employees of the Company or
any of its subsidiaries exists or, to the best knowledge of the
Company and each of the Guarantors, is contemplated or threatened,
except as would not reasonably be expected to have a Material
Adverse Effect.
(ff) Reserve Report Data .
The oil and gas reserve estimates of the Company and any of its
subsidiaries as of December 31, 2008 contained in the
Registration Statement, the Time of Sale Information and the
Prospectus have been based in part on reports prepared by
independent reserve engineers in accordance with the Commission
guidelines applied on a consistent basis throughout the periods
involved. Other than production of the reserves in the ordinary
course of business and intervening product price fluctuations or as
described in the Registration Statement, the Time of Sale
Information and the Prospectus, the Company is not aware of any
facts or circumstances that, taken together, would reasonably be
expected to have a material adverse effect on the reserves or the
present value of the future net cash flows therefrom as described
in the Registration Statement, the Time of Sale Information or the
Prospectus.
12
(gg) Environmental Laws .
Except as disclosed in the Registration Statement, Time of Sale
Information or the Prospectus, (i) the Company and its
subsidiaries (x) are, and at all prior times within the last
five years were, in compliance with any and all applicable federal,
state and local laws, rules, regulations, requirements, decisions
and orders relating to the protection of human health or safety,
the environment, natural resources, 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 under or relating to any Environmental Laws, including
for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of each of (x), (y) or
(z) above, for any such failure to comply, or failure to
receive required permits, licenses, certificates or other
authorizations or approvals, or liability, as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (ii) there are no costs (including
capital expenditures), obligations or liabilities associated with
Environmental Laws or hazardous or toxic substances or wastes,
pollutants or contaminants of and relating to the Company or its
subsidiaries, except for such costs, obligations or liabilities as
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and (iii) there are no
proceedings that are pending or, to the knowledge of the Company or
any of its subsidiaries, threatened against the Company or any of
its subsidiaries under any Environmental Laws other than such
proceedings that would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
(hh) Compliance With ERISA .
(i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ ERISA ”), excluding any
multi-employee plan, within the meaning of Section 3(37) of
ERISA, for which the Company 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 ”)) would have any
liability (each, a “ Plan ”) has been maintained
in material compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code; (ii) no prohibited
transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any
Plan excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) none of the Company, any
member of its Controlled Group and any predecessor thereof
contributed to, or has in the past contributed to, any
multiemployer plan, as defined in Section 3(37) of ERISA;
(iv) for each Plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no
“ accumulated funding deficiency ” as defined in
Section 412 of the Code, whether or not waived, has occurred
or is reasonably expected to occur; (v) no “
reportable event ” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur; and (vi) neither the Company nor any member
of the Controlled Group has incurred, nor reasonably expects to
incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC, in the ordinary
course and without default) in respect of a Plan, except, in each
case, as would not reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect.
13
(ii) Disclosure Controls .
The Company maintains 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 ensure that such information is accumulated
and communicated to the Company’s management as appropriate
to allow timely decisions regarding required disclosure. The
Company carried out evaluations of the effectiveness of its
disclosure controls and procedures as required by Rule 13a-15 of
the Exchange Act.
(jj) Accounting Controls .
The Company maintains 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. There
are no material weaknesses in the Company’s internal
controls.
(kk) Insurance . The Company
and its subsidiaries have insurance in such amounts and insuring
against such losses and risks as are reasonably adequate to protect
the Company and its subsidiaries and their respective
businesses.
(ll) No Unlawful Payments .
Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company and each of the Guarantors, any director,
officer, agent, employee or other person associated with or acting
on behalf of the Company or any of its subsidiaries has
(i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(mm) Compliance with Money
Laundering Laws . The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
with
14
applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act
of 1970, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental agency (collectively, the “
Money Laundering Laws ”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(nn) Compliance with OFAC .
None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or Affiliate
of the Company or any of its subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Department of the Treasury (“ OFAC
”); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(oo) Solvency. On and
immediately after the Closing Date, the Company and each Guarantor
(after giving effect to the issuance of the Securities and the
other transactions related thereto as described in the Registration
Statement, the Time of Sale Information and the Prospectus) will be
Solvent. As used in this paragraph, the term “Solvent”
means, with respect to any person as of a particular date, that on
such date (i) the present fair market value (or present fair
saleable value) of the assets of the such person is not less than
the total amount required to pay the liabilities of such person on
its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured; (ii) such
person is able to realize upon its assets and pay its debts and
other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business;
(iii) assuming consummation of the issuance of the Securities
as contemplated by this Agreement, the Registration Statement, the
Time of Sale Information and the Prospectus, such person is not
incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature; (iv) such person is not engaged
in any business or transaction, and does not propose to engage in
any business or transaction, for which its property would
constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which
such person is engaged; and (v) such person is not a defendant
in any civil action that would result in a judgment that the
Company is or would become unable to satisfy.
(pp) No Restrictions on PVR and
PVG . Neither PVG nor PVR is currently prohibited, directly or
indirectly, under any agreement or other instrument to which it is
a party or is subject, from paying any Quarterly Distributions of
Available Cash (as such terms are defined in the PVG Partnership
Agreement and the PVR Partnership Agreement) on their respective
partnership interests.
(qq) No Broker’s Fees .
Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than
this
15
Agreement) that would give rise to a valid claim
against the Company or any of its subsidiaries or any Underwriter
for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.
(rr) No Registration Rights .
No person has the right to require the Company or any of its
subsidiaries to register any securities for sale under the
Securities Act by reason of the issuance and sale of the
Securities.
(ss) No Stabilization .
Neither the Company nor any of the Guarantors has taken, directly
or indirectly, any action designed to or that would reasonably be
expected to cause or result in any stabilization or manipulation of
the price of the Securities.
(tt) Statistical and Market
Data . Nothing has come to the attention of the Company that
has caused the Company to believe that the statistical and
market-related data included in the Registration Statement, the
Time of Sale Information and the Prospectus is not based on or
derived from sources that are reliable and accurate in all material
respects.
(uu) Sarbanes-Oxley Act . The
Company is, and to the knowledge of the Company, its officers and
directors are, in compliance in all material respects with the
applicable provisions of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection
therewith.
(vv) Status under the Securities
Act . The Company is not an ineligible issuer and is a
well-known seasoned issuer, in each case as defined under the
Securities Act, in each case at the times specified in the
Securities Act in connection with the offering of the Securities.
The Company has paid the registration fee for this offering
pursuant to Rule 456 (b) (1) under the Securities Act or
will pay such fees within the time period required by such rule
(without giving effect to the proviso therein) and in any event
prior to the Closing Date.
4. Further Agreements of the
Company and the Guarantors . The Company and each of the
Guarantors jointly and severally covenant and agree with each
Underwriter that:
(a) Required Filings . The
Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or
430C under the Securities Act, will file any Issuer Free Writing
Prospectus (including the Term Sheet in the form of Annex C hereto)
to the extent required by Rule 433 under the Securities Act; and
will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; and the Company will
furnish copies of the Prospectus and each Issuer Free Writing
Prospectus (to the extent not previously delivered) to the
Underwriters in New York City prior to 10:00 A.M., New York City
time, on
16
the business day next succeeding the date of
this Agreement in such quantities as the Representative may
reasonably request. The Company will pay the registration fees for
this offering within the time period required by Rule 456 (b)(i)
under the Securities Act prior to the Closing Date.
(b) Delivery of Copies . The
Company will deliver, without charge, as many copies of the
Prospectus (including all amendments and supplements thereto and
documents incorporated by reference therein) and each Issuer Free
Writing Prospectus as the Representative may reasonably request. As
used herein, the term “Prospectus Delivery Period”
means such period of time after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by
law to be delivered (or required to be delivered but for Rule 172
under the Securities Act) in connection with sales of the
Securities by any Underwriter or dealer.
(c) Amendments or Supplements,
Issuer Free Writing Prospectuses . Before preparing, using,
authorizing, approving, referring to or filing any Issuer Free
Writing Prospectus, and before filing any amendment or supplement
to the Registration Statement or the Prospectus, the Company will
furnish to the Representative and counsel for the Underwriters a
copy of the proposed Issuer Free Writing Prospectus, amendment or
supplement for review and will not prepare, use, authorize,
approve, refer to or file any such Issuer Free Writing Prospectus
or file any such proposed amendment or supplement to which the
Representative reasonably objects.
(d) Notice to the
Representative . The Company will advise the Representative
promptly, and confirm such advice in writing, (i) when any
amendment to the Registration Statement has been filed or becomes
effective; (ii) when any supplement to the Prospectus or any
Issuer Free Writing Prospectus or any amendment to the Prospectus
has been filed; (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or the receipt of any comments from
the Commission relating to the Registration Statement or any other
request by the Commission for any additional information;
(iv) of the issuance by the Commission of any order suspending
the effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus or the Prospectus
or the initiation or threatening of any proceeding for that purpose
or pursuant to Section 8A of the Securities Act; (v) of
the occurrence of any event within the Prospectus Delivery Period
as a result of which the Prospectus, the Time of Sale Information
or any Issuer Free Writing Prospectus as then amended or
supplemented would include 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 existing when the Prospectus, the Time of Sale
Information or any such Issuer Free Writing Prospectus is delivered
to a purchaser, not misleading; (vi) of the receipt by the
Company of any notice of objection of the Commission to the use of
the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act; and
(vii) of the receipt by the Company of any notice with respect
to any suspension of the qualification of the Securities for offer
and sale in any jurisdiction
17
or the initiation or threatening of any
proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification of the
Securities and, if any such order is issued, will obtain as soon as
possible the withdrawal thereof.
(e) Ongoing Compliance .
(1) If during the Prospectus Delivery Period (i) any
event shall occur or condition shall exist as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, not misleading or
(ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will immediately notify the
Underwriters thereof and forthwith prepare and, subject to
paragraph (c) above, file with the Commission and furnish to
the Underwriters and to such dealers as the Representative may
designate, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus as so amended
or supplemented will not, in the light of the circumstances
existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law and
(2) if at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which the
Time of Sale Information as then amended or supplemented would
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, not misleading or
(ii) it is necessary to amend or supplement the Time of Sale
Information to comply with law, the Company will immediately notify
the Underwriters thereof
