J.P. MORGAN SECURITIES
INC.
10,000,000 Shares of Common
Stock
June 24,
2009
J.P. Morgan Securities Inc.
As Representative of the
several Underwriters listed
in Schedule 1 hereto
383 Madison Avenue
New York, New York 10179
PetroQuest Energy,
Inc., a Delaware corporation (the “Company”), proposes
to issue and sell to the several Underwriters listed in
Schedule 1 hereto (the “Underwriters”), for whom
you are acting as representative (the
“Representative”), an aggregate of 10,000,000 shares of
common stock (the “Common Stock”), par value $0.001 per
share, of the Company (the “Underwritten Shares”) and,
at the option of the Underwriters, up to an additional 1,500,000
shares of Common Stock of the Company (the “Option
Shares”). The Underwritten Shares and the Option Shares are
herein referred to as the “Shares”. The shares of
Common Stock to be outstanding after giving effect to the sale of
the Shares are herein referred to as the “Stock”. The
Stock, including the Shares, will have attached thereto rights (the
“Rights”) to purchase from the Company one
one-thousandth of a share of Preferred Stock — Junior
Participating Series A, par value $0.001 per share, at a price
of $33.00 per one one-thousandth share, subject to adjustment. The
Rights are to be issued pursuant to a Rights Agreement (the
“Rights Agreement”) dated as of November 7, 2001,
between the Company and American Stock Transfer & Trust
Company, as rights agent.
The Company hereby
confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1.
Registration Statement . The Company meets the requirements
for use of Form S-3 under the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) thereunder (collectively,
the “Securities Act”), and has prepared and filed with
the Commission a registration statement (File No. 333-131955)
on Form S-3 including a prospectus (the “Basic
Prospectus”), relating to securities to be issued from time
to time by the Company, including the Shares and the Rights. Such
registration statement, as amended at the time it was declared
effective, including the information, if any, deemed pursuant to
Rule 430A, 430B or 430C under the Securities Act to be part of the
registration statement at the time of its effectiveness
(“Rule 430 Information”), is referred to herein as
the “Registration Statement”; and as used herein, the
term “Preliminary Prospectus” means the Basic
Prospectus included in the Registration Statement at the time of
its effectiveness, together with the preliminary prospectus
supplement dated June 23, 2009 filed with the Commission that
omits Rule 430 Information, and the term “Final
Prospectus” means the Basic Prospectus together with the
final prospectus supplement in accordance with Rules 415 and
424(b) 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 Shares. If the Company
has filed an abbreviated registration statement pursuant to Rule
462(b) under the Securities Act (the “Rule 462
Registration Statement”), then any reference herein to the
term “Registration Statement” shall be deemed to
include such Rule 462 Registration Statement. Any reference in
this Agreement to the Registration Statement, the Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the
effective date of the Registration Statement or the date of the
Preliminary Prospectus or the Final Prospectus, as the case may be,
and any reference to “amend”, “amendment”
or “supplement” with respect to the Registration
Statement, Preliminary Prospectus or the Final Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission
2
thereunder
(collectively, the “Exchange Act”) that are deemed to
be incorporated by reference therein. Capitalized terms used but
not defined herein shall have the meanings given to such terms in
the Registration Statement and the Final Prospectus.
At or prior to the
Applicable Time (as defined below), the Company had prepared the
following information (collectively with the pricing information
set forth on Annex B, the “Pricing Disclosure
Package”): the Preliminary Prospectus dated June 23,
2009, and each “free-writing prospectus” (as defined
pursuant to Rule 405 under the Securities Act), if any, listed
on Annex B hereto.
“Applicable
Time” means 5:30 P.M., New York City time, on June 24,
2009.
2.
Purchase of the Shares by the Underwriters . (a) The
Company agrees to issue and sell the Underwritten Shares to the
several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth
herein, agrees, severally and not jointly, to purchase from the
Company the respective number of Underwritten Shares set forth
opposite such Underwriter’s name in Schedule 1 hereto at
a price per share (the “Purchase Price”) of
$3.3075.
In addition, the
Company agrees to issue and sell the Option Shares solely to cover
over-allotment shares to the several Underwriters as provided in
this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option
to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price.
If any Option
Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares
being purchased as the number of Underwritten Shares set forth
opposite the name of such Underwriter in Schedule 1 hereto (or
such number increased as set forth in Section 10 hereof) bears
to the aggregate number of Underwritten Shares being purchased from
the Company by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the
Representative in its sole discretion shall make.
The Underwriters
may exercise the option to purchase the Option Shares at any time
in whole or in part (but not more than once), on or before the
thirtieth day following the date of the Final Prospectus, by
written notice from the Representative to the Company. Such notice
shall set forth the aggregate number of Option Shares as to which
the option is being exercised and the date and time when the Option
Shares are to be delivered and paid for, which may be the same date
and time as the Closing Date (as hereinafter defined) but shall not
be earlier than the Closing Date nor later than the tenth full
business day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the
provisions of Section 10 hereof). Any such notice shall be
given at least two business days prior to the date and time of
delivery specified therein.
(b) The
Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this
Agreement as in the judgment of the Representative is advisable,
and initially to offer the Shares on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the
Underwriters may offer and sell Shares to or through any affiliate
of an Underwriter.
(c) Payment
for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the
Representative, in the case of the Underwritten Shares, at the
offices of Cravath, Swaine & Moore LLP, 825 Eighth Avenue, New
York, New York at 10:00 A.M. New York City time on
June 30, 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 or,
in the case of the Option Shares, on the date and at the time and
place specified by the Representative in the written notice of the
Underwriters’ election to purchase such Option Shares. The
time and date of such payment for the Underwritten Shares is
referred to herein as the “Closing Date” and the time
and date for such payment for the Option Shares, if other than the
Closing Date, is herein referred to as the “Additional
Closing Date”.
Payment for the
Shares to be purchased on the Closing Date or the Additional
Closing Date, as the case may be, shall be made against delivery to
the Representative for the respective accounts of the several
Underwriters of the Shares to be purchased on such date, with any
transfer taxes payable in connection with the sale of
such
3
Shares duly
paid by the Company. Delivery of the Shares shall be made through
the facilities of The Depository Trust Company (the
“DTC”) unless the Representative shall otherwise
instruct.
(d) The
Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm’s-length contractual
counterparty to the Company with respect to the offering of Shares
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 or any other person.
Additionally, neither the Representative nor any other Underwriter
is advising the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.
The Company shall consult with its 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 with respect thereto. Any review by the
Underwriters of the Company, 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.
3.
Representations and Warranties of the Company . The Company
represents and warrants to each Underwriter 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, as of its date,
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 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 through the Representative expressly for use in
the Preliminary Prospectus, it being understood and agreed that the
only such information furnished by any Underwriter consists of the
information described as such in Section 7(b) hereof.
(b)
Pricing Disclosure Package . The Pricing Disclosure Package,
at the Applicable Time did not, and as of the Closing Date, as the
case may be, 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 through the Representative
expressly for use in such Pricing Disclosure Package, it being
understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in
Section 7(b) hereof.
(c)
Issuer Free Writing Prospectus . Other than the Registration
Statement, Preliminary Prospectus and the Final Prospectus, the
Company (including its agents and representatives, other than the
Underwriters in their capacity as such) has not prepared, used,
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 Shares (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 Rules 134 and 168
under the Securities Act or (ii) the documents listed on Annex
B hereto and any written communications approved in writing in
advance by the Representative. 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
Preliminary Prospectus filed prior to the first use of such Issuer
Free Writing Prospectus, did not, and at the Closing Date and as of
the Additional Closing Date, as the case may be, 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 or
Preliminary Prospectus in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representative expressly
for use in such Issuer Free Writing Prospectus or Preliminary
Prospectus, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 7(b) hereof.
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(d)
Registration Statement and Final Prospectus . The
Registration Statement has been declared effective by the
Commission. 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 of
the Shares has been initiated or, to the knowledge of the Company,
threatened by the Commission; as of the applicable effective date
of the Registration Statement and any post-effective amendment
thereto, the Registration Statement any such post-effective
amendment 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
necessary in order to make the statements therein not misleading;
and as of the date of the Final Prospectus and any amendment or
supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Final Prospectus
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 through the Representative expressly for use in
the Registration Statement and the Final Prospectus and any
amendment or supplement thereto, it being understood and agreed
that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b)
hereof.
(e)
Incorporated Documents . The documents incorporated by
reference in the Registration Statement, the Final Prospectus and
the Pricing Disclosure Package, when they were filed with the
Commission, conformed in all material respects to the requirements
of the Exchange Act, and none of such documents contained any
untrue statement of a material fact or omitted to state a material
fact 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 Final Prospectus or the Pricing
Disclosure Package, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Exchange Act and 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.
(f)
Financial Statements . The financial statements included, or
incorporated by reference, in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus present fairly
in all material respects the financial position of the Company and
its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus, such financial
statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a
consistent basis and the supporting schedules included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus present fairly
in all material respects the information required to be stated
therein; and the other financial information included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus has been
derived from the accounting records of the Company and its
consolidated subsidiaries and presents fairly in all material
respects the information shown thereby (except as otherwise stated
therein).
(g) No
Material Adverse Change . Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus, since the date of the latest audited financial
statements included in the Registration Statement, the Pricing
Disclosure Package and the Final Prospectus, (i) there has not
been any material change in the capital stock (other than the
issuance of shares of Common Stock upon exercise of stock options
and warrants described as outstanding in, and the grant of options
and awards under existing equity incentive plans described in, the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus), short-term debt or long-term debt of the Company
or any of its subsidiaries, nor material adverse change, nor any
development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken
as a whole, and, except as disclosed in or contemplated by the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its
capital stock, other than (A) dividends declared and paid on
its outstanding 6.875% Series B cumulative convertible
perpetual preferred stock or (B) dividends or distributions
deemed to occur upon the exercise or exchange of stock options,
warrants, or other convertible securities of such capital stock or
which represent a portion of the exercise or exchange price thereof
or made in lieu of withholding taxes in connection with any such
exercise or exchange, and
5
(ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether
or not in the ordinary course of business) 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;
(h)
Organization and Good Standing . The Company and each of its
subsidiaries has been duly incorporated or organized and is an
existing corporation or limited liability company in good standing
under the laws of the jurisdiction of its incorporation or
organization, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus, except where the failure to have such power or
authority would not individually or in the aggregate have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company and
its subsidiaries taken as a whole or on the performance by the
Company of its obligations under this Agreement (“Material
Adverse Effect”); and the Company and each of its
subsidiaries is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to so qualify
or to be in good standing would not result in a Material Adverse
Effect.
(i)
Capitalization . The Company has an authorized
capitalization as set forth in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus under the
heading “Capitalization”; all the outstanding shares of
capital stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable and are not
subject to any preemptive or similar rights; except as described in
or expressly contemplated by the Pricing Disclosure Package and the
Final Prospectus, there are no outstanding rights (including,
without limitation, preemptive 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 Pricing Disclosure Package and the
Final Prospectus; and all the outstanding shares of capital stock
or other equity interests of each subsidiary owned, directly or
indirectly, by the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance, security interest, restriction on voting or
transfer or any other claim of any third party, except as disclosed
in the Registration Statement, the Pricing Disclosure Package and
the Final Prospectus.
(j) Due
Authorization . The Company has full right, power and authority
to execute and deliver this Agreement and to perform its
obligations hereunder; and all action required to be taken for the
due and proper authorization, execution and delivery by it of this
Agreement and the consummation by it of the transactions
contemplated hereby has been duly and validly taken.
(k) The
Shares . The Shares to be issued and sold by the Company
hereunder have been duly authorized by the Company and, when
issued, delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Time of Sale Information
and the Final Prospectus; and the issuance of the Shares is not
subject to any preemptive or similar rights. The Rights Agreement
has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights
generally or by equitable principles relating to enforceability.
The Rights have been duly authorized by the Company and, when
issued upon issuance of the Shares, will be validly issued. The
Preferred Stock — Junior Participating Series A, par
value $0.001 per share, has been duly authorized by the Company and
validly reserved for issuance upon the exercise of the Rights in
accordance with the terms of the Rights Agreement and upon such
exercise will be validly issued, fully paid and
non-assessable.
(l) No
Violation or Default . Neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws
(or other comparable organizational documents) or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company
6
or any of its
subsidiaries or their respective property is bound, the effect of
which would have a Material Adverse Effect.
(m) No
Conflicts . The execution, delivery and performance of this
Agreement and the issuance and sale of the Shares will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or
any of their properties, or any agreement or instrument to which
the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject the
effect of which would have a Material Adverse Effect, or the
charter or by-laws (or other comparable organizational documents)
of the Company or any such subsidiary, and the Company has full
power and authority to authorize, issue and sell the Shares as
contemplated by this Agreement.
(n) No
Consents Required . No consent, approval, authorization, or
order of, or filing with, any governmental agency or body or any
court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and
sale of the Shares by the Company, except for registration or
qualification of the Shares under applicable securities or
“Blue Sky” laws of the various states and as may be
required by the New York Stock Exchange (the
“Exchange”), and such as have already been
obtained.
(o) Legal
Proceedings . Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Final Prospectus,
there are no pending legal, governmental or regulatory
investigations, actions, suits or proceedings against or affecting
the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and no such legal, governmental or
regulatory investigations, actions, suits or proceedings are, to
the Company’s knowledge, threatened or contemplated; and
(i) there are no current or pending legal, governmental or
regulatory actions, suits or proceedings that are required under
the Securities Act to be described in the Registration Statement
that are not so described in the Registration Statement, the
Pricing Disclosure Package and the Final Prospectus and
(ii) there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as
exhibits to the Registration Statement or described in the
Registration Statement or the Final Prospectus that are not so
filed as exhibits to the Registration Statement or described in the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus.
(p)
Independent Accountants . Ernst & Young LLP, who has
certified certain financial statements of the Company and its
subsidiaries, is 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.
(q) Title
to Real and Personal Property . Except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus, the Company and its subsidiaries have good and
marketable title to all real properties and all other properties
and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made
thereof by them; and, except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Final Prospectus,
the Company and its subsidiaries hold any leased real or personal
property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof
by them.
(r) Title
to Intellectual Property . The Company and its subsidiaries
own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other
intellectual property (collectively, “intellectual property
rights”) necessary to conduct the business now operated by
them, or presently employed by them, and have not received any
notice of infringement, misappropriation of or conflict with
asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(s) 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
7
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 Final Prospectus and that is not so described in such documents
and in the Pricing Disclosure Package.
(t)
Investment Company Act . The Company is not an open-end
investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940
(the “Investment Company Act”); and the Company is not
and, after giving effect to the offering and sale of the Shares and
the application of the proceeds thereof as described in the
Registration Statement, the Pricing Disclosure Package and the
Final Prospectus, will not be, an “investment company”
as defined in the Investment Company Act.
(u)
Taxes . The Company and its subsidiaries have paid all
material federal, state, local and foreign taxes except as may be
contested in good faith and by appropriate proceedings and filed or
have properly requested extensions of all tax returns required to
be filed through the date hereof; and except as otherwise disclosed
in the Registration Statement, the Pricing Disclosure Package and
the Final 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 and that would have a Material Adverse Effect.
(v)
Licenses and Permits . The Company and its subsidiaries
possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct
the business now operated by them and have not received any notice
of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely
to the Company or any of its subsidiaries, would have a Material
Adverse Effect.
(w) No
Labor Disputes . No labor dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the
Company, is imminent that might have a Material Adverse
Effect.
(x)
Compliance with and Liability under Environmental Laws .
Except for any matters that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect, the Company and its Subsidiaries are in compliance with
Environmental Laws (as defined below). Except as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, (a) there are no proceedings that are pending, or
that are known to be contemplated, against the Company or any of
its subsidiaries under any Environmental Laws (as defined below) in
which a governmental entity is also a party, other than such
proceedings regarding which the Company reasonably believes no
monetary sanctions of $100,000 or more will be imposed,
(b) the Company and its subsidiaries are not aware of any
facts or issues regarding compliance with Environmental Laws, or
liabilities or other obligations under Environmental Laws,
including the Release or threat of Release of Hazardous Materials,
that could reasonably be expected to have a material effect on the
capital expenditures, earnings or competitive position of the
Company and its subsidiaries, and (c) none of the Company and
its subsidiaries anticipates material capital expenditures relating
to any Environmental Laws. “Hazardous Materials” means
any material, chemical, substance, waste, pollutant, contaminant,
compound, mixture, or constituent thereof, in any form or amount,
including petroleum (including crude oil or any fraction thereof)
and petroleum products, natural gas liquids, asbestos and asbestos
containing materials, naturally occurring radioactive materials,
brine, and drilling mud, regulated or which can give rise to
liability under any Environmental Law. “Release” means
any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, or migrating in, into or through
the environment, or in, into from or through any building or
structure. “Environmental Laws” means any and all
applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions, judgments, decrees, orders
and the common law relating to pollution or the protection of the
environment, natural resources or human health or safety, including
those relating to the generation, storage, treatment, use,
handling, transportation, Release or threat of Release of Hazardous
Materials.
(y)
Compliance With ERISA . Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), that is
maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and
its affiliates has been maintained in compliance in all material
respects with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited
to ERISA and the Internal Revenue Code of 1986, as amended (the
“Code”); no prohibited transaction, within the meaning
of Section 406 of ERISA or
8
Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant
to a statutory or administrative exemption; and for each such plan
that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, as
applicable, has been satisfied (without taking into account any
waiver thereof or extension of any amortization period) and is
reasonably expected to be satisfied in the future (without taking
into account any waiver thereof or extension of any amortization
period);
(z)
Disclosure Controls . The Company maintains disclosure
controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) that comply with the requirements of the Exchange Act
and designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported in
accordance with the Exchange Act and the rules and regulations
thereunder. The Company has carried out evaluations, under the
supervision and with the participation of the Company’s
management, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures in accordance
with Rule 13a-15 of the Exchange Act.
(aa)
Accounting Controls . The Company and its subsidiaries
maintain systems of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the Exchange
Act) that comply in all material respects 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 in the United States, 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 in the United States and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Registration Statement, the Pricing Disclosure
Package and the Final Prospectus, there are no material weaknesses
in the Company’s internal controls.
(bb)
Insurance . The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which
insurance is in amounts and insures against such losses and risks
as are adequate to protect the Company, its subsidiaries and their
respective businesses and are customary for the businesses in which
they are engaged; and neither the Company nor any of its
subsidiaries has (i) received notice from any insurer or agent
of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business.
(cc) No
Unlawful Payments . Neither the Company nor any of its
subsidiaries 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 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.
(dd)
Compliance with Money Laundering Laws . The operations of
the Company and its subsidiaries are and have been conducted at all
times in compliance in all material respects with 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.
9
(ee)
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 Shares 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.
(ff) No
Restrictions on Subsidiaries . The entities listed on
Schedule 2 hereto are the only subsidiaries, direct or
indirect, of the Company; and except as disclosed in the
Registration Statement, the Pricing Disclosure Package or the Final
Prospectus, no subsidiary of the Company is currently prohibited,
directly or indirectly, under any agreement or other instrument to
which it is a party or is subject, from paying any dividends to the
Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s properties or assets to
the Company or any other subsidiary of the Company.
(gg) 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 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
Shares.
(hh) No
Stabilization . The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of
the price of the Shares.
(ii)
Margin Rules . Neither the Company nor any of its
subsidiaries nor any agent thereof acting on the behalf of them has
taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Shares to violate
Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System.
(jj)
Forward-Looking Statements . No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Registration
Statement, the Pricing Disclosure Package and the Final Prospectus
has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(kk)
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 Pricing Disclosure Package and the
Final Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(ll)
Sarbanes-Oxley Act . There is and has been no failure on the
part of the Company or, to the knowledge of the Company, any of the
Company’s directors or officers, in their capacities as such,
to comply in all material respects with any provision of the
Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(mm)
Status under the Securities Act . At the time of filing the
Registration Statement and any post-effective amendment thereto, at
the earliest time thereafter that the Company or any offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) under the Securities Act) of the Shares and at
the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 under
the Securities Act.
4.
Further Agreements of the Company . The Company covenants
and agrees 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 to the extent
required by Rule 433 under the Securities Act; will file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the
Commission
10
pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Final Prospectus and for so long as
the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and will furnish copies of the
Final Prospectus and the 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 the business
day next succeeding the date of this Agreement in such quantities
as the Representative may reasonably request.
(b)
Delivery of Copies . The Company will deliver, without
charge, (i) to the Rep
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