EXHIBIT 1.1
[Conformed]
$175,000,000
NGC CORPORATION
7 5/8% SENIOR DEBENTURES DUE 2026
UNDERWRITING AGREEMENT
October 10, 1996
▇▇▇▇▇▇ BROTHERS INC.
NATIONSBANC CAPITAL MARKETS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
C/▇ ▇▇▇▇▇▇ BROTHERS INC.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
NGC Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell $175,000,000 aggregate principal amount of its Senior
Debentures due 2026 (the "Debentures") to you (the "Underwriters"). The
Debentures will be issued pursuant to an Indenture dated as of September 26,
1996 (the "Indenture") among the Company and Natural Gas Clearinghouse, a
Colorado general partnership ("Clearinghouse"), ▇▇▇▇▇▇ NGL, Inc., a Delaware
corporation, ▇▇▇▇▇▇ Petroleum Company, Limited Partnership, a Delaware limited
partnership, ▇▇▇▇▇▇ Energy Resources, Limited Partnership, a Delaware limited
partnership, ▇▇▇▇▇▇ Gas Liquids, Inc., a Delaware corporation, NGC Oil Trading
and Transportation, Inc., a Texas corporation, NGC Futures, Inc., a Texas
corporation, ▇▇▇▇▇▇ Gas Marketing, Inc., a Delaware corporation, ▇▇▇▇▇▇ NGL
Pipeline Company, a Delaware corporation, Kansas Gas Supply Corporation, a
Delaware corporation, ▇▇▇▇▇▇ Intrastate Gas Supply, Inc., a Delaware
corporation, NGC UK Limited, a United Kingdom private limited company, NGC
Canada, Inc., an Alberta corporation, WTLPS, Inc., a Delaware corporation, WPC
LP, Inc., a Delaware corporation, and Electric Clearinghouse, Inc., a Texas
corporation (collectively, the "Subsidiary Guarantors"), and The First National
Bank of Chicago, as Trustee (the "Trustee"). As provided in the Indenture, the
Debentures are to be fully and unconditionally guaranteed, on a senior unsecured
basis, pursuant to guarantees (the "Subsidiary Guarantees") of the Subsidiary
Guarantors, subject to release under certain circumstances as described in the
Indenture. This agreement (this "Agreement") is to confirm the agreement
concerning the purchase of the Debentures from the Company by the Underwriters.
1. REPRESENTATIONS AND WARRANTIES. The Company and the Subsidiary
Guarantors, jointly and severally, represent and warrant to, and agree with,
each Underwriter that:
(a) A registration statement on Form S-3 (File No. 333-12987) with
respect to the Debentures (i) has been prepared by the Company and the
Subsidiary Guarantors in conformity with
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the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, (ii)
has been filed with the Commission under the Securities Act and (iii) either has
become effective under the Securities Act and is not proposed to be amended or
is proposed to be amended by amendment or post-effective amendment. If the
Company and the Subsidiary Guarantors do not propose to amend such Registration
Statement and if any post-effective amendment to such registration statement has
been filed with the Commission prior to the execution and delivery of this
Agreement, the most recent such amendment has been declared effective by the
Commission. Copies of such registration statement as amended to date have been
delivered by the Company to you. For purposes of this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company and
the Subsidiary Guarantors with the consent of the Underwriters pursuant to Rule
424(a) of the Rules and Regulations prior to the filing of the Prospectus;
"Registration Statement" means such registration statement, as amended at the
Effective Time, including any documents incorporated by reference therein and,
if the Effective Date is on or before the date of this Agreement, all
information contained in the final prospectus filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations ("Rule 424(b)") in accordance with
Section 4(a) hereof and deemed to be a part thereof as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations;
"Prospectus" means the form of prospectus relating to the Debentures (including
the prospectus supplement), as first used to confirm sales of the Debentures;
and "described in the Prospectus" or "disclosed in the Prospectus" means
described or disclosed, as applicable, in the Prospectus or any document
incorporated by reference therein. If it is contemplated, at the time this
Agreement is executed, that a registration statement will be filed pursuant to
Rule 462(b) under the Securities Act before the offering of the Debentures may
commence, the term "Registration Statement" as used in this Agreement includes
such registration statement, as the same may be amended from time to time.
Reference made herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents incorporated by reference therein
as of the date of such Preliminary Prospectus or Prospectus, as the case may be,
and any reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of such Preliminary Prospectus or Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or Prospectus. For
purposes of this Section l, all references to the Registration Statement, any
post-effective amendments thereto and the Prospectus shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis, and Retrieval system ("▇▇▇▇▇"). The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus.
(b) If the Effective Date is on or before the date of this Agreement, (i)
the Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
when they become effective or are first used to confirm sales of the Debentures,
as the case may be, conform to the requirements of the Securities Act and the
Rules and Regulations, (ii) the Registration Statement and any amendment thereto
does not
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and will not, as of the applicable effective date, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (iii) the
Prospectus and any amendment or supplement thereto will not, as of the first
date of its use to confirm sales of the Debentures, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Effective Date
is after the date of this Agreement, (i) the Registration Statement and the
Prospectus and any further amendments or supplements thereto will, when they
become effective or are first used to confirm sales of the Debentures, as the
case may be, conform to the requirements of the Securities Act and the Rules and
Regulations, (ii) the Registration Statement and any amendment thereto will not,
as of the applicable effective date, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) the Prospectus
and any amendment or supplement thereto will not, as of the date on which the
Prospectus and any amendment or supplement thereto is first used to confirm
sales of the Debentures, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the Company and the
Subsidiary Guarantors make no representation or warranty as to information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon, and in conformity with written information furnished to the
Company by you, expressly for inclusion therein. There is no contract or
document required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement or to a
document incorporated by reference into the Registration Statement which is not
described or filed as required.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose report is included or incorporated
by reference in the Prospectus, are independent certified public accountants
with respect to the Company and its Subsidiaries, as required by the Securities
Act and the Rules and Regulations. Price Waterhouse, Chartered Accountants and
Registered Auditors, whose report is included or incorporated by reference in
the Prospectus, are independent public accountants with respect to Accord Energy
Limited, as required by the Securities Act and the Rules and Regulations. The
financial statements (including the related notes and supporting schedules but
excluding the pro forma financial information) included or incorporated by
reference in the Registration Statement, any Preliminary Prospectus and the
Prospectus present fairly the financial condition, results of operations and
cash flows of the entities purported to be shown thereby at the dates and for
the periods indicated and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods indicated, except as otherwise noted therein; and the supporting
schedules included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein. The pro forma
financial information and statements included or incorporated by reference in
the Registration Statement and the Prospectus (the "pro forma financial
information") have been prepared in accordance with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; the pro forma adjustments
reflected in the pro forma information have been properly applied to the
historical amounts in compilation of such information; and the assumptions used
in the preparation of the pro forma financial information are reasonable.
Separate financial statements of each Subsidiary Guarantor are not included in
the Registration Statement or the Prospectus, because the guarantees evidenced
by the Subsidiary Guarantees are full and unconditional and because that
information would not be material to investors. The Company's non-guarantor
Subsidiaries, both individually and in the aggregate, are inconsequential to the
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Company and its accounting predecessor, Clearinghouse, as the case may be, as of
and for each of the years ended December 31, 1995, 1994 and 1993 and as of and
for the six months ended June 30, 1996.
(d) Each of the Company and its Subsidiaries (as defined in
Section 13 hereof) has been duly organized or formed and is validly existing in
good standing under the laws of the jurisdiction of its organization or
formation, with full power and authority to own, lease and operate its
properties and conduct its business and to enter into and perform its
obligations under this Agreement and the Indenture; and each of the Company and
its Subsidiaries is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the business conducted by it or the
location of the properties owned, leased or operated by it make such
qualification necessary (except where the failure to so qualify would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole).
(e) All of the outstanding shares of capital stock of each
Subsidiary of the Company that is a corporation have been duly authorized and
validly issued and are fully paid and nonassessable. Except as disclosed in the
Prospectus, all of the outstanding shares of capital stock or partnership
interests of each Subsidiary of the Company are owned directly or indirectly by
the Company, free and clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer, preemptive rights or any other claim of any
third party, except such as are described in the Prospectus and except for
certain restrictions on transfer and preemptive rights relating to the shares of
capital stock owned by the Company in Accord Energy Limited and Novagas
Clearinghouse Ltd.
(f) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been any material adverse change in,
or adverse development which, individually or in the aggregate, materially
affects or may materially affect, the condition (financial or other), results of
operations, business or prospects of the Company and its Subsidiaries taken as a
whole from the respective dates as of which information is given in the
Prospectus.
(g) Neither (i) the execution or delivery hereof by the Company
and the Subsidiary Guarantors, (ii) the consummation of the transactions
contemplated hereby, (iii) the execution and delivery of the Indenture and the
Debentures by the Company, (iv) the execution and delivery of the Indenture and
the Subsidiary Guarantees by the Subsidiary Guarantors nor (v) compliance by the
Company and the Subsidiary Guarantors with all of the provisions of this
Agreement, the Indenture, the Debentures and the Subsidiary Guarantees, will
result in a breach or violation of, or constitute a default under, the
certificate of incorporation, by-laws, partnership agreement or other governing
documents of the Company or any of its Subsidiaries, or any agreement, indenture
or other instrument to which the Company or any of its Subsidiaries is a party
or by which any of them is bound, or to which any of their properties is
subject, nor will any such action or the performance by the Company of its
obligations hereunder violate any law, rule, administrative regulation or decree
of any court, or any governmental agency or body having jurisdiction over the
Company, its Subsidiaries or any of their respective properties, or result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any of its Subsidiaries. Except for permits,
consents, approvals and similar authorizations required under the Securities
Act, the securities or "Blue Sky" laws of certain jurisdictions and the Trust
Indenture Act of 1939, as amended
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(the "Trust Indenture Act"), and except for such permits, consents, approvals
and authorizations which have been obtained, no permit, consent, approval,
authorization or order of any court, governmental agency or body or financial
institution is required in connection with the consummation of the transactions
contemplated by this Agreement.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and constitutes
the valid and binding agreement of the Company and each of the Subsidiary
Guarantors, and is enforceable against each of them in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws relating to or affecting creditors'
rights generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(i) Neither the Company nor any of its Subsidiaries (i) is in
violation of its certificate of incorporation or by-laws or other governing
documents, (ii) is in default and no event has occurred which, 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 agreement,
indenture or other instrument to which it is a party or by which it is bound or
to which any of its properties is subject, except for any such defaults that
would not, individually or in the aggregate, have a material adverse effect on
the condition (financial or other), results of operations, business or prospects
of the Company and its Subsidiaries taken as a whole, or (iii) is in violation
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property may be subject, except for any such violations that would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or prospects of
the Company and its Subsidiaries taken as a whole.
(j) The Indenture has been duly and validly authorized by the
Company and each of the Subsidiary Guarantors and, upon its execution and
delivery by the Company and each of the Subsidiary Guarantors and assuming due
execution and delivery thereof by the Trustee, will be a valid and binding
agreement of the Company and each of the Subsidiary Guarantors, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization or similar laws relating to or
affecting creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). The Indenture (i) has been, or at the time that the
Registration Statement becomes effective will be, duly qualified under the Trust
Indenture Act, (ii) complies as to form with the requirements of the Trust
Indenture Act and (iii) conforms, or at the time that the Registration Statement
becomes effective will conform, to the description thereof in the Registration
Statement and the Prospectus.
(k) The Debentures have been duly and validly authorized by the
Company for issuance and sale to the Underwriters pursuant to this Agreement
and, when executed by the Company and authenticated by the Trustee in accordance
with the Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will have been validly issued and delivered,
free of any preemptive or similar rights to subscribe to or purchase the same
arising by operation of law or under the charter or by-laws of the Company or
otherwise, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in accordance with
their terms, except as enforcement thereof may be limited by
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bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the enforcement of creditors' rights generally and by general
equitable principles, and the Debentures conform, or will conform, to the
description thereof in the Registration Statement and the Prospectus. Neither
the filing of the Registration Statement nor the offering or sale of the
Debentures as contemplated by this Agreement gives rise to any rights, other
than those which have been duly waived or satisfied, for or relating to the
registration of any securities of the Company. The capitalization of the Company
as of the date of the most recent balance sheet included in the Prospectus is as
set forth in the Prospectus. The Company has all requisite corporate power and
authority to issue, sell, and deliver the Debentures in accordance with and upon
the terms and conditions set forth in this Agreement and in the Registration
Statement and Prospectus. All corporate action required to be taken by the
Company for the authorization, issuance, sale and delivery of the Debentures to
be sold by the Company hereunder has been validly and sufficiently taken.
(l) The Subsidiary Guarantees have been duly and validly
authorized by the Subsidiary Guarantors, and, when executed and endorsed upon
the Securities and delivered in accordance with the terms of the Indenture, such
Subsidiary Guarantees will be valid and binding obligations of the Subsidiary
Guarantors, enforceable against the Subsidiary Guarantors in accordance with
their terms; the issuances of the Subsidiary Guarantees are not subject to
preemptive or other similar rights to subscribe to or purchase the same arising
by operation of law or under the charter, bylaws or other organizational
documents of any of the Subsidiary Guarantors or otherwise; the form of notation
to be set forth on each Debenture to evidence the Subsidiary Guarantees will be
in the form contemplated by the Indenture; and the Subsidiary Guarantees conform
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus. The execution, delivery and
performance of this Agreement and the Indenture and the issuance and performance
of the Subsidiary Guarantees and the consummation of the other transactions
contemplated herein and therein, and compliance by the Subsidiary Guarantors
with their respective obligations hereunder and thereunder, have been duly and
validly authorized by all necessary corporate or partnership action on the part
of each of the Subsidiary Guarantors.
(m) Each contract, agreement or arrangement 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 of its
Subsidiaries is subject, which is material to the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole, has been duly and validly authorized, executed
and delivered by the Company or its Subsidiary, as applicable; none of such
contracts, agreements or arrangements has been assigned by the Company or any of
its Subsidiaries to any non-affiliated party other than in the ordinary course
of business, and the Company knows of no present condition or fact which would
prevent compliance by the Company or any of its Subsidiaries or any other party
thereto with the terms of any such contract, agreement or arrangement in
accordance with its terms in all material respects, except for any such failures
to comply that would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or other), results of operations,
business or prospects of the Company and its Subsidiaries taken as a whole;
neither the Company nor any of its Subsidiaries has any present intention to
exercise any right that it may have to cancel any such contract, agreement or
arrangement or otherwise to terminate its rights and obligations thereunder, and
none of them has any knowledge that any other party to any such contract,
agreement or arrangement has any intention not to render full performance in all
material respects as contemplated by the terms thereof, except for any such
cancellations, terminations or failures to perform that would not, individually
or in the
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aggregate, result in a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(n) Each of the Company and its Subsidiaries owns, or has valid
rights to use, all items of real and personal property which are material to the
business of the Company and its Subsidiaries taken as a whole, free and clear of
all liens, encumbrances and claims, except such as are described in the
Prospectus or such as do not materially interfere with the use made and proposed
to be made of such property by the Company.
(o) There is no litigation or governmental proceeding to which
the Company or any of its Subsidiaries is a party or to which any property of
the Company or any of its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries which might, individually or in the aggregate, result in a material
adverse effect on the condition (financial or other), results of operations,
business or prospects of the Company and its Subsidiaries taken as a whole or
which is required to be disclosed in the Prospectus and is not disclosed.
(p) Neither the Company nor any Subsidiary is in violation of any
law, ordinance, governmental rule or regulation or court decree to which it may
be subject which violation might, individually or in the aggregate with all such
violations, have a material adverse effect on the condition (financial or
other), results of operations, business or prospects of the Company and its
Subsidiaries taken as a whole.
(q) The documents incorporated by reference into each Preliminary
Prospectus and the Prospectus, at the time they were or are filed with the
Commission, conform or will conform, as the case may be, with the requirements
of the Securities Act and the Rules and Regulations and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and did not or will
not, as the case may be, include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(r) Each of the Company and its Subsidiaries owns or possesses,
and is operating in compliance with, all approvals, licenses, permits,
certificates, franchises, easements, consents, orders and other governmental
authorizations and rights necessary to own or lease its properties and conduct
its business (collectively, "Approvals"), except such Approvals as to which the
failure to own, possess or operate in compliance with would not, individually or
in the aggregate, result in a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole ("Material Approvals"); all such
Material Approvals are valid and in full force and effect; and the Company has
no reason to believe that any governmental agency or body is considering
limiting, suspending or revoking any such Material Approval.
(s) From the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, neither the Company nor any of its Subsidiaries has (i) issued,
granted, repurchased, reclassified, or exchanged any of their respective
securities (other than in respect of intercompany transactions or pursuant to
employee stock options, the Company's director and key employee stock purchase
plan, the Company's director
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compensation plan or the Company's savings plan), (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii) entered into any
material transaction not in the ordinary course of business or (iv) entered into
any material transaction with an affiliate of the Company, other than a
Subsidiary; and the Company has not declared or paid any dividend on its capital
stock other than the regular quarterly dividend on its Common Stock.
(t) There has been no storage, disposal, generation,
transportation, handling or treatment of hazardous substances or hazardous
wastes by the Company or any of its Subsidiaries (or to the knowledge of the
Company, any of its predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or any of its
Subsidiaries or affiliated partnerships in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not, individually or in the aggregate with all such violations and
remedial actions, result in a material adverse effect on the condition
(financial or other), results of operations, business or prospects of the
Company and its Subsidiaries taken as a whole; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment surrounding such property of any
hazardous wastes or hazardous substances due to or caused by the Company or any
of its Subsidiaries or affiliated partnerships, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which would
not, individually or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases result in a material
adverse effect on the condition (financial or other), results of operations,
business or prospects of the Company and its Subsidiaries taken as a whole; none
of the facilities of the Company or any of its Subsidiaries is a solid waste
facility for purposes of any applicable environmental law; and the terms
"hazardous substances" and "hazardous wastes" shall have the meanings specified
in any applicable local, state and federal laws or regulations with respect to
environmental protection.
(u) The Company has not taken and shall not take, directly or
indirectly, any action designed to cause or result in, or which has constituted
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Debentures to facilitate the sale or resale of
the Debentures.
(v) The Debentures will be PARI PASSU with all existing and
future unsecured and unsubordinated indebtedness of the Company.
(w) Each of the Company and the Subsidiary Guarantors has
complied and will comply in all respects with the provisions of Florida H.B.
1771 (codified as Section 517.075 of the Florida Statutes) and the regulations
promulgated thereunder; and neither the Company, the Subsidiary Guarantors nor
any of their respective affiliates does business with the government of Cuba or
with any person or affiliate located in Cuba.
(x) Neither the Company nor any of its Subsidiaries have,
directly or indirectly, paid or delivered any fee, commission or other sum of
money or item or property, however characterized, to any finder, agent,
government official or other party, in the United States or any other country,
which is in any manner related to the business or operations of the Company and
its
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Subsidiaries, which the Company knows or has reason to believe to have been
illegal under any federal, state or local laws of the United States or any other
country having jurisdiction.
(y) The conditions for the Company's use of Form S-3 for filing
the Registration Statement, as set out in the general instructions to such form,
have been satisfied.
(z) Neither the Company nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act"), or is subject to regulation as an "investment
company" under the 1940 Act.
2. PURCHASE OF THE DEBENTURES BY THE UNDERWRITERS. Subject to the
terms and conditions and upon the basis of the representations and warranties
herein set forth, the Company agrees to issue and sell to the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a price equal to 98.647% of the principal amount thereof, plus
accrued interest, if any, from the third full Business Day after the date of
this Agreement, the principal amount of Debentures set forth opposite such
Underwriter's name in Schedule I hereto. The Underwriters agree to offer the
Debentures to the public as set forth in the Prospectus.
3. DELIVERY OF AND PAYMENT FOR DEBENTURES. Delivery of the
Debentures shall be made at such place or places as mutually may be agreed upon
by the Company and the Underwriters, at 10:00 A.M., New York City time, on the
third full Business Day following the date of this Agreement, (October 16, 1996)
or on such later date as shall be determined by you and the Company (the
"Closing Date").
Delivery of the Debentures shall be made to you by or on behalf
of the Company against payment of the purchase price therefor by wire transfer
of immediately available funds. The Debentures shall be registered in such names
and denominations as you shall have requested at least two full Business Days
prior to the Closing Date, and shall be made available for checking and
packaging in New York, New York or such other location as may be designated by
you at least one full Business Day prior to the Closing Date. Time shall be of
the essence, and delivery of the Debentures at the time and place specified in
this Agreement is a further condition to the obligations of each Underwriter.
4. COVENANTS OF THE COMPANY AND THE SUBSIDIARY GUARANTORS. The
Company and each of the Subsidiary Guarantors, jointly and severally, covenant
and agree with each Underwriter that:
(a) If the Effective Date is on or before the date of this
Agreement, the Company shall comply with the provisions of and make all
requisite filings with the Commission pursuant to Rule 424(b) not later than the
Commission's close of business on the second Business Day following the
execution and delivery of this Agreement or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) of the Rules and Regulations. The Company
shall advise you, promptly after it receives notice thereof, of the time when,
if the Effective Date is on or before the date of this Agreement, any amendment
to the Registration Statement or, if the Effective Date is after the date of
this Agreement, the Registration Statement or any amendment thereto, has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed. The Company shall notify you promptly of any request
by the Commission for any amendment of or
-9-
supplement to the Registration Statement or the Prospectus or for additional
information; the Company and the Subsidiary Guarantors shall prepare and file
with the Commission, promptly upon your request, any amendments or supplements
to the Registration Statement or the Prospectus which, in your opinion, may be
necessary or advisable in connection with the distribution of the Debentures;
and the Company and the Subsidiary Guarantors shall not file any amendment or
supplement to the Registration Statement or the Prospectus or file any document
under the Exchange Act before the termination of the offering of the Debentures
by the Underwriters if such document would be deemed to be incorporated by
reference into the Prospectus, which filing is not consented to by you after
reasonable notice thereof, such consent not to be unreasonably withheld or
delayed. The Company shall advise you promptly of the issuance by the Commission
or any State or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, suspending or
preventing the use of any Preliminary Prospectus or the Prospectus or suspending
the qualification of the Debentures for offering or sale in any jurisdiction, or
of the institution of any proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of any stop order or other
such order and, should a stop order or other such order be issued, to obtain as
soon as possible the lifting thereof.
(b) The Company shall furnish to each of you and to counsel for
the Underwriters a signed copy of the Registration Statement as originally filed
and each amendment thereto filed with the Commission, including all consents and
exhibits filed therewith, and shall furnish to the Underwriters such number of
conformed copies of the Registration Statement, as originally filed and each
amendment thereto (excluding exhibits other than this Agreement), the Prospectus
and all amendments and supplements to any of such documents (including any
document filed under the Exchange Act and deemed to be incorporated by reference
in the Preliminary Prospectus or Prospectus), in each case as soon as available
and in such quantities as you may from time to time reasonably request.
(c) Within the time during which the Prospectus relating to the
Debentures is required to be delivered under the Securities Act, the Company
shall comply with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the continuance of sales of or dealings
in the Debentures as contemplated by the provisions hereof and by the
Prospectus. If during such period any event occurs as a result of which the
Prospectus as then amended or supplemented would include an 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 then existing, not
misleading, or if during such period it is necessary to amend the Registration
Statement or supplement the Prospectus or file any document to comply with the
Securities Act, the Company shall promptly notify you and shall amend the
Registration Statement or supplement the Prospectus or file any document (at the
expense of the Company) so as to correct such statement or omission or to effect
such compliance.
(d) The Company and the Subsidiary Guarantors shall take or cause
to be taken all necessary action and furnish to whomever you may direct such
information as may be required in qualifying the Debentures and the Subsidiary
Guarantees for offering and sale under the laws of such jurisdictions as you
shall designate, and to continue such qualifications in effect for as long as
may be necessary for the distribution of the Debentures; except that in no event
shall the Company
-10-
be obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction where it is
not currently so subject.
(e) The Company and the Subsidiary Guarantors shall make
generally available to their security holders (and shall deliver to you), in the
manner contemplated by Rule 158(b) under the Securities Act or otherwise, as
soon as practicable but in any event not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the Effective Date occurs
(or not later than 90 days after the end of such fiscal quarter if such fiscal
quarter is the last fiscal quarter of the fiscal year), an earnings statement
satisfying the requirements of Section 11(a) of the Securities Act and covering
a period of at least 12 consecutive months beginning after the Effective Date.
(f) Whether or not this Agreement becomes effective or is
terminated or the sale of the Debentures to the Underwriters is consummated, the
Company shall pay or cause to be paid (A) all fees and expenses (including,
without limitation, all registration and filing fees and fees and expenses of
the Company's accountants but excluding fees and expenses of counsel for the
Underwriters) incurred in connection with the preparation, printing, filing,
delivery and shipping of the Registration Statement (including the financial
statements therein and all amendments and exhibits thereto), each Preliminary
Prospectus, the Prospectus, the Indenture, the Statement of Eligibility and
Qualification of the Trustee on Form T-1 filed with the Commission (the "Form
T-1") and any amendments or supplements of the foregoing and any documents
incorporated by reference into any of the foregoing and the copying, delivery
and shipping of this Agreement and Blue Sky Memoranda, (B) all fees and expenses
incurred in connection with the preparation and delivery to the Underwriters of
the Debentures (including the cost of printing the Debentures), (C) all filing
fees and fees and disbursements of counsel to the Underwriters incurred in
connection with the qualification of the Debentures under state securities or
Blue Sky laws as provided in Section 4(d) hereof, (D) any fees required to be
paid to rating agencies incurred in connection with the rating of the
Debentures, (E) the fees, costs and charges of the Trustee, including the fees
and disbursements of counsel for the Trustee, and (F) all other costs and
expenses incident to the performance of its obligations hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that, except as provided in this Section, Section 6 and Section 8 hereof, the
Underwriters shall pay all of their own costs and expenses, including the fees
of their counsel and any advertising expenses incurred in connection with any
offers they may make. If the sale of the Debentures provided for herein is not
consummated by reason of acts of the Company or changes in circumstances of the
Company pursuant to Section 8 hereof which prevent this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed or because any
other condition of the Underwriters' obligations hereunder is not fulfilled or
if the Underwriters shall decline to purchase the Debentures for any reason
permitted under this Agreement, the Company shall reimburse the several
Underwriters for all reasonable out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with any
investigation or preparation made by them in respect of the marketing of the
Debentures or in contemplation of the performance by them of their obligations
hereunder.
(g) During the period of one year from the Effective Date, the
Company shall furnish to the Underwriters, copies of all reports or other
communications furnished to stockholders and copies of any reports or financial
statements furnished to or filed with the Commission or the New York Stock
Exchange (the "NYSE") or any other national securities exchange or association
on
-11-
which any class of securities of the Company is quoted or listed, and the
Company shall furnish to the Underwriters copies of all reports and other
communications furnished to the Noteholders.
(h) Until termination of the offering of the Debentures, the
Company shall timely file all documents and amendments to previously filed
documents required to be filed by it pursuant to Section 12, 13, 14 or 15(d) of
the Exchange Act.
(i) The Company shall apply the net proceeds from the sale of the
Debentures as set forth in the Prospectus.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters hereunder are subject to the accuracy, as of the date hereof
and the Closing Date (as if made at the Closing Date), of the representations
and warranties of the Company contained herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 4(a) hereof, the Registration
Statement and all post-effective amendments to the Registration Statement shall
have become effective, all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made and no such filings shall have been
made without the consent of the Underwriters; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto or suspending the qualification of the Debentures for offering or sale
in any jurisdiction shall have been issued; no proceedings for the issuance of
any such order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been disclosed to you and
complied with to your satisfaction.
(b) No Underwriter shall have been advised by the Company or
shall have discovered and disclosed to the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto, contains an
untrue statement of fact which in your opinion, or in the opinion of counsel to
the Underwriters, is material, or omits to state a fact which, in your opinion,
or in the opinion of counsel to the Underwriters, is material and is required to
be stated therein or is necessary to make the statements therein not misleading.
(c) On the Closing Date, you shall have received from ▇▇▇▇▇ &
▇▇▇▇▇, L.L.P., counsel for the Underwriters, such opinion or opinions with
respect to the validity of the Debentures and other related matters as you may
reasonably request and such counsel shall have received such documents and
information as they request to enable them to pass upon such matters.
(d) On the Closing Date there shall have been furnished to you
the opinion (addressed to the Underwriters) of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel
for the Company, dated the Closing Date and in form and substance satisfactory
to the Underwriters, to the effect that:
(i) Each of the Company and the Subsidiary Guarantors has been
duly incorporated or formed as a partnership, as applicable, and is
validly existing as a corporation, a general partnership or a limited
partnership under the laws of the jurisdiction of its incorporation or
formation (and the Company and each of the Subsidiary Guarantors that is
a corporation or a limited partnership is in good standing under the
laws of their respective
-12-
jurisdictions of incorporation or formation), with full corporate or
partnership (as applicable) power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus. To the knowledge of such counsel, the Company is duly
qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of
the properties owned, leased or operated by it makes such qualification
necessary (except where the failure to so qualify would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or other), results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole).
(ii) To the best of such counsel's knowledge, neither the filing
of the Registration Statement nor the offering or sale of the Debentures
and the Subsidiary Guarantees as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any securities of the
Company or any of its Subsidiaries. The authorized equity capitalization
of the Company as of the date of the most recent balance sheet included
or incorporated by reference in the Prospectus is as set forth in the
Prospectus, and the Debentures and the Subsidiary Guarantees conform as
to legal matters to the description thereof contained in the Prospectus.
The Company has all requisite corporate power and authority to issue,
sell and deliver the Debentures in accordance with and upon the terms
and conditions set forth in this Agreement and in the Registration
Statement and Prospectus.
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors and is a
valid and binding agreement of the Company and each of the Subsidiary
Guarantors, enforceable against the Company and each of the Subsidiary
Guarantors in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
and the Indenture has been duly qualified under the Trust Indenture Act
and the rules and regulations thereunder.
(iv) The Debentures have been duly authorized and executed by the
Company for issuance and sale to the Underwriters pursuant to this
Agreement and, assuming due authentication of the Debentures by the
Trustee, upon delivery to the Underwriters against payment therefor in
accordance with the terms of this Agreement, will have been validly
issued and delivered, will be entitled to the benefits of the Indenture
and will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or judicial decisions
relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(v) The Subsidiary Guarantees have been duly and validly
authorized and executed by the Subsidiary Guarantors, and, when
delivered in accordance with the terms of this Agreement, such
Subsidiary Guarantees will have been validly issued and delivered and
will constitute valid and binding obligations of the Subsidiary
Guarantors, enforceable against
-13-
the Subsidiary Guarantors in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws or judicial decisions relating to or
affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(vi) To the knowledge of such counsel, except as disclosed in the
Prospectus, all of the outstanding shares of capital stock or
partnership interests (or such percentage of the partnership interests
as is set forth in the respective partnership agreements filed (or
incorporated by reference) as exhibits to the Registration Statement) of
each Subsidiary Guarantor are owned directly or indirectly by the
Company, free and clear of any perfected security interest.
(vii) Neither the execution or delivery of this Agreement nor
consummation of the transactions contemplated hereby will result in a
breach or violation of, or constitute a default under, the certificate
of incorporation, by-laws, partnership agreement or other governing
documents of the Company or any of the Subsidiary Guarantors, or any
agreement, indenture or other instrument filed as an exhibit to the
Registration Statement or any document incorporated by reference
therein, nor will the performance by the Company and the Subsidiary
Guarantors of their respective obligations hereunder violate any law,
rule, administrative regulation or (to the knowledge of such counsel)
decree (except that such counsel need not express an opinion as to
federal or state securities or Blue Sky laws with respect to this
subparagraph) of any court or any governmental agency or body having
jurisdiction over the Company, its Subsidiaries or their respective
properties. Except for permits, consents, approvals and similar
authorizations required under the Securities Act, the Trust Indenture
Act and the securities or Blue Sky laws of certain jurisdictions and
except for such permits, consents, approvals and authorizations which
have been obtained, no permit, consent, approval, authorization or order
of any court, governmental agency or body or financial institution is
required of the Company or any of the Subsidiary Guarantors for the
valid authorization, issuance, sale and delivery of the Debentures and
the Subsidiary Guarantees.
(viii) Each of the Company and the Subsidiary Guarantors has all
necessary corporate or partnership (as applicable) power and authority
to execute and deliver this Agreement and perform its obligations
hereunder. This Agreement has been duly authorized, executed and
delivered by the Company and each of the Subsidiary Guarantors.
(ix) The Registration Statement and all post-effective amendments
thereto have become effective under the Securities Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending before or threatened by the
Commission. To the knowledge of such counsel, no order of the Commission
directed to any document incorporated by reference in the Registration
Statement has been issued, and no challenge by appropriate proceedings
has been made to the accuracy or adequacy of any document incorporated
by reference in the Registration Statement.
-14-
(x) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company and the Subsidiary
Guarantors and the Form T-1, as of their respective effective or issue
dates, complied as to form in all material respects with the applicable
requirements of the Securities Act and the Rules and Regulations and the
Trust Indenture Act and the rules and regulations thereunder (except
that no opinion need be expressed as to the financial statements or
notes thereto or other financial and statistical data contained therein
or omitted therefrom).
(xi) The Indenture, the Debentures and the Subsidiary Guarantees
conform in all material respects as to legal matters to the respective
statements concerning them contained in the Registration Statement and
Prospectus. There are no legal proceedings pending or threatened against
the Company or any of its Subsidiaries to which such counsel has given
substantive attention or in which such counsel has been engaged to
represent the Company or any of its Subsidiaries that are required to be
disclosed in the Prospectus.
Such opinion shall also contain a statement that such counsel has
no reason to believe that (i) the Registration Statement, as of the Effective
Time, or any amendment thereto (other than the financial statements and notes
thereto and the other financial and statistical data contained therein, as to
which such counsel need not comment), at the time it became effective, including
in each case any document filed under the Exchange Act and incorporated by
reference therein, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or (ii) the Prospectus or any
supplement or amendment thereto (other than the financial statements and notes
thereto and the other financial and statistical data contained therein, as to
which such counsel need not comment), including in each case any document filed
under the Exchange Act and incorporated by reference therein, on such Closing
Date or at the time such Prospectus or supplement or amendment thereto was
issued contains or contained any untrue statement of a material fact or omits or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(e) On the Closing Date there shall have been furnished to you
the opinion (addressed to the Underwriters) of Senior Vice President and General
Counsel of the Company, dated the Closing Date and in form and substance
satisfactory to the Underwriters, to the effect that:
(i) Each document incorporated by reference in the Registration
Statement as filed under the Exchange Act complied when so filed as to
form in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
(except that no opinion need be expressed as to the financial statements
or notes thereto and other financial and statistical data contained
therein).
(ii) The descriptions in the Registration Statement and
Prospectus of statutes, regulations, legal or governmental proceedings,
to the extent they constitute matters of law and summaries of legal
matters are accurate in all material respects. To the knowledge of such
counsel, there are no contracts or documents required to be described in
the Registration Statement or Prospectus or to be filed as exhibits
thereto which are not described or filed as required.
-15-
(f) There shall have been furnished to you (1) a certificate,
dated the Closing Date and addressed to you, signed by the Chairman of the Board
or the President and by the Chief Financial Officer of the Company to the effect
that: (i) the representations and warranties of the Company contained in this
Agreement are true and correct, as if made at and as of the Closing Date, and
the Company has complied with all the agreements and satisfied all the
conditions on its part to be complied with or satisfied at or prior to the
Closing Date; (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that purpose has
been initiated or, to the best of their knowledge, threatened; (iii) all filings
required by Rule 424(b) and Rule 430A of the Rules and Regulations have been
made; (iv) the signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments or supplements
thereto (including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus), and such documents contain all
statements and information required to be included therein, and do not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and (v) since the Effective Date there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or the Prospectus which has not been so set forth and there has been
no document required to be filed under the Exchange Act and the Rules and
Regulations that upon such filing would be deemed to be incorporated by
reference into the Prospectus that has not been so filed and (2) a certificate,
dated the Closing Date and addressed to you, signed by the Chief Financial
Officer of each Subsidiary Guarantor (or, in the case of a Subsidiary Guarantor
that is a partnership, the Chief Financial Officer of the general partner(s) of
such Subsidiary Guarantor) to the effect that the representations and warranties
of each of the Subsidiary Guarantors contained in this Agreement are true and
correct, as if made at and as of the Closing Date, and each of the Subsidiary
Guarantors has complied with all the agreements and satisfied all the conditions
on its part to be complied with or satisfied at or prior to the Closing Date.
(g) Since the Effective Date, neither the Company nor any of its
Subsidiaries shall have sustained any loss by fire, flood, accident or other
calamity, or shall have become a party to or the subject of any litigation,
which is materially adverse to the Company and its Subsidiaries taken as a
whole, nor shall there have been a material adverse change in the general
affairs, operations, business, prospects, key personnel, capitalization,
financial condition or net worth of the Company and its Subsidiaries taken as a
whole, regardless of whether arising in the ordinary course of business, which
loss, litigation or change, in your judgement, shall render it impractical or
inadvisable to proceed with the payment for and delivery of the Debentures.
(h) On the Closing Date you shall have received a letter from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated the Closing Date and addressed to you, confirming
that they are independent certified public accountants within the meaning of the
Securities Act and the applicable published Rules and Regulations, and stating,
as of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given or incorporated in the Prospectus as of a date not more
than five days prior to the date of such letter, provided that such date shall
be after the date of the Prospectus), the conclusions and findings of such firm
with respect to the financial information and other matters covered by its
letter delivered to you concurrently with the execution of this Agreement, and
confirming the conclusions and findings set forth in such prior letter.
-16-
(i) You shall have been furnished by the Company such additional
documents and certificates as you or counsel for the Underwriters may reasonably
request.
(j) At the time of the Closing, the Debentures shall have a
rating of at least Baa1 by ▇▇▇▇▇'▇ Investors Service and BBB+ by Standard &
Poor's Corporation, and the Company shall have delivered to the Underwriters a
letter, dated the Closing Date, from each such rating agency or other evidence
satisfactory to the Underwriters, confirming such ratings. Since the Effective
Date, there shall not have occurred any downgrading with respect to any debt
securities of the Company or any of its Subsidiaries by any "nationally
recognized statistical rating organization" as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act or any public
announcement that any such organization has under surveillance or review its
rating of any such debt securities (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading of such rating).
All such opinions, certificates, letters and documents shall be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and to counsel for the Underwriters. The Company shall
furnish to you conformed copies of such opinions, certificates, letters and
other documents in such number as you shall reasonably request. If any of the
conditions specified in this Section 5 shall not have been fulfilled when and as
required by this Agreement, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date, by you. Any such cancellation shall be without liability of the
Underwriters to the Company. Notice of such cancellation shall be given to the
Company in writing, or by telegraph or telephone and confirmed in writing.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and each of
the Subsidiary Guarantors shall, jointly and severally, indemnify and hold
harmless each Underwriter from and against any loss, claim, damage or liability
(or any action in respect thereof), joint or several, to which such Underwriter
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage or liability (or action in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement made by the
Company or any Subsidiary Guarantor in Section 1 hereof, (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or the
Registration Statement or Prospectus as amended or supplemented or in any Blue
Sky application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Debentures
under the securities laws thereof (any such application, document or information
being hereinafter referred to as a "Blue Sky Application"), or (iii) the
omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented or in any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and shall reimburse each Underwriter promptly after receipt of
invoices from such Underwriter for any legal or other expenses as reasonably
incurred by such Underwriter in connection with investigating, preparing to
defend or defending against or appearing as a third-party witness in connection
with any such loss, claim, damage, liability or action, notwithstanding the
possibility that payments for such expenses might later be held to be improper,
in which case such payments shall be promptly refunded; PROVIDED, HOWEVER, that
the Company and the Subsidiary Guarantors shall not be liable under this
paragraph 6(a) in any such case to the extent, but only to the extent, that any
such loss, claim,
-17-
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriters expressly for use in the preparation of the Registration Statement,
any Preliminary Prospectus, the Prospectus or the Registration Statement or
Prospectus as amended or supplemented, or any Blue Sky Application; PROVIDED,
FURTHER that with respect to any untrue statement or omission or alleged untrue
statement or omission made in any Preliminary Prospectus, which untrue statement
or omission or alleged untrue statement or omission in such Preliminary
Prospectus was corrected in the Prospectus, the indemnity agreement contained in
this paragraph 6(a) shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) to the extent that any such loss, claim,
damage or liability results from the fact that a copy of the Prospectus was not
sent or given to the person asserting any such losses, claims, damages or
liabilities at or prior to the written confirmation of the sale of the
Debentures concerned to such person by such Underwriter (provided that the
Company shall have complied with the provisions of Section 4(a) and (c) hereof
and such Underwriter shall have been provided with the number of copies of such
Prospectus requested by such Underwriter) and it is judicially determined that
such delivery was required under the Securities Act and was not so made.
(b) Each Underwriter severally, but not jointly, shall indemnify
and hold harmless the Company and each of the Subsidiary Guarantors against any
loss, claim, damage or liability (or any action in respect thereof) to which the
Company may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage or liability (or action in respect thereof) arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or the Registration Statement or Prospectus as
amended or supplemented or in any Blue Sky Application, or (ii) the omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Prospectus or the Registration Statement or Prospectus as
amended or supplemented or in any Blue Sky Application a material fact required
to be stated therein or necessary to make the statements therein not misleading
and shall reimburse the Company promptly after receipt of invoices from the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating, preparing to defend or defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action notwithstanding the possibility that payments for
such expenses might later be held to be improper, in which case such payments
shall be promptly refunded; PROVIDED, HOWEVER, that such indemnification or
reimbursement shall be available in each such case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter expressly for use
therein.
(c) Promptly after receipt by any indemnified party under
subsection (a) or (b) above of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the claim or the commencement of that action; PROVIDED,
HOWEVER, that the failure to so notify the indemnifying party shall not relieve
it from any liability which it may have under this Section 6 except to the
extent it has been prejudiced in any material respect by such failure or from
any liability which it may have to an indemnified party otherwise than under
this Section 6. If any such claim or action shall be brought against any
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
-18-
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under subsection
(a) or (b) above for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; except that the Underwriters shall have the right to
employ counsel to represent the Underwriters who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under such subsection if (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Underwriters shall have been advised by such counsel that there may be one or
more legal defenses available to the Underwriters which are different from or
additional to those available to the Company and in the reasonable judgment of
such counsel it is advisable for the Underwriters to employ separate counsel or
(iii) the Company has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the Underwriters, in which event the fees and
expenses of such separate counsel shall be paid by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Debentures
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Debentures
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. For purposes of the preceding two sentences, the net proceeds deemed
to be received by the Company shall be deemed to be also for the benefit
-19-
of the Subsidiary Guarantors and information supplied by the Company shall also
be deemed to have been supplied by the Subsidiary Guarantors. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending against any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Debentures
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint. Each party entitled to contribution agrees that upon
the service of a summons or other initial legal process upon it in any action
instituted against it in respect to which contribution may be sought, it shall
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought for any obligation it may have hereunder or otherwise (except as
specifically provided in subsection (c) above).
(e) The obligations of the Company under this Section 6 shall be
in addition to any liability that the Company may otherwise have, and shall
extend, upon the same terms and conditions set forth in this Section 6, to the
respective officers and directors of the Underwriters and each person, if any,
who controls any Underwriter within the meaning of the Securities Act; and the
obligations of the Underwriters under this Section 6 shall be in addition to any
liability that the respective Underwriters may otherwise have, and shall extend,
upon the same terms and conditions, to each director of the Company (including
any person who, with his or her consent, is named in the Registration Statement
as about to become a director of the Company), to each officer of the Company
who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
7. SUBSTITUTION OF UNDERWRITERS. If any Underwriter defaults in
its obligation to purchase the principal amount of the Debentures which it has
agreed to purchase under this Agreement, the non-defaulting Underwriters shall
be obligated to purchase (in the respective proportions which the principal
amount of the Debentures set forth opposite the name of each non-defaulting
Underwriter in Schedule I hereto bears to the total principal amount of the
Debentures less the principal amount of the Debentures the defaulting
Underwriter agreed to purchase set forth in Schedule I hereto) the principal
amount of the Debentures which the defaulting Underwriter agreed but failed to
purchase; except that the non-defaulting Underwriters shall not be obligated to
purchase any of the Debentures if the total principal amount of the Debentures
which the defaulting Underwriter or Underwriters agreed but failed to purchase
exceed 9.09% of the total principal amount of the Debentures, and any
non-defaulting Underwriters shall not be obligated to purchase more than
-20-
110% of the principal amount of the Debentures set forth opposite its name in
Schedule I hereto. If the foregoing maximums are exceeded, the non-defaulting
Underwriters, and any other underwriters satisfactory to you who so agree, shall
have the right, but shall not be obligated, to purchase (in such proportions as
may be agreed upon among them) all of the Debentures. If the non-defaulting
Underwriters or the other underwriters satisfactory to the Underwriters do not
elect to purchase the Debentures that the defaulting Underwriter or Underwriters
agreed but failed to purchase within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company, except for the payment of expenses to be borne by the Company
and the Underwriters as provided in Section (4)(f) hereof and the indemnity and
contribution agreements of the Company and the Underwriters contained in Section
6 hereof. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter pursuant to this Section 7.
Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have for damages caused by its default. If the
non-defaulting Underwriters or the other underwriters satisfactory to you are
obligated or agree to purchase the Debentures of a defaulting Underwriter,
either you or the Company may postpone the Closing Date for up to seven full
Business Days in order to effect any changes that may be necessary in the
Registration Statement or the Prospectus or in any other document or agreement,
and to file promptly any amendments or any supplements to the Registration
Statement or the Prospectus which in your opinion may thereby be made necessary.
8. EFFECTIVE DATE AND TERMINATION. (a) This Agreement shall
become effective (i) if the Effective Date is on or before the date of this
Agreement, at 11:00 A.M., New York City time, on the next Business Day following
the date hereof, (ii) if the Effective Date is after the date of this Agreement,
at 11:00 A.M., New York City time, on the first full Business Day following the
Effective Date or (iii) at such earlier time after the Registration Statement
becomes effective as you shall first release the Debentures for sale to the
public. You shall notify the Company immediately after you have taken any action
which causes this Agreement to become effective. Until this Agreement is
effective, it may be terminated by the Company by giving notice as hereinafter
provided to you, or by you by giving notice as hereinafter provided to the
Company except that the provisions of Section 4(f) and Section 6 hereof shall at
all times be effective. For purposes of this Agreement, the release of the
initial public offering of the Debentures for sale to the public shall be deemed
to have been made when you release, by telegram or otherwise, firm offers of the
Debentures to securities dealers or release for publication a newspaper
advertisement relating to the Debentures, whichever occurs first.
(b) Until the Closing Date, this Agreement may be terminated by
you by giving notice as hereinafter provided to the Company if (i) the Company
shall have failed, refused or been unable, at or prior to the Closing Date, to
perform any agreement on its part to be performed hereunder, (ii) any other
condition of the Underwriters' obligation hereunder is not fulfilled, (iii)
trading in securities generally on the NYSE shall have been suspended or minimum
prices shall have been established on such exchange by the Commission or such
exchange or other regulatory body or governmental authority having jurisdiction,
(iv) a banking moratorium is declared by either federal or New York state
authorities, (v) the United States becomes engaged in hostilities or there is an
escalation of hostilities involving the United States or there is a declaration
of a national emergency or war by the United States or (vi) there shall have
been such a material adverse change in general economic, political or financial
conditions, or the effect of international conditions on the financial
-21-
markets in the United States shall be such, as to, in the judgment of a majority
in interest of the several Underwriters, make it inadvisable or impracticable to
proceed with the offering or delivery of the Debentures. Any termination of this
Agreement pursuant to this Section 8 shall be without liability on the part of
the Company or any Underwriter, except as otherwise provided in Sections 4(f)
and 6 hereof.
Any notice referred to above may be given at the address
specified in Section 10 hereof in writing or by telegraph or telephone, and if
by telegraph or telephone, shall be immediately confirmed in writing.
9. SURVIVAL OF CERTAIN PROVISIONS. The agreements contained in
Section 6 hereof and the representations, warranties and agreements of the
Company contained in Sections 1 and 4 hereof shall survive the delivery of the
Debentures to the Underwriters hereunder and shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
10. NOTICES. Except as otherwise provided in the Agreement, (a)
whenever notice is required by the provisions of this Agreement to be given to
the Company, such notice shall be in writing or by telegraph addressed to the
Company at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel; (b) whenever notice is required by the provisions of this Agreement to
be given to the several Underwriters, such notice shall be in writing or by
telegraph addressed to you in care of ▇▇▇▇▇▇ Brothers Inc., 3 World Financial
Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate
Registration Department.
11. INFORMATION FURNISHED BY UNDERWRITERS. The Underwriters
severally confirm that the statements set forth in the last paragraph on the
cover page in any Preliminary Prospectus and in the Prospectus and the
information appearing in the list of names of, and principal amount of
Debentures to be purchased by, each of the Underwriters, under the caption
"Underwriting" in any Preliminary Prospectus and in the Prospectus, and the
statements in the second, third and sixth paragraphs next following such list,
constitute the written information furnished by or on behalf of any Underwriter
referred to in paragraph (b) of Section 1 hereof and in paragraphs (a) and (b)
of Section 6 hereof.
12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company, the Subsidiary Guarantors
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company and the
Subsidiary Guarantors contained in this Agreement shall also be deemed to be for
the benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (b) the indemnity agreement
of the Underwriters contained in Section 6 hereof shall be deemed to be for the
benefit of directors of the Company and the Subsidiary Guarantors, officers of
the Company or any of the Subsidiary Guarantors who signed the Registration
Statement and any person controlling the Company or any of the Subsidiary
Guarantors within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement shall be construed to give any person, other than the persons
referred to in this paragraph, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
-22-
13. DEFINITION OF "BUSINESS DAY" AND "SUBSIDIARY." For purposes
of this Agreement, (a) "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading, other than any day on which commercial banks
are authorized or required to be closed in New York City or Houston, Texas, and
(b) "Subsidiary" has the meaning set forth in Rule 405 of the Rules and
Regulations and includes both partnerships and corporations.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
15. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
16. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
-23-
Please confirm, by signing and returning to us two counterparts
of this Agreement, that you are acting on behalf of yourselves and the several
Underwriters and that the foregoing correctly sets forth the Agreement between
the Company and the several Underwriters.
Very truly yours,
NGC CORPORATION
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
NATURAL GAS CLEARINGHOUSE
By: NGC CORPORATION,
General Partner
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
-24-
▇▇▇▇▇▇ PETROLEUM COMPANY,
LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ PETROLEUM G.P., INC.,
General Partner
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
▇▇▇▇▇▇ ENERGY RESOURCES,
LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇ ENERGY, INC.,
General Partner
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
WPC LP, INC.
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
President
-25-
▇▇▇▇▇▇ NGL, INC.
▇▇▇▇▇▇ GAS LIQUIDS, INC.
NGC OIL TRADING AND
TRANSPORTATION, INC.
NGC FUTURES, INC.
▇▇▇▇▇▇ GAS MARKETING, INC.
▇▇▇▇▇▇ NGL PIPELINE COMPANY
KANSAS GAS SUPPLY CORPORATION
▇▇▇▇▇▇ INTRASTATE GAS
SUPPLY, INC.
NGC UK LIMITED
NGC CANADA, INC.
WTLPS, INC.
ELECTRIC CLEARINGHOUSE, INC.
By: /S/ H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
Confirmed and accepted as of
the date first above mentioned
▇▇▇▇▇▇ BROTHERS INC.
NATIONSBANC CAPITAL MARKETS, INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇ BROTHERS INC.
By: /S/ H. E. ▇▇▇▇▇ III
Authorized Representative
-26-
SCHEDULE I
Underwriting Agreement dated October 10, 1996
Principal Amount
of Debentures to be
UNDERWRITER PURCHASED
----------- ---------
▇▇▇▇▇▇ Brothers Inc.................................. $58,334,000
NationsBanc Capital Markets, Inc..................... 58,333,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc..................................... 58,333,000
-----------
Total ............................................... $175,000,000
===========
I-1