Exhibit 1.1
ONEOK, INC.
9,500,000 Shares
Common Stock
UNDERWRITING AGREEMENT
August ___, 2003
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Westar Industries, Inc. (the "Selling Stockholder"), a Delaware corporation
and a wholly-owned subsidiary of Westar Energy, Inc., a Kansas corporation
("Parent"), proposes to sell to you (the "Underwriter") an aggregate of
9,500,000 shares (the "Firm Shares") of the common stock of ONEOK, Inc., an
Oklahoma corporation (the "Company"), par value $0.01 per share, together with
each associated preferred stock purchase right under the Amended and Restated
Rights Agreement, dated as of February 5, 2003 (the "Rights Agreement"), between
the Company and UMB Bank, N.A., as Rights Agent (the "Common Stock"). The
Selling Stockholder and, to the extent the Selling Stockholder transfers its
shares of Common Stock to Parent prior to the Option Closing Date (as
hereinafter defined) in accordance with the Stipulation and Agreement of the
Kansas Corporation Commission, Parent, have also agreed to grant to the
Underwriter an option (the "Option") to purchase up to an additional 1,425,000
shares (the "Option Shares") of Common Stock on the terms and for the purposes
set forth in Section 1(b). The Firm Shares and the Option Shares are herein
referred to as the "Shares".
The initial public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by you shall be agreed upon by the
Company, Parent, the Selling Stockholder and the Underwriter, and such agreement
shall be set forth in a separate written instrument substantially in the form of
Exhibit A hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among the Company, Parent, the Selling Stockholder and the
Underwriter and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Price Determination Agreement. From and after the date of
the execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein" shall
be deemed to include the Price Determination Agreement.
Each of the Company, Parent and the Selling Stockholder confirms as follows
its agreements with the Underwriter.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of the
Company, Parent and the Selling Stockholder herein contained and
subject to all the terms and conditions of this Agreement, the Selling
Stockholder agrees to sell to you and you agree to purchase from the
Selling Stockholder at the purchase price per share for the Firm
Shares to be agreed upon by you, the Selling Stockholder and the
Company in accordance with subsection (c) below and set forth in the
Price Determination Agreement 9,500,000 Firm Shares as set forth on
Schedule I.
(b) Subject to all the terms and conditions of this Agreement, the Selling
Stockholder and, if applicable, Parent, grant to you the Option to
purchase up to 1,425,000 Option Shares from the Selling Stockholder or
Parent, as the case may be, at the same price per share as you will
pay for the Firm Shares. The Option may be exercised only to cover
over-allotments in your sale of the Firm Shares and may be exercised
in whole or in part at any time (but not more than once) on or before
the 30th day after the date of this Agreement, upon written or
telegraphic notice (the "Option Shares Notice") by the Selling
Stockholder and Parent with a copy to the Company no later than 12:00
noon, New York City time, at least two and no more than five business
days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date") setting forth the aggregate number of
Option Shares to be purchased and the time and date for such purchase.
On the Option Closing Date, the Selling Stockholder or Parent, as the
case may be, will sell to you the number of Option Shares set forth in
the Option Shares Notice and you will purchase such Option Shares.
(c) The initial public offering price per share for the Firm Shares and
the purchase price per share for the Firm Shares to be paid by the
Underwriter shall be agreed upon and set forth in the Price
Determination Agreement.
2. Delivery and Payment.
(a) Delivery of the Firm Shares shall be made to you against payment of
the purchase price by wire transfer in immediately available funds to
an account designated in writing by the Selling Stockholder to you.
Such payment shall be made at 10:00 a.m., New York City time, on the
third business day after the date on which the first bona fide
offering of the Firm Shares to the public is made by you or at such
time on such other date, not later than ten business days after such
first offering date, as may be agreed upon by the Company, Parent, the
Selling Stockholder and the Underwriter (such date is hereinafter
referred to as the "Closing Date"). Delivery of the Firm Shares shall
be made through the facilities of The Depository Trust Company unless
you shall otherwise instruct.
2
(b) To the extent the Option is exercised, delivery of the Option Shares
against payment by you (in the manner specified above) will take place
in the manner specified above for the Closing Date on the Option
Closing Date.
(c) Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as you
shall request at least two business days prior to the Closing Date or
the Option Closing Date, as the case may be, by written notice to
Parent, the Selling Stockholder and the Company. For the purpose of
expediting the checking and packaging of certificates for the Shares,
Parent and the Selling Stockholder agree to make such certificates
available for inspection at least 24 hours prior to the Closing Date
or the Option Closing Date, as the case may be.
(d) The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of the Firm Shares and Option Shares by Parent
or the Selling Stockholder to the Underwriter shall be borne by Parent
and the Selling Stockholder. Parent and the Selling Stockholder will
pay and save the Underwriter and any subsequent holder of the Shares
harmless from any and all liabilities with respect to or resulting
from any failure or delay in paying federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be
payable in connection with the original issuance or sale to the
Underwriter of the Firm Shares and Option Shares.
(e) Not later than 12:00 p.m. on the first business day following the date
the Firm Shares are first released by the Underwriter for sale to the
public, the Company shall deliver or cause to be delivered, copies of
the Prospectus (as hereinafter defined) in such quantities and at such
places as the Underwriter shall request.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to the Underwriter, Parent and the Selling
Stockholder that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 333-104318) on Form S-3
relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to
the date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act of 1933 (the "Act"), and the rules
and regulations (collectively referred to as the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
term "preliminary prospectus" as used herein means a preliminary
prospectus as contemplated by Rule 430 or Rule 430A ("Rule 430A") of
the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and
amendments and of each related preliminary prospectus have been
delivered to the Underwriter. The term "Registration Statement" means
the registration statement described above, as amended at the time it
became effective (the "Effective Date"), including financial
statements and
3
all exhibits and any information deemed to be included by Rule 430A or
Rule 434 of the Rules and Regulations. If the Company files a
registration statement to register a portion of the Shares and relies
on Rule 462(b) of the Rules and Regulations for such registration
statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to the
"Registration Statement" shall be deemed to include the Rule 462
Registration Statement, as amended from time to time. The Company will
file with the Commission a prospectus supplement (the "Prospectus
Supplement") relating to the Shares pursuant to Rule 424 or Rule 434
under the Act. The term "Prospectus" means the form of final
prospectus included in the Registration Statement at the Effective
Date, as amended and supplemented prior to the date of this Agreement
and as supplemented by the Prospectus Supplement, and shall be deemed
to include the "electronic Prospectus" provided for use in connection
with the offering of the Shares as contemplated by Section 5(j) of
this Agreement. Any reference herein to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to refer
to and include (i) the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 that were filed under the Securities
Exchange Act of 1934 (the "Exchange Act"), on or before the Effective
Date or the date of such preliminary prospectus or the Prospectus, as
the case may be, and (ii) any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("XXXXX"). Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration
Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date, or the date of any preliminary
prospectus or the Prospectus, as the case may be, and deemed to be
incorporated therein by reference.
(b) The Company has not received, and has no notice of, any order of the
Commission preventing or suspending the use of any preliminary
prospectus, or instituting proceedings for that purpose. Each
preliminary prospectus and the Prospectus when filed complied in all
material respects with the Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof
delivered to you for use in connection with the offer and sale of the
Shares. On the Effective Date, the date the Prospectus is first filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, at all times subsequent to and including the Closing Date
and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is
filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have
filed with the Commission any amendment or supplement thereto),
including the financial statements included or incorporated by
reference in the Prospectus, did or will comply with all applicable
provisions of the Act, the Exchange Act, the rules and regulations
thereunder (the "Exchange Act Rules and Regulations") and the Rules
and Regulations and will contain all statements required to be stated
therein in accordance with the Act, the Exchange Act, the Exchange Act
Rules and Regulations and the Rules and
4
Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of
the Registration Statement or any such amendment did or will contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed
with the Commission and at the Closing Date and, if later, the Option
Closing Date, the Prospectus did not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
foregoing representations and warranties in this subsection (b) do not
apply to any statements or omissions made in reliance on and in
conformity with information relating to the Underwriter furnished in
writing to the Company by the Underwriter specifically for inclusion
in the Registration Statement or Prospectus or any amendment or
supplement thereto. For all purposes of this Agreement, the concession
and reallowance figures appearing in the fifth paragraph under the
caption "Underwriting" and the information contained in the thirteenth
and fourteenth paragraphs under the caption "Underwriting" in the
Prospectus constitute the only information relating to the Underwriter
furnished in writing to the Company specifically for inclusion in the
Registration Statement or the Prospectus. The Company has not
distributed any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the
preliminary prospectus, the Prospectus or any other materials, if any,
permitted by the Act.
(c) The documents that are incorporated by reference in the Prospectus or
from which information is so incorporated by reference, when they
became effective or were filed with the Commission, as the case may
be, complied in all material respects with the requirements of the Act
or the Exchange Act, as applicable, the Exchange Act Rules and
Regulations and the Rules and Regulations; and any documents so filed
and incorporated by reference subsequent to the date hereof shall,
when they are filed with the Commission, conform in all material
respects with the requirements of the Act and the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations.
(d) The only subsidiaries (as defined in the Rules and Regulations) of the
Company are the subsidiaries named on Schedule II hereto (the
"Subsidiaries"). The Company and each of its Subsidiaries is, and at
the Closing Date will be, a corporation, limited liability company,
general partnership or limited partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. The Company and each of its
Subsidiaries have, and at the Closing Date will have, full power and
authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business
as described in the Registration Statement and the Prospectus. The
Company and each of its Subsidiaries is, and at the Closing Date will
be, duly licensed or qualified to do business and in good
5
standing as a foreign corporation, limited liability company, general
partnership or limited partnership in all jurisdictions in which the
nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification
necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
condition (financial or otherwise), earnings, cash flow, business
affairs or business prospects of the Company and its Subsidiaries,
considered as one enterprise (a "Material Adverse Effect"). Except as
set forth on Schedule II hereto, all of the outstanding shares of
capital stock, capital interests or partnership interests of the
Subsidiaries have been duly authorized and validly issued and, as to
capital stock, are fully paid and non-assessable, and are owned by the
Company free and clear of all security interests, liens, encumbrances
and claims whatsoever. Except for (i) the stock of or interests in the
Subsidiaries disclosed on Schedule II hereto and (ii) as disclosed in
the Registration Statement and the Prospectus, the Company does not
own, and at the Closing Date will not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of
any corporation or have any equity interest in any firm, partnership,
joint venture, association or other entity. Complete and correct
copies of the certificate of incorporation and of the by-laws or other
organizational documents of the Company and each of its significant
subsidiaries (as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations) and all amendments thereto have been delivered
to you, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing
Date.
(e) None of the Subsidiaries is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on such Subsidiary's capital stock, from repaying
to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary, except as described or
contemplated by the Registration Statement and the Prospectus.
(f) The outstanding shares of Common Stock (including shares of Common
Stock issuable upon conversion of the Company's $0.925 Series D
Non-Cumulative Convertible Preferred Stock, par value $.01 per share
(the "Series D Preferred Stock")) have been duly authorized, validly
issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right. The description of the Common Stock in
the Registration Statement and the Prospectus is, and at the Closing
Date and the Option Closing Date, as applicable, will be, complete and
accurate in all respects. Except (i) as set forth in the Registration
Statement and the Prospectus and (ii) with respect to (A) stock
options or other employee and director compensation arrangements
pursuant to the terms of a plan in effect on the date of this
Agreement or (B) employee thrift plans or direct stock purchase or
dividend investment plans in place on the date of this Agreement, the
Company does not have outstanding, and at the Closing Date and the
Option Closing Date, as applicable, will not have outstanding, any
options to purchase, or any rights or warrants to subscribe for, or
any securities or
6
obligations convertible into, or any contracts or commitments to issue
or sell, any shares of Common Stock, any shares of capital stock of
any Subsidiary or any such warrants, convertible securities or
obligations.
(g) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus, and any
amendment or supplement thereto, present fairly the consolidated
financial condition of the Company, as of the date thereof and the
consolidated results of operations and cash flows of the Company for
the period covered thereby, in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire period involved. KPMG LLP (the "Accountant"), the accounting
firm that has certified the financial statements and schedules
included or incorporated by reference in the Registration Statement or
the Prospectus, and any amendment or supplement thereto, is an
independent public accounting firm within the meaning of the Act and
the Rules and Regulations and the Accountant is not in violation of
the auditor independence requirements of Section 201 of the
Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") with respect to
the Company. There are no pro forma financial statements or other pro
forma financial information required to be included or incorporated by
reference in the Registration Statement or the Prospectus. No other
financial statements or schedules of the Company are required by the
Act, the Exchange Act or the Rules and Regulations to be included or
incorporated by reference in the Registration Statement or the
Prospectus. The financial data set forth in the Prospectus under the
captions "Summary -- Summary Consolidated Financial Data" and
"Capitalization" fairly present the information set forth therein on a
basis consistent with that of the audited financial statements
incorporated by reference in the Registration Statement. The Company's
ratio of earnings to combined fixed charges and preferred stock
dividend requirements set forth in the Prospectus under the caption
"Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements" and in Exhibit 12.1 to the Registration
Statement have been calculated in compliance with Item 503(d) of
Regulation S-K under the Act.
(h) The books, records and accounts of the Company and its Subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions
in and dispositions of the assets of the Company and its Subsidiaries.
The Company and each of its Subsidiaries maintain an adequate internal
control structure, procedures for financial reporting and a system of
internal accounting control 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 the preparation of the Company's consolidated
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for the assets of the
Company and its Subsidiaries; (iii) access to the assets of the
Company and its Subsidiaries is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accounts of the assets of the Company and its Subsidiaries is compared
7
with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(i) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus and prior to the Closing
Date and the Option Closing Date, as applicable, except as set forth
in or contemplated by the Registration Statement and the Prospectus,
(i) there has not been and will not have been any material change in
the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries arising for any reason
whatsoever, (ii) neither the Company nor any of its Subsidiaries has
incurred nor will it incur any material liabilities or obligations,
direct or contingent nor has it entered into nor will it enter into
any material transactions other than pursuant to this Agreement and
the Transaction Agreement and the transactions referred to herein and
(iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its
capital stock, other than the ordinary quarterly dividend paid or
payable by the Company to holders of the Common Stock and preferred
stock consistent with past practices.
(j) The Company is not an "investment company" or a company "controlled
by" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(k) Except as set forth in the Registration Statement and the Prospectus,
there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its Subsidiaries or any of
their respective directors or officers in their capacity as such,
before or by any federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding would have a
Material Adverse Effect.
(l) The Company and each of its Subsidiaries has, and at the Closing Date
and the Option Closing Date, as applicable, will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations (collectively, "Governmental Licenses") necessary to
carry on its business as contemplated in the Prospectus, except for
the Governmental Licenses the absence of which would not have a
Material Adverse Effect, (ii) complied in all material respects with
all laws, regulations and orders applicable to it or its business,
including the Xxxxxxxx-Xxxxx Act, other than noncompliance that would
not, individually or in the aggregate, result in a Material Adverse
Effect, and (iii) performed all its obligations required to be
performed by it, and is not, and at the Closing Date and the Option
Closing Date, as applicable, will not be, in default, under any
indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other
agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its property is bound
or affected, other than defaults that would not,
8
individually or in the aggregate, result in a Material Adverse Effect.
To the knowledge of the Company and each of its Subsidiaries, except
as described in the Registration Statement and the Prospectus, no
other party under any material contract or other agreement to which it
is a party is in material default in any respect thereunder. Neither
the Company nor any of its Subsidiaries is, nor at the Closing Date or
the Option Closing Date, as applicable, will any of them be, in
violation of any provision of its certificate of incorporation,
by-laws or other organizational documents.
(m) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required
to be obtained by the Company in connection with the issuance of
shares of Common Stock upon conversion of shares of Series D Preferred
Stock by the Selling Stockholder, in connection with the transfer,
sale or delivery of the Shares by Parent or the Selling Stockholder,
in connection with the execution, delivery and performance of this
Agreement by the Company or in connection with the taking by the
Company of any action contemplated hereby, except such (i) as have
been obtained under the Act or the Rules and Regulations, (ii) as may
be required under state securities or Blue Sky laws or the by-laws and
rules of the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the purchase and distribution by the
Underwriters of the Shares (iii) that the failure to obtain would not
result in a Material Adverse Effect and (iv) as may have already been
obtained.
(n) The Company has full corporate power and authority to enter into this
Agreement and the Transaction Agreement dated as of August 4, 2003
among the Company, Parent and the Selling Stockholder (the
"Transaction Agreement") and to perform its obligations under this
Agreement and the Transaction Agreement. This Agreement and the
Transaction Agreement have been duly authorized, executed and
delivered by the Company and constitute legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with the terms hereof and thereof, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally
and general equitable principles and subject to any principles of
public policy limiting the rights to enforce any indemnification
provisions contained herein and therein. The performance of this
Agreement and the Transaction Agreement and the consummation of the
transactions contemplated hereby and thereby and the application of
the net proceeds from the offering and sale of the Shares in the
manner set forth in the Prospectus under "Use of Proceeds" will not
result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its
Subsidiaries pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration
of any obligation under, the certificate of incorporation or by-laws
of the Company or any of its Subsidiaries, any material contract or
other agreement to which the Company or any of its Subsidiaries is a
party or by which the Company or any of
9
its Subsidiaries or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute,
rule or regulation of any court or governmental agency or body
applicable to the business or properties of the Company or any of its
Subsidiaries.
(o) The Company and each of its Subsidiaries has good and valid title to
all properties and assets described in the Prospectus as owned by it,
free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Prospectus or would not have a
Material Adverse Effect. The Company and each of its Subsidiaries have
valid, subsisting and enforceable leases for the properties described
in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such
Subsidiaries.
(p) All legal or governmental proceedings, affiliate transactions,
contracts, licenses, agreements, leases or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required. All such contracts to
which the Company or any Subsidiary is a party have been duly
authorized, executed and delivered by the Company or such Subsidiary,
constitute valid and binding agreements of the Company or such
Subsidiary and are enforceable against the Company or such Subsidiary
in accordance with the terms thereof, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally
and general equitable principles and subject to any principles of
public policy limiting the rights to enforce any indemnification
provisions contained herein and therein.
(q) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by
this Agreement to be delivered to you was or will be, when made,
inaccurate, untrue or incorrect in any material respect. Any
certificate signed by any officer of the Company and delivered to you
or your counsel in connection with the offering of the Shares shall be
deemed a representation and warranty by the Company to you as to the
matters covered thereby.
(r) Neither the Company nor any of its Subsidiaries or any of their
respective directors, officers, affiliates or controlling persons has
taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result, under the Exchange Act or
otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares.
(s) No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the
Registration Statement or the consummation of the transactions
contemplated by this Agreement.
10
(t) The Shares have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(u) Except as disclosed in the Registration Statement and the Prospectus,
the Company and its Subsidiaries are in substantial compliance with
all federal, state and local employment and labor laws, including, but
not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees; no labor dispute with the employees of
the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent or threatened; and the Company is not aware of
any existing, imminent or threatened labor disturbance by the
employees of any of its principal suppliers, manufacturers or
contractors that could result in a Material Adverse Effect.
(v) The Company and its Subsidiaries own, or are licensed or otherwise
have the full exclusive right to use, all material trademarks, service
marks and trade names that are used in or necessary for the conduct of
their respective businesses as described in the Prospectus, except for
failures of ownership or use that would not cause a Material Adverse
Effect. To the knowledge of the Company, no claims have been asserted
by any person to the use of any such trademarks or trade names or
challenging or questioning the validity or effectiveness of any such
trademark or trade name. The use, in connection with the business and
operations of the Company and its Subsidiaries of such trademarks and
trade names does not, to the Company's knowledge, infringe on the
rights of any person.
(w) Neither the Company nor any of its Subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or any Subsidiary has
made any payment of funds of the Company or any Subsidiary or received
or retained any funds in violation of any law, rule or regulation or
of a character required to be disclosed in the Prospectus.
(x) All United States federal income tax returns of the Company and its
Subsidiaries required by law to be filed have been filed or extensions
have been granted, and all other franchise and income tax returns of
the Company and its Subsidiaries required to be filed pursuant to
applicable foreign, state or local law have been filed, and all taxes
shown by such returns or otherwise assessed, which are due and
payable, have been paid, except tax assessments, if any, as are being
contested in good faith and as to which adequate reserves have been
provided and taxes that are currently payable without penalty or
interest. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of any income and corporate
franchise tax liability for any years not finally determined are
adequate to meet any assessments or reassessments for additional
income or corporate franchise tax for any years not finally
determined.
(y) The Company and its Subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or imposing liability or standards of conduct concerning any Hazardous
Material (as hereinafter defined)
11
("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except as set forth in the Registration Statement and the Prospectus
and except where such noncompliance with Environmental Laws, failure
to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, individually or in the aggregate result in a
Material Adverse Effect. The term "Hazardous Material" means (A) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (B) any
"hazardous waste" as defined by the Resource Conservation and Recovery
Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl and (E) any pollutant or contaminant or
hazardous, dangerous, or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
(z) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, 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). Except as set forth in the Registration
Statement and the Prospectus there are no costs and liabilities
associated with or arising in connection with Environmental Laws as
currently in effect (including, without limitation, costs of
compliance therewith) which would, singly or in the aggregate have a
Material Adverse Effect.
(aa) Except as disclosed in the Registration Statement and the Prospectus,
neither the Company nor any of its Subsidiaries has received any
written communication, whether from a governmental authority,
citizens' group, employee or otherwise, asserting that the Company or
any of its Subsidiaries or any other person or entity for whom any of
them is or may be liable is not in compliance with any Environmental
Laws or permit or authorization required under applicable
Environmental Laws where such failure to comply would have a Material
Adverse Effect, and, to the knowledge of the Company, there are no
circumstances that may prevent or interfere with such full compliance
in the future, except where failure so to comply would not have a
Material Adverse Effect.
(bb) The Company has obtained for the benefit of the Underwriter the
agreement (a "Lock-Up Agreement"), of each of the Company's directors
and executive officers. The Company will not release or purport to
release any person from any Lock-Up Agreement without the prior
written consent of the Underwriter.
12
(cc) The Company and each of its Subsidiaries maintains insurance covering
its properties, operations, personnel and businesses as the Company
deems adequate. Such insurance insures against such losses and risks
to an extent which is adequate in accordance with customary industry
practice to protect the Company and its subsidiaries and their
businesses. All such insurance is outstanding and fully in force on
the date hereof and will be outstanding and fully in force on the
Closing Date and the Option Closing Date, as applicable. Except as
disclosed in the Registration Statement and the Prospectus, neither
the Company nor any of its Subsidiaries has sustained since the date
of the last financial statements included in the Prospectus any
material loss or interference with their respective 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.
(dd) With respect to each employee benefit plan, program and arrangement
(including, without limitation, any "employee benefit plan" as defined
in Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained or contributed to by the
Company, or with respect to which the Company could incur any
liability under ERISA (collectively, the "Benefit Plans"), no event
has occurred and, to the knowledge of the Company, there exists no
condition or set of circumstances, in connection with which the
Company could be subject to any liability under the terms of such
Benefit Plan, applicable law (including, without limitation, ERISA and
the Internal Revenue Code of 1986, as amended) or any applicable
agreement, in any such case, that could have a Material Adverse
Effect.
(ee) The statements in the Prospectus under the captions "Summary -- Recent
developments," "Our company -- Our business strategy" and "Westar's
ownership of our stock; transactions with Westar" (i) are within the
coverage of Rule 175(b) under the Act to the extent such statements
and data constitute forward-looking statements as defined in Rule
175(c) and (ii) were made by the Company with a reasonable basis and
reflect the Company's good faith estimate of the matters described
therein.
(ff) There are no business relationships or related-party transactions
involving the Company or any of its Subsidiaries or any other person
required to be described in the Registration Statement or the
Prospectus that have not been described as required.
(gg) There are no outstanding loans (except for immaterial loans related to
appliance purchases pursuant to a discontinued program under which no
new loans have been made since the enactment of the Xxxxxxxx-Xxxxx
Act), advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors of
the Company or any of the members of any of them.
13
(hh) Any statistical or market-related data included in the Prospectus are
based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written
consent to the use of such data from such sources to the extent
required.
(ii) The Company has not offered, or caused the Underwriter to offer,
Shares to any person with the specific intent to influence unlawfully
(i) a customer or supplier of the Company or any of its Subsidiaries
to alter the customer's or supplier's level or type of business with
the Company or any of its Subsidiaries or (ii) a trade journalist or
publication to write or publish favorable information about the
Company or any of the subsidiaries or any of their respective products
or services.
(jj) There is no broker, finder or other party that is entitled to receive
from the Company any brokerage or finder's fee or other fee or
commission as a result of the transactions contemplated by this
Agreement.
(kk) The Company is in substantial compliance with the applicable
provisions of the Xxxxxxxx-Xxxxx Act that are effective and is
actively taking steps to ensure that it will be in compliance with
other applicable provisions of the Xxxxxxxx-Xxxxx Act upon the
effectiveness of such provisions.
4. Representations and Warranties of Parent and the Selling Stockholder.
Parent and the Selling Stockholder jointly and severally represent and
warrant to the Company and the Underwriter that:
(a) All consents, approvals, authorizations and orders necessary for the
execution and delivery by Parent and the Selling Stockholder of this
Agreement, the Transaction Agreement and the Custody Agreement (the
"Custody Agreement") hereinafter referred to and for the sale and
delivery of the Shares to be sold by Parent or the Selling Stockholder
hereunder, have been obtained; and each of Parent and the Selling
Stockholder has full right, power and authority to enter into this
Agreement, the Transaction Agreement and the Custody Agreement and to
sell, assign, transfer and deliver the Shares to be sold by Parent or
the Selling Stockholder hereunder; this Agreement, the Transaction
Agreement and the Custody Agreement have each been duly authorized,
executed and delivered by Parent and the Selling Stockholder; and the
Transaction Agreement and the Custody Agreement constitute legal,
valid and binding obligations of each of Parent and the Selling
Stockholder, enforceable against each of Parent and the Selling
Stockholder in accordance with the terms hereof and thereof, subject
to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of
creditors generally and general equitable principles and subject to
any principles of public policy limiting the rights to enforce any
indemnification provisions contained herein and therein.
(b) As contemplated by the Transaction Agreement, certain of the Shares
will have been presented for conversion from shares of Series D
Preferred Stock into
14
shares of Common Stock in compliance with procedures set forth in the
Series D Preferred Stock Certificate of Designations, Powers,
Preferences and Relative, Participating, Optional or Other Rights and
the Qualifications, Limitations or Restrictions Thereof on or prior to
the Closing Date.
(c) The execution, delivery and performance by each of Parent and the
Selling Stockholder of this Agreement, the Transaction Agreement and
the Custody Agreement, the sale of the Shares to be sold by each of
Parent and the Selling Stockholder, and the consummation by each of
Parent and the Selling Stockholder of the transactions herein and
therein contemplated will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of Parent or the
Selling Stockholder pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which either
Parent or the Selling Stockholder is a party or by which either Parent
or the Selling Stockholder is bound or to which any of the property or
assets of either Parent or the Selling Stockholder is subject, (ii)
result in any violation of the provisions of the charter or by-laws of
Parent or the Selling Stockholder or (iii) result in the violation of
any law or statute or any judgment, order, rule or regulation of any
court or arbitrator or governmental or regulatory agency.
(d) After giving effect to the conversion of shares of the Series D
Preferred Stock into shares of Common Stock contemplated by the
Transaction Agreement, each of Parent and the Selling Stockholder has
good and valid title to the Shares to be sold by it hereunder at the
Closing Date or the Option Closing Date, as the case may be, free and
clear of all liens, encumbrances, equities or adverse claims; Parent
and the Selling Stockholder will have, immediately prior to the
Closing Date or the Option Closing Date, as the case may be, good and
valid title to the Shares to be sold by it at the Closing Date or the
Option Closing Date, as the case may be, free and clear of all liens,
encumbrances, equities or adverse claims; and, upon delivery of the
certificates representing such Shares and payment therefor pursuant
hereto, good and valid title to such Shares, free and clear of all
liens, encumbrances, equities or adverse claims (other than any
adverse claims of which the Underwriter has notice), will pass to the
Underwriter.
(e) Neither Parent nor the Selling Stockholder has taken, directly or
indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of
the price of the Common Stock.
(f) As of the applicable effective date of the Registration Statement and
any amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did not
and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and as of the
applicable filing date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date and as of the Option
Closing Date,
15
as the case may be, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall only apply to any statements or omissions made in
reliance upon and in conformity with information relating to Parent
and the Selling Stockholder furnished in writing to the Company by
Parent and the Selling Stockholder expressly for use therein.
(g) Within the preceding 180 days, neither Parent nor the Selling
Stockholder, nor any other person acting on behalf of Parent or the
Selling Stockholder (other than the Underwriter and the Company, as to
which the Selling Stockholder makes no representation), has offered or
sold to any person any Common Stock other than the Shares offered or
sold to the Underwriter hereunder.
(h) Neither Parent nor the Selling Stockholder have entered and neither of
them will enter into any contractual arrangement with respect to the
distribution of the Shares except for this Agreement, the Custody
Agreement, the Transaction Agreement, the Registration Rights
Agreement, dated as of January 9, 2003, by and among the Company,
Parent and the Selling Stockholder, and the Shareholder Agreement,
dated as of January 9, 2003, by and among the Company, Parent and the
Selling Stockholder.
(i) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required
in connection with the transfer, sale or delivery of the Shares by
Parent or the Selling Stockholder, in connection with the execution,
delivery and performance of this Agreement by Parent or the Selling
Stockholder or in connection with the taking by Parent or the Selling
Stockholder of any action contemplated hereby, except such (i) as have
been obtained under the Act or the Rules and Regulations, (ii) as may
be required under state securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and distribution by
the Underwriters of the Shares and (iii) as have been obtained from
the Kansas Corporation Commission.
(j) Each of Parent and the Selling Stockholder represents and warrants
that certificates in negotiable form representing (with respect to
those Shares that will be sold upon conversion of the Series D
Preferred Stock, upon such conversion), all of the Shares to be sold
by Parent or the Selling Stockholder hereunder have been placed in
custody under a Custody Agreement relating to such Shares, in the form
heretofore furnished to you, duly executed and delivered by Parent or
the Selling Stockholder to UMB Bank, n.a., as custodian (the
"Custodian").
(k) Each of Parent and the Selling Stockholder specifically agrees that
the Shares represented by the certificates held in custody for Parent
or the Selling Stockholder under the Custody Agreement, are subject to
the interests of the
16
Underwriter, and that the arrangements made by Parent and the Selling
Stockholder for such custody is to that extent irrevocable.
5. Agreements of the Company. The Company agrees with the Underwriter as
follows:
(a) The Company will not, during such period as the Prospectus is required
by law to be delivered in connection with sales of the Shares by an
Underwriter or a dealer (the "Prospectus Delivery Period"), file any
amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to
the Underwriter within a reasonable period of time prior to the filing
thereof and the Underwriter shall not have objected thereto in good
faith.
(b) The Company will notify the Underwriter promptly, and will confirm
such advice in writing, (i) when any post-effective amendment to the
Registration Statement becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement
or the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for
that purpose or the threat thereof, (iv) of the happening of any event
during the period mentioned in the second sentence of subsection (e)
that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus
in order to make the statements therein, in light of the circumstances
in which they are made, not misleading and (v) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the
Registration Statement, any preliminary prospectus or the Prospectus.
If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible moment. The Company will use its best efforts to
comply with the provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and to notify the Underwriter
promptly of all such filings.
(c) The Company has furnished, or will furnish, to the Underwriter,
without charge, two conformed copies of the Registration Statement and
of any post-effective amendment thereto, including financial
statements and schedules, and all exhibits thereto (including any
document filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus).
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time, the Company
will deliver to the Underwriter, without charge, as many copies of the
Prospectus or any amendment or supplement thereto as the Underwriter
may reasonably request.
17
The Company consents to the use of the Prospectus or any amendment or
supplement thereto by the Underwriter and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of
the Shares and during the Prospectus Delivery Period. If, during the
Prospectus Delivery Period any event shall occur that in the judgment
of the Company or counsel to the Underwriter should be set forth in
the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law,
the Company will forthwith prepare and duly file with the Commission
an appropriate supplement or amendment thereto, and will deliver to
the Underwriter, without charge, such number of copies thereof as the
Underwriter may reasonably request. The Company shall not file any
document under the Exchange Act before the termination of the offering
of the Shares by the Underwriter if such document would be deemed to
be incorporated by reference into the Prospectus and if such document
is not approved by the Underwriter after reasonable notice thereof.
(f) Prior to any public offering of the Shares by the Underwriter, the
Company will cooperate with the Underwriter and counsel to the
Underwriter in connection with the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
such jurisdictions as the Underwriter may request; provided, that in
no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
(g) During the period of two years commencing on the date of the Price
Determination Agreement, the Company will furnish to the Underwriter
copies of such financial statements and other periodic and special
reports as the Company may from time to time distribute generally to
the holders of any class of its capital stock, and will furnish to the
Underwriter a copy of each annual or other report it shall be required
to file with the Commission.
(h) The Company will make generally available to its security holders and
the Underwriter as soon as practicable an earning statement that
satisfies the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Commission promulgated thereunder covering a period of
at least twelve months beginning with the first fiscal quarter of the
Company occurring after the "effective date" (as defined in Rule 158)
of the Registration Statement.
(i) The Company will not at any time, directly or indirectly, take any
action intended, or that might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(j) The Company shall cause to be prepared and delivered, at its expense,
within one business day from the effective date of this Agreement, to
the
18
Underwriter an "electronic Prospectus" to be used by the Underwriter
in connection with the offering and sale of the Shares. As used
herein, the term "electronic Prospectus" means a form of Prospectus,
and any amendment or supplement thereto, that meets each of the
following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Underwriter, that may be transmitted
electronically by the Underwriter to offerees and purchasers of the
Shares for at least the Prospectus Delivery Period; (ii) it shall
disclose the same information as the paper Prospectus and Prospectus
filed pursuant to XXXXX, except to the extent that graphic and image
material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be
in or convertible into a paper format or an electronic format,
satisfactory to the Underwriter, that will allow investors to store
and have continuously ready access to the Prospectus at any future
time, without charge to investors (other than any fee charged for
subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to XXXXX or otherwise with the Commission
and in the Registration Statement at the time it was declared
effective an undertaking that, upon receipt of a request by an
investor or his or her representative within the Prospectus Delivery
Period, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Prospectus.
(k) During the 90-day period beginning on the date of this Agreement, the
Company will not without the prior written consent of the Underwriter
(which consent may be withheld at the sole discretion of the
Underwriter), directly or indirectly, sell, offer, contract or grant
any option to sell, pledge, transfer or establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or file with the
Commission a registration statement under the Act relating to, any
shares of Common Stock or securities convertible into or exchangeable
for any shares of Common Stock, or publicly disclose the intention to
make any such offer, sale, pledge, transfer, disposition or filing,
except for (i) issuances pursuant to employee or director compensation
plans existing on the date of this Agreement, including issuances
pursuant to the exercise of stock options outstanding on the date of
this Agreement, (ii) grants of employee or director stock options
pursuant to the terms of a plan in effect on the date of this
Agreement, (iii) issuances pursuant to the exercise of such employee
or director stock options, (iv) the filing of registration statements
on Form S-8 and amendments thereto in connection with such employee or
director stock options or the Company's employee stock purchase plans
in existence on the date of this Agreement, (v) issuances pursuant to
employee thrift plans or direct stock purchase or dividend
reinvestment plans in place on the date of this Agreement and (vi) the
issuance of shares of Common Stock or options in acquisitions in which
the acquiror of such shares or options agrees to the foregoing
restrictions.
19
(l) The Company has engaged and shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(m) The Company and its Subsidiaries will keep and maintain books, records
and accounts that accurately and fairly reflect, in reasonable detail,
transactions in and dispositions of the assets of the Company and its
Subsidiaries. The Company and each of its Subsidiaries will maintain
an adequate internal control structure, procedures for financial
reporting and a system of internal accounting control 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 the preparation of
the Company's consolidated financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for the assets of the Company and its Subsidiaries,
(iii) access to the assets of the Company and its Subsidiaries is
permitted only in accordance with management's general or specific
authorization and (iv) the recorded accounts of the assets of the
Company and its Subsidiaries are compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(n) The Company and its Subsidiaries will maintain such controls and other
procedures, including without limitation, those required by Sections
302 and 906 of the Xxxxxxxx-Xxxxx Act and the applicable regulations
thereunder, that are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission's rules and forms,
including, without limitation, controls and procedures designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is accumulated
and communicated to the Company's management, including its Chief
Executive Officer or officers and Principal Financial Officer or
officers, or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure and to ensure
that material information relating to the Company, including its
Subsidiaries, is made known to them by others within those entities,
particularly during the period in which such periodic reports are
being prepared.
(o) The Company and its Subsidiaries will take all such steps as may be
necessary to enable it to be in substantial compliance with all
effective applicable provisions of the Xxxxxxxx-Xxxxx Act.
6. Agreements of Parent and the Selling Stockholder. Each of Parent and the
Selling Stockholder agrees with the Underwriter as follows:
(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, Parent and the Selling
Stockholder will pay, or reimburse if paid by the Underwriter, all
costs and expenses incident to the performance of the obligations of
the Company, Parent or the Selling Stockholder under this Agreement,
including but not limited to costs and expenses
20
of or relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits to it, each preliminary
prospectus, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus (to the extent such costs are
incurred after the Effective Date), (ii) the preparation and delivery
of certificates representing the Shares, (iii) furnishing (including
costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus,
and all amendments and supplements thereto, as may be requested for
use in connection with the offering and sale of the Shares by the
Underwriter or by dealers to whom Shares may be sold, (iv) the listing
of the Shares on the New York Stock Exchange (to the extent such costs
are incurred after the Effective Date), (v) any filings required to be
made by the Underwriter with the NASD, and the reasonable fees,
disbursements and other charges of counsel to the Underwriter in
connection therewith, (vi) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of
such jurisdictions designated pursuant to Section 5(f), including the
reasonable fees, disbursements and other charges of counsel to the
Underwriter in connection therewith, and the preparation and printing
of preliminary, supplemental and final Blue Sky memoranda, provided
that such fees shall not exceed $5,000, (vii) counsel to the Company,
(viii) counsel to Parent and the Selling Stockholder, (ix) the
transfer agent for the Shares and (x) the Accountant.
(b) For a period of 90 days after the date of the initial public offering
of the Shares, neither Parent nor the Selling Stockholder will (i)
offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with
respect to the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common
Stock without the prior written consent of the Underwriter, in each
case other than the Shares to be sold by Parent or the Selling
Stockholder hereunder and the shares of Common Stock to be sold to the
Company by Parent or the Selling Stockholder pursuant to the
Transaction Agreement.
(c) Each of Parent and the Selling Stockholder will deliver to the
Underwriter prior to or at the Closing Date a properly completed and
executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by the Treasury Department
regulations in lieu thereof) in order to facilitate the Underwriter's
documentation of its compliance with the reporting and withholding
provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated.
21
7. Conditions of the Obligations of the Underwriter. In addition to the
execution and delivery of the Price Determination Agreement, the
obligations of the Underwriter hereunder are subject to the following
conditions:
(a) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or
Blue Sky laws of any jurisdiction shall be in effect and no proceeding
for such purpose shall be pending before or threatened or contemplated
by the Commission or the authorities of any such jurisdiction, (iii)
any request for additional information on the part of the staff of the
Commission or any such authorities shall have been complied with to
the satisfaction of the staff of the Commission or such authorities
and (iv) after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless
a copy thereof was first submitted to the Underwriter and the
Underwriter did not object thereto in good faith, and the Underwriter
will have received certificates, dated the Closing Date and the Option
Closing Date, as applicable, and signed by the Chief Executive
Officer, President or a Vice President of the Company and the Chief
Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to
the effect of clauses (i), (ii) and (iii).
(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus (excluding any amendment or
supplement dated after the date hereof) (i) there shall not have been
a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii)
neither the Company nor any of its Subsidiaries shall have sustained
any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree, which is not set forth in
the Registration Statement and the Prospectus, and in your judgment
makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriter in accordance with the terms
hereof and thereto.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus (excluding any amendment or
supplement dated after the date hereof), there shall have been no
litigation or other proceeding instituted against the Company or any
of its Subsidiaries or any of their respective officers or directors
in their capacities as such, before or by any federal, state or local
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or
22
proceeding an unfavorable ruling, decision or finding would materially
and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole.
(d) Each of the representations and warranties of the Company, Parent and
the Selling Stockholder contained herein shall be true and correct in
all material respects at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, as if made at the Closing
Date or the Option Closing Date, as the case may be, and all covenants
and agreements herein contained to be performed on the part of the
Company and all conditions herein contained to be fulfilled or
complied with by the Company at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date,
shall have been duly performed, fulfilled or complied with.
(e) The Underwriter will have received opinions, each dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel to the Underwriter, from
(i) Xxxxx & Xxxxxxx, counsel to the Company, to the effect set forth
in Exhibit B, (ii) Xxxxxxxx, Byrd, Richeson, Xxxxxxxx and Xxxxxxxx,
special Kansas counsel to the Company, and (iii) Xxxxxx & Xxxxxx,
special Texas counsel to the Company.
(f) The Underwriter will have received opinions, each dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel to the Underwriter, from
(i) Xxxxx Xxxx & Xxxxxxxx, counsel to Parent and the Selling
Stockholder, to the effect set forth in Exhibit C-1 and (ii) Xxxxx X.
Xxxxx, Vice President and General Counsel of Parent, to the effect set
forth in Exhibit C-2.
(g) The Underwriter will have received an opinion, dated the Closing Date
and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel to the Underwriter, from
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., special regulatory counsel to
Parent and the Selling Stockholder.
(h) The Underwriter will have received an opinion, dated the Closing Date
and the Option Closing Date, from Xxxxx Day, counsel to the
Underwriter, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in
all respects to the Underwriter.
(i) On the date of the Prospectus, the Accountant shall have furnished to
the Underwriter a letter, dated the date of its delivery, addressed to
the Underwriter and in form and substance satisfactory to the
Underwriter, containing statements and information of the type
ordinary include in accountant's "comfort letters" to underwriters,
delivered according to Statement of Accounting Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial and other statistical and
numerical information
23
contained or incorporated by reference in the Registration Statement
and the Prospectus. At the Closing Date and, as to the Option Shares,
the Option Closing Date, the Accountant shall have furnished to the
Underwriter a letter, dated the date of its delivery, which shall
confirm, on the basis of a review in accordance with the procedures
set forth in the letter from the Accountant, that nothing has come to
their attention during the period from the date of the letter referred
to in the prior sentence to a date (specified in the letter) not more
than three days prior to the Closing Date and the Option Closing Date
that would require any change in their letter dated the date of the
Prospectus, if it were required to be dated and delivered at the
Closing Date and the Option Closing Date.
(j) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Underwriter an accurate
certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer, President or a Vice President and the Chief
Financial Officer of the Company, in form and substance satisfactory
to the Underwriter, to the effect that:
(i) each signer of such certificate has reviewed the Registration
Statement and the Prospectus (including any documents filed under
the Exchange Act and deemed to be incorporated by reference into
the Prospectus) and (A) as of the date of such certificate, such
documents are true and correct in all material respects and do
not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not untrue
or misleading and (B) since the Effective Date, no event has
occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein
not untrue or misleading in any material respect and there has
been no document required to be filed under the Exchange Act and
the Exchange Act Rules and Regulations that upon such filing
would be deemed to be incorporated by reference into the
Prospectus that has not been so filed;
(ii) each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in
all material respects; and
(iii) each of the covenants required herein to be performed by the
Company on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein
required to be complied with by the Company on or prior to the
date of such certificate has been duly, timely and fully complied
with.
(k) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Underwriter accurate
certificates, dated the date of its delivery, signed by each of the
Chief Executive Officer, President or a Vice President and the Chief
Financial Officer of each of Parent and the Selling
24
Stockholder, in form and substance satisfactory to the Underwriter, to
the effect that:
(i) each of the representations and warranties of Parent and the
Selling Stockholder contained in this Agreement were, when
originally made, and are, at the time such certificate is
delivered, true and correct in all material respects; and
(ii) each of the covenants required herein to be performed by Parent
and the Selling Stockholder on or prior to the delivery of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by Parent or the
Selling Stockholder, as the case may be, on or prior to the date
of such certificate has been duly, timely and fully complied
with.
(l) On or prior to the Closing Date, the Underwriter will have received
executed Lock-Up Letter Agreements, in the form of Exhibit D hereto,
from the Company's directors and executive officers.
(m) The Shares will be qualified for sale in such states as the
Underwriter may reasonably request, each such qualification shall be
in effect and not subject to any stop order or other proceeding on the
Closing Date or the Option Closing Date.
(n) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date or the Option Closing Date, as the case may be,
there shall not have been any downgrading, nor any notice given of any
intended or potential downgrading or of a possible change that does
not indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Act.
(o) The Shares have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
(p) The Company shall have furnished to the Underwriter such certificates,
in addition to those specifically mentioned herein, as the Underwriter
may have reasonably requested as to the accuracy and completeness at
the Closing Date and the Option Closing Date of any statement in the
Registration Statement or the Prospectus or any documents filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus, as to the accuracy at the Closing Date and the Option
Closing Date of the representations and warranties of the Company
herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Underwriter.
If any condition specified in this Section 7 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Underwriter by
notice to the Company,
25
Parent and the Selling Stockholder at any time on or prior to the Closing Date
and, with respect to the Option Shares, at any time prior to the Option Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 5, Section 6, Section 8, Section 10 and
Section 12 shall at all times be effective and shall survive such termination.
8. Reimbursement of Underwriter's Expenses. If this Agreement is terminated by
the Underwriter pursuant to Section 7, Section 9 or Section 11, or if the
sale to the Underwriter of the Firm Shares on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company, Parent or the Selling Stockholder to perform any agreement herein
or to comply with any provision hereof, Parent and the Selling Stockholder
jointly and severally agree to reimburse the Underwriter upon demand for
all out-of-pocket expenses that shall have been reasonably incurred by the
Underwriter in connection with the proposed purchase and the offering and
sale of the Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and
telephone charges.
9. Effectiveness of this Agreement.
(a) This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) if
required, notification by the Commission to the Company, Parent, the
Selling Stockholder and the Underwriter of the effectiveness of the
Registration Statement under the Securities Act.
(b) Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (i) the Company,
Parent or the Selling Stockholder to the Underwriter, except that
Parent and the Selling Stockholder shall be obligated to reimburse the
expenses of the Underwriter pursuant to Sections 5, 6 and 8 hereof,
(ii) the Underwriter to the Company, Parent or the Selling Stockholder
or (iii) any party hereto to any other party, except that the
provisions of Section 10 shall at all times be effective and shall
survive such termination.
10. Indemnification.
(a) The Company will indemnify and hold harmless the Underwriter, the
directors, officers, employees and agents of the Underwriter and each
person, if any, who controls the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between
any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim
asserted), as and when incurred, to which the Underwriter, or any such
person, may become
26
subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, liabilities, expenses or damages arise out of or
are based on (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or in any
documents filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities laws
thereof or filed with the Commission, (ii) the omission or alleged
omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading
or (iii) any act or failure to act or any alleged act or failure to
act by the Underwriter in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent it is finally judicially
determined by a court of competent jurisdiction that such loss, claim,
liability, expense or damage resulted directly from any such acts or
failures to act undertaken or omitted to be taken by the Underwriter
through its gross negligence or willful misconduct); provided that the
Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the
public offering to any person by the Underwriter and is based on an
untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Company by the Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Company might otherwise have.
(b) Parent and the Selling Stockholder, jointly and severally, agree to
indemnify and hold harmless the Underwriter, its affiliates, directors
and officers and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees
and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary prospectus or
the Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, but only insofar as losses,
claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information relating to Parent or the
27
Selling Stockholder furnished in writing to the Company or the
Underwriter by Parent or the Selling Stockholder for use in the
Registration Statement or Prospectus and except insofar as such
losses, claims, damages or liabilities arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information
relating to the Underwriter furnished to the Company in writing by the
Underwriter expressly for use therein, it being understood and agreed
that the only such information furnished by the Underwriter consists
of the information described as such in subsection (c) below.
(c) The Underwriter agrees to indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director
of the Company and each officer of the Company who signs the
Registration Statement and Parent and the Selling Stockholder to the
same extent as the foregoing indemnity from the Company to the
Underwriter, but only insofar as losses, claims, liabilities, expenses
or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on
and in conformity with written information relating to the Underwriter
furnished in writing to the Company by the Underwriter expressly for
use in the Registration Statement or the Prospectus, it being
understood and agreed upon that the only such information furnished by
the Underwriter consists of the following information in the
Prospectus furnished on behalf of the Underwriter: the concession and
reallowance figures appearing in the fifth paragraph under the caption
"Underwriting" and the information contained in the thirteenth and
fourteenth paragraphs under the caption "Underwriting." This indemnity
agreement will be in addition to any liability that the Underwriter
may otherwise have; provided, however, that in no case will the
Underwriter be liable or responsible for any amount in excess of the
underwriting discounts and commissions received by the Underwriter.
(d) Any party that proposes to assert the right to be indemnified under
this Section 10 will, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim is to be
made against an indemnifying party or parties under this Section 10,
notify each such indemnifying party of the commencement of such
action, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party will not relieve it from any liability
that it may have to any indemnified party under the foregoing
provisions of this Section 10 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or
defenses by the indemnifying party. If any such action is brought
against any indemnified party and it notifies the indemnifying party
of its commencement, the indemnifying party will be entitled to
participate in and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party to assume the
defense of the action, with counsel satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified
party of its election to assume the
28
defense, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred
by the indemnified party in connection with the defense. The
indemnified party will have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (i) the
employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (ii) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying
party, (iii) a conflict or potential conflict exists (based on advice
of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of the
indemnified party) or (iv) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party shall
not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees, disbursements and other
charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action
or claim effected without its written consent (which consent will not
be unreasonably withheld). No indemnifying party shall, without the
prior written consent of each indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by
this Section 10 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this subsection (d), if at any
time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any
settlement effected without its written consent if (1) such settlement
is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (2) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (3) such indemnifying party
shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subsections
(a), (b) and (c) is applicable in accordance with its terms but for
any reason is held to be unavailable to an indemnified party
thereunder or insufficient in respect of any losses, claims,
29
liabilities, expenses and damages referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the total losses,
claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company, Parent or the Selling
Stockholder from persons other than the Underwriter, such as persons
who control the Company or Parent or the Selling Stockholder within
the meaning of the Act, officers of the Company who signed the
Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company (in the case of losses,
claims, liabilities, expenses and damages arising from the Company's
obligations under subsection (a)) or Parent or the Selling Stockholder
(in the case of losses, claims, liabilities, expenses and damages
arising from the obligations of Parent and the Selling Stockholder
under subsection (b)) on the one hand and the Underwriter on the other
may be subject in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriter on the other (in the case of losses, claims, liabilities,
expenses and damages arising under subsections (a) or (c)) or Parent
or the Selling Stockholder on the one hand and the Underwriter on the
other (in the case of losses, claims, liabilities, expenses and
damages arising under subsections (b) or (c)). If, but only if, the
allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of
the Company or Parent or the Selling Stockholder on the one hand and
the Underwriter on the other, with respect to the statements or
omissions that resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. The relative
benefits received by the Company or Parent or the Selling Stockholder
on the one hand and the Underwriter on the other shall be deemed to be
in the same respective proportions as the total net proceeds (before
deducting expenses) from the sale of the Shares and the total
underwriting discounts and commissions received by the Underwriter in
connection therewith, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate offering price of the
Shares. The relative fault of the Company (in the case of losses,
claims, liabilities, expenses and damages arising from the Company's
obligations under subsection (a)) or Parent or the Selling Stockholder
(in the case of losses, claims, liabilities, expenses and damages
arising from the obligations of Parent or the Selling Stockholder
under subsection (b)) on the one hand and the Underwriter on the other
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact related to information
supplied by the Company one the one hand or the Underwriter on the
other (in the case of losses, claims, liabilities, expenses and
damages arising under subsections (a) or (c)) or Parent or the Selling
Stockholder on the one hand and the Underwriter on the other (in the
case
30
of losses, claims, liabilities, expenses and damages arising under
subsections (b) or (c)), the relative intent of the parties and their
relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, Parent, the
Selling Stockholder and the Underwriter agree that it would not be
just and equitable if contributions pursuant to this subsection (e)
were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense
or damage, or action in respect thereof, referred to above in this
subsection (e) shall be deemed to include, for purpose of this
subsection (e), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (e), the Underwriter shall not be required to contribute
any amount in excess of the underwriting discounts and commissions
received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
will be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this subsection
(e), any person who controls a party to this Agreement within the
meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution
may be made under this subsection (e), will notify any such party or
parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have under this
subsection (e). Except for a settlement entered into pursuant to the
last sentence of subsection (d) hereof, no party will be liable for
contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld). In
no event shall the obligations of either Parent or the Selling
Stockholder under the foregoing contribution exceed the net proceeds
received by Parent or the Selling Stockholder, as the case may be,
from the sale of the Shares sold by it hereunder (which net proceeds
shall not include the Underwriter's discounts).
(f) The indemnity and contribution agreements contained in this Section 10
and the representations and warranties of the Company, Parent and the
Selling Stockholder contained in this Agreement shall remain operative
and in full force and effect regardless of (i) any investigation made
by or on behalf of the Underwriter, (ii) acceptance of the Shares and
payment therefor or (iii) any termination of this Agreement.
11. Termination. The obligations of the Underwriter under this Agreement may be
terminated at any time on or prior to the Closing Date (or, with respect to
the Option Shares, on or prior to the Option Closing Date), by notice from
the Underwriter to the Company, Parent and the Selling Stockholder if,
prior to delivery and payment for the
31
Shares (or the Option Shares, as the case may be), in the sole judgment of
the Underwriter, (a) there has been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective change,
which has had or is reasonably likely to have a Material Adverse Effect;
(b) trading in any of the equity securities of the Company shall have been
suspended by the Commission, the NASD or the New York Stock Exchange; (c)
trading in securities generally on the New York Stock Exchange or the
Nasdaq National Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange or
automated quotation system, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by the New York Stock Exchange
or The Nasdaq Stock Market or by order of the Commission or the NASD or any
court or other governmental authority; (d) a general banking moratorium
shall have been declared by federal or New York or Oklahoma state
authorities; (e) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any
change in the United States or international financial or securities
markets, or any substantial change or development involving a prospective
substantial change in national or international political, financial or
economic conditions, as in the judgment of the Underwriter is material and
adverse and makes it impractical or inadvisable to market the Shares in the
manner and on the terms described in the Prospectus or to enforce contracts
for the sale of securities; (f) any downgrading, or placement on any watch
list for possible downgrading, in the rating of the Company's debt
securities by any "nationally recognized statistical rating organization"
(as defined for purposes of Rule 436(g) under the Exchange Act); (g) the
taking of any action by any governmental body or agency in respect of its
monetary or fiscal affairs that in the judgment of the Underwriter has a
material adverse effect on the securities markets in the United States; or
(h) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment
of the Underwriter may interfere materially with the business and
operations of the Company regardless of whether of not such loss shall have
been insured. Any termination pursuant to this Section 11 shall be without
liability on the part of (i) the Company, Parent or the Selling Stockholder
to the Underwriter, except that Parent and the Selling Stockholder shall be
obligated to reimburse the expenses of the Underwriter pursuant to Sections
5, 6 and 8 hereof, (ii) the Underwriter to the Company, Parent or the
Selling Stockholder or (iii) of any party hereto to any other party except
that the provisions of Section 10 shall at all times be effective and shall
survive such termination.
12. Miscellaneous.
(a) Notice given pursuant to any of the provisions of this Agreement shall
be in writing and, unless otherwise specified, shall be mailed, hand
delivered or telecopied and confirmed (i) if to the Company, at the
office of the Company, 000 Xxxx Xxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000,
Facsimile: 000-000-0000, Attention: Chief Financial Officer, (ii) if
to Parent or the Selling Stockholder, Westar Energy Inc., 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000, Facsimile: 000-000-0000,
Attention: Chief Financial Officer, or (iii) if to the Underwriter, at
the offices of X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx
32
10172, Facsimile: 000-000-0000, Attention: Xxxxx X. Xxxxxx. Any such
notice shall be effective only upon receipt. Any notice under Section
11 may be made by telecopy or telephone, but if so made shall be
subsequently confirmed in writing.
(b) This Agreement has been and is made solely for the benefit of the
Underwriter, the Company, Parent and the Selling Stockholder and of
the controlling persons, directors and officers referred to in Section
10, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from the
Underwriter.
(c) All representations, warranties and agreements of the Company, Parent
and the Selling Stockholder contained herein or in certificates or
other instruments delivered pursuant hereto, shall remain operative
and in full force and effect regardless of any investigation made by
or on behalf of the Underwriter or any of its controlling persons and
shall survive delivery of and payment for the Shares hereunder.
(d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(e) 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 of such courts and personal service with
respect thereto. Each of the Company, Parent and the Selling
Stockholder hereby consents 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
indemnified party. Each of the Underwriter, the Company (on its behalf
and, to the extent permitted by applicable law, on behalf of all
indemnified parties and its and their stockholders and affiliates),
Parent and the Selling Stockholder waives 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 Company, Parent and the Selling
Stockholder agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be
conclusive and binding upon each of the Company, Parent and the
Selling Stockholder and may be enforced in any other courts in the
jurisdiction of which the Company, Parent or the Selling Stockholder
is or may be subject, by suit upon such judgment.
(f) This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
33
(g) In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
(h) The Company, Parent, the Selling Stockholder and the Underwriter each
hereby irrevocably waives any right they may have to a trial by jury
in respect of any claim based upon or arising out of this Agreement or
the transactions contemplated hereby.
(i) This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by
the Underwriter, Parent, the Selling Stockholder and the Company.
[The remainder of this page is intentionally left blank.]
34
Please confirm that the foregoing correctly sets forth the agreement
between the Company, Parent, the Selling Stockholder and the Underwriter.
Very truly yours,
ONEOK, INC.
By:
--------------------------------------
Name:
Title:
WESTAR ENERGY, INC.
By:
--------------------------------------
Name:
Title:
WESTAR INDUSTRIES, INC.
By:
--------------------------------------
Name:
Title:
Confirmed as of the date
first above mentioned:
X.X. XXXXXX SECURITIES INC.
By:
------------------------
Name:
Title:
35
SCHEDULE I
Number of Firm Shares
of Common Stock
Underwriter to be Purchased
----------- ---------------------
X.X. Xxxxxx Securities Inc. 9,500,000
---------
TOTAL 9,500,000
=========
I-1
SCHEDULE II
SUBSIDIARIES OF THE COMPANY
State of Company's
Incorporation Ownership
Subsidiary or Organization Percentage
---------- --------------- ----------
Mid Continent Market Center, Inc. Kansas 100.0%
Market Center Gathering, Inc. Kansas 100.0%
ONEOK Xxxxx Storage Company Delaware 100.0%
OkTex Pipeline Company Delaware 100.0%
ONEOK Gas Transportation, L.L.C. Oklahoma 100.0%
ONEOK Gas Storage Holdings, Inc. Delaware 100.0%
ONEOK Texas Gas Storage, L.P. Texas 100.0%
ONEOK WesTex Transmission, L.P. Delaware 100.0%
ONEOK Gas Storage, L.L.C. Oklahoma 100.0%
ONEOK Palo Duro Pipeline Company, Inc. Delaware 100.0%
ONEOK Energy Resources Company Delaware 100.0%
ONEOK Services Company Oklahoma 100.0%
ONEOK Technology Company Delaware 100.0%
ONEOK Energy Marketing and Trading Company, II Delaware 100.0%
Kansas Gas Marketing Company Kansas 100.0%
ONEOK Energy Marketing and Trading Company, L.P. Texas 100.0%
ONEOK Energy Marketing Holdings, Inc. Oklahoma 100.0%
ONEOK Energy Marketing Company Oklahoma 100.0%
ONEOK Leasing Company Delaware 100.0%
ONEOK Parking Company Delaware 100.0%
ONEOK Field Services Company Oklahoma 100.0%
ONEOK Bushton Processing, Inc. Delaware 100.0%
Blue Moon Holdings, L.L.C. Delaware 50.0%
ONEOK Field Services Holdings, Inc. Oklahoma 100.0%
ONEOK Texas Field Services, L.P. Texas 100.0%
ONEOK Field Services Transmission, L.L.C. Oklahoma 100.0%
ONEOK Gas Processing, L.L.C. Oklahoma 100.0%
ONEOK International, Inc. Delaware 100.0%
ALPHA Transmission Company Oklahoma 100.0%
Oklahoma Natural Energy Services Company Oklahoma 100.0%
ONEOK Gas Gathering, L.L.C. Oklahoma 100.0%
Potato Hills Gas Gathering System (general partnership) Oklahoma 50.0%
ONEOK Kansas Company Kansas 100.0%
Oasis Acquisition Corporation California 100.0%
Kansas Gas Service Company Kansas 100.0%
Sycamore Gas System (general partnership) Oklahoma 48.4%
Fox Plant, L.L.C. Delaware 50.0
II-1
State of Company's
Incorporation Ownership
Subsidiary or Organization Percentage
---------- --------------- ----------
ONEOK Midstream Gas Supply, L.L.C. Oklahoma 100.0%
ONEOK NGL Marketing, L.P. Texas 100.0%
Kansas Gas Supply Corporation Delaware 100.0%
ONEOK WesTex Gas Pipeline, Inc. Oklahoma 100.0%
ONEOK Texas Resources, Inc. Delaware 100.0%
TGS Rio, L.L.C. Delaware 100.0%
Subsidiaries Acquired from Southern Union
-----------------------------------------
Xxxxxxx Gas Services Inc. Delaware 100.0%
Norteno Pipeline Company Delaware 100.0%
ONEOK Transmission Company Delaware 100.0%
ONEOK International Investments, Inc. Delaware 100.0%
ONEOK Energy International, Inc. Delaware 100.0%
ONEOK Propane Company Delaware 100.0%
Energia Xxxxxxxx de Sur, S.A. de C.V. Mexico 100.0%
Compania Nacional de Gas S.A. de C.V. Mexico 43.29%
Construcciones, Instalaciones y Asesorias, S.A. de C.V. Mexico 43.29%
Gas Servicios Del Norte de Mexico S. De X.X. De C.V. Mexico 43.29%
Materiales y Aparatos, S.A. de C.V. Mexico 48.0%
Salart, S.A. de C.V. Mexico 42.02%
Servicios Corporativos Phenix, S.C. Mexico 43.29%
In addition to the interests of the Company in the Subsidiaries set forth above,
the Company also directly or indirectly holds various interests in oil and gas
xxxxx and related projects and holds various undivided interests in gasoline
plants and other facilities relating to the oil and gas business and holds
minority interests in various other entities and ventures.
In addition, the Company from time to time invests funds in short-term
marketable securities.
II-2
EXHIBIT A
ONEOK, INC.
PRICE DETERMINATION AGREEMENT
August , 2003
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated August _____, 2003
(the "Underwriting Agreement"), among ONEOK, Inc., an Oklahoma corporation (the
"Company"), Westar Industries, Inc. (the "Selling Stockholder"), a Delaware
corporation and a wholly-owned subsidiary of Westar Energy, Inc., a Kansas
corporation ("Parent"), Parent and you (the "Underwriter"). The Underwriting
Agreement provides for the purchase by the Underwriter from the Selling
Stockholder, subject to the terms and conditions set forth therein, of an
aggregate of 9,500,000 shares (the "Firm Shares") of the Company's common
stock, par value $0.01 per share, together with the associated preferred stock
purchase rights. This Agreement is the Price Determination Agreement referred to
in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned agrees
with the Underwriter as follows:
I. The initial public offering price per share for the Firm Shares
shall be $[ ].
II. The purchase price per share for the Firm Shares to be paid by the
Underwriter shall be $[ ] representing an amount equal to the initial
public offering price set forth above, less $[ ] per share.
The Company represents and warrants to the Underwriter that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
Each of Parent and the Selling Stockholder represents and warrants to the
Underwriter that the representations and warranties of Parent and the Selling
Stockholder set forth in Section 4 of the Underwriting Agreement are accurate as
though expressly made at and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I is a
completed list of the Underwriter, which shall be a part of this Agreement and
the Underwriting Agreement.
This Agreement shall be governed by the law of the State of New York.
A-1
If the foregoing is in accordance with your understanding of the agreement
among the Underwriter, Parent, the Selling Stockholder and the Company, please
sign and return to the Company a counterpart hereof, whereupon this instrument
along with all counterparts and together with the Underwriting Agreement shall
be a binding agreement among the Underwriter, Parent, the Selling Stockholder
and the Company in accordance with its terms and the terms of the Underwriting
Agreement.
Very truly yours,
ONEOK, INC.
By:
-----------------------------------
Name:
Title:
WESTAR ENERGY, INC.
By:
-----------------------------------
Name:
Title:
WESTAR INDUSTRIES, INC.
By:
-----------------------------------
Name:
Title:
Confirmed as of the date
first above mentioned:
X.X. XXXXXX SECURITIES INC.
By:
-------------------------
Name:
Title:
A-2
EXHIBIT B
Form of Opinion of
Counsel to the Company
1. The Company and each of its significant subsidiaries (as defined in Rule
1-02(w) of Regulation S-X of the Rules and Regulations) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has full power and authority to conduct
all the activities conducted by it, to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus, except in each case as would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Company is the direct or indirect sole record owner and, to such counsel's
knowledge, the sole beneficial owner of all of the capital stock, capital
interests or partnership interests of each of its Subsidiaries, except as
otherwise set forth on Schedule II to the Underwriting Agreement, dated as
of August ____, 2003 (together with the Price Determination Agreement
included therein as Exhibit A, the "Agreement").
2. All of the shares of Common Stock have been, and the Shares, when delivered
and paid for in accordance with the provisions of the Agreement, will be,
duly authorized, validly issued, fully paid and nonassessable and will not
be subject to (a) any preemptive right arising under the certificate of
incorporation, by-laws or other organizational document of the Company or
any significant subsidiary or the laws of the State of Oklahoma, (b)
co-sale right, (c) right of first refusal or (d) other similar right.
Except as described in the Registration Statement or the Prospectus or in
the documents incorporated therein by reference or in any thrift plan,
dividend reinvestment or direct stock purchase plan or any employee or
director compensation arrangements pursuant to a plan in effect on the date
of this opinion, to such counsel's knowledge, there is no commitment or
arrangement to issue, and there are no outstanding options, warrants or
other rights calling for the issuance of, any share of capital stock of the
Company or any Subsidiary to any person or any security or other instrument
that by its terms is convertible into, exercisable for or exchangeable for
capital stock of the Company.
3. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required to
be obtained by the Company in connection with (a) the
B-1
issuance of shares of Common Stock upon conversion of shares of Series D
Preferred Stock by the Selling Stockholder, (b) the transfer, sale or
delivery of the Shares by Parent or the Selling Stockholder, (c) the
execution, delivery and performance of the Agreement by the Company or (d)
the taking by the Company of any action contemplated thereby except such as
(1) have been obtained under the Act and the Rules and Regulations and (2)
may be required under state securities or "Blue Sky" laws or by the by-laws
and rules of the NASD in connection with the purchase and distribution by
the Underwriter of the Shares to be sold by the Company.
4. The authorized, issued and outstanding capital stock of the Company is as
set forth in the Registration Statement and the Prospectus. The form of
certificate used to evidence the Common Stock and filed as an Exhibit to
the Registration Statement is in due and proper form and complies with all
applicable statutory requirements.
5. All issued and outstanding shares of capital stock or other equity
interests of each significant subsidiary (as defined in Rule 1-02(w) of
Regulation S-X of the Rules and Regulations) of the Company have been duly
authorized and validly issued and, to such counsel's knowledge, have not
been issued in violation of or subject to (a) any preemptive right arising
under the certificate of incorporation, by-laws or other organizational
document of the Company or such significant subsidiary or the laws of the
State of Oklahoma, (b) co-sale right, (c) right of first refusal or (d)
other similar right. To such counsel's knowledge, all of the shares of
capital stock or other equity interests in the Subsidiaries reflected as
owned by the Company on Schedule II to the Agreement are owned by the
Company free and clear of any security interests, liens, encumbrances and
claims whatsoever.
6. The Registration Statement and the Prospectus (including any documents
incorporated by reference into the Prospectus, at the time they were filed)
comply or complied in all material respects as to form with the
requirements of the Act, the Rules and Regulations, the Exchange Act and
the Exchange Act Rules and Regulations (except that such counsel need not
express an opinion as to financial statements, schedules and other
financial data contained in the Registration Statement or the Prospectus or
incorporated by reference therein).
7. The information in the Registration Statement and the Prospectus under the
captions "Transaction Agreement with Westar" and
B-2
"Description of Capital Stock," insofar as such statements purport to
summarize the legal matters or documents referred to therein, present fair
summaries of such legal matters and documents.
8. To such counsel's knowledge, (a) any instrument, document, lease, license,
contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus
has been properly described or referred to therein, and (b) any Document
required to be filed as an exhibit to the Registration Statement has been
filed as an exhibit thereto or has been incorporated as an exhibit by
reference in the Registration Statement or Prospectus; and, to such
counsel's knowledge, no default exists in the due performance or observance
of any obligation, agreement, covenant or condition contained in any
Document filed or required to be filed as an exhibit to the Registration
Statement.
9. To such counsel's knowledge, no person or entity has the right to require
the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.
10. To such counsel's knowledge, the Company is not in violation of, or in
default with respect to, any law, rule, regulation, order, judgment or
decree, except as may be described in the Registration Statement and the
Prospectus (including the documents incorporated by reference therein) or
such as in the aggregate do not now have and would not reasonably be
expected to have a Material Adverse Effect.
11. All descriptions in the Prospectus of statutes, regulations or legal or
governmental proceedings are accurate and fairly present the information
required to be shown in all material respects.
12. The Company has full corporate power and authority to enter into the
Agreement and the Transaction Agreement, and the Agreement and the
Transaction Agreement have been duly authorized, executed and delivered by
the Company, are legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and remedies
of creditors generally and general equitable principles and subject to any
principles of public policy limiting the rights to enforce any
indemnification provisions contained therein.
B-3
13. The execution and delivery by the Company of, and the performance by the
Company of its agreements in, the Agreement and the Transaction Agreement
do not and will not (a) violate the certificate of incorporation or by-laws
of the Company, (b) breach or result in a default under, cause the time for
performance of any obligation to be accelerated under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company or any of its Subsidiaries pursuant to the terms of,
any indenture, mortgage, deed of trust, loan agreement, bond, debenture,
note agreement, capital lease or other evidence of indebtedness of which
such counsel has knowledge, (c) breach or result in a default under, cause
the time for performance of any obligation to be accelerated under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company or any of its assets pursuant to the
terms of, any (i) voting trust arrangement or any contract or other
agreement to which the Company is a party that restricts the ability of the
Company to issue securities of which such counsel has knowledge or (ii)
Document filed as an exhibit to, or incorporated as an exhibit by reference
in, the Registration Statement, (d) breach or otherwise violate any
existing obligation of the Company under any court or administrative order,
judgment or decree of which such counsel has knowledge or (e) violate
applicable provisions of any statute or regulation in the State of Oklahoma
or of the United States; except with respect to items (b), (c) and (d)
above, such conflicts, agreements, breaches, violations or defaults as
would not have a Material Adverse Effect.
14. The Company is not an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
15. The Shares have been duly authorized for listing on the New York Stock
Exchange upon official notice of issuance.
Such counsel hereby confirms to the Underwriter that such counsel has been
orally advised by the Commission that the Registration Statement has become
effective under the Act and that, to such counsel's knowledge, no order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted or is threatened, pending or
contemplated.
Such counsel hereby further confirms to the Underwriter that, to such
counsel's knowledge, there are no actions, suits, proceedings or investigations
pending or overtly threatened in writing against the Company or any of its
Subsidiaries, or any of their respective officers or directors in their
capacities as such, before or by any court, governmental agency or
B-4
arbitrator that (i) seek to challenge the legality or enforceability of the
Agreement or the Shares, (ii) except as set forth in the Registration Statement
or Prospectus or any documents incorporated by reference therein, seek to
challenge the legality or enforceability of any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iii) except as
set forth in the Registration Statement or Prospectus or any documents
incorporated by reference therein seek damages or other remedies with respect to
any of the Documents filed, or required to be filed, as exhibits to the
Registration Statement except as would not have a Material Adverse Effect, (iv)
except as set forth in or contemplated by the Registration Statement or the
Prospectus or any of the documents incorporated by reference into the
Registration Statement or the Prospectus, seek money damages in excess of 10% of
the current assets of the Company and its subsidiaries on a consolidated basis
or seek to impose criminal penalties upon the Company, any of its Subsidiaries
or any of their respective officers or directors in their capacities as such and
of which such counsel has knowledge, other than ordinary routine litigation
incidental to the Company's business, or (v) except as set forth in or
contemplated by the Registration Statement or the Prospectus or any of the
documents incorporated by reference into the Registration Statement or the
Prospectus, seek to enjoin any of the business activities of the Company or any
of its Subsidiaries or the transactions described in the Prospectus and of which
such counsel has knowledge.
Such counsel has participated in the preparation of the Registration
Statement and the Prospectus. From time to time in connection therewith such
counsel has had discussions with (i) officers and representatives of the
Company, (ii) representatives of KPMG LLP, the independent accountants who
examined certain of the financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
and the Prospectus, and (iii) the Underwriter's representatives and counsel
concerning the information contained in or incorporated by reference in the
Registration Statement and the Prospectus. Such counsel has not independently
verified and is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the information contained in or
incorporated by reference in the Registration Statement and the Prospectus
except to the extent set forth in paragraphs 4 and 7 above. Based solely upon
the participation and discussions described above, however, no facts have come
to such counsel's attention that cause such counsel to believe that the
Registration Statement and the Prospectus, when read collectively (except for
the following as to which such counsel is not called upon to express a view: (a)
financial statements, schedules and other financial data contained in the
Registration Statement or the Prospectus (or incorporated by reference therein)
and (b) the information referred to under the caption "Experts" as having been
included or incorporated by reference into the Registration Statement and the
Prospectus on the authority of KPMG LLP as experts), as of the date thereof or
as of the date hereof, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions of other counsel to the Company as to
matters governed by the laws of jurisdictions other than the United States and
the State of Oklahoma, and as to matters of fact, upon certificates of officers
of the Company and of government officials; provided that such
B-5
counsel shall state that in such counsel's opinion that such counsel and the
Underwriter are justified in relying on such opinions of other counsel. Copies
of all such opinions and certificates shall be furnished to counsel to the
Underwriter on the Closing Date. In connection with the transactions
contemplated by the Agreement and the Transaction Agreement, counsel shall not
be required to opine on, and may expressly exclude from its opinion, any matters
relating to the legal effect of the Public Utility Holding Company Act of 1935
or any related laws, rules or regulations on (1) the conversion of the shares of
Series D Preferred Stock to shares of Common Stock, or (2) the sale, transfer or
delivery of the Shares by the Selling Stockholder or Parent, or (3) the
ownership or other impact arising as a result of such conversion, sale, transfer
or delivery of the Shares. For purposes of paragraph 3 and 13(e) above, such
counsel has reviewed only those statutes, rules and regulations, including
regulatory rules and regulations, that in such counsel's experience are
applicable to transactions of the type contemplated by the Agreement or the
Indenture or for the offering, issuance, sale or delivery of the Shares. For
purposes of the foregoing opinion, the term "knowledge" shall mean the conscious
awareness of information by any Primary Lawyer, without undertaking any
investigation. The term "Primary Lawyer" shall mean each lawyer in such
counsel's Firm who gave substantive attention to representations of the Company
in connection with the transaction described in the Prospectus. Capitalized
terms used in such opinion but not defined shall have the meanings assigned to
them in the Agreement, except the term "Subsidiaries" shall not include any
subsidiaries listed on Schedule II to the Agreement as being organized under the
laws of Mexico ("Excluded Subsidiaries") and counsel shall not be required to
express any opinions regarding any Excluded Subsidiaries.
B-6
EXHIBIT C-1
Form of Opinion of Xxxxx Xxxx & Xxxxxxxx,
Counsel to Parent and the Selling Stockholder
1. The Underwriting Agreement has been duly authorized, executed and delivered
by the Selling Stockholder.
2. The Transaction Agreement has been duly authorized, executed and delivered
by the Selling Stockholder.
3. The Custody Agreement has been duly authorized, executed and delivered by
the Selling Stockholder and, assuming due authorization, execution and
delivery thereof by Parent, is a legal, valid and binding obligation of
each of Parent and the Selling Stockholder, enforceable against each of
Parent and the Selling Stockholder in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other laws affecting the rights and remedies of creditors
generally and general equitable principles and subject to any principles of
public policy limiting the rights to enforce any indemnification provisions
contained therein.
4. The sale of the Shares and the execution and delivery by the Selling
Stockholder of, and the performance by the Selling Stockholder of its
obligations under, the Underwriting Agreement and the Transaction
Agreement, and the consummation of the transactions contemplated therein,
have been duly authorized on the part of the Selling Stockholder; and no
consent, approval, authorization, order, registration or qualification
under United States federal securities laws is required for the sale of the
Shares or the consummation by Parent or the Selling Stockholder of the
transactions contemplated by the Underwriting Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
have been obtained under the Securities Act.
5. Upon payment for the Shares to be sold by Parent or the Selling Stockholder
as provided in the Underwriting Agreement, delivery of such Shares, as
directed by the Underwriter, to Cede or such other nominee as may be
designated by DTC, registration of such Shares in the name of Cede or such
other nominee and the crediting of such Shares on the books of DTC to
securities accounts of the Underwriter (assuming that neither DTC nor the
Underwriter has notice of any adverse claim (as such phrase is defined in
Section 8-105 of the UCC) to such Shares)), (A) DTC
C-1-1
shall be a "protected purchaser" of such Shares within the meaning of 8-303
of the UCC, (B) under Section 8-501 of the UCC, the Underwriter will
acquire a valid security entitlement in respect of such Shares and (C) no
action based on any "adverse claim" (as defined in Section 8-102 of the
UCC) to such Shares may be asserted against the Underwriter with respect to
such security entitlement (it being understood that for the purpose of this
opinion, such counsel may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in the name of
Cede or another nominee designated by DTC, in each case on the Company's
share registry in accordance wit its certificate of incorporation, bylaws
and applicable law, (y) DTC will be registered as a "clearing corporation"
within the meaning of Section 8-102 of the UCC and (z) appropriate entries
to the account(s) of the Underwriter on the records of DTC will have been
made pursuant to the UCC). The opinion of counsel described above shall be
rendered to the Underwriter at the request of Parent and the Selling
Stockholder and shall so state therein.
C-1-2
EXHIBIT C-2
Form of Opinion of Xxxxx X. Xxxxx,
Vice President and General Counsel of Parent and the Selling Stockholder
1. The Underwriting Agreement has been duly authorized, executed and delivered
by Parent.
2. The Transaction Agreement has been duly authorized, executed and delivered
by Parent and is a legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, receivership, moratorium
and other laws affecting the rights and remedies of creditors generally and
general equitable principles and subject to any principles of public policy
limiting the rights to enforce any indemnification provisions contained
therein.
3. The Custody Agreement has been duly authorized, executed and delivered by
Parent.
4. The sale of the Shares and the execution, delivery and performance by
Parent and the Selling Stockholder of, and the performance by Parent and
the Selling Stockholder of their respective obligations under, the
Underwriting Agreement and the Transaction Agreement, and the consummation
of the transactions contemplated therein, will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which Parent or the Selling Stockholder
is a party or by which Parent or the Selling Stockholder is bound or to
which any of the property or assets of Parent or the Selling Stockholder is
subject, nor will any such action result in any violation of any applicable
law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Parent or the Selling
Stockholder or any of their respective properties (other than under any
federal or state securities or Blue Sky laws as to which we express no
opinion), and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Shares or the consummation by Parent and the
Selling Stockholder of the transactions contemplated by the Underwriting
Agreement or the Transaction Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required under
the Securities Act or any applicable state securities or Blue
C-2-1
Sky laws in connection with the purchase and distribution of the Shares by
the Underwriter.
The opinion of counsel described above shall be rendered to the Underwriter at
the request of Parent and the Selling Stockholder and shall so state therein.
C-1-2
EXHIBIT D
LOCK-UP LETTER AGREEMENT
August , 2003
X.X. XXXXXX SECURITIES INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of
common stock, $0.01 par value per share (including the associated preferred
stock purchase rights, the "Common Stock"), of ONEOK, Inc., an Oklahoma
corporation (the "Company"). Westar Industries, Inc. (the "Selling
Stockholder"), a Delaware corporation and a wholly-owned subsidiary of Westar
Energy, Inc., a Kansas corporation ("Parent") proposes to sell [9,500,000] of
its shares of Common Stock (the "Offering"), for which you will act as the
underwriter. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit Parent and the Selling Stockholder. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company, Parent
and the Selling Stockholder with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, (and will cause any spouse or immediate family member of
the spouse or the undersigned living in the undersigned's household not to),
without the prior written consent of X.X. Xxxxxx Securities Inc. (which consent
may be withheld in their sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including, without limitation, any short
sale), pledge, transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934 or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock, currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934) by the undersigned (or such spouse or family member), or publicly announce
an intention to do any of the foregoing, for a period commencing on the date
hereof and continuing through the close of trading on the date 90 days after the
date of the final prospectus supplement relating to the Offering. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent or registrar, as applicable, against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
D-1
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of 1933 of any Common
Stock owned either of record or beneficially by the undersigned, including any
rights to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives, and assigns of the
undersigned.
------------------------------------
Printed Name of Holder
By:
--------------------------------
Signature
------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
D-2
