EXHIBIT 1.1
EXECUTION COPY
ONEOK, INC.
12,000,000 Shares
Common Stock
UNDERWRITING AGREEMENT
January 23, 2003
BANC OF AMERICA SECURITIES LLC
UBS WARBURG LLC
J.P. MORGAN SECURITIES INC.
as Representatives of the Several
Underwriters Named in Schedule I hereto
c/o BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019
c/o UBS WARBURG LLC
299 Park Avenue
New York, New York 10171
c/o J.P. MORGAN SECURITIES INC.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
ONEOK, Inc., an Oklahoma corporation (the "Company"), proposes to issue and
sell an aggregate of 12,000,000 shares (the "Firm Shares") of the Company's
common stock, $0.01 par value per share, together with each associated preferred
stock purchase right under the Rights Agreement, dated as of November 26, 1997
(the "Rights Agreement"), between the Company and Bank One, N.A., formerly known
as Liberty Bank and Trust Company of Oklahoma, N.A., as Rights Agent (the
"Common Stock"), to you and to the other underwriters named in Schedule I hereto
(collectively, the "Underwriters"), for whom you are acting as representatives
(collectively, the "Representatives"). The Company has also agreed to grant to
the Underwriters an option (the "Option") to purchase up to an additional
1,800,000 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
hereinafter collectively referred to as the "Shares." The term "Representatives"
as used herein shall be deemed to mean the firms or companies addressed hereby.
If there are any Underwriters in addition to the Representatives, you represent
that you have been authorized by each of the Underwriters to enter into this
Underwriting Agreement (this "Agreement") on their behalf and to act for them in
the manner herein provided in all matters
relating to carrying out the provisions of this Agreement. All obligations of
the Underwriters hereunder are several and not joint.
The initial public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the several Underwriters shall be
agreed upon by the Company and the Representatives, acting on behalf of the
several Underwriters, 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 between the
Company and the Representatives 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.
The Company confirms as follows its agreements with the Representatives and
the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the
terms and conditions of this Agreement, the Company agrees to sell
to each Underwriter, and each Underwriter, severally and not
jointly, agrees to purchase from the Company at the purchase price
per share for the Firm Shares to be agreed upon by the Underwriters
and the Company in accordance with Section 1(c) or 1(d) hereof and
set forth in the Price Determination Agreement, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule
I, plus such additional number of Firm Shares which such Underwriter
may become obligated to purchase pursuant to Section 10 hereof. If
the Company elects to rely on Rule 430A of the Rules and Regulations
(as hereinafter defined), Schedule I may be attached to the Price
Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the Underwriters to purchase,
severally and not jointly, up to 1,800,000 Option Shares from the
Company at the same price per share as the Underwriters will pay for
the Firm Shares. The Option may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters
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 (or, if the Company has elected to rely on Rule 430A, on
or before the 30th day after the date of the Price Determination
Agreement), upon written or telegraphic notice (the "Option Shares
Notice") by the Representatives 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")
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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 Company will issue and sell to the Underwriters the number of
Option Shares set forth in the Option Shares Notice and each
Underwriter will purchase such percentage of the Option Shares as is
equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted as the Representatives deem advisable to
avoid fractional shares.
(c) If the Company has elected not to rely on Rule 430A of the
Rules and Regulations, 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 several Underwriters shall be agreed upon
and set forth in the Price Determination Agreement, which shall be
dated as of the date hereof, and an amendment to the Registration
Statement (as hereinafter defined) containing such per share price
information shall be filed before the Registration Statement becomes
effective.
(d) If the Company has elected to rely on Rule 430A of the Rules
and Regulations, 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 several Underwriters 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 the
Representatives for the accounts of the Underwriters against payment
of the purchase price by wire transfer in immediately available
funds to an account designated in writing by the Company to the
Representatives. 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
the Underwriters 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 and the Representatives (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 the Representatives shall otherwise instruct.
(b) To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (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 the Representatives 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 the Company. For the purpose of
expediting the checking and packaging of certificates for the
Shares, the Company
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agrees 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 the Company to the Underwriters shall be borne by the Company.
The Company will pay and save each 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 such Underwriter of the Firm Shares and Option
Shares.
(e) Not later than 12:00 p.m. on the second business day
following the date the Firm Shares are first released by the
Underwriters 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
Representatives shall request.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 333-102105) on Form S-3, as
amended, 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 each 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 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
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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 4(l) 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 ("EDGAR"). 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 EDGAR (except as may be permitted by
Regulation S-T under the Act), was identical to the copy thereof
delivered to the Underwriters 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 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
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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 Section 3(b) do not
apply to any statements or omissions made in reliance on and in
conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto. For all purposes of this Agreement,
the amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the
Representatives 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 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
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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 the Underwriters, 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, except that the
Company may file a Certificate of Designations with the Secretary of
State of the State of Oklahoma related to the Series D Convertible
Preferred Stock of the Company as contemplated by the Transaction
Agreement, dated as of January 9, 2003 (the "Transaction
Agreement"), among the Company, Westar Energy, Inc., a Kansas
corporation, and Westar Industries, Inc., a Delaware corporation.
(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 have been, and the
Shares to be issued and sold by the Company upon such issuance will
be, 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)
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 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.
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(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 Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley 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 ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividend requirements set
forth in the Prospectus under the captions "Summary- Summary
Consolidated Financial Data," "Ratio of Earnings to Fixed Charges"
and "Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividend Requirements" and in Exhibits 12.1 and 12.2 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 with
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
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(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 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"). After receipt of the payment for the
Shares, the Company will not be an "investment company" within the
meaning of the Investment Company Act and will conduct its business
in a manner so that it will not become subject to 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 Sarbanes-Oxley 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
9
property is bound or affected, other than defaults that would not,
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 in connection with the authorization, issuance,
transfer, sale or delivery of the Shares by the Company, 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 and (iii) that the failure to
obtain would not result in a Material Adverse Effect.
(n) The Company has full corporate power and authority to enter
into this Agreement and 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 its
Subsidiaries or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order,
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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 the Underwriters 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 the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be
deemed a representation and warranty by the Company to the
Underwriters 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.
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(t) The Shares have been approved for listing on the New York
Stock Exchange, subject only to official notice of issuance.
(u) 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)
12
("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 Underwriters
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 Representatives.
13
(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. 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," "Our Company - Our Business Segments" and "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
Sarbanes-Oxley 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.
14
(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 Underwriters 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 Sarbanes-Oxley Act that are effective and is
actively taking steps to ensure that it will be in compliance with
other applicable provisions of the Sarbanes-Oxley Act upon the
effectiveness of such provisions.
4. Agreements of the Company. The Company agrees with each 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 Underwriters within a reasonable period of
time prior to the filing thereof and the Underwriters shall not have
objected thereto in good faith.
(b) The Company will notify the Underwriters 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 Section 4(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
15
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 Underwriters promptly of all such filings.
(c) The Company has furnished, or will furnish, to the
Underwriters, 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 Representatives, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as
the Representatives may reasonably request. The Company consents to
the use of the Prospectus or any amendment or supplement thereto by
the Underwriters 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 Underwriters 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 Representatives, without charge, such number of
copies thereof as the Representatives 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 Underwriters if
such document would be deemed to be incorporated by reference into
the Prospectus and if such document is not approved by the
Representatives after reasonable notice thereof.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives
and counsel to the Underwriters 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
Representatives 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.
16
(g) During the period of two years commencing on the date of the
Price Determination Agreement, the Company will furnish to the
Representatives 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 Representatives 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 holders of its
securities as soon as may be practicable but in no event later than
the last day of the 15th full calendar month following the calendar
quarter in which the "effective date of the Registration Statement"
(as defined in Rule 158 of the Rules and Regulations) falls, an
earnings statement (which need not be audited but shall be in
reasonable detail) for a period of 12 months ended commencing after
such "effective date of the Registration Statement" and satisfying
the provisions of Section 11(a) of the Act (including Rule 158 of
the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the
Company will pay, or reimburse if paid by the Underwriters, all
costs and expenses incident to the performance of the obligations of
the Company under this Agreement, including but not limited to costs
and expenses 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, (ii) the
preparation and delivery of certificates representing the Shares,
(iii) the word processing, printing and reproduction of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements
and any Underwriter's Questionnaire, (iv) 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,
(v) the listing of the Shares on the New York Stock Exchange, (vi)
any filings required to be made by the Underwriters with the NASD,
and the reasonable fees, disbursements and other charges of counsel
to the Underwriters in connection therewith, (vii) 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 4(f), including the reasonable fees,
disbursements and other charges of counsel to the Underwriters in
connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (viii)
counsel to the Company, (ix) the transfer agent for the Shares and
(x) the Accountant.
(j) 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.
17
(k) The Company will apply the net proceeds from the offering and
sale of the Shares to be sold by the Company in the manner set forth
in the Prospectus under "Use of Proceeds." The Company shall not
invest, or otherwise use the proceeds received by the Company from
its sale of the Shares in such a manner as would require the Company
or any of its Subsidiaries to register as an investment company
under the Investment Company Act.
(l) 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 Representatives an "electronic Prospectus" to be
used by the Underwriters 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 Representatives, that may
be transmitted electronically by the Representatives and the other
Underwriters 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
EDGAR, 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
Representatives, 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 EDGAR 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.
(m) During the 90-day period beginning on the date of this
Agreement, the Company will not without the prior written consent of
the Representatives (which consent may be withheld at the sole
discretion of the Representatives), 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 stock options pursuant to the terms
18
of a plan in effect on the date of this Agreement, (iii) issuances
pursuant to the exercise of such stock options, (iv) the filing of
registration statements on Form S-8 and amendments thereto in
connection with such stock options or the Company's employee stock
purchase plans in existence on the date of this Agreement, (v) the
filing of registration statements in connection with any exercise by
Westar Energy, Inc. or Westar Industries, Inc. of their demand
registration rights, (vi) the filing of an amendment to the
Company's Form 8-A registration statement relating to the preferred
stock purchase rights under the Rights Agreement as contemplated by
the Transaction Agreement, (vii) issuances pursuant to direct stock
purchase or dividend reinvestment plans in place on the date of this
Agreement, (viii) 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 and (ix) the issuance of shares
of the Company's Series D Convertible Preferred Stock as
contemplated by the Transaction Agreement.
(n) The Company has engaged and shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
(o) 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.
(p) The Company and its Subsidiaries will maintain such controls
and other procedures, including without limitation, those required
by Sections 302 and 906 of the Sarbanes-Oxley 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
19
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.
(q) 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 Sarbanes-Oxley Act.
5. Conditions of the Obligations of the Underwriters. In addition to
the execution and delivery of the Price Determination Agreement, the
obligations of each 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 Underwriters and the Underwriters did not object
thereto in good faith, and the Underwriters 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 (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 Underwriters in accordance with the terms hereof
and thereto.
20
(c) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, 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 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
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, 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 Representatives will have received opinions, each dated
the Closing Date and, with respect to the Option Shares, the Option
Closing Date, and satisfactory in form and substance to counsel to
the Underwriters, from (i) Gable & Gotwals, counsel to the Company,
to the effect set forth in Exhibit B, (ii) Andersen, Byrd, Richeson,
Flaherty and Henrichs, special Kansas counsel to the Company, and
(iii) Patman & Osborn, special Texas counsel to the Company.
(f) The Representatives will have received an opinion, dated the
Closing Date and the Option Closing Date, from Jones Day, counsel to
the Underwriters, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory
in all respects to the Representatives.
(g) On the date of the Prospectus, the Accountant shall have
furnished to the Representatives a letter, dated the date of its
delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, 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
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 Representatives 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
21
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.
(h) At the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to each 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 Underwriters, 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.
(i) On or prior to the Closing Date, the Representatives will
have received executed Lock-Up Letter Agreements, in the form of
Exhibit C hereto, from the Company's directors and executive
officers.
(j) The Shares will be qualified for sale in such states as the
Underwriters 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.
(k) 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
22
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.
(l) The Shares shall have been approved for listing on the New
York Stock Exchange, subject only to official notice of issuance.
(m) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as
the Representatives 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 each Underwriter.
If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company 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 4, Section 6, Section 8 and
Section 11 shall at all times be effective and shall survive such termination.
6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, Section
9 or Section 10, or if the sale to the Underwriters of the Firm Shares on
the Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably
incurred by the Representatives and the Underwriters 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.
7. 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 and the
Representatives of the effectiveness of the Registration Statement
under the Securities Act.
23
(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 to any Underwriter, except that the Company shall be
obligated to reimburse the expenses of the Representatives and the
Underwriters pursuant to Sections 4 and 6 hereof, (ii) any
Underwriter to the Company or (iii) any party hereto to any other
party, except that the provisions of Section 8 shall at all times be
effective and shall survive such termination.
8. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each 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 any Underwriter, or any
such person, may become 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 any 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 such 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 an 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 either
24
Underwriter furnished in writing to the Company by such 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) Each Underwriter agrees, severally and not jointly, 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 to
the same extent as the foregoing indemnity from the Company to each
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 such Underwriter furnished in writing to the Company by the
Representatives expressly for use in the Registration Statement or
the Prospectus. This indemnity agreement will be in addition to any
liability that each Underwriter may otherwise have; provided,
however, that in no case will any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts
and commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 8 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 8, 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 8 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 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
25
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
reasonable 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 8 (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 Section
8(c), 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.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 8 is applicable in accordance
with its terms but for any reason is held to be unavailable from the
Company or the Underwriters, the Company and the Underwriters 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 from
persons other than the Underwriters, such as persons who control the
Company 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 and the
Underwriters may be
26
subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other. The relative benefits received by the
Company on the one hand and the Underwriters 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
bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. 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, on the one hand, and the Underwriters, 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. Such relative fault shall be determined by
reference to 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 or the
Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions
pursuant to this Section 8(d) 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 Section 8(d) shall be deemed to
include, for purpose of this Section 8(d), 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 Section 8(d), no Underwriter
shall 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. The
Underwriters' obligations to contribute as provided in this Section
8(d) are several to their respective underwriting obligations and
not joint. For purposes of this Section 8(d), 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 Section 8(d), 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 Section 8(d). Except for a settlement entered into pursuant to
the
27
last sentence of Section 8(c) 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).
(e) The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Company
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 Underwriters, (ii) acceptance of the Shares and payment
therefor or (iii) any termination of this Agreement.
9. Termination. The obligations of the Underwriters 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 to the Company from the Representatives if, prior to
delivery and payment for the Shares (or the Option Shares, as the case may
be), in the sole judgment of the Representatives, (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 Representatives
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
Representatives 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 Representatives 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 9 shall be without liability on the part of (i) the Company
to any Underwriter, except that the Company shall be obligated to reimburse
the expenses of the
28
Representatives and the Underwriters pursuant to Section 4 and 6 hereof,
(ii) any Underwriter to the Company or (iii) of any party hereto to any
other party except that the provisions of Section 8 shall at all times be
effective and shall survive such termination.
10. Default of One or More of the Several Underwriters.
(a) If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the several Underwriters shall fail
or refuse to purchase Shares that it or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares that such
defaulting Underwriter or Underwriters agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm
Shares set forth opposite their respective names on Schedule I
hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in
such other proportions as may be specified by the Representatives
with the consent of the non-defaulting Underwriters, to purchase the
Shares that such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the Closing Date
or the Option Closing Date, as the case may be, any one or more of
the Underwriters shall fail or refuse to purchase Shares and the
aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on
such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Shares are not made within 48
hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriters or the
Company for the purchase or sale of any Shares under this Agreement.
In any such case, either the Representatives or the Company shall
have the right to postpone the Closing Date or the Option Closing
Date, as the case may be, but in no event for a period longer than
seven days, in order that the required changes, if any, to the
Registration Statement and the Prospectus or in any other documents
or arrangements may be effected.
(b) As used in this Section 10, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting
Underwriter under this Section 10. Any action taken pursuant to this
Section 10 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
11. 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, 100 West Fifth Street, Tulsa,
Oklahoma 74103, Facsimile: 918-588-7971, Attention: Chief Financial
Officer, or (ii) if to the Underwriters, at the offices of (A) Banc
of America Securities LLC, 9 West 57th Street, New York, New York
10019,
29
Facsimile: 212-583-8567, Attention: Nicholas T. Ganz, (B) UBS
Warburg LLC, 299 Park Avenue, New York, New York 10171, Facsimile:
212-821-4042, Attention: General Counsel, and (C) J.P. Morgan
Securities Inc., 277 Park Avenue, New York, New York 10172,
Facsimile: 212-622-6037, Attention: Paul A. O'Hern. Any such notice
shall be effective only upon receipt. Any notice under Section 9 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 several Underwriters and the Company and of the controlling
persons, directors and officers referred to in Section 8, 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 Underwriters.
(c) All representations, warranties and agreements of the Company
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
Underwriters or any of its controlling persons and shall survive
delivery of and payment for the Shares hereunder.
(d) Any action required or permitted to be taken by the
Representatives under this Agreement shall be taken by them jointly.
(e) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(f) 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. The Company 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 Representatives and 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) 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. The Company agrees that a
final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts in the jurisdiction
of which the Company is or may be subject, by suit upon such
judgment.
30
(g) 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.
(h) 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.
(i) The Company and the Underwriters each hereby irrevocably
waive 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.
(j) This Agreement may not be amended or otherwise modified or
any provision hereof waived except by an instrument in writing
signed by the Representatives and the Company.
[The remainder of this page is intentionally left blank.]
31
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
ONEOK, INC.
By: /s/ Jim Kneale
-----------------------------------
Name: Jim Kneale
---------------------------------
Title: Senior Vice President, Treasurer
--------------------------------
and Chief Financial Officer
--------------------------------
Confirmed as of the date first above mentioned:
BANC OF AMERICA SECURITIES LLC
Acting on behalf of itself and as the Representative of the other several
Underwriters
By: /s/
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
UBS WARBURG LLC
Acting on behalf of itself and as the Representative of the other several
Underwriters
By: /s/ By: /s/
------------------------------------- ---------------------------------
Name: Name:
----------------------------------- -------------------------------
Title: Title:
---------------------------------- ------------------------------
J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and as the Representative of the other several
Underwriters
By: /s/
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
S-1
SCHEDULE I
Number of Firm Shares
of Common Stock
Underwriter to be Purchased
- ----------- ---------------------
Banc of America Securities LLC......................... 3,154,000
UBS Warburg LLC........................................ 3,154,000
J.P. Morgan Securities Inc............................. 3,154,000
A.G. Edwards & Sons, Inc............................... 1,368,000
Wachovia Securities, Inc............................... 570,000
Sanders Morris Harris Inc.............................. 300,000
Blaylock & Partners, L.P............................... 300,000
--------------------
TOTAL......................................... 12,000,000
====================
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 Sayre 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 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%
State of Company's
Incorporation Ownership
Subsidiary or Organization Percentage
- ---------- --------------- ----------
Fox Plant, L.L.C. Delaware 50.0%
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%
ONEOK Beta Company Delaware 100.0%
Subsidiaries Acquired from Southern Union
- -----------------------------------------
Mercado 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%
SUPro Energy Company Delaware 100.0%
Energia Estrella 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 R.L. De C.V. Mexico 43.29%
Materiales y Aparatus, 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
wells 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.
EXHIBIT A
ONEOK, INC.
PRICE DETERMINATION AGREEMENT
January 23, 2003
BANC OF AMERICA SECURITIES LLC
UBS WARBURG LLC
J.P. MORGAN SECURITIES INC.
as Representatives of the Several
Underwriters Named in Schedule I to the
Underwriting Agreement Referred to Below
c/o BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019
c/o UBS WARBURG LLC
299 Park Avenue
New York, New York 10171
c/o J.P. MORGAN SECURITIES INC.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated January 23, 2003
(the "Underwriting Agreement"), among ONEOK, Inc., an Oklahoma corporation (the
"Company"), and the several Underwriters named in Schedule I thereto
(collectively, the "Underwriters"), for whom you are acting as representatives
(collectively, the "Representatives"). The Underwriting Agreement provides for
the purchase by the Underwriters from the Company, subject to the terms and
conditions set forth therein, of an aggregate of 12,000,000 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 Representatives as follows:
I. The initial public offering price per share for the Firm Shares
shall be $17.19.
A-1
II. The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $16.524 representing an amount equal to the
initial public offering price set forth above, less $0.666 per share.
The Company represents and warrants to the Underwriters 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.
As contemplated by the Underwriting Agreement, attached as Schedule I is a
completed list of the several Underwriters, 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.
[The remainder of this page is intentionally left blank.]
A-2
If the foregoing is in accordance with your understanding of the agreement
among the Underwriters 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
Underwriters and the Company in accordance with its terms and the terms of the
Underwriting Agreement.
Very truly yours,
ONEOK, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Confirmed as of the date first above mentioned:
BANC OF AMERICA SECURITIES LLC
Acting on behalf of itself and as the Representative of the other several
Underwriters
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
UBS WARBURG LLC
Acting on behalf of itself and as the Representative of the other several
Underwriters
By: By:
------------------------------------- ---------------------------------
Name: Name:
----------------------------------- -------------------------------
Title: Title:
---------------------------------- ------------------------------
J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and as the Representative of the other several
Underwriters
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A-3
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, general partnership 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
January 23, 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 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. Except as described in
the Registration Statement or the Prospectus or in the documents incorporated
therein by reference or in 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 in
connection with (a) the authorization, issuance, transfer, sale or delivery of
the Shares by the Company, (b) the execution, delivery and performance of the
Agreement, by the Company or (c) 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 Underwriters 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.
B-1
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 or
any such significant subsidiary's jurisdiction of incorporation or organization,
(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 "Transactions with Westar" and "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; 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.
B-2
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.
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. Delivery of certificates for the Shares will transfer valid and
marketable title thereto to each Underwriter that has purchased such Shares in
good faith and without notice of any adverse claim with respect thereto.
15. 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.
16. The Shares have been duly authorized for listing on the New York Stock
Exchange upon official notice of issuance.
B-3
Such counsel hereby confirms to the Underwriters 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 Underwriters 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 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 Underwriters' 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
B-4
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 counsel shall
state that in such counsel's opinion that such counsel and the Underwriters are
justified in relying on such opinions of other counsel. Copies of all such
opinions and certificates shall be furnished to counsel to the Underwriters on
the Closing Date. 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-5
EXHIBIT C
LOCK-UP LETTER AGREEMENT
January 13, 2003
BANC OF AMERICA SECURITIES LLC
UBS WARBURG LLC
J.P. MORGAN SECURITIES INC.
as Representatives of the Several
Underwriters of the Proposed Public
Offering Referred to Below
c/o BANC OF AMERICA SECURITIES LLC
600 Montgomery Street - Equity Capital Markets
San Francisco, California 94111
c/o UBS WARBURG LLC
299 Park Avenue
New York, New York 10171
c/o J.P. MORGAN SECURITIES INC.
277 Park Avenue
New York, New York 10172
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"). The Company proposes to carry out a public offering
(the "Offering") of Common Stock, for which you will act as the representatives
of the underwriters. The undersigned recognizes that the Offering will be of
benefit to the undersigned and will benefit the Company. The undersigned
acknowledges that you and the other underwriters 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 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 Banc of America Securities LLC, UBS Warburg
LLC and J.P. Morgan 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
C-1
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.
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)
C-2