EXHIBIT 1.1
Western Gas Resources, Inc.
10% Senior Subordinated Notes due 2009
guarancteed as to the payment of principal, premium,
if any, and interest by
Xxxxx Oil & Gas Company, Inc.,
MIGC, Inc.,
Mountain Gas Resources, Inc.,
Pinnacle Gas Treating, Inc.
Western Gas Resources - Texas, Inc.,
Western Gas Resources - Oklahoma, Inc., and
Western Gas Wyoming, L.L.C.
_____________
Purchase Agreement
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June 10, 1999
Xxxxxxx, Xxxxx & Co.,
Banc of America Securities LLC,
Prudential Securities Incorporated
XX Xxxxx Securities Corporation,
Xxxxxx Xxxxxxx & Co., Inc.
As representatives of the several Purchasers
named in Schedule I hereto,
c/x Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Western Gas Resources, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$155,000,000 principal amount of the Notes specified above (the "Notes"). The
Notes will be unconditionally guaranteed as to the payment of principal,
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premium, if any, and interest (collectively, the "Guarantees") by Xxxxx Oil &
Gas Company, Inc., a Delaware corporation, MIGC, Inc., a Delaware corporation,
Mountain Gas Resources, Inc., a Delaware corporation, Pinnacle Gas Treating,
Inc., a Texas corporation, Western Gas Resources - Texas, Inc., a Texas
corporation, Western Gas Resources - Oklahoma, Inc., a Delaware corporation, and
Western Gas Wyoming, L.L.C., a Wyoming limited liability company (collectively,
the "Guarantors"). The Notes and the Guarantees are hereinafter collectively
called the "Securities".
1. Each of the Company and the Guarantors, jointly and severally,
represents and warrants to, and agrees with, each of the Purchasers that:
(a) A preliminary offering circular, dated May 25, 1999 (the
"Preliminary Offering Circular") and an offering circular, dated June 10,
1999 (the "Offering Circular"), in each case including the international
supplement thereto, have been prepared in connection with the offering of
the Securities. Any reference to the Preliminary Offering Circular or the
Offering Circular shall be deemed to refer to and include the Company's
most recent Annual Report on Form 10-K and all subsequent documents filed
with the United States Securities and Exchange Commission (the
"Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act"), on
or prior to the date of the Preliminary Offering Circular or the Offering
Circular, as the case may be, and any reference to the Preliminary Offering
Circular or the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act after the date of the Preliminary Offering
Circular or the Offering Circular, as the case may be, and prior to such
specified date and (ii) any Additional Issuer Information (as defined in
Section 5(f)) furnished by the Company prior to the completion of the
distribution of the Securities and all documents filed under the Exchange
Act and so deemed to be included in the Preliminary Offering Circular or
the Offering Circular, as the case may be, or any amendment or supplement
thereto are hereinafter called the "Exchange Act Reports". The Exchange Act
Reports, when they were or are filed with the Commission, conformed or will
conform in all material respects to the applicable requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder. The Preliminary Offering Circular, the Offering Circular and
any amendments or supplements thereto and the Exchange Act Reports did not
and will not, as of their respective dates, contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by a Purchaser through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(b) Neither the Company, the Guarantors nor any of their respective
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Offering Circular
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular; and, since the
respective dates as of which information is given in the Offering Circular,
there has not been any change in the capital stock or
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long-term debt of the Company, the Guarantors or any of their respective
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
management, financial position, stockholders' equity or results of
operations of the Company, the Guarantors or any of their respective
subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Offering Circular;
(c) Each of the Company, the Guarantors and their respective
subsidiaries has good and defensible title to all its material properties
and assets, in each case free and clear of all liens, encumbrances and
defects except that (i) with regard to easements and rights-of-way relating
to gathering systems of each of the Company, the Guarantors and their
respective subsidiaries, as the case may be, there exist no liens,
encumbrances and defects that a reasonable and prudent operator in the gas
processing business would consider to be a material impairment of title and
each of the Company, the Guarantors and their respective subsidiaries, as
the case may be, have such title as is reasonably necessary to permit the
use and enjoyment of such gathering systems and (ii) no representation or
warranty is made with respect to any oil, gas or mineral property or
interest to which no proved oil or gas reserves are properly attributed;
(d) Each of the Company and the Guarantors has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction; and each subsidiary of the Company and the Guarantors
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, except, where
the failure to be so qualified or, where applicable, in good standing,
would not have a material adverse effect on the business, consolidated
financial position, stockholders' equity or results of operations of the
Company, the Guarantors and their respective subsidiaries taken as a whole
(a "Material Adverse Effect");
(e) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company and the Guarantors have been duly and validly authorized and issued
and are fully paid and non-assessable; and all of the issued shares of
capital stock of each subsidiary of the Company and the Guarantors have
been duly and validly authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying shares) are owned directly
or indirectly by the Company or the Guarantors, as the case may be, free
and clear of all liens, encumbrances, equities or claims;
(f) The Notes have been duly authorized and, when issued and
delivered as provided herein, will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
indenture to be dated as of June 15, 1999 (the "Indenture") among the
Company, the Guarantors and Chase Bank of Texas, National Association, as
Trustee (the "Trustee"), under which they are to be issued, which will be
substantially in the form previously delivered to you;
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the Guarantees have been duly authorized and, upon the due authorization,
issuance and delivery of the related Notes and the due endorsement of the
Guarantees thereon, will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding obligations of the
Guarantors entitled to the benefits provided by the Indenture; the
Indenture and the Exchange and Registration Rights Agreement, dated as of
the date hereof, among the Company, the Guarantors and the Purchasers (the
"Registration Rights Agreement") have each been duly authorized and, when
executed and delivered by the Company, the Guarantors and the Trustee (in
the case of the Indenture) and the Purchasers (in the case of the
Registration Rights Agreement), will constitute valid and legally binding
instruments, enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Securities, the Indenture and the
Registration Agreement will conform to the descriptions thereof in the
Offering Circular;
(g) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities,
the Indenture and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company, the Guarantors or any
of their respective subsidiaries is a party or by which the Company, the
Guarantors or any of their respective subsidiaries is bound or to which any
of the property or assets of the Company, the Guarantors or any of their
respective subsidiaries is subject, except for such conflicts, breaches,
violations or defaults which, individually or in the aggregate, would not
have a Material Adverse Effect, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company, the Guarantors or any of their respective subsidiaries or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, the Guarantors or any
of their respective subsidiaries or any of their respective properties; and
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the issue and sale of the Securities or the consummation by the Company or
the Guarantors of the transactions contemplated by this Agreement or the
Indenture, except for the filing of a registration statement by the Company
with the Commission pursuant to United States Securities Act of 1933, as
amended (the "Act"), pursuant to Section 5(l) hereof and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Purchasers;
(h) Neither the Company, the Guarantors nor any of their respective
subsidiaries is in violation of its Certificate of Incorporation or By-laws
(or other organizational documents) or in default in the performance or
observance of any material obligation, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, except where such violation or default would not
result in a Material Adverse Effect;
(i) The statements set forth in the Offering Circular under the
caption "Description of Notes," insofar as they purport to constitute a
summary of the terms of the Securities, under
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the caption "Certain United States Federal Income Tax Consequences" insofar
as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(j) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company, the
Guarantors or any of their respective subsidiaries is a party or of which
any of their properties is the subject which, if determined adversely to
the Company, the Guarantors or any of their respective subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect; and, to
the best of the Company's and the Guarantors' knowledge, no such
proceedings are threatened by governmental authorities or others;
(k) Neither the Company nor the Guarantors are or, after giving
effect to the offering and sale of the Securities, will be an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(l) Neither the Company, the Guarantors nor any of their affiliates
does business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
(m) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, the Guarantors and their respective
subsidiaries, are independent public accountants as required by the Act and
the rules and regulations of the Commission thereunder;
(n) The Company has reviewed its operations and that of its
subsidiaries and any third parties with which the Company or any of its
subsidiaries has a material relationship to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries will
be affected by the Year 2000 Problem. As a result of such review, the
Company has no reason to believe, and does not believe, that the Year 2000
Problem will have a material adverse effect on the business, consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, or result in any material
loss or interference with the Company's business or operations. The "Year
2000 Problem" as used herein means any significant risk that computer
hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of
data or in the operation of mechanical or electrical systems of any kind
will not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000.
(o) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(p) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to
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cause or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the Securities;
(q) When the Securities are issued and delivered as provided in this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the Act) as securities which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system;
(r) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(s) Neither the Company, the Guarantors, nor any person acting on its
or their behalf (other than the Purchasers, with respect to whom no
representation or warranty is made) has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning
of Rule 502(c) under the Act or, with respect to Securities sold outside
the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of Rule
902 under the Act and the Company, the Guarantors, any affiliate of the
Company and any person acting on its or their behalf (other than the
Purchasers, with respect to whom no representation or warranty is made) has
complied with and will implement the "offering restriction" within the
meaning of such Rule 902;
(t) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company (other than the Purchasers,
with respect to whom no representation or warranty is made) has offered or
sold to any person any Securities, or any securities of the same or a
similar class as the Securities, other than Securities offered or sold to
the Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the Act)
of any Securities or any substantially similar security issued by the
Company, within six months subsequent to the date on which the distribution
of the Securities has been completed (as notified to the Company by
Xxxxxxx, Xxxxx & Co.), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of the
Securities in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the
Act;
(u) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries and the related notes thereto
included in the Offering Circular present fairly in all material respects
the financial position of the Company and its consolidated subsidiaries and
the results of operations and changes in financial condition as of the
dates and periods therein specified. Such financial statements and
schedules have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
(except as otherwise noted therein). The pro forma consolidated financial
statements of the Company and its consolidated subsidiaries and the related
notes thereto included in the Offering Circular have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein. The selected
consolidated financial and
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operating data set forth under the caption "Selected Consolidated Financial
and Operating Data" in the Offering Circular present fairly in all material
respects, on the basis stated in the Offering Circular, the information
included therein. The other financial, engineering and statistical
information and data set forth in, or incorporated by reference into, the
Offering Circular is accurately presented and, to the extent such
information and data is derived from the financial books and records of the
Company, is prepared on a basis consistent with such financial statements
and the books and records of the Company. The Company has complied with
Industry Guide 2 promulgated under the Act to the extent required.
(v) No labor dispute with the employees of the Company, the
Guarantors or any of their respective subsidiaries exists or, to the
knowledge of the Company, is threatened that would result in a Material
Adverse Effect.
(w) The Company, the Guarantors and each of their respective
subsidiaries are insured by insurers of recognized financial responsibility
against such material losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; and neither the
Company, the Guarantors nor any of their respective subsidiaries has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not result in a Material Adverse Effect;
(x) No subsidiary of the Company 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,
except as described in or contemplated by the Offering Circular;
(y) The Company, the Guarantors and their respective subsidiaries
possess, and are in compliance with, all certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities required to conduct their respective businesses except for
those the failure of which to possess or be in compliance with,
individually or in the aggregate, would not have a Material Adverse Effect,
and neither the Company, the Guarantors nor any of their respective
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorizing or permit
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect;
(z) The Company and the Guarantors have filed all foreign, federal,
state and local tax returns that are required to be filed through the date
hereof or have requested extensions thereof and have paid all taxes (other
than immaterial amounts of franchise taxes with respect to immaterial
subsidiaries and immaterial amounts of severance taxes) required to be paid
by them and any other assessment, fine or penalty levied against them, to
the extent that any of the foregoing is due and payable, except for any
such assessment, fine or penalty that is currently being contested in good
faith or as described in or contemplated by the Offering Circular;
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(aa) Neither the Company, the Guarantors nor any of their respective
subsidiaries is in violation of any federal or state law or regulation,
rule or order relating to occupational safety and health or to the use,
storage, handling, disposal or transportation of hazardous or toxic
materials or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would, individually or in the
aggregate, have a Material Adverse Effect; and the Company and the
Guarantors are not aware of any pending investigation which might lead to
such a claim; and
(bb) The Company, the Guarantors and each of their respective
subsidiaries own, possess or license adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "intellectual
property rights") necessary to conduct the business now operated by them,
or presently employed by them, and have not received any notice of
termination of any license or notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights
that, if determined adversely to the Company, the Guarantors or any of
their respective subsidiaries would, individually or in the aggregate, have
a Material Adverse Effect.
2. Subject to the terms and conditions herein set forth, the Company and
the Guarantors agree to issue and the Company agrees to sell to each of the
Purchasers, and each of the Purchasers agrees, severally and not jointly, to
purchase from the Company, at a purchase price of 99.225% of the principal
amount thereof, plus accrued interest, if any, from June 15, 1999 to the Time of
Delivery (as defined in paragraph 4) hereunder, the principal amount of
Securities set forth opposite the name of such Purchaser in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company and the
Guarantors that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within
the meaning of Rule 144A under the Act in transactions meeting the
requirements of Rule 144A or (ii) upon the terms and conditions set forth
in Annex I to this Agreement;
(b) It is an accredited investor within the meaning of Rule 501 under
the Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
4. (a) Except as set forth in the next paragraph, the Securities to be
purchased by each Purchaser hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by
or on behalf of the Company with The Depository Trust
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Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Purchaser,
against payment by or on behalf of such Purchaser of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company to Xxxxxxx, Xxxxx & Co. at least forty-eight hours
in advance, by causing DTC to credit the Securities to the account of
Xxxxxxx, Xxxxx & Co. at DTC. The Company will cause the certificates
representing the Securities to be made available to Xxxxxxx, Xxxxx & Co.
for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on June 15, 1999 or such other time and
date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing.
Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by
the Purchasers pursuant to Section 7(k) hereof, will be delivered at the
offices of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000 (the "Closing Location"), and the Securities will be delivered
at the Designated Office, all at the Time of Delivery. A meeting will be
held at the Closing Location at 2:00 p.m., Dallas, Texas time, on the New
York Business Day next preceding the Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. Each of the Company and the Guarantors, jointly and severally, agrees
with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to
make no amendment or any supplement to the Offering Circular which shall be
disapproved by you promptly after reasonable notice thereof; and to furnish
you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
neither the Company nor any Guarantor shall be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish the Purchasers with such number of copies of the
Offering Circular and each amendment or supplement thereto with the
independent accountants' report(s) in the Offering Circular, and any
amendment or supplement containing amendments to the financial statements
covered by such report(s), signed by the accountants, in such quantities as
you may from time to time reasonably request, and if, at any time prior to
the expiration of nine
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months after the date of the Offering Circular, any event shall have
occurred as a result of which the Offering Circular as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend
or supplement the Offering Circular, to notify you and upon your request to
prepare and furnish without charge to each Purchaser and to any dealer in
securities as many copies as you may from time to time reasonably request
of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date six months after the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that are substantially similar to the Securities;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act, for the benefit of holders from time to time of
Securities, to furnish at its expense, upon request, to holders of
Securities and prospective purchasers of securities information (the
"Additional Issuer Information") satisfying the requirements of subsection
(d)(4)(i) of Rule 144A under the Act;
(g) If requested by you, to use its best efforts to cause the
Securities to be eligible for the PORTAL trading system of the National
Association of Securities Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after the
Time of Delivery, five copies of a notice on Form D under the Act (one of
which will be manually signed by a person duly authorized by the Company);
to otherwise comply with the requirements of Rule 503 under the Act; and to
furnish promptly to you evidence of each such required timely filing
(including a copy thereof);
(i) To make generally available to the holders of the Securities as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity
and cash flows of the Company and its consolidated subsidiaries certified
by independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning with
the fiscal quarter ending after the date of the Offering Circular), to make
generally available to its holders of the Securities consolidated summary
financial information of the Company and its subsidiaries for such quarter
in reasonable detail;
(j) During a period of five years from the date of the Offering
Circular, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders
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of the Company, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with
the Commission or any securities exchange on which the Securities or any
class of securities of the Company are listed; and (ii) such additional
information concerning the business and financial condition of the Company
as you may from time to time reasonably request (such financial statements
to be on a consolidated basis to the extent the accounts of the Company and
its subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission); and
(k) During the period of two years after the Time of Delivery, not
to, and not to permit any of its "affiliates" (as defined in Rule 144 under
the Act) to, resell any of the Securities which constitute "restricted
securities" under Rule 144 that have been reacquired by any of them.
6. Each of the Company and the Guarantors, jointly and severally,
covenants and agrees with the several Purchasers that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of
their counsel and accountants in connection with the issue of and all other
expenses in connection with the preparation and printing of the Preliminary
Offering Circular and the Offering Circular and any amendments and supplements
thereto and the mailing and delivering of copies thereof to the Purchasers and
dealers; (ii) the cost of printing or producing any Agreement among Purchasers,
this Agreement, the Indenture, the Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Purchasers in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the cost of preparing the Securities; (vi) the fees
and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities; (vii) any cost incurred in connection with the designation of
the Securities for trading in PORTAL; and (viii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, and Sections 8 and 11 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and the Guarantors herein are, at and as of the Time
of Delivery, true and correct, the condition that each of the Company and the
Guarantors shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) Xxxxxx & Xxxxxx L.L.P., counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iii), (iv), (v),
(xi) and (xii) of Exhibit B below as well as such other related matters as
---------
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
11
(b) Xxxx X. Xxxxxx, general counsel for the Company and the
Guarantors, shall have furnished to you his written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, in substantially
the form attached hereto as Exhibit A and such counsel shall have received
---------
such papers and information as he may reasonably request to enable him to
pass upon such matters;
(c) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Company
and the Guarantors incorporated under the laws of the State of Delaware,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, in substantially the
form attached hereto as Exhibit B, and such counsel shall have received
---------
such papers and information as they may reasonably request to enable them
to pass upon such matters;
(d) Xxxxxxx & Xxxxx, L.L.P., special Texas counsel to Pinnacle Gas
Treating, Inc. and Western Gas Resources - Texas, Inc., shall have
furnished to you their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, in substantially the form attached
hereto as Exhibit C, and such counsel shall have received such papers and
---------
information as they may reasonably request to enable them to pass upon such
matters.
(e) Holland & Xxxx, special Wyoming counsel to Western Gas Wyoming,
L.L.C., shall have furnished to you their written opinion, dated the Time
of Delivery, in form and substance satisfactory to you, in substantially
the form attached hereto as Exhibit D, and such counsel shall have received
---------
such papers and information as they may reasonably request to enable them
to pass upon such matters.
(f) On the date of the Offering Circular at a time prior to the
execution of this Agreement and also at the Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II hereto;
(g) (i) Neither the Company, the Guarantors nor any of their
respective subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Offering Circular any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Offering Circular, and (ii) since the respective
dates as of which information is given in the Offering Circular there shall
not have been any change in the capital stock or long-term debt of the
Company, the Guarantors or any of their respective subsidiaries or any
change, or any development involving a prospective change, in or affecting
the business, management, financial position, stockholders' equity or
results of operations of the Company, the Guarantors or any of their
respective subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Circular, the effect of which, in any such
case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering
Circular;
12
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities other than the negative outlook with
respect to the Company reaffirmed by Standard & Poor's on May 26, 1999;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; (iv) the outbreak
or escalation of hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the effect of any
such event specified in this clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in the
manner contemplated in the Offering Circular; or (v) the occurrence of any
material adverse change in the existing financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Representatives, would materially and adversely affect the financial
markets or the markets for the Securities and other debt securities;
(j) The Securities shall have been designated for trading on PORTAL;
(k) The Company and the Guarantors shall have furnished or caused to
be furnished to you at the Time of Delivery certificates of officers of the
Company and the Guarantors satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Guarantors herein at
and as of such Time of Delivery, as to the performance by the Company and
the Guarantors of all of their obligations hereunder to be performed at or
prior to such Time of Delivery, as to the matters set forth in subsections
(e) and (f) of this Section and as to such other matters as you may
reasonably request;
(l) The Company and the Guarantors shall have furnished to you at the
Time of Delivery an executed original of the Registration Rights Agreement;
and
(m) The lenders under the Senior Debt Agreements shall not have
revoked or modified their consents to the offering of the Securities and
the terms of the Indenture.
8. (a) The Company and the Guarantors, jointly and severally, will
indemnify and hold harmless each Purchaser against any losses, claims,
damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not
13
misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the Company nor the Guarantors
shall be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Preliminary Offering Circular, or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through Xxxxxxx,
Xxxxx & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company and
the Guarantors against any losses, claims, damages or liabilities to which
the Company or the Guarantors may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Circular, the Offering Circular or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Offering Circular, or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Purchaser through Xxxxxxx,
Xxxxx & Co. expressly for use therein; and will reimburse the Company and
the Guarantors for any legal or other expenses reasonably incurred by the
Company and the Guarantors in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify such
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to
such action or claim) unless such settlement, compromise or
14
judgment (i) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Guarantors on the one
hand and the Purchasers on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law or if the indemnified party failed to
give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the
Guarantors on the one hand and the Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company and the Guarantors on the one hand and the Purchasers on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company and the Guarantors bear to the total underwriting discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Guarantors on the one
hand or the Purchasers on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Guarantors and the Purchasers
agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Purchasers' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
15
(e) The obligations of the Company and the Guarantors under this
Section 8 shall be in addition to any liability which the Company or the
Guarantors may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Act; and the obligations of the Purchasers under this
Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or the Guarantors
and to each person, if any, who controls the Company or the Guarantors
within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours
after such default by any Purchaser you do not arrange for the purchase of
such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, you notify the
Company that you have so arranged for the purchase of such Securities, or
the Company notifies you that it has so arranged for the purchase of such
Securities, you or the Company shall have the right to postpone the Time of
Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Offering Circular, or
in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement
shall include any person substituted under this Section with like effect as
if such person had originally been a party to this Agreement with respect
to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company
as provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall
have the right to require each non-defaulting Purchaser to purchase the
principal amount of Securities which such Purchaser agreed to purchase
hereunder and, in addition, to require each non-defaulting Purchaser to
purchase its pro rata share (based on the principal amount of Securities
which such Purchaser agreed to purchase hereunder) of the Securities of
such defaulting Purchaser or Purchasers for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Purchaser from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company
as provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not
exercise the right described in subsection (b) above to require non-
defaulting Purchasers to purchase Securities of a defaulting Purchaser or
Purchasers, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Purchaser, the Company or the
Guarantors, except for the expenses to be borne by the Company, the
Guarantor and the Purchasers as provided in Section 6 hereof and the
indemnity and contribution agreements
16
in Section 8 hereof; but nothing herein shall relieve a defaulting
Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Guarantors and the several Purchasers set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, the
Guarantors or any officer or director or controlling person of the Company or
the Guarantors, and shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Guarantors shall then be under any liability to any
Purchaser except as provided in Sections 6 and 8 hereof; but, if for any other
reason, the Securities are not delivered by or on behalf of the Company as
provided herein, the Company and the Guarantors, jointly and severally, will
reimburse the Purchasers through you for all out-of-pocket expenses, including
fees and disbursements of counsel, reasonably incurred by the Purchasers in
making preparations for the purchase, sale and delivery of the Securities, but
neither the Company nor the Guarantors shall then be under any further liability
to any Purchaser except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; and if to a Guarantor shall be delivered or sent
by mail, telex or facsimile transmission to the address of that Guarantor set
forth in the Indenture, Attention: Secretary; provided, however, that any notice
to a Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Purchaser at its address set forth
in its Purchasers' Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company and the Guarantors by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchaser, the Company, the Guarantors and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company or the
Guarantors and each person who controls the Company, the Guarantors or any
Purchaser, and their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. No purchaser of any of the Securities from any Purchaser
shall be deemed a successor or assign by reason merely of such purchase.
17
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one counterpart hereof for the Company, the Guarantors and each of
the Representatives plus one for each counsel, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers, the Company
and the Guarantors. It is understood that your acceptance of this letter on
behalf of each of the Purchasers is pursuant to the authority set forth in a
form of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
WESTERN GAS RESOURCES, INC.
By:
Name:
Title:
XXXXX OIL & GAS COMPANY, INC.
MIGC INC.
MOUNTAIN GAS RESOURCES, INC.
PINNACLE GAS TREATING, INC.
WESTERN GAS RESOURCES-TEXAS, INC.
WESTERN GAS RESOURCES-OKLAHOMA, INC.
WESTERN GAS WYOMING L.L.C.
By:
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Banc of America Securities LLC
Prudential Securities Incorporated
18
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxxx & Co., Inc.
By:
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Purchasers
19
SCHEDULE I
Principal
Amount of
Securities
to be
Underwriter Purchased
----------- -----------
Xxxxxxx, Xxxxx & Co. $ 93,000,000
Banc of America Securities LLC 27,125,000
Prudential Securities Incorporated 19,375,000
XX Xxxxx Securities Corporation 7,750,000
Xxxxxx Xxxxxxx & Co., Inc. 7,750,000
Total $155,000,000
20
EXHIBIT A
Form of Xxxx Xxxxxx Opinion
---------------------------
(i) Each of the Company, the Guarantors and each other subsidiary of the
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the Company
and the Guarantors have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) Each of the Company, the Guarantors and their subsidiaries has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company and the
Guarantors, provided that such counsel shall state that he believes that both
you and he are justified in relying upon such opinions and certificates);
(iv) Each Guarantor and other subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation; and all of the issued shares of
capital stock of each such Guarantor or other subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable, and (except
for directors' qualifying shares) are owned directly or indirectly by the
Company and the Guarantors, as the case may be, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company and the Guarantors
or their subsidiaries, provided that such counsel shall state that he believes
that both you and they are justified in relying upon such opinions and
certificates);
(v) Each of the Company, the Guarantors and their subsidiaries has good
and marketable title in fee simple to all real property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Offering Circular or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company, the Guarantors or any of their subsidiaries;
and any real property and buildings held under lease by the Company, the
Guarantors or any of their subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company, the Guarantors or any of their subsidiaries (in giving
the opinion in this clause, such counsel may state that no examination of record
titles for the purpose of such opinion has been made, and that he is relying
upon a general review of the titles of the Company, the Guarantor and their
subsidiaries, upon opinions of local counsel and abstracts, reports and policies
of title companies rendered or issued at or subsequent to the time of
acquisition of such property by the
21
Company, the Guarantors or any of their subsidiaries, upon opinions of counsel
to the lessors of such property and, in respect of matters of fact, upon
certificates of officers of the Company, the Guarantors or any of their
subsidiaries, provided that such counsel shall state that he believes that both
you and he is justified in relying upon such opinions, abstracts, reports,
policies and certificates);
(vi) To the best of such counsel's knowledge and other than as set forth
in the Offering Circular, there are no legal or governmental proceedings pending
to which the Company, the Guarantors or any of their subsidiaries is a party or
of which any property of the Company, the Guarantors or any of their
subsidiaries is the subject which, if determined adversely to the Company, the
Guarantors or any of their subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company, the
Guarantors and their subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(vii) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors;
(viii) The Exchange Act Reports (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion),
when they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder; and such counsel has no reason to believe that any
of such documents, when they were so filed, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading;
(ix) To the best knowledge of such counsel, there are no statutes or
regulations relating to the exploration for, development, production,
processing, treating or marketing of oil and gas that are material to the
operations of the Company and its subsidiaries, taken as a whole, other than
those which are described in the Offering Circular;
(x) The Securities have been duly authorized, executed, authenticated,
issued and constitute valid and legally binding obligations of the Company or
the Guarantors entitled to the benefits provided by the Indenture; and the
Securities and the Indenture conform to the descriptions thereof in the Offering
Circular;
(xi) The Indenture and the Registration Agreement have been duly
authorized, executed and delivered by the parties thereto and constitute valid
and legally binding instruments of the Company and the Guarantors, enforceable
in accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(xii) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities, the
Indenture, the Registration Agreement and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default
22
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company, the Guarantors or any of their subsidiaries
is a party or by which the Company, the Guarantors or any of their subsidiaries
is bound or to which any of the property or assets of the Company, the
Guarantors or any of their subsidiaries is subject, nor will such actions result
in any violation of the provisions of the Certificate of Incorporation or By-
laws of the Company, the Guarantors, any of their subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company, the Guarantors or any of their subsidiaries or
any of their properties;
(xiii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company or the Guarantors of the transactions contemplated by this Agreement,
the Registration Agreement or the Indenture except such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Purchasers;
(xiv) Neither the Company, the Guarantors nor any of their subsidiaries is
in violation of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(xv) Such counsel has no reason to believe that the Offering Circular and
any further amendments or supplements thereto made by the Company prior to the
Time of Delivery (other than the financial statements therein, as to which such
counsel need express no opinion) contained as of its date or contains as of the
Time of Delivery an untrue statement of a material fact or omitted or omits, as
the case may be, to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
23
EXHIBIT B
Form of Xxxxxxx Xxxx Opinion
----------------------------
(i) Each of the Company, the Guarantors and each other subsidiary of the
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in the
Offering Circular;
(iii) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantors;
(iv) The Securities have been duly authorized, executed, authenticated,
issued and delivered and constitute valid and legally binding obligations of the
Company or the Guarantors entitled to the benefits provided by the Indenture;
and the Securities and the Indenture conform to the descriptions thereof in the
Offering Circular;
(v) The Indenture and the Registration Agreement have been duly
authorized, executed and delivered by the parties thereto and constitute valid
and legally binding instruments, enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles;
(vi) The issue and sale of the Securities and the compliance by the
Company and the Guarantors with all of the provisions of the Securities, the
Indenture, the Registration Agreement and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company, the Guarantors or any of their subsidiaries is a party or by which the
Company, the Guarantors or any of their subsidiaries is bound or to which any of
the property or assets of the Company, the Guarantors or any of their
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the Company, the
Guarantors, any of their subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company, the Guarantors or any of their subsidiaries or any of their
properties;
(vii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by the
Company or the Guarantors of the transactions contemplated by this Agreement,
the Registration Agreement or the Indenture except such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Purchasers;
(viii) The statements set forth in the Offering Circular under the
24
caption "Description of Notes", insofar as they purport to constitute a summary
of the terms of the Securities, under the caption "Certain United States Federal
Tax Consequences", and under the caption "Plan of Distribution", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(ix) When the Securities are issued and delivered to the Purchasers
pursuant to the Agreement, such Securities will not be of the same class (within
the meaning of Rule 144A(d)(3) under the Act) as any security of the Company
that is listed on a national securities exchange registered under Section 6 of
the Exchange Act or that is quoted in a United States automated interdealer
quotation system;
(x) The Company is not required to deliver the information specified in
Rule 144A(d)(4) in connection with the Offering and initial resale of the
Securities by the Purchasers;
(xi) No registration of the Securities under the Act, and no
qualification of an indenture under the Trust Indenture Act with respect
thereto, is required for the offer, sale and initial resale of the Securities by
the Purchasers in the manner contemplated by this Agreement;
(xii) Such counsel have no reason to believe that the Offering Circular
and any further amendments or supplements thereto made by the Company prior to
the Time of Delivery (other than the financial statements therein, as to which
such counsel need express no opinion) contained as of its date or contains as of
the Time of Delivery an untrue statement of a material fact or omitted or omits,
as the case may be, to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and
(xiii) Neither the Company nor any Guarantor is an "investment company",
as such term is defined in the Investment Company Act.
25
ANNEX I
(1) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or Rule 144A. Accordingly, each Purchaser agrees that neither it,
its affiliates nor any persons acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and it
and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant to Rule 144A), it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to U.S.
persons pursuant to Section 3 of this Agreement without delivery of the written
statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may
26
otherwise lawfully be issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with the Company's and Xxxxxxx, Xxxxx & Co.'s express written consent and then
only at such Purchaser's own risk and expense.
27
ANNEX II
Pursuant to Section 7(f) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published
rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Offering Circular
agrees with the corresponding amounts (after restatements where applicable)
in the audited consolidated financial statements for such five fiscal
years;
(iv) On the basis of the procedures they performed specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, consisting of a reading of the unaudited financial statements
and other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included in the
Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet
28
items included in the Offering Circular and referred to in clause (B)
were not determined on a basis substantially consistent with the basis
for the audited consolidated financial statements included in the
Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Offering Circular) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other items
specified by the Representatives, or any increases or decreases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Offering
Circular except in each case for changes, increases or decreases which
the Offering Circular discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases or decreases in any items specified
by the Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s) included
in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company
and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
29
