Execution Copy
WESTERN GAS PARTNERS, LP
18,750,000 Common Units
Representing Limited Partner Interests
Underwriting
Agreement
May 8, 2008
Underwriting
Agreement
May 8, 2008
UBS
Securities LLC
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Morgan Stanley & Co. Incorporated
as Managing
Underwriters
c/o UBS
Securities LLC
299 Park Avenue
New York, New York 10171-0026
Ladies
and Gentlemen:
Western Gas Partners, LP, a Delaware
limited partnership (the “ Partnership ”),
proposes to issue and sell to the underwriters named in
Schedule A annexed hereto (the “
Underwriters ”), for whom UBS Securities LLC,
Citigroup Global Markets Inc., Credit Suisse Securities
(USA) LLC and Morgan Stanley & Co. Incorporated are acting
as representatives (the “ Representatives ”), an
aggregate of 18,750,000 common units (the “ Firm Units
”) representing limited partner interests in the Partnership
(the “ Common Units ”). In addition, the
Partnership proposes to grant to the Underwriters the option to
purchase up to an additional 2,812,500 Common Units (the “
Additional Units ”), solely for the purpose of
covering over-allotments. The Firm Units and the Additional Units
are hereinafter collectively referred to as the “
Units .” The Units are described in the Prospectus,
which is referred to below.
This agreement (the “
Agreement ”) is to confirm the agreement among the
Partnership, Anadarko Petroleum Corporation, a Delaware corporation
(“ Anadarko ”), Western Gas Resources, Inc., a
Delaware corporation (“ Western Gas ”), WGR
Holdings, LLC, a Delaware limited liability company (“
Holdings ”), and Western Gas Holdings, LLC, a Delaware
limited liability company (the “ General Partner
,” and together with the Partnership, Anadarko, Western Gas,
and Holdings, the “ Western Gas Parties ”), on
the one hand, and the Underwriters on the other hand, concerning
the purchase of the Units from the Partnership by the
Underwriters.
The Western Gas Parties, together
with Western Gas Operating, LLC, a Delaware limited liability
company (“ Operating GP ”), WGR Operating, LP, a
Delaware limited partnership (the “ Operating
Partnership ”), Anadarko Gathering Company, LLC, a
Delaware limited liability company (“ AGC ”),
Pinnacle Gas Treating LLC, a Texas limited liability company
(“ PGT ”), and MIGC LLC, a Delaware limited
liability company (“ MIGC ”), are collectively
referred to herein as the “ Western Gas Entities
.” Each of Operating GP, the Operating Partnership, AGC, PGT
and MIGC is sometimes hereinafter referred to herein as an “
Operating Subsidiary ,” and they are collectively
referred to herein as the “ Operating Subsidiaries
.” The Western Gas Entities, other than Anadarko and Western
Gas, are collectively referred to herein as the “
Partnership Entities .”
The Partnership hereby acknowledges
that, in connection with the proposed offering of the Units (the
“ Offering ”), it has requested UBS Financial
Services, Inc. (the “ DUP Manager ”) to
administer a directed unit program (the “ Directed Unit
Program ”), under which up to
2,812,500 Firm Units, or 15.0% of the Firm Units to be purchased by
the Underwriters (the “ Reserved Units ”), shall
be reserved for sale by the DUP Manager at the initial public
offering price to the officers, directors and employees of the
General Partner and its affiliates, including Anadarko, and certain
other persons having a relationship with the Partnership, as
designated by the Partnership (the “ Directed Unit
Participants ”), as part of the distribution of the Units
by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the Financial
Industry Regulatory Authority (“ FINRA ”) and
all other applicable laws, rules and regulations. The number of
Units available for sale to the general public will be reduced to
the extent that Directed Unit Participants purchase Reserved Units.
The Underwriters may offer any Reserved Units not purchased by
Directed Unit Participants to the general public on the same basis
as the other Units being issued and sold hereunder. The Partnership
has supplied the DUP Manager with the names, addresses and
telephone numbers of the individuals or other entities that the
Partnership has designated to be participants in the Directed Unit
Program. It is understood that any number of those so designated to
participate in the Directed Unit Program may decline to do
so.
The Partnership has prepared and
filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder
(collectively, the “ Act ”), with the Securities
and Exchange Commission (the “ Commission ”) a
registration statement on Form S-1 (File No. 333-146700) under
the Act, including a prospectus, relating to the Units. In
addition, amendments to such registration statement have been
prepared and filed with the Commission in accordance with the
Act.
Except where the context otherwise
requires, “ Registration Statement ,” as used
herein, means the registration statement on Form S-1 (File
No. 333-146700), as amended at the time of such registration
statement’s effectiveness for purposes of Section 11 of
the Act, as such section applies to the respective Underwriters
(the “ Effective Time ”), including (i) all
documents filed as a part thereof, (ii) any information
contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed, pursuant to
Rule 430A or Rule 430C under the Act, to be part of the
registration statement at the Effective Time, and (iii) any
additional registration statement filed pursuant to Rule 462(b)
under the Act.
The Partnership has furnished to the
Representatives, for use by the Underwriters and by dealers in
connection with the Offering, copies of one or more preliminary
prospectuses relating to the Units. Except where the context
otherwise requires, “ Preliminary Prospectus ,”
as used herein, means each such preliminary prospectus, in the form
so furnished.
Except where the context otherwise
requires, “ Prospectus ,” as used herein, means
the prospectus relating to the Units, filed by the Partnership with
the Commission pursuant to Rule 424(b) under the Act on or before
the second business day after the date hereof (or such earlier time
as may be required under the Act) or, if no such filing is
required, the final prospectus included in the Registration
Statement at the time it became effective under the Act, in each
case in the form furnished by the Partnership to the
Representatives for use by the Underwriters and by dealers in
connection with the Offering.
“ Permitted Free Writing
Prospectuses ,” as used herein, means each document
listed on
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Schedule B-1 attached hereto, each “road
show” (as defined in Rule 433 under the Act), if any,
related to the Offering contemplated hereby that is a
“written communication” (as defined in Rule 405
under the Act) (each such road show, a “ Road Show
”) and any other “free writing prospectus” (as
defined in Rule 405 under the Act) to which the
Representatives provide their prior consent.
“ Disclosure Package
,” as used herein, means any Preliminary Prospectus together
with any combination of one or more of the Permitted Free Writing
Prospectuses, if any, and the information set forth on
Schedule B-2 attached hereto.
As used in this Agreement, “
business day ” shall mean a day on which the New York
Stock Exchange (the “ NYSE ”) is open for
trading. The terms “herein,” “hereof,”
“hereto,” “hereinafter” and similar terms,
as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph,
sentence or other subdivision of this Agreement. The term
“or,” as used herein, is not exclusive.
The Partnership has prepared and
filed, in accordance with Section 12 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the “ Exchange Act ”),
with the Commission a registration statement on Form 8-A (File No.
001-34046) (as amended, the “ Exchange Act Registration
Statement ”) under the Exchange Act to register, under
Section 12(b) of the Exchange Act, the class of securities
consisting of the Common Units.
It is understood and agreed to by all
parties that the Partnership was recently formed by Holdings and
the General Partner to gather, treat and transport natural gas. The
Partnership will initially indirectly own AGC, PGT and MIGC.
Currently, Anadarko indirectly owns AGC, PGT and MIGC through its
indirect ownership of WGR Asset Holding Company LLC (“
Asset Holdco ”). Prior to the date hereof, the
following transactions (the “ Formation Transactions
”) occurred:
1. Western Gas formed Asset
Holdco and contributed $1,000 in exchange for all of the membership
interests in Asset Holdco;
2. Asset Holdco formed Holdings
and contributed $4,000 in exchange for all of the membership
interests in Holdings;
3. Asset Holdco formed the
General Partner and contributed $1,000 in exchange for all of the
membership interests in the General Partner;
4. The General Partner and Asset
Holdco formed the Partnership and contributed $60 and $2,940,
respectively, in exchange for a 2% general partner interest and a
98% limited partner interest in the Partnership,
respectively;
5. Asset Holdco contributed all
of the membership interests in the General Partner and its 98%
limited partner interest in the Partnership to Holdings;
6. The Partnership formed
Operating GP and contributed $1,000 in exchange for all
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of the
membership interests in Operating GP;
7. Operating GP and the
Partnership formed the Operating Partnership and contributed $0.10
and $999.90, respectively, in exchange for a 0.01% general partner
interest and a 99.99% limited partner interest in the Operating
Partnership, respectively; and
8. Asset Holdco distributed all
of the membership interests in Holdings to Western Gas.
It is further understood and agreed
by all parties that the following transactions (the “
Offering Transactions ”) will occur substantially
contemporaneously with the time of purchase (as defined in
Section 2 hereof):
1. Asset Holdco will distribute
all of the membership interests in AGC, PGT and MIGC to Western
Gas;
2. Western Gas will contribute
to the General Partner, on behalf of Holdings, a membership
interest in AGC with a value equal to 2% of the equity value of the
Partnership at the time of purchase (the “ GP Contribution
Interest ”);
3. Western Gas will contribute
to Holdings all of the remaining membership interest in AGC and all
of the membership interests in PGT and MIGC;
4. The General Partner will
contribute the GP Contribution Interest to the Partnership in
exchange for (a) 1,083,115 general partner units representing
a continuation of its 2.0% general partner interest in the
Partnership and (b) the Incentive Distribution Rights (as
defined in the Partnership Agreement, which is defined in
Section 3(i) hereof);
5. Holdings will contribute all
of the remaining interest in AGC and all of the interests in PGT
and MIGC to the Partnership in exchange for (a) 4,973,806
Common Units, (b) 26,536,306 subordinated units representing
limited partner interests in the Partnership (the “
Subordinated Units ”), (c) the right to receive,
upon the earlier to occur of the expiration of the Over-Allotment
Option period or the exercise in full of the Over-Allotment Option,
(1) a number of additional Common Units that is equal to the
excess, if any, of (x) 2,812,500 over (y) the aggregate
number of Common Units, if any, actually purchased by and issued to
the Underwriters pursuant to the exercise of the Over-Allotment
Option and (2) a reimbursement of pre-formation capital
expenditures in an amount equal to the total amount of cash, if
any, contributed by the Underwriters to the Partnership at the
additional time(s) of purchase with respect to the Common Units
purchased by and issued to the Underwriters pursuant to the
exercise of the Over-Allotment Option (if the Over-Allotment Option
is not exercised, the Common Units issuable pursuant to the right
to receive additional Common Units described in this clause will,
together with the Common Units described in clause (a) and the
Subordinated Units described in clause (b), represent a 63.4%
limited partner interest in the Partnership) and (d) the right
to receive a distribution of $14.3 million as a reimbursement for
certain pre-formation capital expenditures;
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6. The Partnership will
contribute all of the membership interests in AGC, PGT and MIGC to
the Operating Partnership, of which 0.01% of such membership
interests will be contributed on behalf of Operating GP;
7. The public, through the
Underwriters, will contribute $309.4 million in cash (the
“ Offering Proceeds ”) to the Partnership in
exchange for 18,7500,000 Common Units, which will, if the
Over-Allotment Option is not exercised, represent a 34.6% limited
partner interest in the Partnership;
8. The Partnership will use the
Offering Proceeds to (a) pay the Underwriters’ discounts
and a structuring fee totaling approximately $20.1 million,
(b) pay approximately $5.0 million of Offering expenses,
(c) make a loan of $260.0 million to Anadarko in exchange
for a 30-year note bearing interest at a fixed annual rate of 6.5%
(the “ Note ”), (d) reimburse Anadarko for
$14.3 million of capital expenditures it incurred with respect
to the assets contributed to the Partnership and (e) provide
$10.0 million for general partnership purposes;
9. The 98% limited partner
interest in the Partnership held by Holdings and the 2% general
partner interest in the Partnership held by the General Partner
will be redeemed and the initial capital contributions of Asset
Holdco and the General Partner will thereupon be refunded, and any
interest or other profit that may have resulted from the investment
or other use of such capital contributions will be distributed to
Holdings and the General Partner in proportion to such capital
contributions.
10. The Partnership will enter
into a $30.0 million working capital facility with Anadarko as
the lender (the “ Credit Facility ”); and
11. The agreements of limited
partnership and the limited liability company agreements of the
Partnership Entities will be amended and restated to the extent
necessary to reflect the foregoing transactions and any other
transactions contemplated by the Contribution Agreements (as
described below).
If the Underwriters exercise the
Over-Allotment Option, the Partnership will use the net proceeds of
the sale of Additional Units to reimburse Anadarko for capital
expenditures it incurred with respect to the assets contributed to
the Partnership during the two-year period prior to the Offering.
In connection with the Formation Transactions and the Offering
Transactions (collectively, the “ Transactions
”), the parties to the Transactions have entered or will
enter into various agreements, assignments, conveyances,
contribution agreements and related documents (collectively, the
“ Contribution Documents ”). Additionally, the
Partnership, the General Partner and Anadarko will enter into an
omnibus agreement to be dated as of the Closing Date (the “
Omnibus Agreement ”), the General Partner and Anadarko
will enter into a services and secondment agreement to be dated as
of the Closing Date (the “ Services Agreement ”)
and the General Partner and Andarko will enter into a tax sharing
agreement to be dated as of the Closing Date (the “ Tax
Sharing Agreement ,” and together with the Contribution
Documents, the Omnibus Agreement and the Services Agreement, the
“ Transaction Documents ”). The Transaction
Documents, the Operating Agreements (as defined below) and the
Credit Facility are collectively referred to herein as the “
Operative Documents ”).
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The Western Gas Parties and the
Underwriters agree as follows:
1. Sale and Purchase .
Upon the basis of the representations and warranties and subject to
the terms and conditions set forth herein, the Partnership agrees
to issue and sell to the respective Underwriters, the General
Partner agrees to cause the Partnership to issue and sell to the
respective Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase from the Partnership, the number of
Firm Units set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in
accordance with Section 8 hereof, in each case at a
purchase price of $15.51 per Unit. The Partnership is advised by
the Representatives that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Units as
soon after the effective date of the Registration Statement as in
the Representatives’ judgment is advisable and
(ii) initially to offer the Firm Units upon the terms set
forth in the Prospectus. The Representatives may from time to time
increase or decrease the public offering price after the initial
public offering to such extent as they may determine.
In addition, the Partnership hereby
grants to the several Underwriters the option (the “
Over-Allotment Option ”) to purchase, and upon the
basis of the representations and warranties and subject to the
terms and conditions set forth herein, in the event that the
Underwriters sell more Common Units in the Offering than the number
of Firm Units, the Underwriters shall have the right to purchase,
severally and not jointly, from the Partnership, ratably in
accordance with the number of Firm Units to be purchased by each of
them, all or a portion of the Additional Units at the same purchase
price per Unit to be paid by the Underwriters to the Partnership
for the Firm Units. The Over-Allotment Option may be exercised by
the Representatives on behalf of the several Underwriters at any
time and from time to time on or before the thirtieth day following
the date of the Prospectus, by written notice to the Partnership.
Such notice shall set forth the aggregate number of Additional
Units as to which the Over-Allotment Option is being exercised and
the date and time when the Additional Units are to be delivered
(any such date and time being referred to herein as an “
additional time of purchase ”); provided ,
however , that no additional time of purchase shall be
earlier than the time of purchase (as defined in
Section 2 hereof) nor earlier than the second business
day after the date on which the Over-Allotment Option shall have
been exercised nor later than the tenth business day after the date
on which the Over-Allotment Option shall have been exercised. The
number of Additional Units to be sold to each Underwriter shall be
the number that bears the same proportion to the aggregate number
of Additional Units being purchased as the number of Firm Units set
forth opposite the name of such Underwriter in
Schedule A attached hereto bears to the aggregate
number of Firm Units, subject to such adjustments as the
Representatives may determine are necessary to eliminate fractional
Units and subject to adjustment in accordance with Section 8
hereof.
2. Payment and Delivery
. Payment of the purchase price for the Firm Units shall be made to
the Partnership by Federal Funds wire transfer against electronic
delivery of the Firm Units in book entry form to the
Representatives through the facilities of The Depository Trust
Company (“ DTC ”) for the respective accounts of
the Underwriters. Such payment and delivery shall be made at 9:00
A.M., Houston, Texas time, on May 14, 2008 (the “
Closing Date ”) (unless another time shall be agreed
to by the Representatives and the Partnership or unless postponed
in accordance with the provisions of Section 8 hereof).
The time at which such payment and
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delivery
are to be made is sometimes referred to herein as the “
time of purchase .” Electronic transfer of the Firm
Units shall be made to the Representatives at the time of purchase
in such names and in such denominations as they shall
specify.
Payment of the purchase price for the
Additional Units shall be made at the additional time of purchase
in the same manner as the payment for the Firm Units. Electronic
transfer of the Additional Units shall be made to the
Representatives at the additional time of purchase in such names
and in such denominations as they shall specify.
Delivery of the documents described
in Section 6 hereof with respect to the purchase of the
Firm Units and any purchase of Additional Units shall be made at
the offices of Andrews Kurth LLP, 600 Travis, Suite 4200,
Houston, Texas 77002, at 9:00 A.M., Houston, Texas time, on the
Closing Date and the date of the closing of any purchase of
Additional Units.
3. Representations and
Warranties of the Western Gas Parties . Each of the Western Gas
Parties, jointly and severally, represents, warrants to and agrees
with each of the Underwriters that:
(a) Effectiveness of
Registration Statement . The Registration Statement has
heretofore become effective under the Act or, with respect to any
registration statement to be filed to register the offer and sale
of Units pursuant to Rule 462(b) under the Act, will be filed with
the Commission and become effective under the Act no later than
10:00 P.M., New York City time, on the date of determination
of the public offering price for the Units; no stop order of the
Commission preventing or suspending the use of any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has
been issued, and no proceedings for such purpose have been
instituted or, to the Partnership’s knowledge after due
inquiry, are contemplated by the Commission; and the Exchange Act
Registration Statement has become effective as provided in
Section 12 of the Exchange Act.
(b) Compliance with Act; No
Material Misstatements or Omissions . The Registration
Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, will comply at the
time of purchase, each additional time of purchase, if any, and at
all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Units, in all material respects, with the requirements
of the Act; the Registration Statement did not, as of the Effective
Time, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; each Preliminary
Prospectus complied at the time it was filed with the Commission,
and complies as of the date hereof, in all material respects, with
the requirements of the Act; at no time during the period that
begins on the earlier of the date of such Preliminary Prospectus
and the date such Preliminary Prospectus was filed with the
Commission and ends at the time of purchase did or will any
Preliminary Prospectus, as then amended or supplemented, include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, and
at no time during such period did or will any
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Preliminary
Prospectus, as then amended or supplemented, together with any
combination of one or more of the then-issued Permitted Free
Writing Prospectuses, if any, include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; the Prospectus will comply,
as of its date, the date that it is filed with the Commission, the
time of purchase, each additional time of purchase, if any, and at
all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Units, in all material respects, with the requirements
of the Act (including, without limitation, Section 10(a) of the
Act); at no time during the period that begins on the earlier of
the date of the Prospectus and the date the Prospectus is filed
with the Commission and ends at the later of the time of purchase,
the latest additional time of purchase, if any, and the end of the
period during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with
Rule 172 under the Act or any similar rule) in connection with
any sale of Units did or will the Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; at no time during the period that begins
on the date of the earliest use of any Permitted Free Writing
Prospectus and ends at the time of purchase did or will any
Permitted Free Writing Prospectus include an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading, or conflict with the
information contained in the Registration Statement, the
Preliminary Prospectuses or the Prospectus; provided ,
however , that the Western Gas Parties make no
representation or warranty in this Section 3(b) with
respect to any statement contained in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus in reliance upon and in conformity with
information specified in Section 10 hereof, furnished
in writing by or on behalf of any Underwriter through the
Representatives to the Partnership expressly for use in the
Registration Statement, such Preliminary Prospectus, the Prospectus
or such Permitted Free Writing Prospectus. To the extent required
by Rule 433(d) under the Act, all Permitted Free Writing
Prospectuses were preceded or accompanied by a statutory prospectus
meeting the requirements of Section 10 of the Act.
(c) No Other Prospectus
. Prior to the execution of this Agreement, the Partnership has
not, directly or indirectly, offered or sold any Units by means of
any “prospectus” (within the meaning of the Act) or
used any “prospectus” (within the meaning of the Act)
in connection with the offer or sale of the Units, in each case
other than the Preliminary Prospectuses and the Permitted Free
Writing Prospectuses, if any; the Partnership has not, directly or
indirectly, prepared, used or referred to any Permitted Free
Writing Prospectus except in compliance with Rules 164 and 433
under the Act; assuming that any such Permitted Free Writing
Prospectus is accompanied or preceded by the most recent
Preliminary Prospectus that contains a price range or the
Prospectus, as the case may be, and that any such Permitted Free
Writing Prospectus is so used or referred to after the Registration
Statement was filed with the Commission (and after any such
Permitted Free Writing Prospectus was, if required pursuant to Rule
433(d) under
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the Act, filed
with the Commission), the use of or reference to any such Permitted
Free Writing Prospectus by any Underwriter will satisfy the
provisions of Rule 164 and Rule 433 (without reliance on
subsection (b), (c) or (d) of Rule 164); each of the
Preliminary Prospectuses is a prospectus that, other than by reason
of Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act, including a price range
where required by rule; neither the Partnership nor the
Underwriters are disqualified, by reason of subsection (f) or
(g) of Rule 164 under the Act, from using, in connection
with the offer and sale of the Units, a “free writing
prospectus” (as defined in Rule 405 under the Act)
pursuant to Rules 164 and 433 under the Act; the Partnership
is not an “ineligible issuer” (as defined in
Rule 405 under the Act) as of the eligibility determination
date for purposes of Rules 164 and 433 under the Act with
respect to the Offering contemplated hereby; the parties hereto
agree and understand that the content of any and all “road
shows” (as defined in Rule 433(h)(4) under the Act)
related to the Offering contemplated hereby is solely the property
of the Partnership; and the Partnership has caused there to be made
available at least one version of a “ bona fide
electronic road show” (as defined in Rule 433(h)(5)
under the Act) in a manner such that, pursuant to
Rule 433(d)(8)(ii) under the Act, the Partnership is not
required, pursuant to Rule 433(d) under the Act, to file with the
Commission any Road Show.
(d) Formation of the Western
Gas Entities . Each of the Western Gas Entities has been duly
formed and is validly existing as a limited partnership, limited
liability company or corporation, as the case may be, and is in
good standing under the laws of the State of Delaware or the State
of Texas, as the case may be, with full partnership, limited
liability company or corporate power and authority to own, lease
and operate its properties and conduct its business as described in
the Registration Statement, the Preliminary Prospectuses, the
Prospectus and each Permitted Free Writing Prospectus and
(i) in the case of the Western Gas Parties, to execute and
deliver this Agreement and consummate the transactions contemplated
hereby, (ii) in the case of the Partnership, to issue, sell
and deliver the Units, (iii) in the case of the General
Partner, to act as the general partner of the Partnership, and
(iv) in the case of each Western Gas Entity that is a party to
an Operative Document, to execute and deliver such Operative
Document and consummate the transactions contemplated
thereby.
(e) Foreign Qualification
and Registration . Each of the Western Gas Entities is duly
qualified to do business as a foreign limited partnership, limited
liability company or corporation, as the case may be, and is in
good standing in each jurisdiction where the ownership or lease of
its properties or the conduct of its business requires such
qualification (as set forth in Schedule C hereto),
except for any failures to be so qualified and in good standing
that would not, individually or in the aggregate, (i) have a
material adverse effect on the business, assets, condition
(financial or otherwise), results of operations or prospects of the
Partnership Entities taken as a whole (a “ Material
Adverse Effect ”) or (ii) subject the limited
partners of the Partnership to any material liability or
disability.
(f) Ownership of Western
Gas . At the time of purchase and each additional time of
purchase, after giving effect to the Transactions, Anadarko will
directly and indirectly own all of the issued and outstanding
shares of capital stock of Western Gas;
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such shares of
capital stock will be duly authorized and validly issued; and
Anadarko will own such shares of capital stock free and clear of
all claims, liens, encumbrances, security interests, equities and
charges (“ Liens ”).
(g) Ownership of
Holdings . At the time of purchase and each additional time of
purchase, after giving effect to the Transactions, Western Gas will
own all of the issued and outstanding membership interests in
Holdings; such membership interests will be duly authorized and
validly issued in accordance with the limited liability company
agreement of Holdings, as in effect at each such time (the “
Holdings LLC Agreement ”), fully paid (to the extent
required by the Holdings LLC Agreement) and nonassessable (except
as such nonassessability may be affected by Section 18-607 of
the Delaware Limited Liability Company Act (the “ Delaware
LLC Act ”)); and Western Gas will own such membership
interests free and clear of all Liens.
(h) Ownership of the General
Partner . At the time of purchase and each additional time of
purchase, after giving effect to the Transactions, Holdings will
own all of the issued and outstanding membership interests in the
General Partner; such membership interests will be duly authorized
and validly issued in accordance with the limited liability company
agreement of the General Partner, as in effect at each such time
(the “ General Partner LLC Agreement ”), fully
paid (to the extent required by the General Partner LLC Agreement)
and nonassessable (except as such nonassessability may be affected
by Section 18-607 of the Delaware LLC Act); and Holdings will own
such membership interests free and clear of all Liens.
(i) Ownership of General
Partner Interest in the Partnership . At the time of purchase
and each additional time of purchase, after giving effect to the
Transactions, the General Partner will be the sole general partner
of the Partnership, with a 2.0% general partner interest in the
Partnership; such general partner interest will be duly authorized
and validly issued in accordance with the agreement of limited
partnership of the Partnership, as in effect at each such time (the
“ Partnership Agreement ”); and the General
Partner will own such general partner interest free and clear of
all Liens, except for restrictions on transferability contained in
the Partnership Agreement and as otherwise described in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus.
(j) Ownership of Sponsor
Units . At the time of purchase, after giving effect to the
Transactions and assuming that the Over-Allotment Option has not
been exercised at such time of purchase, there will be 23,723,806
Common Units and 26,536,306 Subordinated Units outstanding; at the
time of purchase, after giving effect to the Transactions and
assuming that the Over-Allotment Option has not been exercised at
such time of purchase, Holdings will own 4,973,806 Common Units,
26,536,306 Subordinated Units and the right to receive additional
Common Units in an amount equal to 2,812,500 less the number of
Additional Units, if any, purchased by the Underwriters pursuant to
the exercise of the Over-Allotment Option (such Common Units and
Subordinated Units and any Common Units issuable pursuant to the
right to receive additional Common Units described in this clause
being collectively referred to herein as the “ Sponsor
Units ”); and at the time of purchase and after giving
effect to the
- 10 -
Transactions,
the General Partner will own 1,083,115 general partner units and
all of the Incentive Distribution Rights (as defined in the
Partnership Agreement). On the 31 st day following
the date of the Prospectus, there will be 26,536,306 Common Units
and 26,536,306 Subordinated Units outstanding; on such day,
Holdings will own the number of Common Units equal to 7,786,306
less the number of Additional Units, if any, purchased by the
Underwriters pursuant to the exercise of the Over-Allotment Option
and 26,536,306 Subordinated Units; and on such day, the General
Partner will own 1,083,115 general partner units and all of the
Incentive Distribution Rights. All of the Sponsor Units and the
limited partner interests represented thereby and the Incentive
Distribution Rights will be duly authorized and validly issued in
accordance with the Partnership Agreement and will be fully paid
(to the extent required by the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by
(i) matters described in the Registration Statement, the
Preliminary Prospectus and the Prospectus under the caption
“Risk Factors—Risks Inherent in an Investment in
Us—Your liability may not be limited if a court finds that
unitholder action constitutes control of our business,”
“Risk Factors—Risks Inherent in an Investment in
Us—Unitholders may have liability to repay distributions that
were wrongfully distributed to them” and “The
Partnership Agreement—Limited Liability” (and any
similar information, if any, contained in any Permitted Free
Writing Prospectus) and (ii) Sections 17-303 and 17-607
of the Delaware LP Act); and all of the Sponsor Units owned by
Holdings and the Incentive Distribution Rights owned by the General
Partner will be owned free and clear of all Liens, except with
respect to the restrictions on transferability contained in the
Partnership Agreement and as otherwise described in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus.
(k) Ownership of Operating
GP . At the time of purchase and each additional time of
purchase, after giving effect to the Transactions, the Partnership
will own all of the issued and outstanding membership interests in
Operating GP; such membership interests will be duly authorized and
validly issued in accordance with the limited liability company
agreement of Operating GP, as in effect at each such time (the
“ Operating GP LLC Agreement ”), fully paid (to
the extent required by the Operating GP LLC Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and the Partnership
will own such membership interests free and clear of all
Liens.
(l) Ownership of the
Operating Partnership . At the time of purchase and each
additional time of purchase, after giving effect to the
Transactions, the Partnership will be the sole limited partner of
the Operating Partnership, with a 99.99% limited partner interest
in the Operating Partnership; such limited partner interest will be
duly authorized and validly issued in accordance with the agreement
of limited partnership of the Operating Partnership, as in effect
at each such time (the “ Operating Partnership LP
Agreement ”), fully paid (to the extent required by the
Operating Partnership LP Agreement) and nonassessable (except as
such nonassessability may be affected by Sections 17-303 and 17-607
of the Delaware LP Act); and the Partnership will own such limited
partner interest free and clear of all Liens. At the time of
purchase and each additional time of purchase, after giving effect
to the Transactions, Operating GP will be the sole general partner
of the Operating Partnership, with 0.01% general partner
interest
- 11 -
in the
Operating Partnership; such general partner interest will be duly
authorized and validly issued in accordance with the Operating
Partnership LP Agreement; and the Partnership will own such general
partner interest free and clear of all Liens.
(m) Ownership of AGC .
At the time of purchase and each additional time of purchase, after
giving effect to the Transactions, the Operating Partnership will
own all of the issued and outstanding membership interests in AGC;
such membership interests will be duly authorized and validly
issued in accordance with the limited liability company agreement
of AGC, as in effect at each such time (the “ AGC LLC
Agreement ”), fully paid (to the extent required by the
AGC LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the
Delaware LLC Act); and the Operating Partnership will own such
membership interests free and clear of all Liens.
(n) Ownership of PGT .
At the time of purchase and each additional time of purchase, after
giving effect to the Transactions, the Operating Partnership will
own all of the issued and outstanding membership interests in PGT;
such membership interests will be duly authorized and validly
issued in accordance with the limited liability company agreement
of PGT, as in effect at each such time (the “ PGT LLC
Agreement ”), fully paid (to the extent required by the
PGT LLC Agreement) and nonassessable (except as such
nonassessability may be affected by 101.206 of the Texas Business
Organizations Code (“ TBOC ”)); and the
Operating Partnership will own such membership interests free and
clear of all Liens.
(o) Ownership of MIGC .
At the time of purchase and each additional time of purchase, after
giving effect to the Transactions, the Operating Partnership will
own all of the issued and outstanding membership interests in MIGC;
such membership interests will be duly authorized and validly
issued in accordance with the limited liability company agreement
of MIGC, as in effect at each such time (the “ MIGC LLC
Agreement ”), fully paid (to the extent required by the
MIGC LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 18-607 of the
Delaware LLC Act); and the Operating Partnership will own such
membership interests free and clear of all Liens.
(p) No Other
Subsidiaries . The Partnership has no other direct or indirect
“subsidiaries” (as defined under the Act) other than
the Operating Subsidiaries. Other than its ownership interest in
the Operating Subsidiaries, the Partnership does not own, and at
the time of purchase and each additional time of purchase will not
own, directly or indirectly, any shares of stock, any other equity
interests or any long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association
or other entity, other than the Note. All equity interests in the
Operating Subsidiaries have been issued in compliance with all
applicable securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar
right. No options, warrants or other rights to purchase, agreements
or other obligations to issue or rights to convert any obligation
into equity interests in any of the Operating Subsidiaries are
outstanding.
(q) Valid Issuance of the
Units . At the time of purchase and each additional
- 12 -
time of
purchase, the Units to be sold by the Partnership, and the limited
partner interests represented thereby, will be duly authorized in
accordance with the Partnership Agreement and, when issued and
delivered to the Underwriters against payment therefor as provided
herein, will be validly issued, fully paid (to the extent required
under the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by (i) matters described in
the Registration Statement, the Preliminary Prospectus and the
Prospectus under the caption “Risk Factors—Risks
Inherent in an Investment in Us—Your liability may not be
limited if a court finds that unitholder action constitutes control
of our business,” “Risk Factors—Risks Inherent in
an Investment in Us—Unitholders may have liability to repay
distributions that were wrongfully distributed to them” and
“The Partnership Agreement—Limited Liability”
(and any similar information, if any, contained in any Permitted
Free Writing Prospectus) and (ii) Sections 17-303 and
17-607 of the Delaware LP Act); other than the Sponsor Units and
the Incentive Distribution Rights, the Units will be the only
limited partner interests of the Partnership issued and outstanding
at the time of purchase and each additional time of purchase; and
the issuance and delivery of the Units against payment therefore as
provided herein will not violate any restriction upon the transfer
thereof or any preemptive right, resale right, right of first
refusal or similar right pursuant to the Partnership’s
certificate of limited partnership, the Partnership Agreement or
any agreement or other instrument to which the Partnership, any of
the Partnership Entities or any of their affiliates is a party or
by which any of them or any of their respective properties may be
bound or affected.
(r) Conformity of Securities
to Description . The Units, when issued and delivered in
accordance with the terms of the Partnership Agreement and against
payment therefor as provided herein will conform, and the Sponsor
Units, the general partner interest and the Incentive Distribution
Rights conform, or when issued and delivered in accordance with the
terms of the Partnership Agreement will conform, in all material
respects to the descriptions thereof, if any, contained in the
Registration Statement, the Preliminary Prospectuses, the
Prospectus and each Permitted Free Writing Prospectus.
(s) Authority and
Authorization . The Partnership has all requisite power and
authority under the Partnership Agreement and the Delaware LP Act
to issue, sell and deliver (i) the Units, in accordance with
and upon the terms and conditions set forth in this Agreement, the
Partnership Agreement, the Registration Statement, the Preliminary
Prospectuses and the Prospectus, and (ii) the Sponsor Units,
in accordance with the terms and conditions set forth in the
Partnership Agreement and the Transaction Documents. At the time of
purchase and each additional time of purchase, all partnership,
limited liability company and corporate action, as the case may be,
required to be taken by the Western Gas Entities or any of their
partners, members or stockholders for the authorization, issuance,
sale and delivery of the Units and the Sponsor Units, the
consummation of the transactions (including the Transactions)
contemplated by this Agreement and the execution and delivery of
the Operative Documents shall have been validly taken.
(t) Authorization, Execution
and Delivery of this Agreement . This Agreement has been duly
authorized, executed and delivered by each of the Western Gas
Parties.
- 13 -
(u) Authorization,
Execution, Delivery and Enforceability of Other Agreements . At
or before the time of purchase:
(i) The Holdings LLC Agreement will
be duly authorized, executed and delivered by Western Gas and will
be a valid and legally binding agreement of Western Gas,
enforceable against Western Gas in accordance with its terms;
(ii) The General Partner LLC
Agreement will be duly authorized, executed and delivered by
Holdings and will be a valid and legally binding agreement of
Holdings, enforceable against Holdings in accordance with its
terms;
(iii) The Partnership Agreement will
be duly authorized, executed and delivered by the General Partner
and Holdings and will be a valid and legally binding agreement of
the General Partner and Holdings, enforceable against both of them
in accordance with its terms;
(iv) The Operating GP LLC Agreement
will be duly authorized, executed and delivered by the Partnership
and will be a valid and legally binding agreement of the
Partnership, enforceable against the Partnership in accordance with
its terms;
(v) The Operating Partnership LP
Agreement will be duly authorized, executed and delivered by the
Partnership and Operating GP and will be a valid and legally
binding agreement of the Partnership and Operating GP, enforceable
against both of them in accordance with its terms;
(vi) The AGC LLC Agreement will be
duly authorized, executed and delivered by the Operating
Partnership and will be a valid and legally binding agreement of
the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms;
(vii) The MIGC LLC Agreement will be
duly authorized, executed and delivered by the Operating
Partnership and will be a valid and legally binding agreement of
the Operating Partnership, enforceable against the Operating
Partnership in accordance with its terms;
(viii) The PGT LLC Agreement
(together with the Holdings LLC Agreement, the General Partner LLC
Agreement, the Partnership Agreement, the Operating GP LLC
Agreement, the Operating Partnership LP Agreement, the AGC LLC
Agreement and the MIGC LLC Agreement, the “ Operating
Agreements ”) will be duly authorized, executed and
delivered by the Operating Partnership and will be a valid and
legally binding agreement of the Operating Partnership, enforceable
against the Operating Partnership in accordance with its
terms;
(ix) Each of the Contribution
Documents will be duly authorized, executed and delivered by the
parties thereto and will be a valid and legally
- 14 -
binding
agreement of each of the parties thereto, enforceable against each
of such parties in accordance with its terms;
(x) The Omnibus Agreement will be
duly authorized, executed and delivered by the Partnership, the
General Partner and Anadarko and will be a valid and legally
binding agreement of each of them, enforceable against each of them
in accordance with its terms;
(xi) The Services Agreement will be
duly authorized, executed and delivered by the General Partner and
Anadarko and will be a valid and legally binding agreement of both
of them, enforceable against both of them in accordance with its
terms;
(xii) The Tax Sharing Agreement will
be duly authorized, executed and delivered by the General Partner
and Anadarko and will be a valid and legally binding agreement of
both of them, enforceable against both of them in accordance with
its terms;
(xiii) The Credit Facility will be
duly authorized, executed and delivered by the Partnership and
Anadarko and will be a valid and legally binding agreement of both
of them, enforceable against both of them in accordance with its
terms;
provided
that, with respect to each agreement described in this Section
3(u) , the enforceability thereof may be limited by
(A) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or
affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and
(B) public policy, applicable laws relating to fiduciary
duties and indemnification and an implied covenant of good faith
and fair dealing.
(v) No Defaults . No
Western Gas Entity is in breach or violation of or in default under
(nor has any event occurred which, with notice, lapse of time or
both, would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under) (i) its formation, governing or other
organizational documents, (ii) any indenture, mortgage, deed
of trust, bank loan, credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which it is a party or by which it or any of its
properties may be bound or affected, (iii) any federal, state,
local or foreign law, regulation or rule, (iv) any rule or
regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the rules and regulations of the NYSE), or (v) any
decree, judgment or order applicable to it or any of its
properties, except in the case of clauses (ii) through
(v) for any such breaches, violations or default that would
not, individually or in the aggregate, have a Material Adverse
Effect, affect the validity of the Units or prevent or materially
interfere with the consummation of the transactions contemplated by
this Agreement,
- 15 -
including the
Offering, and the other transactions (including, but not limited
to, the Transactions) contemplated by the Registration Statement,
the Preliminary Prospectuses, the Prospectus, any Permitted Free
Writing Prospectus and the Operative Documents.
(w) No Conflicts . The
execution, delivery and performance of this Agreement and the
Operative Documents, the issuance and sale of the Units and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the Transactions) will not conflict
with, result in any breach or violation of, constitute a default
under (or constitute any event which, with notice, lapse of time or
both, would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under), or result in the creation or imposition of a
Lien on any property or assets of any Western Gas Entity pursuant
to (i) the formation, governing or other organizational
documents of any of the Western Gas Entities, (ii) any
indenture, mortgage, deed of trust, bank loan, credit agreement or
other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which any of the Western Gas
Entities is a party or by which any of the Western Gas Entities or
any of their respective properties may be bound or affected,
(iii) any federal, state, local or foreign law, regulation or
rule, (iv) any rule or regulation of any self-regulatory
organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the
NYSE), or (v) any decree, judgment or order applicable to any
of the Western Gas Entities or any of their respective properties,
except in the cases of clauses (ii) through (v) for any
such conflicts, breaches, violations or defaults that would not,
individually or in the aggregate, have a Material Adverse Effect,
affect the validity of the Units or prevent or materially interfere
with the consummation of the transactions contemplated by this
Agreement, including the Offering, and the other transactions
(including, but not limited to, the Transactions) contemplated by
the Registration Statement, the Preliminary Prospectuses, the
Prospectus, any Permitted Free Writing Prospectus and the Operative
Documents.
(x) No Consents . No
approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NYSE), or approval of
the security holders of the Western Gas Entities (each, a “
Consent ”), is required in connection with the
issuance and sale of the Units, the execution, delivery and
performance of the Operative Documents by the Western Gas Entities
or the consummation by the Western Gas Entities of the transactions
contemplated hereby or thereby (including, without limitation, the
Transactions), other than (i) registration of the Units under
the Act, which has been effected (or, with respect to any
registration statement to be filed hereunder pursuant to Rule
462(b) under the Act, will be effected in accordance herewith),
(ii) any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Units are being
offered by the Underwriters, (iii) under the rules and
regulations of FINRA and (iv) Consents that have been, or
prior to the Closing Date will be, obtained.
(y) No Preemptive Rights,
Registration Rights, Options or Other Rights .
- 16 -
Except as
described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus,
(i) no person has the right, contractual or otherwise, to
cause the Partnership to issue or sell to it any Units or other
equity interests of the Partnership, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any Units or other equity interests in the
Partnership, (iii) no person has any resale rights in respect
of any Units or other equity interests in the Partnership that
would be required to be disclosed in the Registration Statement and
are not so disclosed, (iv) no person has the right to act as
an underwriter or as a financial advisor to the Partnership in
connection with the Offering and (v) no person has the right,
contractual or otherwise, to cause the Partnership to register
under the Act any Units or other equity interests in the
Partnership, or to include any Units or other equity interests in
the Partnership in the Registration Statement or the Offering
contemplated thereby.
(z) Permits . Each of
the Partnership Entities has all necessary licenses,
authorizations, consents and approvals (each, a “
Permit ”) and has made all necessary filings required
under any applicable law, regulation or rule, and has obtained all
necessary Permits from other persons, in order to conduct its
business, except for such Permits that, if not obtained, would not,
individually or in the aggregate, result in a Material Adverse
Effect; and no Partnership Entity is in violation of or default
under, or has received notice of any proceedings relating to the
revocation or modification of, any such Permit or any federal,
state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to such Partnership Entity, except for
any such violations, defaults, revocations or modifications that
would not, individually or in the aggregate, have a Material
Adverse Effect.
(aa) Disclosure of Certain
Items . All legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, properties, leases or documents of a character required
to be described in the Registration Statement, the Preliminary
Prospectuses or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
and the statements included in the Registration Statement, the
Preliminary Prospectuses and the Prospectus under the headings
“Our Cash Distribution Policy and Restrictions on
Distributions,” “Provisions of our Partnership
Agreement Relating to Cash Distributions,”
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital
Resources,” “Business—Safety and
Maintenance,” “Business—Regulation of
Operations,” “Business—Environmental
Matters,” “Business—Title to Properties and
Rights of Way,” “Management,” “Certain
Relationships and Related Party Transactions,”
“Conflicts of Interest and Fiduciary Duties,”
“Description of the Common Units,” “The
Partnership Agreement,” “Material Tax
Consequences” and “Underwriting” (and any similar
information contained in each Permitted Free Writing Prospectus),
insofar as they purport to summarize legal or governmental matters
or proceedings or the terms of statutes, rules, regulations,
agreements or documents, are fair and accurate summaries of such
legal or governmental matters or proceedings, statutes, rules,
regulations, agreements or documents.
(bb) Litigation . Except
as described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, there are
no
- 17 -
actions, suits,
claims, investigations or proceedings pending or, to the Western
Gas Parties’ knowledge, threatened or contemplated to which
the Western Gas Entities or any of their respective directors or
officers is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NYSE), except for any
such actions, suits, claims, investigations or proceedings that
would not, individually or in the aggregate, if resolved adversely
to any Western Gas Entity, have a Material Adverse Effect, affect
the validity of the Units or prevent or materially interfere with
consummation of the transactions contemplated by this Agreement,
including the Offering, and the other transactions (including, but
not limited to, the Transactions) contemplated by the Registration
Statement, the Preliminary Prospectuses, the Prospectus, any
Permitted Free Writing Prospectus and the Operative
Documents.
(cc) Independent Registered
Public Accounting Firm . KPMG LLP, whose reports on the
financial statements of certain of the Partnership Entities and the
combined financial statements of Western Gas Partners Predecessor
(as defined in such financial statements) are included in the
Registration Statement, the Preliminary Prospectuses, the
Prospectus and each Permitted Free Writing Prospectus containing an
audit report, are independent registered public accountants as
required by the Act and by the rules of the Public Company
Accounting Oversight Board.
(dd) Financial
Statements . The financial statements included in the
Registration Statement, the Preliminary Prospectuses, the
Prospectus and, if any, each Permitted Free Writing Prospectuses,
together with the related notes and schedules, present fairly in
all material respects the financial position of the Partnership,
the General Partner, MIGC and Western Gas Partners Predecessor as
of the dates indicated and the results of operations, cash flows
and changes in parents’, partners’ or members’
equity, as the case may be, of the Partnership, the General
Partner, MIGC and Western Gas Partners Predecessor for the periods
specified; such financial statements have been prepared in
compliance with the requirements of the Act and Exchange Act and in
conformity with U.S. generally accepted accounting principles
applied on a consistent basis during the periods involved; all pro
forma financial statements or data included in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and each
Permitted Free Writing Prospectus (excluding the pro forma
information and assumptions set forth under the caption “Our
Cash Distribution Policy and Restrictions on
Distributions—Unaudited Pro Forma Available Cash for the Year
Ended December 31, 2007” and in the related notes)
comply with the requirements of the Act (including, without
limitation, Regulations S-X and G under the Act), the Exchange Act,
Item 10 under Regulation S-K and Financial Interpretation
No. 46, and the assumptions used in the preparation of such
pro forma financial statements and data are reasonable, the pro
forma adjustments used therein are appropriate to give effect to
the transactions or circumstances described therein and the pro
forma adjustments have been properly applied to the historical
amounts in the compilation of those statements and data; all other
financial and statistical data contained in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and each
Permitted Free Writing Prospectus are accurately and fairly
presented and prepared on a
- 18 -
basis
consistent with the financial statements and books and records of
the Western Gas Entities; the assumptions and forecasts underlying
the pro forma information set forth under the captions “Our
Cash Distribution Policy and Restrictions on
Distributions—Partnership Statement of Estimated Adjusted
EBITDA” and “Our Cash Distribution Policy and
Restrictions on Distributions—Unaudited Pro Forma Available
Cash for the Year Ended December 31, 2007” and in the
related notes in the Registration Statement, the Preliminary
Prospectuses and the Prospectus (and any similar information, if
any, contained in any Permitted Free Writing Prospectus) are, in
the informed judgment of management of the Partnership Entities,
reasonable, and with respect to the pro forma information set forth
under the caption “Our Cash Distribution Policy and
Restrictions on Distributions—Unaudited Pro Forma Available
Cash for the Year Ended December 31, 2007” and in the
related notes, the pro forma adjustments used therein are
appropriate to give effect to the transactions or circumstances
described therein and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of those
statements and data; there are no financial statements (historical
or pro forma) that are required to be included in the Registration
Statement, any Preliminary Prospectus or the Prospectus that are
not so included as required; the Partnership Entities do not have
any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not described in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus; and all disclosures
contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and each Permitted Free Writing
Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission) comply with Regulation G and Item 10 of
Regulation S-K under the Act, to the extent applicable.
(ee) No Material Adverse
Change . Subsequent to the respective dates as of which
information is given in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and each Permitted Free Writing
Prospectus, in each case excluding any amendments or supplements to
the foregoing made after the execution of this Agreement, except as
described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, there has
not been (i) any material adverse change, or any developments
that are reasonably likely to result in, individually or in the
aggregate, a material adverse change, in the business, assets,
management, condition (financial or otherwise), prospects or
results of operations of the Partnership Entities (taken as a
whole), (ii) any transaction that is material to the
Partnership Entities (taken as a whole), (iii) any obligation
or liability, direct or contingent (including any off-balance sheet
obligations), incurred by any Partnership Entity that is material
to the Partnership Entities (taken as a whole), (iv) any
material change in the capitalization, ownership or outstanding
indebtedness of any Partnership Entity or (v) any dividend or
distribution of any kind declared, paid or made on the security
interests of any Partnership Entity.
(ff) Lock-Up Agreement .
The Partnership has obtained for the benefit of the Underwriters
the agreement (a “ Lock-Up Agreement ”), in the
form set forth as Exhibit A hereto, of (i) each
director and “officer” (within the meaning of Rule
16a-1(f) under the Exchange Act) of the General Partner,
(ii) each Directed Unit Participant who purchases in excess of
$100,000 worth of Reserved Units pursuant to the Directed Unit
Program, (iii) each holder of Sponsor Units and (iv) each
other holder of Common Units named in Exhibit A-1
hereto.
- 19 -
(gg) Investment Company
. None of the Partnership Entities is, at no time during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Units will any
of them be, nor, after giving effect to the Offering and sale of
the Units and the application of the proceeds therefrom, will any
of them be, an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “ Investment Company Act ”).
(hh) Title to Properties
. The Partnership Entities have good and marketable title to all
real property and good title to all personal property described in
the Registration Statement, the Preliminary Prospectuses, the
Prospectus and each Permitted Free Writing Prospectus as being
owned by any of them, free and clear of all Liens, except for Liens
that would not materially interfere with the use of any such
property for the conduct of their businesses and Liens described in
the Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus. All property described
in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and each Permitted Free Writing Prospectus as being held
under lease by any Partnership Entity is held thereby under valid,
subsisting and enforceable leases.
(ii) Rights-of-Way .
Each Partnership Entity has such consents, easements, rights-of-way
or licenses from any person (“ rights-of-way ”)
as are necessary to enable it to conduct its business in the manner
described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and each Permitted Free Writing
Prospectus, subject to such qualifications as may be set forth in
the Registration Statement, each such Preliminary Prospectus, the
Prospectus or each such Permitted Free Writing Prospectus, except
for (i) qualifications, reservations and encumbrances that
would not, individually or in the aggregate, have a Material
Adverse Effect and (ii) such rights-of-way that, if not
obtained, would not result in, individually or in the aggregate, a
Material Adverse Effect; and, except as described in the
Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus or as would not interfere
with the operations of the Partnership Entities as conducted on the
date hereof to such a material extent that the Representatives
could reasonably conclude that proceeding with the Offering would
be inadvisable, none of such rights-of-way contains any restriction
that is materially burdensome to the Partnership Entities, taken as
a whole.
(jj) Intellectual
Property . The Partnership Entities own, or have obtained valid
and enforceable licenses for or other rights to use, the
inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, service names,
copyrights, trade secrets and other proprietary information
(collectively, “ Intellectual Property ”)
described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and, if any, each Permitted Free
Writing Prospectus as being owned or licensed by them or that are
necessary for the conduct of their respective businesses as
currently conducted or as proposed to be conducted, except for any
failures to own, license or have rights to such Intellectual
Property that would not, individually or
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in the
aggregate, have a Material Adverse Effect. The Western Gas Parties
are unaware of any claim to the contrary or any challenge by any
other person to the rights of any of the Partnership Entities with
respect to any Intellectual Property. No Partnership Entity has
infringed or is infringing the intellectual property of a third
party or has received notice of a claim by a third party to the
contrary.
(kk) Labor and Employment
Matters . No Partnership Entity is engaged in any unfair labor
practice, and no labor disputes with the employees of or to be
seconded to any Partnership Entity exist or, to the knowledge of
the Western Gas Parties after due inquiry, are imminent or
threatened that would, individually or in the aggregate, have a
Material Adverse Effect. To the knowledge of the Western Gas
Parties: (i) there is (A) no unfair labor practice
complaint pending or threatened against any Partnership Entity
before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective
bargaining agreements pending or threatened, (B) no strike,
labor dispute, slowdown or stoppage pending or threatened against
any Partnership Entity and (C) no union representation dispute
currently existing concerning the employees of or to be seconded to
any Partnership Entity, (ii) no union organizing activities
are currently taking place concerning the employees of or to be
seconded to any Partnership Entity and (iii) there has been no
violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974, as amended (“
ERISA ”), or the rules and regulations promulgated
thereunder concerning the employees of or to be seconded to any
Partnership Entity.
(ll) Environmental
Compliance . Except as described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and
the Prospectus, (i) each Partnership Entity and each of the
properties, assets and operations of the Partnership Entities is in
compliance with any and all applicable federal, state, local or
foreign laws, statutes, ordinances, rules, regulations, orders,
decrees, judgments, injunctions, permits, licenses, authorizations
or other binding requirements, or common laws, relating to health,
safety or the protection, cleanup or restoration of the environment
or natural resources, including those relating to the distribution,
processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of
Hazardous Materials (as defined below) (“ Environmental
Laws ”), (ii) each Partnership Entity has received
and is in compliance with all permits, licenses, authorizations or
other approvals required under applicable Environmental Laws to
conduct its business as it is currently being conducted,
(iii) no Western Gas Entity has received written notice of
any, and to the knowledge of the Western Gas Parties, after
reasonable inquiry, there are no events, conditions or activities
that could reasonably be expected to form the basis for any, actual
or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, and (iv) no Western Gas Entity is
subject to any pending or, to the knowledge of the Western Gas
Parties, threatened actions, suits, demands, orders or proceedings
against any Partnership Entity relating to any Environmental Laws
(collectively, “ Proceedings ”), except for any
(A) failures to comply with Environmental Laws or to receive
or comply with required permits, licenses, authorizations or other
approvals, (B) actual or potential liabilities or
(C) Proceedings that would not, individually or in the
aggregate, have a Material Adverse
- 21 -
Effect. Except
as described in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus, no
Partnership Entity has entered into any agreement relating to any
alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below). Except as described
in
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