Exhibit 1.1
Western Gas Resources, Inc.
Common Stock
(par value $0.10 per share)
____________
Underwriting Agreement
----------------------
November 21, 1996
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
From time to time Western Gas Resources, Inc., a Delaware corporation (the
"Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇ (the "Selling Stockholder") propose to enter into
one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex
I hereto, with such additions and deletions as the parties thereto may
determine, and, subject to the terms and conditions stated herein and therein,
to issue and sell to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with respect to such
Pricing Agreement and the securities specified therein) certain shares of the
Company's common stock, par value $0.10 per share (the "Shares"), specified in
Schedule II to such Pricing Agreement (with respect to such Pricing Agreement,
the "Firm Shares"). If specified in such Pricing Agreement, the Company or the
Selling Stockholder may grant to the Underwriters the right to purchase at their
election an additional number of shares, specified in such Pricing Agreement as
provided in Section 3 hereof (the "Optional Shares"). The Firm Shares and the
Optional Shares, if any, which the Underwriters elect to purchase pursuant to
Section 3 hereof are herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of the Company or the Selling
Stockholder to sell any of the Shares or as an obligation of any of the
Underwriters to purchase any of the Shares. The obligation of the Company to
issue and sell any of the Shares, the obligation of the Selling Stockholder to
sell any of the Shares and the obligation of any of the Underwriters to purchase
any of the Shares shall be evidenced by the Pricing Agreement with respect to
the Designated Shares specified therein. Each Pricing Agreement shall specify
the aggregate number of the Firm Shares, the maximum number of Optional Shares,
if any, the initial public offering price of such Firm and Optional Shares or
the manner of determining such price, the purchase price to the Underwriters of
such Designated Shares, the names of the Underwriters of such Designated Shares,
the names of the Representatives of such Underwriters, the number of such
Designated Shares to be purchased by each Underwriter and the commission, if
any, payable to the Underwriters with respect thereto and shall set forth the
date, time and manner of delivery of such Firm and Optional Shares, if any, and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the registration statement and prospectus with respect thereto) the
terms of such Designated Shares. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) Four registration statements on Form S-3 (File Nos. 33-66516,
33-54741, 333-00903 and 333-13099) in respect of the Shares have been filed
with the Securities and Exchange Commission (the "Commission"); such
registration statements and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but including all
documents incorporated by reference in the prospectus included in the
latest registration statement, to the Representatives for each of the other
Underwriters have been declared effective by the Commission in such form;
no other document with respect to such registration statements or document
incorporated by reference therein has heretofore been filed, or transmitted
for filing, with the Commission (other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), each in the form heretofore
delivered to the Representatives); and no stop order suspending the
effectiveness of any such registration statement has been issued and no
proceeding for that purpose has been initiated or, to the best of the
Company's knowledge, after reasonable investigation, threatened by the
Commission (any preliminary prospectus included in such registration
statements or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various parts of
such registration statements, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statements at the time such part of the registration
statements became effective, each as amended at the time such part of the
registration statements became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus
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relating to the Shares, in the form in which it has most recently been
filed, or transmitted for filing, with the Commission on or prior to the
date of this Agreement, is hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; 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
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Shares in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof, including any documents incorporated by reference therein as
of the date of such filing);
(ii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an 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 light
of the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the Prospectus
or any further amendment or supplement thereto, 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 the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Designated Shares;
(iii) The Registration Statement conforms, and any further amendments
or supplements to the Registration Statement will conform, in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder and does not and will not, as of the applicable
effective date, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; the Prospectus conforms, and any
further amendments or supplements to the Prospectus will conform, in all
material respects to the
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requirements of the Act and the rules and regulations of the Commission
thereunder and does not and will not, as of the applicable filing date,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Shares through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such
Designated Shares;
(iv) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus 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 dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;
(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus;
(vi) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable;
(viii) The Shares have been duly and validly authorized, and, when the
Firm Shares are issued and delivered pursuant to this Agreement and the
Pricing Agreement with respect to such Designated Shares and, in the case
of any Optional Shares, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated Shares will
be duly and validly issued and fully paid and non-assessable; the Shares
conform to the description thereof contained in the Registration Statement
and the Designated Shares will conform to the description thereof contained
in the Prospectus as amended or supplemented with respect to such
Designated Shares;
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(ix) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of this Agreement, any Pricing Agreement
and each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets
of the Company is subject except for such conflicts, breaches, violations
or defaults which would not have a material adverse effect on the business,
financial position, prospects or results of operations of the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any
of its properties (including, without limitation, the Natural Gas Act, as
amended by the Natural Gas Policy Act, and the rules, regulations, orders
and official pronouncements of the Federal Energy Regulatory Commission
(the "FERC") thereunder); and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement or any Pricing Agreement or any Over-allotment Option, except
such as have been, or will have been prior to each Time of Delivery (as
defined in Section 4 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(x) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the business, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xi) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound such that such default
would have a material adverse effect on the business, financial position,
prospects or results of operations of the Company and its subsidiaries,
taken as a whole;
(xii) This Agreement has been duly and validly authorized, executed
and delivered by the Company;
(xiii) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary
5
to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a material adverse effect on the business,
financial position, prospects or results of operations of the Company and
its subsidiaries, taken as a whole; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a material adverse effect on the
business, financial position, prospects or results of operations of the
Company and its subsidiaries, taken as a whole; and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse effect on the
business, financial position, prospects or results of operations of the
Company and its subsidiaries, taken as a whole;
(xiv) None of the Company or its subsidiaries has violated any
environmental safety or similar law or regulation applicable to its
business relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permits, licenses or other
approvals required of them under applicable Environmental Laws to own,
lease and operate their respective properties and to conduct their business
in the manner described in the Prospectus as amended or supplemented, is
violating any terms and conditions of any such permit, license or approval
or has permitted to occur any event that allows, or after notice or lapse
of time would allow, revocation or termination of any such permit, license
or approval or result in any other impairment of their rights thereunder,
which in each case would have a material adverse effect on the business,
financial position, prospects or results of operations of the Company and
its subsidiaries, taken as a whole;
(xv) The Company and its subsidiaries have (i) generally
satisfactory title to all their interests in their oil and gas properties,
(ii) good and marketable title in fee simple to all other real property
owned by the Company and its subsidiaries that is owned or used in
connection with the Company's or such subsidiary's operations and (iii)
good and marketable title to all personal property owned by the Company and
its subsidiaries that is owned or used in connection with the Company's or
such subsidiary's operations, in each case free and clear of all liens,
encumbrances, claims, security interests, subleases and defects except such
as are described in the Prospectus or such as would not have a material
adverse effect on the business, financial position, prospects or results of
operations of the Company and its subsidiaries, taken as a whole; and any
real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(xvi) Except as described in or contemplated by the Prospectus, (i)
the Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged, (ii) neither the Company nor any such subsidiary
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has been refused any insurance coverage sought or applied for, and
(iii) neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would
not have a material adverse effect on the business, financial position,
prospects or results of operations of the Company and its subsidiaries,
taken as a whole;
(xvii) The statements set forth (i) in the Registration Statement
under the caption "Description of Capital Stock" and "Plan of
Distribution," (ii) in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 under the caption "Items 1 and 2. Business and
Properties - Regulation," (iii) in the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1996 under the caption "Part II - Other
Information - Item 1 Legal Proceedings," (iv) in the Company's 1996 Notice
and Proxy Statement under the captions "Stock Option Plans" and "Profit
Sharing Plan," (v) in the Registration Statement under Item 15 and (vi) in
the Prospectus under the caption "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(xviii) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act") ;
and
(xix) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(b) The Selling Stockholder represents and warrants to, and agrees with,
each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary
for the execution and delivery by the Selling Stockholder of this Agreement
and the Pricing Agreement with respect to the Designated Shares, and for
the sale and delivery of the Designated Shares to be sold by the Selling
Stockholder hereunder and thereunder, have been obtained; and the Selling
Stockholder has full right, power and authority to enter into this
Agreement and the Pricing Agreement with respect to the Designated Shares
and to sell, assign, transfer and deliver the Designated Shares to be sold
by such Selling Stockholder hereunder and thereunder;
(ii) The sale of the Designated Shares to be sold by the Selling
Stockholder hereunder and under the Pricing Agreement and the compliance by
the Selling Stockholder with all of the provisions of this Agreement and
such Pricing Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject
7
which conflict, breach or violation would have a material adverse effect on
the validity, performance or consummation of the transactions contemplated
by this Agreement, nor will such action result in any violation of the
provisions of any statu te or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property of the Selling Stockholder;
(iii) The Selling Stockholder has, and immediately prior to the each
Time of Delivery (as defined in Section 4 hereof) the Selling Stockholder
will have, good and valid title to the Designated Shares to be sold by the
Selling Stockholder hereunder and under the Pricing Agreement with respect
to the Designated Shares, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Designated Shares and
payment therefor pursuant hereto, good and valid title to such Designated
Shares, free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters;
(iv) During the period beginning from the date of the Pricing
Agreement with respect to the Designated Shares to be sold by the Selling
Stockholder and continuing to and including the date 90 days after the date
of the Pricing Agreement for such Designated Shares, not to offer, sell
contract to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the Designated
Shares, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Shares or
any such substantially similar securities (other than pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of the
Pricing Agreement for such Designated Shares), without the prior written
consent of the Representatives;
(v) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Designated Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by the Selling
Stockholder expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and the Prospectus and any further amendments
or supplements to the Registration Statement and the Prospectus, when they
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 and the
rules and regulations of the Commission thereunder and will not 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
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed
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United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company and the Selling Stockholder may specify in the Pricing
Agreement applicable to any Designated Shares that the Company thereby grants to
the Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Shares set forth in such Pricing
Agreement, on the terms set forth in the paragraph above, for the sole purpose
of covering over-allotments in the sale of the Firm Shares. Any such election
to purchase Optional Shares may be exercised by written notice from the
Representatives to the Company and the Selling Stockholder, given within a
period specified in the Pricing Agreement, setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Representatives but in no event earlier
than the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives, the Company and the Selling Stockholder otherwise agree in
writing, earlier than or later than the respective number of business days after
the date of such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company and the Selling Stockholder has been
advised by the Representatives have been attributed to such Underwriter;
provided that, if the Company and the Selling Stockholder has not been so
advised, the number of Optional Shares to be so added shall be, in each case,
that proportion of Optional Shares which the number of Firm Shares to be
purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Shares (rounded as the Representatives may determine to
the nearest 100 shares). The number of Optional Shares to be sold by the
Company and the Selling Stockholder shall be in proportion to the maximum number
of Optional Shares to be sold by the Company and the Selling Stockholder,
respectively, as set forth in the Pricing Agreement applicable to such
Designated Shares. The total number of Designated Shares to be purchased by all
the Underwriters pursuant to such Pricing Agreement shall be the aggregate
number of Firm Shares set forth in Schedule I to such Pricing Agreement plus the
aggregate number of Optional Shares which the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company and the Selling
Stockholder, shall be delivered by or on behalf of the Company and the Selling
Stockholder to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
wire transfer or transfers, payable to the order of the Company and the Selling
Stockholder, as their interest may appear, in the funds specified in such
Pricing Agreement, (i) with respect to the Firm Shares, all in the manner and at
the place and time and date specified in such Pricing Agreement or at such other
place and time and date as the
9
Representatives, the Company and the Selling Stockholder may agree upon in
writing, such time and date being herein called the "First Time of Delivery" and
(ii) with respect to the Optional Shares, if any, in the manner and at the time
and date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional Shares,
or at such other time and date as the Representatives, the Company and the
Selling Stockholder may agree upon in writing, such time and date, if not the
First Time of Delivery, herein called the "Second Time of Delivery". Each such
time and date for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Shares in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Shares or, if applicable, such earlier time as may be required by
Rule 424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the Pricing
Agreement relating to such Shares and prior to any Time of Delivery for such
Shares which shall be disapproved by the Representatives for such Shares
promptly after reasonable notice thereof; to advise the Representatives promptly
of any such amendment or supplement after any Time of Delivery for such Shares
and furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be filed
by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Shares, and during such
same period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any
prospectus relating to the Shares, of the suspension of the qualification of
such Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification, promptly
to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
10
(c) Prior to 10:00 a.m., New York City time, on the business day next
succeeding the date of the Pricing Agreement and from time to time, to
furnish the Underwriters in New York City with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Shares and if at such
time any event shall have occurred 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 any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act
or the Exchange Act, to notify the Representatives and upon their request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Shares and continuing to and including the
date 90 days after the date of the Pricing Agreement for such Designated
Shares, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities of the Company that are
substantially similar to the Designated Shares, including but not limited
to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Shares or any such substantially similar
securities (other than pursuant to employee stock option plans existing on,
or upon the conversion of convertible or exchangeable securities
outstanding as of, the date of the Pricing Agreement for such Designated
Shares) without the prior written consent of the Representatives.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants and the
Selling Stockholder's counsel in connection with the registration of the Shares
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Blue Sky Memorandum and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and
11
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) the cost of
preparing certificates for the Shares; (v) the cost and charges of any transfer
agent or registrar or dividend disbursing agent; and (vi) all other costs and
expenses incident to the performance of its obligations hereunder and under any
Over-allotment Options which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Shares by them, their own travel expenses and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Company and of the Selling Stockholder in
or incorporated by reference in the Pricing Agreement relating to such
Designated Shares are, at and as of each Time of Delivery for such Designated
Shares, true and correct, the condition that the Company and the Selling
Stockholder shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Shares shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel for the Underwriters shall have
furnished to the Representatives such opinion or opinions (a draft of each
such opinion is attached as Annex II(a) hereto), dated each Time of
Delivery for such Designated Shares, with respect to the matters covered in
paragraphs (i), (ii) (solely as to the Designated Shares being delivered by
the Company), (iv), (vi) (solely as to the statements set forth (a) in the
Prospectus under the caption "Description of Capital Stock -- Common Stock"
and (b) in the Prospectus as amended or supplemented under the caption
"Underwriting"), (xi) and (xii) of subsection (c) below as well as such
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company
and the Selling Stockholder, shall have furnished to the Representatives
their written opinion (a draft of each such opinion is attached as Annex
II(b) hereto), dated each Time of Delivery for such Designated Shares,
respectively, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware with
12
corporate power and authority to own its properties and conduct its
business as described in the Prospectus as amended or supplemented;
(ii) The number of authorized, issued and outstanding shares of
capital stock of the Company is as set forth in the Prospectus as
amended or supplemented under the caption "Capitalization;" the shares
of issued and outstanding capital stock of the Company, including the
Designated Shares being delivered by the Selling Stockholder at such
Time of Delivery, have been duly authorized and validly issued and are
fully paid and nonassessable; the Designated Shares being delivered by
the Company at such Time of Delivery have been duly authorized by the
Company and, upon payment and delivery in accordance with this
Agreement and the Pricing Agreement with respect to the Designated
Shares, will be validly issued, fully paid and nonassessable; and the
authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in
the Prospectus as amended or supplemented under the caption
"Description of Capital Stock;"
(iii) The issuance of the Designated Shares is not subject to
any preemptive or similar rights under the General Corporation Law of
the State of Delaware (the "DGCL") or the Certificate of Incorporation
or By-laws of the Company;
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and delivered
by the Company;
(v) None of the execution and delivery by the Company of, or
the performance by the Company of its obligations under, this Agreement
and the Pricing Agreement with respect to the Designated Shares, or the
issuance and sale of the Designated Shares being delivered by the
Company at such Time of Delivery, in each case in accordance with the
terms of this Agreement and the Pricing Agreement with respect to the
Designated Shares, will conflict with the Certificate of Incorporation
or the By-Laws of the Company;
(vi) The statements set forth (i) in the Prospectus under the
captions "Description of Capital Stock" and "Plan of Distribution,"
(ii) in the Registration Statement Under Item 15 and (iii) in the
Prospectus as amended or supplemented under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate and fairly present the
information disclosed therein in all material respects;
(vii) The documents incorporated by reference in the Prospectus
as amended or supplemented, when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, except that, in each case, such counsel need not express
any opinion as to the financial statements, schedules and other
13
financial data included therein or excluded therefrom and such counsel
need not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in such documents;
(viii) This Agreement and the Pricing Agreement with respect to
the Designated Shares has been duly executed and delivered by the
Selling Stockholder;
(ix) Based, as to factual matters, solely on a certificate from
the Selling Stockholder, no Governmental Approval (as hereinafter
defined), which has not been obtained or taken and is not in full force
and effect, is required in connection with the execution, delivery or
performance by the Selling Stockholder of this Agreement or the Pricing
Agreement with respect to the Designated Shares being delivered at such
Time of Delivery by the Selling Stockholder, except such as have been
obtained or made and such as may be required under state securities or
Blue Sky laws or by the National Association of Securities Dealers,
Inc., as to which such counsel need not express any opinion the term;
"Applicable Laws" means the DGCL, the laws of the State of New York and
the laws of the United States of America that, in our experience, are
normally applicable to transactions of the type contemplated by this
Agreement and the Pricing Agreement with respect to the Designated
Shares; the term "Governmental Authorities" means any Delaware, New
York or federal executive, legislative, judicial, administrative or
regulatory body under Applicable Laws; the term "Governmental Approval"
means any consent, approval, license, authorization or validation of,
or filing, recording or registration with, any Governmental Authority
pursuant to Applicable Laws;
(x) Upon transfer of the Designated Shares to be sold at such
Time of Delivery by the Selling Stockholder to the Underwriters, each
Underwriter will acquire such Designated Shares purchased by such
Underwriter and will acquire its interests in such Designated Shares
purchased by it free of any adverse claim, assuming the Underwriters
who have purchased such Designated Shares have done so in good faith
and without notice of any such lien, encumbrance, equity or claim or
any other adverse claim within the meaning of the New York Uniform
Commercial Code;
(xi) The Registration Statement, as of its effective date, and
the Prospectus as amended or supplemented, as of its respective date,
appeared on their face to be appropriately responsive in all material
respects to the requirements of the Act and the rules and regulations
thereunder, except that, in each case, such counsel need not express
any opinion as to the financial statements, schedules and other
financial data included therein or excluded therefrom or the exhibits
to the Registration Statement, and such counsel need not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus as
amended or supplemented except for those referred to in the opinion in
subsection (vi) of this Section 7(c) insofar as they relate to
provisions of law and documents therein described; and
14
(xii) Although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent
check or verification thereof, except for those referred to in the
opinion in subsection (vi) of this Section 7(c), no facts have come to
such counsel's attention that have led such counsel to believe that, as
of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery
contained an 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 not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that,
as of such Time of Delivery, the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that such counsel need not express
any opinion as to the financial statements, schedules and other
financial data included therein or excluded therefrom or to the
exhibits to the Registration Statement.
(d) ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel for the Company, shall have
furnished to the Representatives his written opinion (a draft of each such
opinion is attached as Annex II(c) hereto), dated each Time of Delivery for such
Designated Shares, respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction;
(iii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued
shares of capital stock of the Company (including the Designated Shares
being delivered at such Time of Delivery) have been duly and validly
authorized and issued and are fully paid and non-assessable and are not
subject to any preemptive or similar rights; and the Designated Shares
conform to the description thereof in the Prospectus as amended or
supplemented;
15
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and delivered
by the Company;
(v) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the current or
future consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) The issuance and sale of the Designated Shares being
delivered at such Time of Delivery by the Company and the compliance by
the Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to the Designated Shares and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject except for such conflicts, breaches, violations or defaults
which would not have a material adverse effect on the business,
financial position, prospects or results of operations of the Company
and its subsidiaries taken as a whole, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issuance and sale of the Designated Shares being
delivered at such Time of Delivery by the Company or the consummation
by the Company of the transactions contemplated by this Agreement or
the Pricing Agreement with respect to such Designated Shares, except
such as have been obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of such Designated Shares by the Underwriters;
(viii) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
16
(ix) The Company and its subsidiaries possess such Governmental
Licenses issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to possess or comply would not, singly or in the
aggregate, have a material adverse effect on the business, financial
position, prospects or results of operations of the Company and its
subsidiaries, taken as a whole; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a material adverse effect on
the business, financial position, prospects or results of operations of
the Company and its subsidiaries, taken as a whole; and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
material adverse effect on the business, financial position, prospects
or results of operations of the Company and its subsidiaries, taken as
a whole;
(x) None of the Company or its subsidiaries has violated any
Environmental Laws, lacks any permits, licenses or other approvals
required of them under applicable Environmental Laws to own, lease and
operate their respective properties and to conduct their business in
the manner described in the Prospectus as amended or supplemented, is
violating any terms and conditions of any such permit, license or
approval except for such violations which, individually or in the
aggregate, would reasonably be expected not to have a material adverse
effect on the business, financial position, prospects or results of
operations of the Company and its subsidiaries taken as a whole, or has
permitted to occur any event that allows, or after notice or lapse of
time would allow, revocation or termination of any such permit, license
or approval or result in any other impairment of their rights
thereunder, which in each case reasonably would be expected to have a
material effect on the business, financial position, prospects or
results of operations of the Company and its subsidiaries, taken as a
whole;
(xi) The statements set forth (i) in the Registration Statement
under the captions "Description of Capital Stock" and "Plan of
Distribution," (ii) in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 under the caption "Items 1 and 2. Business
and Properties - Regulation," (iii) in the Company's Quarterly Report
on Form 10-Q for the period ended June 30, 1996 under the caption "Part
II - Other Information - Item 1 Legal Proceedings," (iv) in the
Company's 1996 Notice and Proxy Statement under the captions "Stock
Option Plans" and "Profit Sharing Plan," (v) in the Registration
Statement under Item 15 and (vi) in the Prospectus under the caption
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
17
(xii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act;
(xiii) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and they have no
reason to believe that any of such documents, when they became
effective or were so filed, as the case may be, contained, in the case
of a registration statement which became effective under the Act, an
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 not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading;
(xiv) Such counsel does not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to be described
in the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required; and
(xv) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), comply as to form in all material respects with
the requirements of the Act and the rules and regulations thereunder;
although he does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (xii) of this Section 7(d), he has no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an 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 not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contained an untrue
statement
18
of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of such Time of
Delivery, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(e) On the date of the Pricing Agreement for such Designated Shares and
at each Time of Delivery for such Designated Shares, the independent accountants
of the Company who have certified the financial statements of the Company and
its subsidiaries included or incorporated by reference in the Registration
Statement shall have furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the most recent
report filed with the Commission containing financial statements and
incorporated by reference in the Registration Statement, if the date of such
report is later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex III hereto (the
executed copy of the letter delivered prior to the execution of this Agreement
is attached as Annex III(a) hereto and a draft of the form of letter to be
delivered as of each Time of Delivery is attached as Annex III(b) hereto), and
with respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
as amended prior to the date of the Pricing Agreement relating to the Designated
Shares, and (ii) since the respective dates as of which information is given in
the Prospectus as amended prior to the date of the Pricing Agreement relating to
the Designated Shares there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Shares, the effect of which, in any such
case described in Clause (i) or (ii), is in the judgment of the Representatives
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated Shares on the terms
and in the manner contemplated in the Prospectus as amended relating to the
Designated Shares;
(g) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating accorded
the Company's debt
19
securities or preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or preferred
stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange, (iii) a general moratorium
on commercial banking activities declared by either Federal or New York or
Colorado State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
Clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Firm
Shares or Optional Shares or both on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the Designated
Shares;
(i) The Shares at each Time of Delivery shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange;
(j) The Company has obtained and delivered to the Representatives at
the First Time of Delivery for the Designated Shares copies of an agreement from
each of the Company's executive officers and directors substantially to the
effect set forth in Subsection 5(e) hereof in form and substance satisfactory to
the Representatives;
(k) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to the Representatives at each Time of Delivery for the
Designated Shares certificates of officers of the Company and the Selling
Stockholder satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company and the Selling Stockholder,
respectively, herein at and as of such Time of Delivery, as to the performance
by the Company and the Selling Stockholder of all of its respective obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (f) of this Section and as to such
other matters as the Representatives may reasonably request; and
(l) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the business day next
succeeding the date of this Agreement.
8. (a) The Company and the Selling Stockholder, jointly and severally,
will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the
20
Prospectus as amended or supplemented and any other prospectus relating to the
Shares, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company and the Selling Stockholder shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares; provided, further, that the liability of
the Selling Stockholder pursuant to this subsection (a) shall not exceed the
product of the number of Shares sold by the Selling Stockholder including any
Optional Shares and the initial public offering price of the Shares as set forth
in the Prospectus; and provided, further, that the Company and the Selling
Stockholder shall not be liable to any Underwriter under the indemnity agreement
in this subsection (a) with respect to any Preliminary Prospectus to the extent
that any such loss, claim, damage or liability of such Underwriter results from
the fact that such Underwriter sold Shares to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus in any case where such
delivery is required by the Act if such Underwriter failed to make reasonable
efforts generally consistent with the then prevailing industry practice and the
Company has previously furnished copies thereof in sufficient quantity and on a
timely basis to such Underwriter and the loss, claim, damage or liability of
such Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus which was identified in writing at such
time to such Underwriter and corrected in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Company and the
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company and the Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Shares, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each 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 any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein; and will reimburse the
Company and the Selling Stockholder for any legal or other expenses reasonably
incurred by the Company and the Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
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(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such 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
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. It is understood, however, that the indemnifying party
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for the indemnified parties. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholder on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Selling Stockholder on the
one hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which 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 and the Selling Stockholder on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company and the
Selling Stockholder bear to the total
22
underwriting discounts and commissions received by such Underwriters. The
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 Selling Stockholder on the one hand or such Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Selling Stockholder and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. 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 applicable Designated
Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. Notwithstanding anything to the contrary in this
subsection (d), the liability of the Selling Stockholder hereunder shall not
exceed the product of the number of Shares sold by the Selling Stockholder
including any Optional Shares and the initial public offering price of the
Shares as set forth in the Prospectus. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Shares in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Shares and not joint.
(e) The obligations of the Company and the Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and the Selling Stockholder and to each
person, if any, who controls the Company or the Selling Stockholder within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Shares or Optional Shares which it has agreed to purchase under the Pricing
Agreement relating to such Shares, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such Shares
on the terms contained herein. If within thirty-six hours after such default by
any Underwriter the Representatives do not arrange for the purchase of such Firm
Shares or Optional Shares, as the case may be, then the Company and the Selling
Stockholder shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to the
Representatives to purchase such Shares on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
and the Selling Stockholder that they have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholder notify the Representatives
that they have so arranged for the purchase
23
of such Shares, the Representatives or the Company and the Selling Stockholder
shall have the right to postpone a Time of Delivery for such Shares for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of the Firm Shares or Optional Shares, as the case may be, to be
purchased at the respective Time of Delivery, then the Company and the Selling
Stockholder shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may be, which
such Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Shares and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Firm Shares or Optional
Shares, as the case may be, which such Underwriter agreed to purchase under such
Pricing Agreement) of the Firm Shares or Optional Shares, as the case may be, of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company and the Selling
Stockholder as provided in subsection (a) above, the aggregate number of Firm
Shares or Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Firm Shares or Optional Shares, as
the case may be, to be purchased at the respective Time of Delivery, as referred
to in subsection (b) above, or if the Company and the Selling Stockholder shall
not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Shares or Optional Shares, as the case
may be, of a defaulting Underwriter or Underwriters, then the Pricing Agreement
relating to such Firm Shares or the Over-allotment Option relating to such
Optional Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholder, except for the expenses to be borne by the Company and the
Selling Stockholder and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholder and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or
24
the Company or the Selling Stockholder, or any officer or director or
controlling person of the Company, or any controlling person of the Selling
Stockholder and shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, neither the Company nor the Selling Stockholder
shall be under any liability to any Underwriter with respect to the Firm Shares
or Optional Shares with respect to which such Pricing Agreement shall have been
terminated except as provided in Sections 6 and 8 hereof; but, if for any other
reason, Designated Shares are not delivered by or on behalf of the Company and
the Selling Stockholder as provided herein, the Company will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses approved
in writing by the Representatives, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of such Designated Shares, but the Company and the Selling
Stockholder shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; if to the Selling Stockholder shall be delivered or sent by
mail, telex, or facsimile transmission to counsel for the Selling Stockholder at
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, 919 Third Avenue, New York, New York,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇; and if to the Company shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Stockholder by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and the Selling
Stockholder and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Company and each person who controls the Company,
the Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Shares from any Underwriter shall
be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
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15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof.
Very truly yours,
WESTERN GAS RESOURCES, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
SELLING STOCKHOLDER
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Inc.
By: /s/ ▇▇▇▇▇▇▇, Sachs & Co.
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