7
1
/
2
% Senior Subordinated Notes due 2015
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
Denbury Resources Inc., a Delaware
corporation (the “Company”), proposes to issue and sell
to you as the underwriter (the “Underwriter”)
$150 million principal amount of its 7
1
/
2
% Senior Subordinated Notes due 2015 (the
“Securities”). The Securities will be issued pursuant
to an Indenture to be dated as of December 7, 2005 (the
“Indenture”) between the Company, the guarantors listed
in Schedule 2 hereto (the “Guarantors”) and
JPMorgan Chase Bank, National Association, as trustee (the
“Trustee”), and will be guaranteed on an unsecured
senior subordinated basis by each of the Guarantors (the
“Guarantees”).
The Company hereby confirms its
agreement with the Underwriter concerning the purchase and sale of
the Securities, as follows:
1. Registration
Statement . The Company has 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. 333-130160), including a prospectus, relating to the
Securities. Such registration statement, as amended at the time it
becomes effective, including the information, if any, deemed
pursuant to Rule 430A or 430B 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 prospectus
included in such registration statement (and any amendments
thereto) that at the time of its effectiveness omits Rule 430
Information, and the term “Prospectus” means the
prospectus 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. Any reference in
this
Agreement to the Registration Statement, any 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
effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be and
any reference to “amend”, “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the 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 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 Prospectus.
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 (the “Time
of Sale Information”): a Preliminary Prospectus dated
December 6, 2005, and each “free-writing
prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto.
2. Purchase of the
Securities by the Underwriter . (a) The Company agrees to
issue and sell the Securities to the Underwriter as provided in
this Agreement, and the Underwriter, on the basis of the
representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees to purchase from
the Company the principal amount of Securities set forth opposite
the Underwriter’s name in Schedule 1 hereto at a price
equal to 99% of the principal amount thereof plus accrued interest,
if any, from December 21, 2005 to the Closing Date (as defined
below). 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 Underwriter intends to make a public offering of the Securities
as soon after the effectiveness of this Agreement as in the
judgment of the Underwriter is advisable, and initially to offer
the Securities on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriter may offer and
sell Securities to or through any affiliate of the Underwriter and
that any such affiliate may offer and sell Securities purchased by
it to or through the Underwriter.
(c) Payment for and delivery of
the Securities will be made at the offices of Simpson Thacher &
Bartlett LLP at 10:00 A.M., New York City time, on
December 21, 2005, or at such other time or place on the same
or such other date, not later than the fifth business day
thereafter, as the Underwriter 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 Underwriter
against
2
delivery to the nominee of The Depository Trust Company, for the
account of the Underwriter, 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 Underwriter 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 the 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, the Underwriter is
not 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 their own independent investigation and appraisal of the
transactions contemplated hereby, and the Underwriter shall have no
responsibility or liability to the Company or the Guarantors with
respect thereto. Any review by the Underwriter 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 Underwriter and shall not be on behalf of the
Company or the Guarantors.
3. Representations and
Warranties of the Company and the Guarantors . The Company and
the Guarantors jointly and severally represent and warrant to the
Underwriter that:
(a) Preliminary
Prospectus. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
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 the Underwriter furnished
to the Company in writing by the Underwriter expressly for use in
any 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 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 the Underwriter furnished to the Company in writing by
the Underwriter expressly for use in such Time of Sale Information.
No statement of material fact
3
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 Underwriter in its 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 the Underwriter in its capacity as such, (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 under the Securities Act or
(ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the Underwriter.
Each such Issuer Free Writing Prospectus complied in all material
respects with the Securities Act, has been or will be 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 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 and the Guarantors make 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 the
Underwriter furnished to the Company in writing by the Underwriter
expressly for use in any Issuer Free Writing Prospectus.
(d) Registration Statement
and Prospectus. The Registration Statement is an
“automatic shelf 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
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
4
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 the Underwriter furnished to the Company in writing by the
Underwriter expressly 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 were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act of
1934, as amended, and the rules and regulation of the Commission
thereunder (collectively, the “Exchange Act”), 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, 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 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 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 the financial position of the Company and its 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
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 the information required to be stated
therein; the other financial information included or incorporated
by reference in the Registration Statement, the Time of Sale
Information and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the
information shown thereby; and no pro forma or
historical financial information relating to the seller under the
Purchaser Agreement (defined herein) are required to be included or
incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectus.
(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
5
Statement, the Time of Sale Information and the Prospectus,
(i) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock,
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
properties, management, financial position, 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 material 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, except
with respect to each of clauses (i), (ii) and (iii), as
otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus.
(h) Organization and Good
Standing. The Company and each of its subsidiaries have been
duly organized 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, have a material adverse effect on
the business, properties, management, financial position, 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 and the
Guarantees (a “Material Adverse Effect”). The Company
does not own or control, directly or indirectly, any corporation,
association or other entity other than the subsidiaries required to
be listed and so listed in Exhibit 21 to the Registration
Statement.
(i) Capitalization. The
Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the
Prospectus and all the outstanding shares of capital stock or other
equity interests of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable (except for general partner interests) 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 set forth
in any partnership governing documents.
(j) Due Authorization.
The Company and each of the Guarantors have full right, power and
authority to execute and deliver this Agreement, the Securities,
the Indenture (including each Guarantee set forth therein) and the
Agreement, dated November 9, 2005, between the Company and a
single seller relating to the acquisition of certain oil and gas
properties located in Mississippi and Alabama (the
“Purchase
6
Agreement”) (collectively, the “Transaction
Documents”) and to perform their respective obligations
hereunder and thereunder; and all action required to be taken for
the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.
(k) The Indenture. The
Indenture has been duly authorized by the Company and each of 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 each of the Guarantors
enforceable against each of them in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles
relating to enforceability (collectively, the “Enforceability
Exceptions”).
(l) The Securities and the
Guarantees . 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; and the Guarantees have been duly
authorized by each of the Guarantors and, when the Securities have
been duly executed, authenticated, issued and delivered as provided
in the Indenture and paid for as provided herein, will be valid and
legally binding obligations of each of the Guarantors, enforceable
against each of the Guarantors in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture.
(m) Underwriting
Agreement . This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(n) Other Transaction
Documents . The Purchase Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, subject to the Enforceability
Exceptions.
(o) 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.
(p) 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
7
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.
(q) No Conflicts. The
execution, delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents, the issuance and
sale of the Securities, the issuance of the Guarantees and
compliance by the Company and each of the Guarantors with the terms
thereof and the consummation of the transactions contemplated by
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, except, in the case of
clauses (i) and (iii) above, for any such conflict,
breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(r) No Consents Required
. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or
regulatory authority is required for the execution, delivery and
performance by the Company or each of the Guarantors of each of the
Transaction Documents, the issuance and sale of the Securities and
the issuance of the Guarantees and compliance by the Company and
each of the Guarantors with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents,
except for the registration of the Securities (including the
Guarantees) under the Securities Act, the qualification of the
Indenture and the Trustee under the Trust Indenture Act and 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 (including the Guarantees) by the
Underwriter.
(s) Legal Proceedings.
Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, 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 that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; no
such investigations, actions, suits or proceedings are threatened
or, to the best knowledge of the Company and each of the
Guarantors,
8
contemplated by any governmental or regulatory authority or
threatened by others; 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 Time of Sale Information and the
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 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.
(t) Independent Registered
Public Accounting Firm. PricewaterhouseCoopers, who has audited
certain financial statements of the Company and its subsidiaries
is, and Deloitte & Touche, who has audited certain financial
statements of the Company and its subsidiaries was at the time of
its audit, 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
Accounting Oversight Board (United States) and as required by the
Securities Act.
(u) Title to Real and
Personal Property. The Company and its subsidiaries have good
and valid title in fee simple 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. Any liens, encumbrances, claims and defects and
imperfections of title with respect to the items of real and
personal property are disclosed or do not materially interfere with
the use made and proposed to be made of such property by the
Company and its subsidiaries and could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(v) Title to Intellectual
Property. The Company and its subsidiaries own or possess
adequate rights or licenses 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 believe the conduct of their respective businesses
will not conflict in any material respect with any such rights of
others, and the Company and its subsidiaries have not received any
notice of any claim of infringement or conflict with any such
rights of others.
(w) 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.
9
(x) Investment Company
Act. Each of the Company and the Guarantors is not 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 Sale Information and the
Prospectus, will not 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”).
(y) Taxes. The Company
and its subsidiaries have paid all federal, state, local and
foreign taxes and filed all tax returns required to be paid or
filed through the date hereof; and except as would not have a
Material Adverse Effect or 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.
(z) 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, 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.
(aa) 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
and the Company and each of the Guarantors are not aware of any
existing or imminent labor disturbance by, or dispute with, the
employees of any of their or their subsidiaries’ principal
suppliers, contractors or customers, except as would not have a
Material Adverse Effect.
(bb) Compliance With
Environmental Laws. (i) The Company and its subsidiaries
(x) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, requirements,
decisions and orders relating to the protection of human health and
safety, the environment or 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 for the investigation
or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, and
(ii) there are
10
no costs or liabilities associated with Environmental Laws of or
relating to the Company or its subsidiaries, except in the case of
each of clauses (i) and (ii) above, for any such failure
to comply, or failure to receive required permits, licenses or
approvals, or cost or liability, as would not, individually or in
the aggregate, have a Material Adverse Effect.
(cc) 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 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”), except
for any such failure to comply as would not, individually or in the
aggregate, have a Material Adverse Effect; no prohibited
transaction, within the meaning of Section 406 of ERISA or
Section 4975 of the Code, has occurred with respect to any
such plan excluding transactions effected pursuant to a statutory
or administrative exemption, except for any such prohibited
transaction, as would not, individually or in the aggregate, have a
Material Adverse Effect; and no such plan is subject to the funding
rules of Section 412 of the Code or Section 302 of
ERISA.
(dd) Disclosure Controls
. The Company and its subsidiaries maintain “disclosure
controls and procedures” (as defined in Rule 13a-15(e)
of the Exchange Act) designed to ensure that information required
under the Exchange Act to be disclosed in the Company’s
filings is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms.
The chief executive officer and chief financial officer have
evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the
Company’s 2004 Annual Report on Form 10-K (the “2004
10-K”) and have determined that such disclosure controls and
procedures are effective in all material respects in providing to
them on a timely basis material information required to be
disclosed in the 2004 10-K. The chief executive officer and chief
financial officer have evaluated the effectiveness of the
Company’s disclosure controls and procedures as of the end of
the periods covered by each of the Company’s Quarterly
Reports on Form 10-Q in 2005 (the “2005 10-Q’s”)
and have determined that such disclosure controls and procedures
are effective in ensuring that material information required to be
disclosed in the 2005 10-Q’s is accumulated and communicated
to them.
(ee) Accounting
Controls. The Company and its subsidiaries have established and
maintain internal control over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) as set forth in
Item 9A. and Exhibits 31(a) and 31(b) of the 2004 10-K. Except
as disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus, there were no material weaknesses
in the Company’s internal controls for the period covered by
the 2004 10-K, and, for the periods subsequent to the period
covered by the 2004 10-K, there are no material weaknesses in the
Company’s internal controls that have come to the attention
of the Company’s management.
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(ff) Insurance. The
Company and its subsidiaries have insurance covering such risks as
are customarily carried by businesses similarly situated, including
insurance against (other than losses or damage to property owned by
the Company or any of its subsidiaries which is self insured)
losses customarily insured against as a result of damage by fire,
lightning, hail, tornado, explosion and other similar risk covering
their respective properties, operations, personnel and businesses,
including business interruption insurance; 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 at
reasonable cost from similar insurers as may be necessary to
continue its business.
(gg) 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.
(hh) Compliance with Money
Laundering Laws . The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance
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.
(ii) 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”); the Company is not currently under
investigation by OFAC; the Company has not discovered any facts
that would lead it to believe it has violated any laws or
regulations administered by 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.
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(jj) Solvency. On the
Closing Date, and after giving effect to the issuance of the
Securities and the consummation of the other transactions related
thereto as described in the Registration Statement, the Time of
Sale Information and the Prospectus, as of the Closing Date, the
Company will be Solvent. As used in this paragraph, the term
“Solvent” means, with respect to a particular date,
that on such date (i) the present fair market value (or
present fa
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