WESTERN GAS PARTNERS, LP 6,000,000 Common Units Representing Limited Partner Interests Underwriting Agreement December 4, 2009
Exhibit 1.1
Execution
Copy
WESTERN GAS PARTNERS, LP
6,000,000 Common Units
Representing Limited Partner Interests
Representing Limited Partner Interests
December 4, 2009
December 4, 2009
Barclays Capital Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ Fargo Securities, LLC
as Representatives
c/o Barclays Capital Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ Fargo Securities, LLC
as Representatives
c/o Barclays Capital Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Western Gas Partners, LP, a Delaware limited partnership (the “Partnership”), proposes
to issue and sell to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom Barclays Capital Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇▇, Sachs & Co. and ▇▇▇▇▇ Fargo Securities, LLC are acting as representatives
(the “Representatives”), an aggregate of 6,000,000 common units (the “Firm Units”)
representing limited partner interests in the Partnership (the “Common Units”). In
addition, the Partnership proposes to grant to the Underwriters the option to purchase up to an
additional 900,000 Common Units (the “Additional Units”), solely for the purpose of
covering over-allotments. The Firm Units and the Additional Units are hereinafter collectively
referred to as the “Units.” The Units are described in the Prospectus, which is referred
to below.
This agreement (the “Agreement”) is to confirm the agreement among the Partnership,
Western Gas Holdings, LLC, a Delaware limited liability company (the “General Partner”),
Western Gas Operating, LLC, a Delaware limited liability company (“Operating GP”), and WGR
Operating, LP, a Delaware limited partnership (the “Operating Partnership,” and together
with the Partnership, the General Partner and the Operating GP, the “Western Gas Parties”),
on the one hand, and the Underwriters on the other hand, concerning the purchase of the Units from
the Partnership by the Underwriters.
The Western Gas Parties and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions set forth herein, the Partnership agrees to issue and sell to
the respective Underwriters, the General Partner agrees to cause the Partnership to issue and sell
to the respective Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Partnership, the number of Firm Units set forth opposite the name of such
Underwriter in Schedule A attached hereto, subject to adjustment in accordance with
Section 8 hereof, in each case at a purchase price of $17.46 per Unit.
In addition, the Partnership hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions set forth herein, in the event that the Underwriters sell
more Common Units in the Offering than the number of Firm Units, the Underwriters shall have the
right to purchase, severally and not jointly, from the Partnership, ratably in accordance with the
number of Firm Units to be purchased by each of them, all or a portion of the Additional Units at
the same purchase price per Unit to be paid by the Underwriters to the Partnership for the Firm
Units. The Over-Allotment Option may be exercised by the Representatives on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth day following the date of
the Prospectus, by written notice to the Partnership. Such notice shall set forth the aggregate
number of Additional Units as to which the Over-Allotment Option is being exercised and the date
and time when the Additional Units are to be delivered (any such date and time being referred to
herein as an “additional time of purchase”); provided, however, that no
additional time of purchase shall be earlier than the time of purchase (as defined in Section
2 hereof) nor, if the additional time of purchase is after the time of purchase, earlier than
the second business day after the date on which the Over-Allotment Option shall have been exercised
nor later than the tenth business day after the date on which the Over-Allotment Option shall have
been exercised. The number of Additional Units to be sold to each Underwriter shall be the number
that bears the same proportion to the aggregate number of Additional Units being purchased as the
number of Firm Units set forth opposite the name of such Underwriter in Schedule A attached
hereto bears to the aggregate number of Firm Units, subject to such adjustments as the
Representatives may determine are necessary to eliminate fractional Units and subject to adjustment
in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Units shall be
made to the Partnership by Federal Funds wire transfer against electronic delivery of the Firm
Units in book entry form to the Representatives through the facilities of The Depository Trust
Company (“DTC”) for the respective accounts of the Underwriters. Such payment and delivery
shall be made at 9:00 A.M., Houston, Texas time, on December 9, 2009 (the “Closing Date”)
(unless another time shall be agreed to by the Representatives and the Partnership or unless
postponed in accordance with the provisions of Section 8 hereof). The time at which such
payment and delivery are to be made is sometimes referred to herein as the “time of
purchase.” Delivery of the Firm Units shall be made in book-entry form through the Full Fast
Program of the facilities of The Depository Trust Company (“DTC”) unless the Underwriters
shall otherwise instruct. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of the Underwriters.
Payment of the purchase price for the Additional Units shall be made at the additional time of
purchase in the same manner as the payment for the Firm Units. If settlement for the Option Units
occurs after the Closing Date, the Partnership will deliver to the Underwriters on the settlement
date for the Option Units, and the obligation of the Underwriters to purchase the Option Units
shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as
of such date the opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
Delivery of the documents described in Section 6 hereof with respect to the purchase
of the Firm Units and any purchase of Additional Units shall be made at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 9:00 A.M., Houston,
Texas time, on the Closing Date and the date of the closing of any purchase of Additional Units.
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3. Representations and Warranties of the Western Gas Parties. Each of the Western Gas
Parties, jointly and severally, represents, warrants to and agrees with each of the Underwriters
that:
(a) A registration statement on Form S-3 (File No. 333-160000) relating to the Units
(i) has been prepared by the Partnership in conformity with 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) is effective under the Securities Act. Copies of such
registration statement and any amendment thereto have been delivered by the Partnership to
the Representatives. As used in this Agreement:
| (i) | “Applicable Time” means 8:40 a.m. (New York City time) on the date of this Agreement; | ||
| (ii) | “Effective Date” means any date as of which any part of such registration statement relating to the Units became, or is deemed to have become, effective under the Securities Act in accordance with the Rules and Regulations; | ||
| (iii) | “Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the Partnership or used or referred to by the Partnership in connection with the offering of the Units; | ||
| (iv) | “Preliminary Prospectus” means any preliminary prospectus relating to the Units included in such registration statement or filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, including any preliminary prospectus supplement thereto relating to the Units; | ||
| (v) | “Pricing Disclosure Package” means, as of the Applicable Time, the most recent Preliminary Prospectus, together with the information included on Schedule B-2 hereto and each Issuer Free Writing Prospectus filed or used by the Partnership on or before the Applicable Time, other than a road show that is an Issuer Free Writing Prospectus under Rule 433 of the Rules and Regulations; | ||
| (vi) | “Prospectus” means the final prospectus relating to the Units, including any prospectus supplement thereto relating to the Units, as filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations; and | ||
| (vii) | “Registration Statement” means, collectively, the various parts of the registration statement referred to in this Section 3(a), each as amended as of the Effective Date for such part, including any Preliminary Prospectus or the Prospectus and all exhibits to such registration statement. |
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Form S-3 under the
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Securities Act as of the date of such Preliminary Prospectus or the Prospectus, as the case may be. Any
reference to the “most recent Preliminary Prospectus” shall be deemed to refer to the
latest Preliminary Prospectus included in the Registration Statement or filed pursuant to Rule
424(b) prior to or on the date hereof (including, for purposes hereof, any documents incorporated
by reference therein prior to the date hereof). Any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the
date of such Preliminary Prospectus or the Prospectus, as the case may be, and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to include any annual report of the
Partnership on Form 10-K filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Date that is incorporated by reference in the Registration
Statement. The Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending the effectiveness of the Registration
Statement, and no proceeding or examination for such purpose has been instituted or threatened by
the Commission.
(b) Partnership Not an Ineligible Issuer. For purposes of firm commitment underwritten
offerings contemplated under the Registration Statement, the Partnership was not at the time
of the initial filing of the Registration Statement and at the earliest time thereafter that
the Partnership or another offering participant made a bona fide offer (within the meaning
of Rule 164(h)(2) of the Rules and Regulations) of the Units, is not on the date hereof and
will not be at the time of purchase and each additional time of purchase, if any, an
“ineligible issuer” (as defined in Rule 405 of the Rules and Regulations). The Partnership
has been since the time of the initial filing of the Registration Statement and continues to
be eligible to use Form S-3 for the offering of the Units.
(c) Form of Documents. The Registration Statement conformed and will conform in all
material respects on each Effective Date and at the time of purchase and each additional
time of purchase, if any, and any amendment to the Registration Statement filed after the
date hereof will conform in all material respects when filed, to the requirements of the
Securities Act and the Rules and Regulations. The most recent Preliminary Prospectus
conformed, and the Prospectus will conform, in all material respects when filed with the
Commission pursuant to Rule 424(b) and at the time of purchase and each additional time of
purchase, if any, to the requirements of the Securities Act and the Rules and Regulations.
The documents incorporated by reference in any Preliminary Prospectus or the Prospectus
conformed, and any further documents so incorporated will conform, when filed with the
Commission, in all material respects to the requirements of the Exchange Act or the
Securities Act, as applicable, and the rules and regulations of the Commission thereunder.
(d) Registration Statement. The Registration Statement did not, as of each 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; provided that no representation or warranty is made as to information
contained in or omitted from the Registration Statement in reliance upon and in
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conformity with written information furnished to the Partnership through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which information is specified
in Section 10.
(e) Prospectus. The Prospectus will not, as of its date and at the time of purchase
and each additional time of purchase, if any, contain an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided that no
representation or warranty is made as to information contained in or omitted from the
Prospectus in reliance upon and in conformity with written information furnished to the
Partnership through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in Section 10.
(f) Documents Incorporated by Reference. The documents incorporated by reference in
any Preliminary Prospectus or the Prospectus did not, and any further documents filed and
incorporated by reference therein will not, when filed with the Commission, contain an
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(g) Pricing Disclosure Package. The Pricing Disclosure Package did not, as of the
Applicable Time, contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Pricing Disclosure Package in
reliance upon and in conformity with written information furnished to the Partnership
through the Representatives by or on behalf of any Underwriters specifically for inclusion
therein, which information is specified in Section 10.
(h) Issuer Free Writing Prospectus and Pricing Disclosure Package. Each Issuer Free
Writing Prospectus (including, without limitation, any road show that is a free writing
prospectus under Rule 433), when considered together with the Pricing Disclosure Package as
of the Applicable Time, did not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(i) Each Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus conformed
or will conform in all material respects to the requirements of the Securities Act and the
Rules and Regulations on the date of first use, and the Partnership has complied with any
filing requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules
and Regulations. The Partnership has not made any offer relating to the Units that would
constitute an Issuer Free Writing Prospectus without the prior written consent of the
Representatives, except as set forth on Schedule B-1
hereto. The Partnership has retained in accordance with the Rules and Regulations all
Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Rules
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and Regulations (it being understood that, as of the date hereof, the Partnership has not
retained any Issuer Free Writing Prospectus for the three-year period required thereby).
Each Issuer Free Writing Prospectus does not and will not include any information that
conflicts with the information contained in the Registration Statement or the Pricing
Disclosure Package, including any document incorporated therein and any prospectus
supplement deemed to be a part thereof that has not been superseded or modified.
(j) Formation of the Partnership Entities. Each of the Western Gas Parties, Anadarko
Gathering Company, LLC, a Delaware limited liability company (“AGC”), Pinnacle Gas
Treating LLC, a Texas limited liability company (“PGT”), MIGC LLC, a Delaware
limited liability company (“MIGC”), Western Gas Wyoming, L.L.C., a Wyoming limited
liability company (“WGW”), Chipeta Processing LLC, a Delaware limited liability
company (“Chipeta), and Western Gas Finance Corporation, a Delaware corporation
(“FinanceCo”, and together with AGC, PGT, MIGC, WGW and Chipeta, the “Operating
Subsidiaries” (the Operating Subsidiaries together with the Western Gas Parties, the
“Partnership Entities”)) has been duly formed or incorporated, as the case may be,
and is validly existing as a limited partnership, limited liability company or corporation,
as the case may be, and is in good standing under the laws of the State of Delaware, the
State of Texas or the State of Wyoming, as the case may be, with full partnership, limited
liability company or corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus and (i) in the case of the Western Gas Parties, to execute and
deliver this Agreement and consummate the transactions contemplated hereby, (ii) in the case
of the Partnership, to issue, sell and deliver the Units, and (iii) in the case of the
General Partner, to act as the general partner of the Partnership.
(k) Foreign Qualification and Registration. Each of the Partnership Entities is duly
qualified to do business as a foreign limited partnership, limited liability company or
corporation, as the case may be, and is in good standing in each jurisdiction where the
ownership or lease of its properties or the conduct of its business requires such
qualification (as set forth in Schedule C hereto), except for any failures to be so
qualified and in good standing that would not, individually or in the aggregate, (i) have a
material adverse effect on the business, assets, condition (financial or otherwise), results
of operations or prospects of the Partnership Entities taken as a whole (a “Material
Adverse Effect”) or (ii) subject the limited partners of the Partnership to any material
liability or disability.
(l) Ownership of the General Partner. WGR Holdings, LLC, a Delaware limited liability
company (“Holdings”) owns all of the issued and outstanding membership interests in
the General Partner; such membership interests have been duly authorized and validly issued
in accordance with the limited liability company agreement of the General Partner, as in
effect as of the date hereof and at the time of purchase and each additional time of
purchase, if any (the “General Partner LLC Agreement”), and are fully paid (to the
extent required by the General Partner LLC Agreement) and
nonassessable (except as such nonassessability may be affected by Section 18-607 of the
Delaware Limited Liability Company Act (the “Delaware LLC Act”)); and Holdings
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owns such membership interests free and clear of all liens, encumbrances, security interests,
charges or claims (“Liens”).
(m) Ownership of General Partner Interest in the Partnership. The General Partner is
the sole general partner of the Partnership, with a 2.0% general partner interest in the
Partnership; such general partner interest has been duly authorized and validly issued in
accordance with the agreement of limited partnership of the Partnership, as in effect as of
the date hereof and at the time of purchase and each additional time of purchase, if any
(the “Partnership Agreement”), and the General Partner owns such general partner
interest free and clear of all Liens, except for restrictions on transferability contained
in the Partnership Agreement and as otherwise described in the Registration Statement
(excluding the exhibits thereto), the Pricing Disclosure Package and the Prospectus.
(n) Capitalization. As of the date hereof and immediately prior to the issuance of the
Units pursuant to this Agreement, there will be 29,474,925 Common Units and 26,536,306
subordinated units representing limited partner interests in the Partnership (the
“Subordinated Units”) outstanding; Holdings owns 8,633,746 Common Units and
26,536,306 Subordinated Units (such Common Units and Subordinated Units being collectively
referred to herein as the “Sponsor Units”); and the General Partner owns 1,143,086
general partner units and all of the Incentive Distribution Rights (as defined in the
Partnership Agreement). All of the Common Units and Subordinated Units and the limited
partner interests represented thereby and the Incentive Distribution Rights have been duly
authorized and validly issued in accordance with the Partnership Agreement and are fully
paid (to the extent required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by (i) matters described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus under the caption “Risk Factors—Risks
Inherent in an Investment in Us—Your liability may not be limited if a court finds that
unitholder action constitutes control of our business” and “Risk Factors—Risks Inherent in
an Investment in Us—Unitholders may have liability to repay distributions that were
wrongfully distributed to them” and (ii) Sections 17-303 and 17-607 of the Delaware Revised
Uniform Limited Partnership Act (the “Delaware LP Act”); and all of the Sponsor Units owned
by Holdings and the Incentive Distribution Rights owned by the General Partner will be owned
free and clear of all Liens, except with respect to the restrictions on transferability
contained in the Partnership Agreement and as otherwise described in the Registration
Statement (excluding the exhibits thereto), the Pricing Disclosure Package and the
Prospectus.
(o) Ownership of FinanceCo. The Partnership owns all of the issued and outstanding
shares of capital stock of FinanceCo; such shares of capital stock have been duly authorized
and validly issued in accordance with the articles of incorporation and by-laws of
FinanceCo, each as in effect as of the date hereof and at the time of purchase and each
additional time of purchase, if any (collectively, the “FinanceCo Operating
Agreements”), and are fully paid (to the extent required by the FinanceCo Operating
Agreements) and nonassessable; and the Partnership owns such shares of capital stock
free and clear of all Liens.
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(p) Ownership of Operating GP. The Partnership owns all of the issued and outstanding
membership interests in Operating GP; such membership interests have been duly authorized
and validly issued in accordance with the limited liability company agreement of Operating
GP, as in effect as of the date hereof and at the time of purchase and each additional time
of purchase, if any (the “Operating GP LLC Agreement”), and are fully paid (to the
extent required by the Operating GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the
Partnership owns such membership interests free and clear of all Liens.
(q) Ownership of the Operating Partnership. The Partnership is the sole limited
partner of the Operating Partnership, with a 99.99% limited partner interest in the
Operating Partnership; such limited partner interest has been duly authorized and validly
issued in accordance with the agreement of limited partnership of the Operating Partnership,
as in effect as of the date hereof and at the time of purchase and each additional time of
purchase, if any (the “Operating Partnership LP Agreement”), and is fully paid (to
the extent required by the Operating Partnership LP Agreement) and nonassessable (except as
such nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware LP Act);
and the Partnership owns such limited partner interest free and clear of all Liens.
Operating GP is the sole general partner of the Operating Partnership, with 0.01% general
partner interest in the Operating Partnership; such general partner interest has been duly
authorized and validly issued in accordance with the Operating Partnership LP Agreement; and
the Partnership owns such general partner interest free and clear of all Liens.
(r) Ownership of AGC. The Operating Partnership owns all of the issued and outstanding
membership interests in AGC; such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of AGC, as in effect as of
the date hereof and at the time of purchase and each additional time of purchase, if any
(the “AGC LLC Agreement”), and are fully paid (to the extent required by the AGC LLC
Agreement) and nonassessable (except as such nonassessability may be affected by Section
18-607 of the Delaware LLC Act); and the Operating Partnership owns such membership
interests free and clear of all Liens.
(s) Ownership of PGT. The Operating Partnership owns all of the issued and outstanding
membership interests in PGT; such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of PGT, as in effect as of
the date hereof and at the time of purchase and each additional time of purchase, if any
(the “PGT LLC Agreement”), and are fully paid (to the extent required by the PGT LLC
Agreement) and nonassessable (except as such nonassessability may be affected by 101.206 of
the Texas Business Organizations Code (“TBOC”)); and the Operating Partnership owns
such membership interests free and clear of all Liens.
(t) Ownership of MIGC. The Operating Partnership owns all of the issued
and outstanding membership interests in MIGC; such membership interests have been duly
authorized and validly issued in accordance with the limited liability company
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agreement of MIGC, as in effect as of the date hereof and at the time of purchase and each additional
time of purchase, if any (the “MIGC LLC Agreement”), and are fully paid (to the
extent required by the MIGC LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the
Operating Partnership owns such membership interests free and clear of all Liens.
(u) Ownership of WGW. The Operating Partnership owns all of the issued and outstanding
membership interests in WGW; such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of WGW, as in effect as of
the date hereof and at the time of purchase and each additional time of purchase, if any
(the “WGW LLC Agreement”), and are fully paid (to the extent required by the WGW LLC
Agreement) and nonassessable (except as such nonassessability may be affected by the Wyoming
Limited Liability Company Act); and the Operating Partnership owns such membership interests
free and clear of all Liens.
(v) Ownership of Chipeta. The Operating Partnership owns 51.0% of the issued and
outstanding membership interests in Chipeta; such membership interests have been duly
authorized and validly issued in accordance with the limited liability company agreement of
Chipeta, as in effect as of the date hereof and at the time of purchase and each additional
time of purchase, if any (the “Chipeta LLC Agreement”), and are fully paid (to the
extent required by the Chipeta LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the Chipeta LLC Act); and the
Operating Partnership owns such membership interests free and clear of all Liens.
(w) Ownership of Fort Union. WGW owns 14.81% of the issued and outstanding membership
interests in Fort Union Gas Gathering, L.L.C., a Delaware limited liability company
(“Fort Union”); such membership interests have been duly authorized and validly
issued in accordance with the limited liability company agreement of Fort Union, as in
effect as of the date hereof and at the time of purchase and each additional time of
purchase, if any (the “Fort Union LLC Agreement”), and are fully paid (to the extent
required by the Fort Union LLC Agreement) and nonassessable (except as such nonassessability
may be affected by Section 18-607 of the Delaware LLC Act); and the WGW owns such membership
interests free and clear of all Liens.
(x) No Other Subsidiaries. The Partnership has no other direct or indirect
“subsidiaries” (as defined under the Securities Act) other than the Operating Subsidiaries.
Other than its ownership interest in the Operating Subsidiaries, the Partnership does not
own, and at the time of purchase and each additional time of purchase will not own, directly
or indirectly, any shares of stock, any other equity interests or any long-term debt
securities of any corporation, partnership, limited liability company, joint venture,
association or other entity, other than its interest in Fort Union and the note issued by
Anadarko Petroleum Corporation as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus. All equity interests in the Operating Subsidiaries
have been issued in compliance with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or similar right.
No options, warrants or other rights to purchase, agreements or other obligations to issue
or rights to convert any obligation into equity interests in any of the Operating
Subsidiaries are outstanding.
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(y) Valid Issuance of the Units. At the time of purchase and each additional time of
purchase, the Units to be sold by the Partnership and the limited partner interests
represented thereby, will be duly authorized in accordance with the Partnership Agreement
and, when issued and delivered to the Underwriters against payment therefor as provided
herein, will be validly issued, fully paid (to the extent required under the Partnership
Agreement) and nonassessable (except as such nonassessability may be affected by (i) matters
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus
under the caption “Risk Factors—Risks Inherent in an Investment in Us—Unitholders’
liability may not be limited if a court finds that unitholder action constitutes control of
our business” and “Risk Factors—Risks Inherent in an Investment in Us—Unitholders may have
liability to repay distributions that were wrongfully distributed to them” (and any similar
information, if any, contained in any Permitted Free Writing Prospectus) and (ii) Sections
17-303, 17-607 and 17-804 of the Delaware LP Act); and the issuance and delivery of the
Units against payment therefore as provided herein will not violate any restriction upon the
transfer thereof or any preemptive right, resale right, right of first refusal or similar
right pursuant to the Partnership’s certificate of limited partnership, the Partnership
Agreement or any agreement or other instrument to which the Partnership, any of the
Partnership Entities or any of their affiliates is a party or by which any of them or any of
their respective properties may be bound or affected.
(z) Conformity of Securities to Description. The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement and against payment therefor as
provided herein will conform in all material respects to the descriptions thereof contained
in the Registration Statement, the Pricing Disclosure Package and the Prospectus.
(aa) Authority and Authorization. The Partnership has all requisite power and
authority under the Partnership Agreement and the Delaware LP Act to issue, sell and deliver
the Units, in accordance with and upon the terms and conditions set forth in this Agreement,
the Partnership Agreement, the Registration Statement, the Preliminary Prospectuses and the
Prospectus. At the time of purchase and each additional time of purchase, all partnership,
limited liability company and corporate action, as the case may be, required to be taken by
the Partnership Entities or any of their partners, members or stockholders for the
authorization, issuance, sale and delivery of the Units and the consummation of the
transactions contemplated hereby shall have been validly taken.
(bb) Authorization, Execution and Delivery of this Agreement. This Agreement has been
duly authorized, executed and delivered by each of the Western Gas Parties.
(cc) No Defaults. No Partnership Entity is in breach or violation of or in default
under (nor has any event occurred which, with notice, lapse of time or both, would result in
any breach or violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (i) its
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formation, governing or other organizational documents, (ii) any indenture, mortgage,
deed of trust, bank loan, credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound or affected, (iii) any federal, state, local or
foreign law, regulation or rule, (iv) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the rules and regulations of the New York Stock Exchange (the “NYSE”)), or (v) any
decree, judgment or order applicable to it or any of its properties, except in the case of
clauses (ii) through (v) for any such breaches, violations or default that would not,
individually or in the aggregate, have a Material Adverse Effect, affect the validity of the
Units or prevent or materially interfere with the consummation of the transactions
contemplated by this Agreement, including the Offering.
(dd) No Conflicts. The execution, delivery and performance of this Agreement, the
issuance and sale of the Units and the consummation of the transactions contemplated hereby
will not conflict with, result in any breach or violation of, constitute a default under (or
constitute any event which, with notice, lapse of time or both, would result in any breach
or violation of, constitute a default under or give the holder of any indebtedness (or a
person acting on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness under), or result in the creation or
imposition of a Lien on any property or assets of any Partnership Entity pursuant to (i) the
formation, governing or other organizational documents of any of the Partnership Entities,
(ii) any indenture, mortgage, deed of trust, bank loan, credit agreement or other evidence
of indebtedness, or any license, lease, contract or other agreement or instrument to which
any of the Partnership Entities is a party or by which any of the Partnership Entities or
any of their respective properties may be bound or affected, (iii) any federal, state, local
or foreign law, regulation or rule, (iv) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority (including, without limitation,
the rules and regulations of the NYSE), or (v) any decree, judgment or order applicable to
any of the Partnership Entities or any of their respective properties, except in the cases
of clauses (ii) through (v) for any such conflicts, breaches, violations or defaults that
would not, individually or in the aggregate, have a Material Adverse Effect, affect the
validity of the Units or prevent or materially interfere with the consummation of the
transactions contemplated by this Agreement, including the Offering.
(ee) No Consents. No approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory commission, board, body,
authority or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the NYSE), or approval
of the security holders of the Partnership Entities (each, a “Consent”), is required
in connection with the issuance and sale of the Units, the execution, delivery and
performance of this Agreement by the Western Gas Parties or the consummation by the
Partnership Entities of the transactions contemplated hereby, other than (i) registration of
the Units under the Securities Act, which has been effected (or, with respect to any
registration statement to be filed hereunder pursuant to Rule 462(b) of the Rules and
Regulations, will be effected in accordance herewith), (ii) any necessary qualification
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under the securities or blue sky laws of the various jurisdictions in which the Units
are being offered by the Underwriters, (iii) under the rules and regulations of the
Financial Industry Regulatory Authority (“FINRA”) and (iv) Consents that have been,
or prior to the Closing Date will be, obtained.
(ff) No Preemptive Rights, Registration Rights, Options or Other Rights. Except as
described in the Registration Statement (excluding the exhibits thereto), the Pricing
Disclosure Package and the Prospectus, (i) no person has the right, contractual or
otherwise, to cause the Partnership to issue or sell to it any Units or other equity
interests of the Partnership, (ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any Units or other equity interests in
the Partnership, (iii) no person has any resale rights in respect of any Units or other
equity interests in the Partnership that would be required to be disclosed in the
Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so
disclosed, (iv) no person has the right to act as an underwriter or as a financial advisor
to the Partnership in connection with the Offering and (v) no person has the right,
contractual or otherwise, to cause the Partnership to register under the Securities Act any
Units or other equity interests in the Partnership, or to include any Units or other equity
interests in the Partnership in the Registration Statement, the Pricing Disclosure Package
or the Prospectus or the Offering contemplated thereby.
(gg) Permits. Each of the Partnership Entities has all necessary licenses,
authorizations, consents and approvals (each, a “Permit”) and has made all necessary
filings required under any applicable law, regulation or rule, and has obtained all
necessary Permits from other persons, in order to conduct its business, except for such
Permits that, if not obtained, would not, individually or in the aggregate, result in a
Material Adverse Effect; and no Partnership Entity is in violation of or default under, or
has received notice of any proceedings relating to the revocation or modification of, any
such Permit or any federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to such Partnership Entity, except for any such violations,
defaults, revocations or modifications that would not, individually or in the aggregate,
have a Material Adverse Effect.
(hh) Disclosure of Certain Items. All legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses, agreements, properties,
leases or documents of a character required to be described in or incorporated by reference
into the Registration Statement, the Pricing Disclosure Package or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so described or filed as
required; and the statements included in the Registration Statement, the Pricing Disclosure
Package and the Prospectus under the headings “Cash Distribution Policy,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and
Capital Resources,” “Business and Properties—Safety and Maintenance,” “Business and
Properties—Regulation of Operations,” “Business and Properties—Environmental Matters,”
“Business and Properties—Title to Properties and Rights of Way,” “Management,” “Certain
Relationships and Related Transactions, and Director Independence” “Description of the
Common Units,” “The Limited Partnership Agreement,” “Material Tax Considerations” and
“Underwriting”, insofar as they purport
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to summarize legal or governmental matters or proceedings or the terms of statutes,
rules, regulations, agreements or documents, are fair and accurate summaries of such legal
or governmental matters or proceedings, statutes, rules, regulations, agreements or
documents.
(ii) Litigation. Except as described in the Registration Statement (excluding the
exhibits thereto), the Pricing Disclosure Package and the Prospectus, there are no actions,
suits, claims, investigations or proceedings pending or, to the Western Gas Parties’
knowledge, threatened or contemplated to which the Partnership Entities or any of their
respective directors or officers is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
before or by any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NYSE), except for any such actions, suits, claims,
investigations or proceedings that would not, individually or in the aggregate, if resolved
adversely to any Partnership Entity, have a Material Adverse Effect, affect the validity of
the Units or prevent or materially interfere with consummation of the transactions
contemplated by this Agreement, including the Offering.
(jj) Independent Registered Public Accounting Firm. KPMG LLP, who has audited the
financial statements contained or incorporated by reference in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, is an independent registered public
accounting firm with respect to the Partnership and the General Partner within the meaning
of the Securities Act and the applicable rules and regulations thereunder adopted by the
Commission and the Public Company Accounting Oversight Board (United States) (the
“PCAOB”).
(kk) Financial Statements. The historical financial statements (including the related
notes and supporting schedule) contained or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, (i) comply in all material
respects with the applicable requirements under the Securities Act and the Exchange Act
(except that certain supporting schedules are omitted), (ii) present fairly in all material
respects the financial position, results of operations and cash flows of the entities
purported to be shown thereby on the basis stated therein at the respective dates or for the
respective periods, and (iii) have been prepared in accordance with accounting principles
generally accepted in the United States of America consistently applied throughout the
periods involved, except to the extent disclosed therein. The other financial information
of the General Partner and the Partnership and its subsidiaries, including non-GAAP
financial measures, if any, contained or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus has been derived from the
accounting records of the General Partner, the Partnership and its subsidiaries, and fairly
presents the information purported to be shown thereby. Nothing has come to the attention
of any of the Partnership Entities that has caused them to believe that the statistical and
market-related data included in the Registration Statement, the Pricing Disclosure Package
and the Prospectus is not based on or derived from sources that are reliable and accurate in
all material respects.
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(ll) No Material Adverse Change. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, in each case excluding any amendments or supplements to the foregoing made after
the execution of this Agreement, except as described in the Registration Statement
(excluding the exhibits thereto), the Pricing Disclosure Package and the Prospectus, there
has not been (i) any material adverse change, or any developments that are reasonably likely
to result in, individually or in the aggregate, a material adverse change, in the business,
assets, management, condition (financial or otherwise), prospects or results of operations
of the Partnership Entities (taken as a whole), (ii) any transaction that is material to the
Partnership Entities (taken as a whole), (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by any Partnership Entity
that is material to the Partnership Entities (taken as a whole), (iv) any material change in
the capitalization, ownership or outstanding indebtedness of any Partnership Entity or (v)
any dividend or distribution of any kind declared, paid or made on the security interests of
any Partnership Entity.
(mm) Investment Company. None of the Partnership Entities is, at no time during which
a prospectus is required by the Securities Act to be delivered (whether physically or
through compliance with Rule 172 under the Securities Act or any similar rule) in connection
with any sale of Units will any of them be, nor, after giving effect to the proposed
offering of the Units (the “Offering”) and sale of the Units and the application of
the proceeds therefrom, will any of them 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”).
(nn) Title to Properties. The Partnership Entities have good and marketable title to
all real property and good title to all personal property described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus as being owned by any of them,
free and clear of all Liens, except for Liens that would not materially interfere with the
use of any such property for the conduct of their businesses and Liens described in the
Registration Statement (excluding the exhibits thereto), the Pricing Disclosure Package and
the Prospectus. All property described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus as being held under lease by any Partnership Entity is held
thereby under valid, subsisting and enforceable leases.
(oo) Rights-of-Way. Each Partnership Entity has such consents, easements,
rights-of-way or licenses from any person (“rights-of-way”) as are necessary to
enable it to conduct its business in the manner described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, subject to such qualifications as may be set
forth in the Registration Statement, the Pricing Disclosure Package or the Prospectus,
except for (i) qualifications, reservations and encumbrances that would not, individually or
in the aggregate, have a Material Adverse Effect and (ii) such rights-of-way that, if not
obtained, would not result in, individually or in the aggregate, a Material Adverse Effect;
and, except as described in the Registration Statement (excluding the exhibits thereto), the
Pricing Disclosure Package and the Prospectus or as would not interfere with the operations
of the Partnership Entities as conducted on the date hereof to such a material extent that
the Representatives could reasonably conclude that proceeding with the
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Offering would be inadvisable, none of such rights-of-way contains any restriction that
is materially burdensome to the Partnership Entities, taken as a whole.
(pp) Intellectual Property. The Partnership Entities own, or have obtained valid and
enforceable licenses for or other rights to use, the inventions, patent applications,
patents, trademarks (both registered and unregistered), tradenames, service names,
copyrights, trade secrets and other proprietary information (collectively, “Intellectual
Property”) described in the Registration Statement, the Pricing Disclosure Package and
the Prospectus as being owned or licensed by them or that are necessary for the conduct of
their respective businesses as currently conducted or as proposed to be conducted, except
for any failures to own, license or have rights to such Intellectual Property that would
not, individually or in the aggregate, have a Material Adverse Effect. The Western Gas
Parties are unaware of any claim to the contrary or any challenge by any other person to the
rights of any of the Partnership Entities with respect to any Intellectual Property. No
Partnership Entity has infringed or is infringing the intellectual property of a third party
or has received notice of a claim by a third party to the contrary.
(qq) Labor and Employment Matters. No Partnership Entity is engaged in any unfair
labor practice, and no labor disputes with the employees of or to be seconded to any
Partnership Entity exist or, to the knowledge of the Western Gas Parties after due inquiry,
are imminent or threatened that would, individually or in the aggregate, have a Material
Adverse Effect. To the knowledge of the Western Gas Parties: (i) there is (A) no unfair
labor practice complaint pending or threatened against any Partnership Entity before the
National Labor Relations Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements pending or threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or threatened against any Partnership Entity and (C) no union
representation dispute currently existing concerning the employees of or to be seconded to
any Partnership Entity, (ii) no union organizing activities are currently taking place
concerning the employees of or to be seconded to any Partnership Entity and (iii) there has
been no violation of any federal, state, local or foreign law relating to discrimination in
the hiring, promotion or pay of employees, any applicable wage or hour laws or any provision
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the
rules and regulations promulgated thereunder concerning the employees of or to be seconded
to any Partnership Entity.
(rr) Environmental Compliance. Except as described in the Registration Statement
(excluding the exhibits thereto), the Pricing Disclosure Package and the Prospectus, (i)
each Partnership Entity and each of the properties, assets and operations of the Partnership
Entities is in compliance with any and all applicable federal, state, local or foreign laws,
statutes, ordinances, rules, regulations, orders, decrees, judgments, injunctions, permits,
licenses, authorizations or other binding requirements, or common laws, relating to health,
safety or the protection, cleanup or restoration of the environment or natural resources,
including those relating to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened release of Hazardous
Materials (as defined below) (“Environmental Laws”), (ii) each Partnership Entity
has received and is in compliance with all permits, licenses, authorizations or other
approvals required under applicable Environmental Laws to conduct its business as it is
- 15 -
currently being conducted, (iii) no Partnership Entity has received written notice of
any, and to the knowledge of the Western Gas Parties, after reasonable inquiry, there are no
events, conditions or activities that could reasonably be expected to form the basis for
any, actual or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants, and (iv) no
Partnership Entity is subject to any pending or, to the knowledge of the Western Gas
Parties, threatened actions, suits, demands, orders or proceedings against any Partnership
Entity relating to any Environmental Laws (collectively, “Proceedings”), except for
any (A) failures to comply with Environmental Laws or to receive or comply with required
permits, licenses, authorizations or other approvals, (B) actual or potential liabilities or
(C) Proceedings that would not, individually or in the aggregate, have a Material Adverse
Effect. Except as described in the Registration Statement (excluding the exhibits thereto),
the Pricing Disclosure Package and the Prospectus, no Partnership Entity has entered into
any agreement relating to any alleged violation of any Environmental Law or any actual or
alleged release or threatened release or cleanup at any location of any Hazardous Materials
(as defined below). Except as described in the Registration Statement (excluding the
exhibits thereto), the Pricing Disclosure Package and the Prospectus, no Partnership Entity
is currently named as a “potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
(“CERCLA”). As used herein, “Hazardous Materials” means any material
(including, without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any Environmental Law.
(ss) Environmental Compliance Review. In the ordinary course of its business, each
Partnership Entity conducts a periodic review of the effect of the Environmental Laws on its
business, operations and properties, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance with Environmental
Laws or any permit, license or approval), any related constraints on operating activities
and any potential liabilities to third parties.
(tt) ERISA Compliance. None of the following events has occurred or exists with
respect to any of the Partnership Entities: (i) a failure to fulfill the obligations, if
any, under the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and the regulations
and published interpretations thereunder with respect to any Plan, determined without regard
to any waiver of such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension
Benefit Guaranty Corporation or any other federal or state governmental agency or any
foreign regulatory agency with respect to the employment or compensation of employees of or
to be seconded to the Partnership Entities that would have a Material Adverse Effect; or
(iii) any breach of any contractual obligation, or any violation of law or applicable
qualification standards, with respect to the employment or compensation of employees of or
to be seconded to the Partnership Entities by any such Partnership Entity that would have a
Material Adverse Effect. None of the following events has occurred or is reasonably likely
to occur with respect to any of the Partnership Entities: (i) a material
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increase in the aggregate amount of contributions required to be made to all Plans in
the current fiscal year compared to the amount of such contributions made by the Partnership
Entities in the most recently completed fiscal year; (ii) a material increase in the
Partnership Entities’ “accumulated post-retirement benefit obligations” (within the meaning
of Statement of Financial Accounting Standards 106) compared to the amount of such
obligations in the most recently completed fiscal year; (iii) any event or condition giving
rise to a liability under Title IV of ERISA that would have a Material Adverse Effect; or
(iv) the filing of a claim by one or more employees of, former employees of, or employees to
be seconded to the Partnership Entities related to its or their employment that would have a
Material Adverse Effect. For purposes of this paragraph, the term “Plan” means a
plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect
to which any Partnership Entity may have any liability.
(uu) Tax Returns. All tax returns required to be filed by the Partnership Entities
have been timely filed, and all taxes and other assessments of a similar nature (whether
imposed directly or through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such entities have been timely
paid, other than those (i) that are being contested in good faith and for which adequate
reserves have been provided or (ii) that, if not paid, would not, individually or in the
aggregate, have a Material Adverse Effect.
(vv) Insurance. The Partnership Entities maintain insurance covering the properties,
operations, personnel and businesses of the Partnership Entities as such Partnership
Entities reasonably deem adequate; such insurance insures against losses and risks to an
extent which is adequate, in accordance with customary industry practice, to protect the
Partnership Entities and their respective businesses; all such insurance is fully in force
on the date hereof and will be fully in force at the time of purchase and each additional
time of purchase; and the Partnership Entities have no reason to believe that they will not
be able to renew such insurance as and when such insurance expires.
(ww) No Business Interruptions. No Partnership Entity has sustained, since the date of
the last audited financial statements included in or incorporated by reference into the
Registration Statement, the Pricing Disclosure Package or 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.
(xx) Non-Renewal of Contracts and Agreements; Third Party Defaults. Except as
described in the Registration Statement (excluding the exhibits thereto), the Pricing
Disclosure Package and the Prospectus, no Partnership Entity has sent or received any
communication regarding the termination of, or intent not to renew, any of the contracts or
agreements referred to or described in the Pricing Disclosure Package and the Prospectus, or
referred to or described in, or filed as an exhibit to, the Registration Statement, and no
such termination or non-renewal has been threatened by any of the Partnership Entities or,
to the knowledge of the Western Gas Parties, any other party to any such contract or
agreement. To the knowledge of the Western Gas Parties, after due inquiry, no third party
to any indenture, contract, lease, mortgage, deed of trust, note
- 17 -
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to or by which any of the Partnership Entities is a party or bound or to which
their respective properties are subject is in breach, default or violation under any such
agreement (and no event has occurred that, with notice or lapse of time or both, would
constitute such an event), which breach, default or violation would have a Material Adverse
Effect.
(yy) Internal Controls. The Partnership Entities maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(zz) Disclosure Controls. The Partnership has established and will maintain and
evaluate “disclosure controls and procedures” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act) and “internal control over financial reporting” (as such term
is defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the Partnership is
made known to the General Partner’s Chief Executive Officer and its Chief Financial Officer,
and such disclosure controls and procedures are effective to perform the functions for which
they were established; the Partnership’s independent auditors and the Audit Committee of the
Board of Directors of the General Partner have been advised of (i) all significant
deficiencies, if any, in the design or operation of internal control over financial
reporting which could adversely affect the Partnership’s ability to record, process,
summarize and report financial data and (ii) all fraud, if any, whether or not material,
that involves management or other employees who have a role in the Partnership’s internal
control over financial reporting; all material weaknesses, if any, in the Partnership’s
internal control over financial reporting have been identified to the Partnership’s
independent auditors; and since the date of the most recent evaluation of such disclosure
controls and procedures and internal control over financial reporting, there have been no
significant changes in the Partnership’s internal control over financial reporting or in
other factors that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(aaa) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The Partnership Entities have taken all necessary action to
ensure that, upon and at all times after the filing of the Registration Statement, the
Partnership Entities and their respective officers and directors, in their capacities as
such, were and will be in compliance in all material respects with the applicable provisions
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) and the rules and
regulations of the Commission and NYSE promulgated thereunder.
(bbb) Forward-Looking Statements. Each “forward-looking statement” (within the meaning
of Section 27A of the Securities Act or Section 21E of the Exchange Act)
- 18 -
contained in the Registration Statement, the Pricing Disclosure Package and the
Prospectus has been made or reaffirmed with a reasonable basis and in good faith.
(ccc) Statistical and Market-Related Data. All statistical or market-related data
included in the Registration Statement, the Pricing Disclosure Package and the Prospectus
are based on or derived from sources that the Partnership reasonably believes to be reliable
and accurate, and the Partnership has obtained the written consent to the use of such data
from such sources to the extent required.
(ddd) Foreign Corrupt Practices Act. No Partnership Entity nor, to the knowledge of
the Western Gas Parties, any employee or agent of the Partnership Entities has made any
payment of funds of the Partnership Entities or received or retained any funds in violation
of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices
Act of 1977), which payment, receipt or retention is of a character required to be disclosed
in the Registration Statement, the Preliminary Prospectuses and the Prospectus.
(eee) Money Laundering Laws. The operations of the Partnership Entities are and have
been conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines issued, administered
or enforced by any governmental agency (collectively, “Money Laundering Laws”); and
no action, suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator or non-governmental authority involving the Partnership Entities with
respect to Money Laundering Laws is pending or, to the knowledge of the Western Gas Parties,
threatened.
(fff) OFAC. No Partnership Entity nor, to the knowledge of the Western Gas Parties,
any director, officer, agent, employee or affiliate of the Partnership Entities is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Partnership Entities will not directly or
indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available
such proceeds to any other person or entity, for the purpose of financing the Securities
Activities of any person currently subject to any U.S. sanctions administered by OFAC.
(ggg) No Prohibition on Distributions. No Partnership Entity is currently prohibited,
directly or indirectly, from making distributions with respect to its equity securities,
from repaying to any other Partnership Entity any loans or advances or from transferring any
property or assets to the Partnership or any other Partnership Entity, except pursuant to
the Chipeta LLC Agreement and as described in the Registration Statement (excluding the
exhibits thereto), the Pricing Disclosure Package and the Prospectus.
(hhh) Related Party Transactions. No Partnership Entity has, directly or indirectly
(i) extended credit, arranged to extend credit, or renewed any extension of
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credit, in the form of a personal loan, to or for any director or executive officer of
the General Partner or its affiliates, or to or for any family member or affiliate of any
director or executive officer of the General Partner or its affiliates or (ii) made any
material modification to the term of any personal loan to any director or executive officer
of the General Partner or its affiliates, or any family member or affiliate of any director
or executive officer of the General Partner or its affiliates.
(iii) No Broker’s Fees. No Partnership Entity has incurred any liability for any
finder’s or broker’s fee or agent’s commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby or by the
Registration Statement, the Pricing Disclosure Package and the Prospectus.
(jjj) Stabilization or Manipulation. None of the Partnership Entities or any of their
“affiliates” (as such term is defined in Rule 405 promulgated under the Securities Act) has
taken, directly or indirectly, any action which has constituted, or that was designed or
might reasonably be expected to cause or result in, the stabilization or manipulation of the
price of any security of the Partnership to facilitate the sale or resale of the Units.
(kkk) FINRA Affiliations. To the knowledge of the Western Gas Parties, after due
inquiry, there are no affiliations or associations between (i) any member of FINRA and (ii)
the Partnership, the General Partner or any of the General Partner’s officers or directors,
any 5% or greater securityholder of the Partnership or any beneficial owner of the
Partnership’s unregistered equity securities that were acquired at any time on or after the
180th day immediately preceding the date hereof, except as described in the Registration
Statement (excluding the exhibits thereto), the Pricing Disclosure Package and the
Prospectus.
(lll) Lending Relationship. Except as described in the Registration Statement
(excluding the exhibits thereto), the Pricing Disclosure Package and the Prospectus, no
Partnership Entity (i) has any material lending or other relationship with any bank or
lending affiliate of any Underwriter and (ii) intends to use any of the proceeds from the
Offering to repay any outstanding debt owed to any affiliate of any Underwriter.
(mmm) Reserved Unit Sales. Except as set forth in Schedule D hereto, none of
the Partnership Entities has directed the Underwriters to reserve Units for purchase by any
director, officer or employee of any of the Partnership Entities or any third party. The
Partnership has not offered, or caused the Underwriters to offer, Units to any person with
the intent to influence unlawfully any person to alter such person’s level or type of
business with the Partnership Entities.
(nnn) No Distribution of Other Offering Materials. None of the Partnership Entities
has distributed, nor will they distribute, prior to the later to occur of (i) the time of
purchase and each additional time of purchase, and (ii) the completion of the distribution
of the Units, any “prospectus” (as defined under the Securities Act) in connection with the
offering and sale of the Units other than the Registration Statement, the Pricing Disclosure
Package and the Prospectus or other materials, if any, permitted by
the Securities Act, including Rule 134 promulgated thereunder.
- 20 -
In addition, any certificate signed by an officer of any of the Partnership Entities and
delivered to the Underwriters or counsel for the Underwriters in connection with the offering or
sale of the Units shall be deemed to be a representation and warranty by such Partnership Entity,
as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Western Gas Parties. The Western Gas Parties, jointly and
severally, hereby agree:
(a) Preparation of Prospectus and Registration Statement. (i) To prepare the
Prospectus in a form approved by the Underwriters and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than 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) under the Securities
Act; (ii) to make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; (iii) to advise the Underwriters, 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 and to furnish the Underwriters with copies thereof; (iv) to
advise the Underwriters promptly after it receives notice thereof of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of
the Units 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, the Prospectus or any Issuer Free Writing
Prospectus or for additional information; and (v) in the event of the issuance of any stop
order or of any order preventing or suspending the use of the Prospectus or any Issuer Free
Writing Prospectus or suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal.
(b) Copies of Registration Statements. To furnish promptly to the Underwriters and to
counsel for the Underwriters, upon request, a signed copy or a conformed copy of the
Registration Statement as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
(c) Exchange Act Reports. To file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership with the Commission pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (“Exchange Act Reports”)
subsequent to the date of the Prospectus and for so long as the delivery of a prospectus (or
in lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is
required in connection with the offering or sale of the Units.
(d) Copies of Documents to the Underwriters. To deliver promptly to the Underwriters
such number of the following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed
- 21 -
with the Commission and each amendment thereto (in each case excluding exhibits), (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus,
(iii) each Issuer Free Writing Prospectus and (iv) any document incorporated by reference in
any Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus (or in
lieu thereof, the notice referred to in Rule 173(a) of the Rules and Regulations) is
required at any time after the date hereof in connection with the offering or sale of the
Units or any other securities relating thereto and if at such time any events 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 (or in lieu thereof, the notice referred to in Rule 173(a) of the Rules
and Regulations) is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus (or in lieu thereof, the notice referred to
in Rule 173(a) of the Rules and Regulations) or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act or with a request from the Commission, to notify the Underwriters
immediately thereof and to promptly prepare and, subject to Section 4(e) hereof, file with
the Commission an amended Prospectus or supplement to the Prospectus which will correct such
statement or omission or effect such compliance.
(e) Filing of Amendment or Supplement. To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus, any supplement to the Prospectus
or any new, replacement registration statement that may, in the judgment of the Partnership
or the Underwriters, be required by the Securities Act or the Exchange Act or requested by
the Commission. Prior to filing with the Commission any amendment to the Registration
Statement, any supplement to the Prospectus or any new, replacement registration statement,
any document incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the Underwriters and counsel
for the Underwriters and not to file any such document to which the Underwriters shall
reasonably object after having been given reasonable notice of the proposed filing thereof
unless the Partnership is required by law to make such filing. The Partnership will furnish
to the Underwriters such number of copies of such new registration statement, amendment or
supplement as the Underwriters may reasonably request and use its commercially reasonable
efforts to cause such new registration statement or amendment to be declared effective as
soon as practicable. In any such case, the Partnership will promptly notify the
Representatives of such filings and effectiveness.
(f) Reports to Security Holders. As soon as practicable after the First Delivery Date,
to make generally available to the Partnership’s security holders an earnings statement of
the Partnership and its Subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations (including, at the option of the
Partnership, Rule 158).
(g) Copies of Reports. For a period of two years following the date hereof, to furnish
to the Underwriters copies of all materials furnished by the Partnership to its
- 22 -
security holders and all reports and financial statements furnished by the Partnership
to the principal national securities exchange upon which the Units may be listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder, in each case to the
extent that such materials, reports and financial statements are not publicly filed with the
Commission.
(h) Blue Sky Laws. Promptly to take from time to time such actions as the Underwriters
may reasonably request to qualify the Units for offering and sale under the securities or
Blue Sky laws of such jurisdictions as the Underwriters may designate and to continue such
qualifications in effect for so long as required for the resale of the Units; and to arrange
for the determination of the eligibility for investment of the Units under the laws of such
jurisdictions as the Underwriters may reasonably request; provided that no Partnership
Entity shall be obligated to qualify as a foreign entity in any jurisdiction in which it is
not so qualified or to file a general consent to service of process in any jurisdiction.
(i) Lock-up Period; Lock-up Letters. For a period of 60 days from the date of the
Prospectus (the “Lock-Up Period”), not to, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at any time in
the future of) any Common Units or securities convertible into, or exchangeable for Common
Units, or sell or grant options, rights or warrants with respect to any Common Units or
securities convertible into or exchangeable for Common Units (other than (A) the grant of
awards pursuant to the Western Gas Partners, LP 2008 Long-Term Incentive Plan and (B) the
issuance of Common Units to Anadarko Petroleum Corporation or its affiliates as full or
partial consideration for any sale or contribution of assets to the Partnership, provided
that the Underwriters have received lock-up agreements from such sellers substantially in
the form of Exhibit A-1 and provided further that the number of Common Units issued
is no more than 5% of the Common Units then outstanding, or (ii) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such Common Units, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common Units or other
securities, in cash or otherwise, (iii) file or cause to be filed a registration statement,
including any amendments, with respect to the registration of any Common Units or securities
convertible, exercisable or exchangeable into Common Units (other than any registration
statement on Form S-8 or as otherwise excepted from this lock-up provision) or (iv) publicly
disclose the intention to do any of the foregoing, in each case without the prior written
consent of the Representatives; provided, however, that the foregoing restrictions do not
apply to: the issuance and sale of Common Units by the Partnership to the Underwriters in
connection with the public offering contemplated by this Agreement; provided, that the
Western Gas Parties shall otherwise remain subject to the restrictions set forth in this
Section 4(i) with respect to any Common Units or any securities convertible into, or
exercisable or exchangeable for, Common Units registered thereunder. Each person listed on
Exhibit A-1, including each executive officer of the General Partner, shall furnish
to the Underwriters, prior to or on the date of this Agreement, a letter or letters,
substantially in the form of Exhibit A
hereto.
- 23 -
(j) Application of Proceeds. To apply the net proceeds from the sale of the Units as
set forth in the Pricing Disclosure Package and the Prospectus.
(k) Investment Company. To take such steps as shall be necessary to ensure that no
Partnership Entity shall become an “investment company” as defined in the Investment Company
Act.
(l) Issuer Free Writing Prospectuses. Not to make any offer relating to the Units that
would constitute an Issuer Free Writing Prospectus without the prior written consent of the
Representatives.
(m) Retention of Issuer Free Writing Prospectuses. To retain in accordance with the
Rules and Regulations all Issuer Free Writing Prospectuses not required to be filed pursuant
to the Rules and Regulations; and if at any time after the date hereof and prior to any
Delivery Date, any events shall have occurred as a result of which any Issuer Free Writing
Prospectus, as then amended or supplemented, would conflict with the information in the
Registration Statement, the most recent Preliminary Prospectus or the Prospectus or, when
considered together with the most recent Preliminary Prospectus, 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, not
misleading, or, if for any other reason it shall be necessary to amend or supplement any
Issuer Free Writing Prospectus, to notify the Representatives and, upon their reasonable
request or as required by the Rules and Regulations, to file such document and to prepare
and furnish without charge to each Underwriter as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented Issuer Free Writing
Prospectus that will correct such conflict, statement or omission or effect such compliance.
(n) NYSE Listing. Prior to and on the Closing Date, to ensure the Units have been
approved for listing on the New York Stock Exchange, subject only to official notice of
issuance.
(o) Stabilization. To not directly or indirectly take any action designed to or which
constitutes or which might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any security of the
Partnership to facilitate the sale or resale of the Units.
(p) Covenant to Pay Costs. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees
and taxes in connection with (i) the preparation and filing of the Registration Statement,
each Preliminary Prospectus, the Prospectus, each Permitted Free Writing Prospectus and any
amendments or supplements thereto, and the printing and furnishing of copies of each thereof
to the Underwriters, counsel for the Underwriters and dealers (including costs of mailing
and shipment), (ii) the registration, issuance, sale and delivery of the Units including any
stock or transfer taxes and stamp or similar duties
- 24 -
payable upon the sale, issuance or delivery of the Units to the Underwriters, (iii) the
producing, word processing and/or printing of this Agreement, any agreement among
underwriters, any dealer agreements, any powers of attorney and any closing documents
(including compilations thereof) and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriters and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of the Units for offering
and sale under state or foreign laws and the determination of their eligibility for
investment under state or foreign law (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters) and the printing and furnishing of copies of
any blue sky surveys or legal investment surveys to the Underwriters and to dealers, (v) the
listing of the Units on any securities exchange or qualification of the Units for listing on
the NYSE and any registration thereof under the Exchange Act, (vi) any filing for review of
the public offering of the Units by FINRA, including the legal fees and filing fees and
other disbursements of counsel to the Underwriters relating to FINRA matters, (vii) the fees
and disbursements of any transfer agent or registrar for the Units, (viii) the costs and
expenses of the Partnership Entities relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the Units to prospective investors
and the Underwriters’ sales forces, including, without limitation, expenses associated with
the production of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations, travel, lodging and other expenses
incurred by the officers of the Partnership Entities and any such consultants, and the cost
of any aircraft chartered in connection with the road show, (ix) the costs and expenses of
qualifying the Units for inclusion in the book-entry settlement system of the DTC, (x) the
preparation and filing of the Exchange Act Registration Statement, including any amendments
thereto, and (xi) the performance of the Western Gas Parties’ other obligations hereunder.
5. Reimbursement of Underwriters’ Expenses. If the Units are not delivered at the
time of purchase or each additional time of purchase for any reason other than the termination of
this Agreement pursuant to the fifth paragraph of Section 8 hereof or the default by one or
more of the Underwriters in its or their respective obligations hereunder, the Western Gas Parties,
jointly and severally, shall, in addition to paying the amounts described in Section 4(p)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel; provided, however, that if this agreement is
terminated because of the occurrence of any event specified in clause (b) of the second paragraph
of Section 7 (other than as specified in clause (b)(ii) thereof), the Western Gas Parties
shall not be obligated to reimburse the Underwriters for any expenses specified in this Section
5.
6. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
part of the Western Gas Parties on the date hereof, at the time of purchase and at each additional
time of purchase, to the performance by the Western Gas Parties of their obligations hereunder and
to the following additional conditions precedent:
(a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 4(a) of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the
- 25 -
Prospectuses or any Issuer Free Writing Prospectuses or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or threatened by
the Commission; any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied with to the
reasonable satisfaction of the Underwriters; and the Commission shall not have notified the
Partnership of any objection to the use of the form of the Registration Statement.
(b) The Registration Statement, the Prospectus or the Pricing Disclosure Package, or
any amendment or supplement thereto, do not contain an untrue statement of a fact which, in
the opinion of counsel for the Underwriters, is material or do not omit to state any fact
which, in the opinion of such counsel, is material and is required to be stated therein or
in the documents incorporated by reference therein or is necessary to make the statements
therein not misleading.
(c) All corporate, partnership and limited liability company proceedings and other
legal matters incident to the authorization, execution and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and any Issuer Free Writing
Prospectus, and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Partnership shall have furnished to such counsel all documents and
information that they or their counsel may reasonably request to enable them to pass upon
such matters.
(d) The Partnership shall have furnished to the Representatives at the time of purchase
and at each additional time of purchase an opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇,
L.L.P., counsel for the Partnership, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed copies for
each of the other Underwriters, in form and substance reasonably satisfactory to the
Representatives.
(e) The Partnership shall have furnished to the Representatives at the time of purchase
and at each additional time of purchase an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLP, counsel for the
Partnership, addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with executed copies for each of the other
Underwriters, in form and substance reasonably satisfactory to the Representatives.
(f) The Partnership shall have furnished to the Representatives at the time of purchase
and at each additional time of purchase an opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President,
General Counsel and Corporate Secretary of the General Partner, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase, as the case
may be, with executed copies for each of the other Underwriters, in form and substance
reasonably satisfactory to the Representatives, each substantially in form set forth in
Exhibit B hereto.
(g) At the time of execution of this Agreement, the Underwriters shall have
- 26 -
received from KPMG LLP a letter or letters, in form and substance satisfactory to the
Underwriters, addressed to the Underwriters and dated the date hereof (i) confirming that
they are an independent registered public accounting firm within the meaning of the
Securities Act and are in compliance with the applicable rules and regulations thereunder
adopted by the Commission and the PCAOB, and (ii) stating that, as of the date hereof (or,
with respect to matters involving changes or developments since the respective dates as of
which specified financial information is given in the Pricing Disclosure Package and the
Prospectus, as of a date not more than five days prior to the date hereof), the conclusions
and findings of such firm with respect to the financial information and other matters
ordinarily covered by accountants’ “comfort letters” to underwriters in connection with
registered public offerings.
(h) With respect to the letter or letters of KPMG referred to in the preceding
paragraph and delivered to the Underwriters concurrently with the execution of this
Agreement (the “initial letters”), such accounting firm shall have furnished to the
Underwriters a letter (the “bring-down letter”) of KPMG, addressed to the
Underwriters and dated the date of the time of purchase and each additional time of
purchase, if any, (i) confirming that they are an independent registered public accounting
firm within the meaning of the Securities Act and are in compliance with the applicable
rules and regulations thereunder adopted by the Commission and the PCAOB, (ii) stating that,
as of the date of the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
(i) The Representatives shall have received at the time of purchase and at each
additional time of purchase the favorable opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the
Underwriters, addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, in form and substance reasonably
satisfactory to the Representatives.
(j) Prior to and at the time of purchase and each additional time of purchase, (i) no
stop order with respect to the effectiveness of the Registration Statement shall have been
issued under the Securities Act and no proceedings shall have been initiated under Section
8(d) or 8(e) of the Securities Act; (ii) the Registration Statement and all amendments
thereto shall not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not
misleading; (iii) none of the Preliminary Prospectuses or the Prospectus, and no amendment
or supplement thereto, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; (iv) no Pricing Disclosure Package,
and no amendment or supplement thereto, shall include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading; and (v) no Permitted
Free Writing Prospectus shall include an untrue
- 27 -
statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they are made,
not misleading.
(k) Between the time of execution of this Agreement and the later of the time of
purchase and each additional time of purchase, (i) no material adverse change, or any
developments that are reasonably likely to result in, individually or in the aggregate, a
material adverse change, in the business, assets, management, condition (financial or
otherwise), prospects or results of operations of the Partnership Entities, taken as a
whole, shall have occurred or become known and (ii) no transaction which is material and
adverse to the Partnership Entities, taken as a whole, shall have been entered into by any
of the Partnership Entities or become probable, the effect of which is, in the judgment of
the Representatives, so material or adverse as to make it impracticable or inadvisable to
proceed with the Offering or the delivery of the Units as contemplated by the Prospectus.
(l) No action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which would, as of
the time of purchase or an additional time of purchase, if any, prevent the issuance or sale
of the Units; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of such Delivery
Date which would prevent the issuance or sale of the Units.
(m) The Partnership shall have delivered to the Representatives at the time of purchase
and at each additional time of purchase a certificate of the Chief Executive Officer and
Chief Financial Officer of the General Partner, dated the time of purchase or the additional
time of purchase, as the case may be, in the form attached as Exhibit C hereto.
(n) The Partnership Entities shall have furnished to the Representatives such other
documents and certificates as to the accuracy and completeness of any statement in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus as of the time of purchase and each additional time of purchase as the
Representatives may reasonably request.
(o) The Units shall have been approved for listing on the NYSE, subject only to notice
of issuance at or prior to the time of purchase.
(p) FINRA shall not have raised any objection that has not been resolved with respect
to the fairness or reasonableness of the underwriting, or other arrangements of the
transactions, contemplated hereby.
(q) The Lock-Up Agreements between the Representatives and the persons listed on
Exhibit A-1, delivered to the Representatives on or before the date of this
Agreement, shall be in full force and effect on the time of purchase or an additional time
of purchase, if any, except to the extent waived, released, suspended or terminated in
writing by the Representatives.
- 28 -
7. Effective Date of Agreement; Termination. This Agreement shall become effective when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to termination in the
absolute discretion of the Representatives, if (a) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the Registration Statement, the
Pricing Disclosure Pacakge, the Prospectus and any Permitted Free Writing Prospectus, there has
been any change, or any developments that are reasonably likely to result in, individually or in
the aggregate, a material adverse change, in the business, assets, management, condition (financial
or otherwise), prospects or results of operations of any Partnership Entity, the effect of which
change or development on the Partnership Entities, taken as a whole, is, in the sole judgment of
the Representatives, so material and adverse as to make it impractical or inadvisable to proceed
with the Offering or the delivery of the Units on the terms and in the manner contemplated in the
Registration Statement, the Pricing Disclosure Pacakge, the Prospectus and each Permitted Free
Writing Prospectus, (b) since the time of execution of this Agreement, there shall have occurred
(i) a suspension or material limitation in trading in securities generally on the NYSE or the
NASDAQ; (ii) a suspension or material limitation in trading in the Partnership’s securities on the
NYSE; (iii) a general moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) an outbreak or escalation of hostilities or acts of
terrorism involving the United States or a declaration by the United States of a national emergency
or war; or (v) any other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event specified in clause
(iv) or (v), in the sole judgment of the Representatives, makes it impractical or inadvisable to
proceed with the Offering or the delivery of the Units on the terms and in the manner contemplated
in the Registration Statement, the Pricing Disclosure Pacakge, the Prospectus and each Permitted
Free Writing Prospectus, or (c) since the time of execution of this Agreement, there shall have
occurred any downgrading in, or any notice or announcement shall have been given or made of (i) any
intended or potential downgrading or (ii) any watch, review or possible change that does not
indicate an affirmation or improvement in the rating accorded to, any securities of or guaranteed
by any Partnership Entity by any “nationally recognized statistical rating organization,” as that
term is defined in Rule 436(g)(2) under the Securities Act.
If the Representatives elect to terminate this Agreement as provided in this Section
7, the Partnership and each other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the Units, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Partnership Entities shall be unable to comply with any of the terms of
this Agreement, the Western Gas Parties shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 4(p), 5 and 9 hereof),
and the Underwriters shall be under no obligation or liability to the Western Gas Parties under
this Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay for the Firm Units to
be
- 29 -
purchased by it hereunder (otherwise than for a failure of a condition set forth in
Section 6 hereof or a reason sufficient to justify the termination of this Agreement under
the provisions of Section 7 hereof) and if the number of Firm Units that all Underwriters
so defaulting shall have agreed but failed to take up and pay for does not exceed 10% of the total
number of Firm Units, the non-defaulting Underwriters (including the Underwriters, if any,
substituted in the manner set forth below) shall take up and pay for (in addition to the aggregate
number of Firm Units they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Units agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Units shall be taken up and paid for by such non-defaulting Underwriters in such
amount or amounts as the Representatives may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such Units shall be taken up and paid for
by all non-defaulting Underwriters pro rata in proportion to the aggregate number of Firm Units set
forth opposite the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter of its obligations hereunder, the Partnership
agrees with the non-defaulting Underwriters that it will not sell any Firm Units hereunder unless
all of the Firm Units are purchased by the Underwriters (or by substituted Underwriters selected by
the Representatives with the approval of the Partnership or selected by the Partnership with the
approval of the Representatives).
If a new Underwriter or Underwriters are substituted by the Underwriters or by the Partnership
for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the
Partnership or the Representatives shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary changes in the Registration
Statement and the Prospectus and other documents may be effected.
The term “Underwriter” as used in this Agreement shall refer to and include any Underwriter
substituted under this Section 8 with like effect as if such substituted Underwriter had
originally been named in Schedule A hereto.
If the aggregate number of Firm Units that the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm Units, and if neither the non-defaulting
Underwriters nor the Partnership shall make arrangements within the five business day period stated
above for the purchase of all the Firm Units that the defaulting Underwriter or Underwriters agreed
to purchase hereunder, this Agreement shall terminate without further act or deed and without any
liability on the part of the Partnership to any Underwriter and without any liability on the part
of any non-defaulting Underwriter to the Partnership. Nothing in this paragraph, and no action
taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) Each of the Western Gas Parties, jointly and severally, agrees to indemnify, defend
and hold harmless each Underwriter, its partners, directors, officers and affiliates, and
any person who controls any Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and the successors
- 30 -
and assigns of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation) which, jointly
or severally, any such Underwriter or any such person may incur under the Securities Act,
the Exchange Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Partnership) or any
omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity with the
information specified in Section 10 hereof furnished in writing by or on behalf of
such Underwriter through the Representatives to the Partnership expressly for use in, the
Registration Statement or arises out of or is based upon any omission or alleged omission to
state a material fact in the Registration Statement in connection with such information,
which material fact was not contained in such information and which material fact was
required to be stated in such Registration Statement or was necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact included in any Preliminary Prospectus, the Pricing Disclosure Package, the
Prospectus, in any Permitted Free Writing Prospectus, in any “issuer information” (as
defined in Rule 433 under the Securities Act) of the Partnership or in any Prospectus
together with any combination of one or more Permitted Free Writing Prospectuses, if any, or
arises out of or is based upon any omission or alleged omission to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except, with respect to such Preliminary Prospectus,
Pricing Disclosure Package, Prospectus or Permitted Free Writing Prospectuses, insofar as
any such loss, damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in, and in conformity
with the information specified in Section 10 hereof furnished in writing by or on
behalf of such Underwriter through the Representatives to the Partnership expressly for use
in, such Preliminary Prospectus, Pricing Disclosure Package, Prospectus or Permitted Free
Writing Prospectus or arises out of or is based upon any omission or alleged omission to
state a material fact in such Preliminary Prospectus, Pricing Disclosure Package, Prospectus
or Permitted Free Writing Prospectus in connection with such information, which material
fact was not contained in such information and which material fact was necessary in order to
make the statements in such information, in the light of the circumstances under which they
were made, not misleading, or (iii) any untrue statement or alleged untrue statement of a
material fact included in any “road show” (as defined in Rule 433 under the Securities Act)
not constituting an Issuer Free Writing Prospectus.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Western Gas Parties, their directors and officers, and any person who controls the Western
Gas Parties within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Western Gas Parties or any such person
- 31 -
may incur under the Securities Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in, and in
conformity with the information specified in Section 10 hereof furnished in writing
by or on behalf of such Underwriter through the Representatives to the Partnership expressly
for use in, the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Partnership), or any omission or alleged omission to
state a material fact in such Registration Statement in connection with such information,
which material fact was not contained in such information and which material fact was
required to be stated in such Registration Statement or was necessary to make such
information not misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with the information specified in Section
10 hereof furnished in writing by or on behalf of such Underwriter through the
Representatives to the Partnership expressly for use in, a Preliminary Prospectus, the
Pricing Disclosure Package, the Prospectus or a Permitted Free Writing Prospectus, or any
omission or alleged omission to state a material fact in such Prospectus or Permitted Free
Writing Prospectus in connection with such information, which material fact was not
contained in such information and which material fact was necessary in order to make the
statements in such information, in the light of the circumstances under which they were
made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against any of the Western Gas Parties or an Underwriter (as applicable, the
“indemnifying party”) pursuant to subsection (a) or (b) of this
Section 9, such indemnified party shall promptly notify such indemnifying party in
writing of the institution of such Proceeding and such indemnifying party shall assume the
defense of such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided,
however, that the failure to so notify such indemnifying party shall not relieve
such indemnifying party from any liability which such indemnifying party may have to any
indemnified party or otherwise. The indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless the employment of such
counsel shall have been authorized in writing by the indemnifying party in connection with
the defense of such Proceeding or the indemnifying party shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to defend such Proceeding or
such indemnified party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict with those
available to such indemnifying party (in which case such indemnifying party shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by such indemnifying
party and paid as incurred (it being understood, however, that, except as provided in
Section 9(b), such indemnifying party shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel) in any one Proceeding or series
of related Proceedings in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The indemnifying party shall not be liable for any settlement
- 32 -
of any Proceeding effected without its written consent but, if settled with its written
consent, such indemnifying party agrees to indemnify and hold harmless the indemnified party
or parties from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this Section 9(c), then the
indemnifying party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days’ prior notice of its intention to settle.
No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault or culpability or a failure to
act by or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsection (a) or (b) of this Section 9 or
insufficient to hold an indemnified party harmless in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Western Gas Parties on the one hand and the
Underwriters on the other hand from the Offering 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 Western Gas Parties on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable considerations.
The relative benefits received by the Western Gas Parties on the one hand and the
Underwriters on the other shall be deemed to be in the same respective proportions as the
total proceeds from the Offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Western Gas Parties, and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate public
offering price of the Units. The relative fault of the Western Gas Parties on the one hand
and of the Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the Western Gas Parties or
by the Underwriters and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, damages, expenses, liabilities and claims referred to in
this subsection shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
- 33 -
(e) The Western Gas Parties and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 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 that does not take account of the equitable considerations
referred to in subsection (d) above. Notwithstanding the provisions of this
Section 9, no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Units underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of any damage that
such Underwriter has otherwise been required to pay by reason of such untrue statement 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 to contribute pursuant to this Section
9 are several in proportion to their respective underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this Section 9 and
the covenants, warranties and representations of the Western Gas Parties contained in this
Agreement shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, its partners, directors or officers or any person (including
each partner, officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Western Gas Parties, their directors or officers or any person who controls
the Western Gas Parties within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and shall survive any termination of this Agreement or the issuance and
delivery of the Units. The Western Gas Parties and each Underwriter agree promptly to
notify each other of the commencement of any Proceeding against it and, in the case of the
Western Gas Parties, against any of their officers or directors in connection with the
issuance and sale of the Units, or in connection with the Registration Statement, the
Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus.
10. Information Furnished by the Underwriters. The concession figure appearing under
the caption “Underwriting—Commissions and Expenses” and the statements relating to stabilization
by the Underwriters appearing under the caption “Underwriting—Stabilization; Short Positions and
Penalty Bids” in the Prospectus, constitute the only information furnished by or on behalf of the
Underwriters, as such information is referred to in Sections 3 and 9 hereof.
11. Notices. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or facsimile
transmission to each of (i) Barclays Capital Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Registration (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of
any notice pursuant to Section 8(c), to the Director of Litigation, Office of the General
Counsel, Barclays Capital Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
- 34 -
10019; (ii) ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Syndicate Department, Fax: (▇▇▇) ▇▇▇-▇▇▇▇ with a copy to
Attention: ECM Legal, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; (iii) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department; and (iv) ▇▇▇▇▇ Fargo Securities,
LLC, (4) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Equity Syndicate Department (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Western Gas Parties, shall be delivered or sent by mail or facsimile
transmission to the offices of the Partnership at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Western
Gas Parties consent to the jurisdiction of such courts and personal service with respect thereto.
The Western Gas Parties hereby consent to personal jurisdiction, service and venue in any court in
which any Claim arising out of or in any way relating to this Agreement is brought by any third
party against any Underwriter or any indemnified party. Each Underwriter and the Western Gas
Parties (each on its own behalf and, to the extent permitted by applicable law, on behalf of its
equity owners and affiliates) waive all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating
to this Agreement. Each of the Western Gas Parties agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon
the Western Gas Parties and may be enforced in any other courts to the jurisdiction of which the
Western Gas Parties are or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement set forth herein has been and is made solely
for the benefit of the Underwriters and the Western Gas Parties and to the extent provided in
Section 9 hereof the controlling persons, partners, directors and officers referred to in
such Section, and their respective successors, assigns, heirs, personal representatives and
executors and administrators. No other person, partnership, association or corporation (including
a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. No Fiduciary Relationship. The Western Gas Parties hereby acknowledge that the
Underwriters are acting solely as underwriters in connection with the purchase and sale of the
Partnership’s securities. The Western Gas Parties further acknowledge that the Underwriters are
acting pursuant to a contractual relationship created solely by this Agreement entered into on an
arm’s length basis, and in no event do the parties intend that the Underwriters act or be
- 35 -
responsible as a fiduciary to the Partnership Entities, their management, security holders or
creditors or any other person in connection with any activity that the Underwriters may undertake
or have undertaken in furtherance of the purchase and sale of the Units, either before or after the
date hereof. The Underwriters hereby expressly disclaim any fiduciary or similar obligations to
the Partnership Entities, either in connection with the transactions contemplated by this Agreement
or any matters relating to such transactions, and each Western Gas Party hereby confirms its
understanding and agreement to that effect. The Western Gas Parties and the Underwriters agree
that they are each responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Underwriters to the Partnership
Entities regarding such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Partnership’s securities, do not constitute advice or
recommendations to the Partnership Entities. Each Partnership Entity hereby waives and releases,
to the fullest extent permitted by law, any claims that it may have against the Underwriters with
respect to any breach or alleged breach of any fiduciary or similar duty to the Partnership
Entities in connection with the transactions contemplated by this Agreement or any matters relating
to such transactions.
16. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
17. Successors and Assigns. This Agreement shall be binding upon the Underwriters,
the Western Gas Parties, their respective successors and assigns and any successor or assign of any
substantial portion of any of the Western Gas Parties or any of the Underwriters’ respective
businesses and/or assets.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
- 36 -
If the foregoing correctly sets forth the understanding among the Western Gas Parties and the
several Underwriters, please so indicate in the space provided below for that purpose, whereupon
this Agreement and your acceptance shall constitute a binding agreement between the Western Gas
Parties and the Underwriters, severally.
| Very truly yours, Western Gas Holdings, LLC |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | President |
|||
| Western Gas Partners, LP |
||||
| By: | Western Gas Holdings, LLC, its general partner |
|||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President and Chief Financial Officer |
|||
| Western Gas Operating, LLC |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President and Chief Financial Officer |
|||
| WGR Operating, LP |
||||
| By: | Western Gas Operating, LLC, its general partner |
|||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President and Chief Financial Officer |
|||
Western Gas Partners, LP
Signature Page to Underwriting Agreement
Signature Page to Underwriting Agreement
| Accepted and agreed to as of the
date first above written, on behalf of itself and the other several Underwriters named in Schedule
A Barclays Capital Inc. |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇▇▇▇ | |||
| Title: | Vice President | |||
| ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated |
||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: | Managing Director | |||
| ▇▇▇▇▇▇▇, Sachs & Co. |
||||
| By: | /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. | |||
| (▇▇▇▇▇▇▇, Sachs & Co.) | ||||
| ▇▇▇▇▇ Fargo Securities, LLC |
||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Director | |||
Western Gas Partners, LP
Signature Page to Underwriting Agreement
Signature Page to Underwriting Agreement
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Units | |||
BARCLAYS
CAPITAL INC. |
1,162,500 | |||
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED |
1,162,500 | |||
▇▇▇▇▇▇▇,
SACHS & CO. |
1,162,500 | |||
▇▇▇▇▇ FARGO SECURITIES, LLC |
1,162,500 | |||
DEUTSCHE
BANK SECURITIES INC. |
487,500 | |||
RBC CAPITAL MARKETS CORPORATION |
487,500 | |||
SCOTIA
CAPITAL (USA) INC. |
187,500 | |||
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & COMPANY, INCORPORATED |
187,500 | |||
Total |
6,000,000 | |||
SCHEDULE B-1
Permitted Free Writing Prospectuses
None
SCHEDULE B-2
Information Included in the Pricing Disclosure Package
Number of Common Units offered to the public: 6,000,000
Public offering price: $18.20 per common unit
SCHEDULE C
Jurisdictions of Foreign Qualification
| Entity | Jurisdictions of Foreign Qualification | |
Western Gas Holdings, LLC
|
Arizona, Colorado, Kansas, New Mexico, Oklahoma, Texas, Utah, Wyoming | |
Western Gas Partners, LP
|
Arizona, Colorado, Kansas, New Mexico, Oklahoma, Texas, Utah, Wyoming | |
Western Gas Operating, LLC
|
Arizona, Colorado, Kansas, New Mexico, Oklahoma, Texas, Utah, Wyoming | |
WGR Operating, LP
|
Arizona, Colorado, Kansas, New Mexico, Oklahoma, Texas, Utah, Wyoming | |
Anadarko Gathering Company, LLC
|
Kansas, Louisiana, Mississippi, Oklahoma, Texas, Utah | |
Pinnacle Gas Treating LLC
|
None | |
MIGC LLC
|
Colorado, Wyoming | |
Western Gas Wyoming, L.L.C.
|
None | |
Chipeta Processing LLC
|
Colorado, Utah | |
Western Gas Partners Finance
Corporation
|
None |
Schedule D
Reserved Unit Sales
| Director/Officer Participating | Maximum Number of Units | |||
| in the Offering | to be Purchased | |||
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ |
54,945 | |||
▇▇▇▇▇ ▇. ▇▇▇▇▇ |
74,945 | |||
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
550 | |||
Total |
130,440 | |||
Schedule D-1
EXHIBIT A
Lock-Up Agreement
December 4, 2009
Barclays Capital Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ Fargo Securities, LLC
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇ Fargo Securities, LLC
As Representatives of the several Underwriters,
c/o Barclays Capital Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Western Gas Holdings, LLC, a
Delaware limited liability company, Western Gas Partners, LP, a Delaware limited partnership (the
“Partnership”), Western Gas Operating, LLC, a Delaware limited liability company, and WGR
Operating, LP, a Delaware limited partnership, and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering (the “Offering”) of
common units representing limited partner interests in the Partnership (the “Common
Units”). Capitalized terms used but not defined herein shall have the meanings given to them
in the Underwriting Agreement.
In consideration of the execution of the Underwriting Agreement by you, and for other good and
valuable consideration, the undersigned hereby irrevocably agrees that the undersigned will not,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any Common Units or securities convertible into, or
exchangeable for Common Units, or sell or grant options, rights or warrants with respect to any
Common Units or securities convertible into or exchangeable for Common Units, in each case owned by
the undersigned on the date of execution of this Lock-Up Agreement or on the date of the completion
of the Offering, or (ii) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership of such Common
Units, whether any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Units or other securities, in cash or otherwise, or (iii) publicly disclose the
intention to do any of the foregoing, in each case for a period of 60 days from the date of the
Prospectus (the “Lock-Up Period”) without the prior written consent of the Representatives;
provided, however, that with respect to the undersigned, the foregoing restrictions do not apply to
(a) the registration of the issuance and sale of the Common Units as
Exhibit A-1
contemplated by the Underwriting Agreement and the sale of the Common Units to the Underwriters in
the Offering, (b) bona fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Agreement, (c) dispositions to any trust for
the direct or indirect benefit of the undersigned and/or the immediate family of the undersigned,
provided that such trust agrees in writing with the Underwriters to be bound by the terms of this
Lock-Up Agreement or (d) as required or permitted by the Partnership’s benefit plans to reimburse
or pay income tax in connection with the vesting of options, rights or warrants. For purposes of
this paragraph, “immediate family” shall mean the undersigned and the spouse, any lineal
descendent, father, mother, brother or sister of the undersigned.
In addition, the undersigned hereby waives any rights the undersigned may have to require
registration of Common Units in connection with the filing of a registration statement relating to
the Offering. The undersigned further agrees that, for the Lock-Up Period, the undersigned will
not, without the prior written consent of the Representatives, make any demand for, or exercise any
right with respect to, the registration of Common Units or any securities convertible into or
exercisable or exchangeable for Common Units, or warrants or other rights to purchase Common Units
or any such securities.
In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and similar rights that the undersigned may have in
connection with the Offering or with any issuance or sale by the Partnership of any equity or other
securities before the Offering, except for any such rights as have been heretofore duly exercised.
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take any action
designed, or which has constituted or will constitute or might reasonably be expected, to cause or
result in the stabilization or manipulation of the price of any security of the Partnership to
facilitate the sale or resale of the Common Units.
* * *
Exhibit A-2
If (i) the Partnership notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Commission with respect to the Offering is
withdrawn or (iii) for any reason the Underwriting Agreement shall be terminated prior to the “time
of purchase” (as defined in the Underwriting Agreement), this Lock-Up Agreement shall be terminated
and the undersigned shall be released from its obligations hereunder.
Yours very truly, |
||||
| Name: | ||||
Exhibit A-3
EXHIBIT A-1
LIST OF PARTIES TO EXECUTE LOCK-UP AGREEMENTS
| Name | Position | |
1. Western Gas Holdings,
LLC |
||
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇
|
Chairman of the Board and Chief Executive Officer | |
3. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
President | |
4. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
Senior Vice President and Chief Financial Officer | |
5. ▇▇▇▇▇ ▇. ▇▇▇
|
Senior Vice President, Chief Operating Officer and Director | |
6. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
|
Vice President, General Counsel and Corporate Secretary | |
7. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
Vice President and Treasurer | |
8. ▇. ▇. ▇▇▇▇▇▇
|
Director | |
9. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
Director | |
10. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
Director | |
11. WGR Holdings, LLC |
Exhibit A-1-1
EXHIBIT B
FORM OF OPINION OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
GENERAL COUNSEL OF WESTERN GAS HOLDINGS, LLC
GENERAL COUNSEL OF WESTERN GAS HOLDINGS, LLC
| 1. | To my knowledge, there are no contracts, licenses, agreements, leases or documents of a character that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus or to be filed as an exhibit to the Registration Statement that have not been so described or filed as required. | |
| 2. | Each Partnership Entity has all necessary licences, authorizations, consents and approvals (each, a “Permit”) and has made all necessary filings required under any applicable law, regulation or rule, and has obtained all necessary Permits from other persons, in order to conduct its business, except for such Permits that, if not obtained, would not have a Material Adverse Effect; and no Partnership Entity is in violation of or default under, or has received notice of any proceedings relating to the revocation or modification of, any such Permit or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to such Partnership Entity, except for any such violations, defaults, revocations or modifications that would not, individually or in the aggregate, have a Material Adverse Effect. | |
| 3. | Except as described in the Registration Statement, the Pricing Disclosure Package, the Prospectus and, if any, each Permitted Free Writing Prospectus, there are no actions, suits, claims investigations or proceedings pending or, to my knowledge, threatened or contemplated to which the Partnership Entities or any of their respective directors or officers is or would be a party or to which any of their respective properties is or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency, or before or by any self-regulatory organization or other non-governmental regulatory authority (including, without limitation, the NYSE), except for any such actions, suits, claims, investigations or proceedings that would not, individually or in the aggregate, if resolved adversely to any Partnership Entity, have a Material Adverse Effect. |
Capitalized terms used herein without definition shall have the meanings ascribed to them in
the Underwriting Agreement.
Exhibit B-1
EXHIBIT C
OFFICERS’ CERTIFICATE
Each of the undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive Officer of Western Gas Holdings, LLC,
a Delaware limited liability company (the “General Partner”), which is the general partner
of Western Gas Partners, LP, a Delaware limited partnership (the “Partnership”), and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President and Chief Financial Officer of the General Partner, on
behalf of the Partnership, does hereby certify pursuant to Section 6(l) of that certain
Underwriting Agreement dated December 4, 2009 (the “Underwriting Agreement”) among the
General Partner, the Partnership, the Operating GP and the Operating Partnership (collectively, the
“Western Gas Parties”), and, on behalf of the several Underwriters named therein, Barclays
Capital Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co. and ▇▇▇▇▇
Fargo Securities, LLC, that as of December 9, 2009:
| 1. | He has reviewed the Registration Statement, each Preliminary Prospectus, the Prospectus and each Permitted Free Writing Prospectus, if any. | |
| 2. | The representations and warranties of the Western Gas Parties as set forth in the Underwriting Agreement are true and correct as of the date hereof and as if made on the date hereof. | |
| 3. | The Western Gas Parties have performed all of their obligations under the Underwriting Agreement as are to be performed at or before the date hereof. | |
| 4. | The conditions set forth in Section 6(i) of the Underwriting Agreement have been met. | |
| 5. | From the time of execution of the Underwriting Agreement to and including the date hereof, no material adverse change, or any developments that are reasonably likely to result in, individually or in the aggregate, a material adverse change, in the business, assets, management, condition (financial or otherwise), prospects or results of operations of the Partnership Entities, taken as a whole, has or have occurred. |
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
[Signature page follows]
Exhibit C-1
In Witness Whereof, the undersigned have hereunto set their hands on this December 9,
2009.
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | President and Chief Executive Officer | |||
| Name: | ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
Exhibit C-2