Exhibit 1.1
Execution Copy
HERITAGE FINANCIAL
CORPORATION
(a Washington
corporation)
3,775,000 Shares of Common
Stock
(No Par Value Per Share)
UNDERWRITING
AGREEMENT
September 16, 2009
KEEFE, BRUYETTE & WOODS,
INC.
as Representative of the several
Underwriters
Keefe, Bruyette & Woods,
Inc.
787 Seventh Avenue
4 th Floor
New York, New York 10019
Ladies and Gentlemen:
Heritage Financial Corporation, a
Washington corporation (the “Company”), confirms its
agreements with Keefe, Bruyette & Woods, Inc.
(“Keefe Bruyette”) and each of the other Underwriters
named in Schedule A hereto (collectively, the
“Underwriters”, which term shall also include any
underwriter substituted as hereinafter provided in Section 10
hereof), for whom Keefe Bruyette is acting as representative (in
such capacity, the “Representative”), with respect to
(i) the sale by the Company, and the purchase by the
Underwriters, acting severally and not jointly, of the respective
numbers of shares of Common Stock, no par value per share, of the
Company (“Common Stock”) set forth in Schedule A hereto
and (ii) the grant by the Company to the Underwriters, acting
severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 566,250
additional shares of Common Stock to cover over-allotments, if any.
The aforesaid 3,775,000 shares of Common Stock (the “Initial
Securities”) to be purchased by the Underwriters and all or
any part of the 566,250 shares of Common Stock subject to the
option described in Section 2(b) hereof (the “Option
Securities”) are hereinafter called, collectively, the
“Securities”.
The Company understands that the
Underwriters propose to make a public offering of the Securities as
soon as the Representative deems advisable after this Agreement has
been executed and delivered.
The Company has filed with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. 333-156271), including
the related preliminary prospectus or prospectus covering the
registration of the Securities under the Securities Act of 1933, as
amended (the “1933 Act”). Promptly after execution and
delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with
the provisions of Rule 430A (“Rule 430A”) of the rules
and regulations of the Commission under the 1933 Act (the
“1933 Act Regulations”) and paragraph (b) of Rule
424 (“Rule 424(b)”) of the 1933 Act Regulations. The
information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it
became effective pursuant to paragraph (b) of Rule 430A is
referred to as “Rule 430A Information.” Each prospectus
used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information
that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a
“preliminary prospectus.” Such registration statement,
including the amendments thereto, the exhibits and any schedules
thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at
the time it became effective and including the Rule 430A
Information, is herein called the “Registration
Statement.” Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the
“Rule 462(b) Registration Statement,” and after such
filing the term “Registration Statement” shall include
the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein, in the
form first furnished to the Underwriters for use in connection with
the offering of the Securities is herein called the
“Prospectus.” For purposes of this Agreement, all
references to the Registration Statement, any preliminary
prospectus or the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”).
All references in this Agreement to
financial statements and schedules and other information which is
“contained,” “included” or
“stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import)
shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by
reference in the Registration Statement, any preliminary prospectus
or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration
Statement, any preliminary prospectus or the Prospectus shall be
deemed to mean and include the filing of any document under the
Securities Exchange Act of 1934 (the “1934 Act”) which
is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may
be.
SECTION 1. Representations and
Warranties and Agreements
(a) Representations and
Warranties by the Company. The Company represents and warrants
to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:
(i) Compliance with Registration
Requirements . (A) At the time of filing the Registration
Statement, any 462(b) Registration Statement and any post-effective
amendments thereto, (B) at the earliest time thereafter that
the Company or another offering participant made a bona fide offer
(within the meaning of Rule 164(h)(2) of the 1933 Act Regulations)
of the Securities, and (C) at the date hereof, the Company was
not an “ineligible issuer” as defined in Rule 405 of
the
2
1933 Act Regulations (“Rule 405”).
The Company meets the requirements for use of Form S-3 under the
1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and
no stop order suspending the effectiveness of the Registration
Statement and any post-effective amendment thereto or any Rule
462(b) Registration Statement has been issued and any
post-effective amendment thereto under the 1933 Act and no
proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendments thereto became effective and at the
Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did
not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, at the
time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an
untrue statement of a material fact or omitted or will 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.
Each preliminary prospectus and the
prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in
all material respects with the 1933 Act and the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
As of the Applicable Time, neither
(x) the Issuer-Represented General Free Writing Prospectus(es)
(as defined below) issued at or prior to the Applicable Time (as
defined below) and the Statutory Prospectus (as defined below), all
considered together (collectively, the “ General
Disclosure Package ”), nor (y) any individual
Issuer-Represented Limited Use Free Writing Prospectus, when
considered together with the General Disclosure Package, included
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
The registration statement relating
to the Securities initially became effective within three years of
the date hereof. If, immediately prior to the third anniversary of
the initial effective date of the registration statement relating
to the Securities, any of the Securities remain unsold by the
Underwriters, the Company will prior to that third anniversary
file, if it has not already done so, a new shelf registration
statement relating to the Securities, in a form satisfactory to the
Representative, will use its best efforts to cause such
registration statement to be declared effective within 180 days
after that third anniversary, and will take all other action
necessary or appropriate to permit the public offering and sale of
the Securities to continue as contemplated in the expired
registration statement relating to the Securities. References
herein to the registration statement relating to the Securities
shall include such new shelf registration statement.
3
As used in this subsection and
elsewhere in this Agreement:
“ Applicable Time
” means 7:30 p.m. (Eastern time) on the date of this
Agreement or such other time as agreed by the Company and Keefe
Bruyette.
“ Statutory Prospectus
” as of any time means the prospectus relating to the
Securities that is included in the Registration Statement
immediately prior to that time, including any document incorporated
by reference therein and any prospectus supplement deemed to be a
part thereof. For purposes of this definition, information
contained in a form of prospectus that is deemed retroactively to
be a part of the Registration Statement pursuant to Rule 430B shall
be considered to be included in the Statutory Prospectus as of the
actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b).
“ Issuer-Represented Free
Writing Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“ Rule 433 ”), relating to the
Securities that (i) is required to be filed with the
Commission by the Company or (ii) is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of
the Securities or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule
433(g).
“ Issuer-Represented
General Free Writing Prospectus ” means any
Issuer-Represented Free Writing Prospectus that is intended for
general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.
“ Issuer-Represented
Limited Use Free Writing Prospectus ” means any
Issuer-Represented Free Writing Prospectus that is not an
Issuer-Represented General Free Writing Prospectus.
Each Issuer-Represented Free Writing
Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the
Securities or until any earlier date that the issuer notified or
notifies Keefe Bruyette as described in the next sentence, did not,
does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document
incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded
or modified, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof
that has not been superseded or modified.
The representations and warranties
in this subsection shall not apply to statements in or omissions
from the Registration Statement, any preliminary prospectus, the
Prospectus or any Issuer-Represented Free Writing Prospectus made
in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Keefe Bruyette
expressly for use therein.
4
(ii) Incorporated Documents .
The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when
they became effective or at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the “1934 Act
Regulations”), and, when read together with the other
information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was issued
and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(iii) Independent Accountants
. KPMG LLP, the accounting firm that certified the financial
statements and supporting schedules of the Company included in the
Registration Statement and the Prospectus, is an independent
registered public accounting firm as required by the 1933 Act and
the 1933 Act Regulations. With respect to the Company, KPMG LLP is
not and has not been in violation of the auditor independence
requirements of the Sarbanes-Oxley Act of 2002
(“Sarbanes-Oxley Act”) and the related rules and
regulations of the Commission.
(iv) Financial Statements .
The financial statements included in the Registration Statement,
the General Disclosure Package and the Prospectus, together with
the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations,
stockholders’ equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles (“GAAP”) applied on a consistent
basis throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement, the General Disclosure
Package and the Prospectus present fairly in accordance with GAAP
the information required to be stated therein. The selected
financial data and the summary financial information included in
the Registration Statement, the General Disclosure Package and the
Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement and the
books and records of the Company. No other financial statements or
schedules are required to be included in the Registration
Statement. To the extent applicable, all disclosures contained in
the Registration Statement or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined
by the rules and regulations of the Commission) comply with
Regulation G of the Securities Exchange Act of 1934, as amended
(“1934 Act”), the rules and regulations of the 1934 Act
(the “1934 Act Regulations”) and Item 10 of
Regulation S-K under the 1933 Act, as applicable.
(v) No Material Adverse Change in
Business . Since the respective dates as of which information
is given in the Registration Statement, the General Disclosure
Package and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse
Effect”), (B) there have been no transactions entered
into by
5
the Company or any of its subsidiaries, other
than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on
the Common Stock prior to the suspension of such dividends in the
second quarter of 2009, and the Company’s outstanding Series
A Preferred Stock, in amounts per share that are consistent with
past practice, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its
capital stock.
(vi) Good Standing of the
Company . The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Washington and has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the General Disclosure Package and the Prospectus and
to enter into and perform its obligations under this Agreement; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. The Company is registered as a
bank holding company under the Bank Holding Company Act of 1956, as
amended.
(vii) Good Standing of
Subsidiaries . Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a “Subsidiary” and, collectively, the
“Subsidiaries”) has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the General Disclosure Package and the
Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. Except as otherwise disclosed
in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary. The only
subsidiaries of the Company are the subsidiaries listed on Schedule
C hereto. Each of the subsidiaries, Heritage Bank and Central
Valley Bank, is an insured bank under the provisions of the Federal
Deposit Insurance Act, as amended. The deposit accounts of each of
Heritage Bank and Central Valley Bank are insured up to the
applicable limits by the Federal Deposit Insurance Corporation
(“FDIC”) to the fullest extent permitted by law and the
rules and regulations of the FDIC, and no proceeding for the
revocation or termination of such insurance is pending or, to the
Company’s knowledge, threatened.
(viii) Capitalization . The
authorized, issued and outstanding capital stock of the Company is
as set forth in the General Disclosure Package and the Prospectus
in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options
referred to in the
6
Prospectus). The shares of issued and
outstanding capital stock have been duly authorized and validly
issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock was issued in violation of the
preemptive or other similar rights of any securityholder of the
Company. Except as described in the Registration Statement and the
Prospectus, there are no outstanding rights (contractual or
otherwise), warrants or options to acquire, or instruments
convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares
of capital stock of or other equity interest in the
Company.
(ix) Authorization of
Agreement . This Agreement has been duly authorized, executed
and delivered by the Company.
(x) Authorization and Description
of Securities . The Securities to be purchased by the
Underwriters from the Company have been duly authorized for
issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable; the
Common Stock conforms in all material respects to all statements
relating thereto contained in the Prospectus and such description
conforms in all material respects to the rights set forth in the
instruments defining the same; no holder of the Securities will be
subject to personal liability for the debts of the Company by
reason of being such a holder; and the issuance of the Securities
is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and
Conflicts . Neither the Company nor any of its subsidiaries is
in violation of its articles of incorporation or by-laws or in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any
of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or
any subsidiary is subject (collectively, “Agreements and
Instruments”) except for such defaults that would not result
in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the
Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder have been
duly authorized by all necessary corporate action and do not and
will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any subsidiary pursuant
to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the articles of
incorporation or by-laws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As
used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such
7
holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary. Except as disclosed
in the Registration Statement and the Prospectus, the Company and
its subsidiaries are conducting their respective businesses in
compliance in all material respects with all federal, state, local
and foreign statutes, laws, rules, regulations, decisions,
directives and orders applicable to them, including, without
limitation, all regulations and orders of, or agreements with, the
Federal Reserve Board and the FDIC, the Washington State Department
of Financial Institutions, and the Commission, and neither the
Company nor any of its subsidiaries has received any written, or to
the Company’s knowledge, oral communication asserting that
the Company or any of its subsidiaries is not in material
compliance with any statute, law, rule, regulation, decision,
directive or order.
(xii) Absence of Labor
Dispute . No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any
subsidiary’s principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiii) Absence of Proceedings
. There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement, the General Disclosure Package or the Prospectus (other
than as disclosed therein), or which might reasonably be expected
to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated
in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is
a party or of which any of their respective property or assets is
the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Effect.
(xiv) Accuracy of Exhibits .
There are no contracts or documents which are required to be
described in the Registration Statement, or the General Disclosure
Package, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual
Property . The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures and excluding
generally commercially available “off the shelf”
software programs licensed pursuant to shrink wrap or “click
and accept” licenses), trademarks, service marks, trade names
or other intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by
them, and neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect
the
8
interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect.
(xvi) Absence of Further
Requirements . No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters..
(xvii) Possession of Licenses and
Permits . The Company and its subsidiaries possess such
material permits, licenses, approvals, consents and other
authorizations (collectively, “Governmental Licenses”)
issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has failed to file with applicable regulatory
authorities any statement, report, information or form required by
any applicable law, regulation or order, except where the failure
to be so in compliance would not, individually or in the aggregate,
have a Material Adverse Effect, all such filings were in material
compliance with applicable laws when filed and no material
deficiencies have been asserted by any regulatory commission,
agency or authority with respect to any such filings or
submissions.
(xviii) Title to Property .
The Company and its subsidiaries have good and marketable title to
all real property owned by the Company and its subsidiaries and
good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except
such as (a) are described in the General Disclosure Package
and the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in
the General Disclosure Package and the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary
under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any
such lease or sublease.
9
(xix) Investment Company Act
. The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the General Disclosure Package
and the Prospectus will not be, an “investment company”
or an entity “controlled” by an “investment
company” as such terms are defined in the Investment Company
Act of 1940, as amended (the “1940 Act”).
(xx) Environmental Laws .
Except as described in the Registration Statement and except as
would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or
mold (collectively, “Hazardous Materials”) or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials
(collectively, “Environmental Laws”), (B) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that
might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxi) Taxes . The Company and
each of the subsidiaries has (a) timely filed all material
foreign, United States federal, state and local tax returns,
information returns, and similar reports that are required to be
filed (taking into account valid extensions), and all tax returns
are true, correct and complete, (b) paid in full all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, except for any such tax assessment, fine or
penalty that is currently being contested in good faith or as would
not have, individually or in the aggregate, a Material Adverse
Effect, and (c) established on the most recent balance sheet
reserves that are adequate for the payment of all taxes not yet due
and payable.
(xxii) Insurance . The
Company and its Subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as the Company reasonably
believes are adequate for the conduct of the business of the
Company and its Subsidiaries and the value of their properties and
as are customary in the business in which the Company and its
Subsidiaries are engaged; neither the Company nor any of its
Subsidiaries has been refused any insurance coverage sought or
applied for; and the Company has no reason to believe that they
will not be able to renew their 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 at a
cost that would not have a Material Adverse Effect.
10
(xxiii) Statistical and Market
Data . The statistical and market related data contained in the
Prospectus and Registration Statement are based on or derived from
sources which the Company believes are reliable and
accurate.
(xxiv) Relationship . No
relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries, on the one hand, and the
directors, officers, shareholders, customers or suppliers of the
Company or any of its subsidiaries, on the other, that is required
by the Securities Act or by the rules and regulations of the
Commission thereunder to be described in the Registration Statement
and/or the Prospectus and that is not so described.
(xxv) Internal Control Over
Financial Reporting . The Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance
with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (D) 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 described in the Registration Statement, General Disclosure
Package and Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (I) no material
weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (II) no change in the
Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect,
the Company’s internal control over financial
reporting.
(xxvi) Disclosure Controls and
Procedures . The Company employs disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the 1934
Act), which (A) are designed to ensure that information
required to be disclosed by the Company in the reports that it
files or submits under the 1934 Act is recorded, processed,
summarized and reported within the time periods specified in the
Commission’s rules and forms and that material information
relating to the Company and its Subsidiaries is made known to the
Company’s principal executive officer and principal financial
officer by others within the Company and its Subsidiaries to allow
timely decisions regarding disclosure, and (B) are effective
in all material respects to perform the functions for which they
were established. Based on the evaluation of the Company’s
and each Subsidiary’s disclosure controls and procedures
described above, the Company is not aware of (1) any
significant deficiency in the design or operation of internal
controls which could adversely affect the Company’s ability
to record, process, summarize and report financial data or any
material weaknesses in internal controls or (2) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls. Since the most recent evaluation of the
Company’s disclosure controls and procedures described above,
there have been no significant changes in internal controls or in
other factors that could significantly affect internal
controls.
11
(xxvii) Compliance with the
Sarbanes-Oxley Act . There is and has been no failure on the
part of the Company or 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.
(xxviii) Pending Procedures and
Examinations . The Registration Statement is not the subject of
a pending proceeding or examination under Section 8(d) or 8(e)
of the 1933 Act, and the Company is not the subject of a pending
proceeding under Section 8A of the 1933 Act in connection with
the offering of the Securities.
(xxix) Unlawful Payments .
Neither the Company nor any of its subsidiaries nor, to the
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 (A) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (B) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (C) violated or is
in violation of any provision of the Foreign Corrupt Practices Act
of 1977; or (D) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(xxx) 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 1933 Act
by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Securities to be sold by
the Company hereunder.
(xxxi) No Stabilization or
Manipulation . Neither the Company nor any of its Subsidiaries,
nor any affiliates of the Company or its Subsidiaries, has 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 Securities.
(xxxii) No Unauthorized Use of
Prospectus . The Company has not distributed and, prior to the
later to occur of (i) the Closing Time and
(ii) completion of the distribution of the Securities, will
not distribute any prospectus (as such term is defined in the 1933
Act and the 1933 Act Regulations) in connection with the offering
and sale of the Securities other than the Registration Statement,
any preliminary prospectus, the Prospectus or other materials, if
any, per
