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[CONFORMED COPY]
K N ENERGY, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
March 4, 1998
From time to time, K N ENERGY, INC., a Kansas corporation (the "COMPANY"),
may enter into one or more underwriting agreements that provide for the sale of
designated securities to the several underwriters named therein. The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (an "UNDERWRITING AGREEMENT"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this "Agreement". Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The registration statement relating to the Debt
Securities also constitutes post-effective amendment number 2 to registration
statement no. 333-40869 (the "FIRST PRIOR REGISTRATION STATEMENT") and post-
effective amendment number 1 to registration statement no. 333-04385 (the
"SECOND PRIOR REGISTRATION STATEMENT"). The registration statement as amended at
the date of this Agreement, including information, if any, deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act, together with the First Prior Registration Statement
and the Second Prior Registration Statement is hereinafter referred to as the
"REGISTRATION STATEMENT." The term "BASIC PROSPECTUS" means the prospectus
included in the Registration Statement. The term "PROSPECTUS" means the Basic
Prospectus
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together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms
"Registration Statement," "Basic Prospectus," "Prospectus" and "preliminary
prospectus" shall include in each case the documents, if any, incorporated by
reference therein. The terms "SUPPLEMENT," "AMENDMENT" and "AMEND" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic Prospectus by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). If the Company has filed an abbreviated
registration statement to register additional Debt Securities pursuant to Rule
462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then
any reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement. Concurrently with the offering of
the Offered Securities, the Company intends to offer, together with and
including the Offered Securities, up to 12,650,000 shares of Common Stock (the
"EQUITY OFFERING"). The Equity Offering and the offerings of the Offered
Securities are not conditioned upon each other.
On January 30, 1998, the Company acquired from Occidental Petroleum
Corporation ("OCCIDENTAL") all of the capital stock of MidCon Corp. ("MIDCON")
and a short term note in the aggregate principal amount of $1.39 billion for
$2.1 billion in cash and another short-term note in the aggregate principal
amount of $1.39 billion (the "ACQUISITION"). Upon the consummation of the
Acquisition, MidCon became a wholly owned subsidiary of the Company. MidCon,
MidCon Texas Pipeline Operator, Inc. and Natural Gas Pipeline Company of America
are referred to herein as "SIGNIFICANT MIDCON SUBSIDIARIES". K N Gas Gathering,
Inc., K N Interstate Gas Transmission Co. and K N Services Inc. are referred to
herein as "SIGNIFICANT COMPANY SUBSIDIARIES". The "Significant MidCon
Subsidiaries" and the "Significant Company Subsidiaries" are collectively
referred to herein as "SIGNIFICANT SUBSIDIARIES".
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
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and the applicable rules and regulations of the Commission thereunder,
(ii) on the original effective date of the Registration Statement, and at
the time of filing of the Company's annual report on Form 10-K for the
year ended December 31, 1997, the Registration Statement did not contain,
and, as amended or supplemented, if applicable, will not contain, any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement and the Prospectus
comply, and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply
(A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Manager or its
counsel expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) under
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"),
of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the state of Kansas, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) Each Significant Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of
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the issued shares of capital stock of each such Significant Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) Each of the Calculation Agency Agreement and the Securities
Purchase Option Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws relating to or affecting creditors'
rights generally and general principles of equity.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(h) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance
with the terms of the Underwriting Agreement, will be entitled to the
benefits of the Indenture, and will be valid and binding obligations of
the Company, in each case enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or similar laws
relating to or affecting creditors' rights generally and general
principles of equity.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Calculation Agency Agreement, the Securities Purchase Option Agreement,
the Indenture and the Offered Securities will not contravene any provision
of applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or
any of its Significant Subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any Significant Subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
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under this Agreement, the Indenture or the Offered Securities, except the
registration of the Offered Securities under the Securities Act and such
as have been obtained or may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Offered Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or the documents incorporated
therein by reference or to be filed as an exhibit to the Registration
Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries 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
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and are in compliance with all terms and
conditions of any such permit, license or approval, except where such
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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, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) To the knowledge of the Company, no person or corporation which
is a "holding company" or a "subsidiary of a holding company", within the
meaning of such terms as defined in the Public Utility Holding Company Act
of 1935, directly or indirectly owns, controls or holds with power to vote
10% or more of the outstanding voting securities of the Company; and the
Company is not a "holding company" or to its knowledge, a "subsidiary of a
holding company" as so defined.
(p) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities, including, without limitation, the Federal
Energy Regulatory Commission, necessary to conduct their respective
businesses as described in the Prospectus, except when the failure to
possess such certificates, authorizations or permits would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly in
all material respects the financial position and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved, except as otherwise stated therein.
(r) The pro forma financial statements of the Company, and the
related notes thereto, included in the Prospectus present fairly in all
material respects the pro forma financial position of the Company, as of
the dates indicated and the results of their operations for the periods
specified; the pro forma combined financial information, and the related
notes thereto, included in the Prospectus has been prepared in accordance
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with the applicable requirements of the Exchange Act and is based upon
good faith estimates and assumptions believed by the Company to be
reasonable.
(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as
described in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
2. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after this Agreement has been entered into as
in the Manager's judgment is advisable. The terms of the public offering of the
Offered Securities are set forth in the Prospectus.
3. Payment and Delivery. Payment for the Offered Securities shall be made
to the Company in Federal or other funds immediately available in New York City
at the time and place set forth in the Underwriting Agreement, upon delivery to
the Manager for the respective accounts of the several Underwriters of the
Offered Securities registered in such names and in such denominations as the
Manager shall request in writing not less than one full business day prior to
the date of delivery, with any transfer taxes payable in connection with the
transfer of the Offered Securities to the Underwriters duly paid.
4. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters are subject to the following conditions:
(a) no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no
proceedings for that purpose shall have been instituted or shall be
pending or, to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel for the Underwriters.
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(b) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that is with negative
implications, 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
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that makes it,
in the judgment of the Manager, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the
Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by each of the chief
executive officer and the chief financial officer of the Company, to the
effect set forth in Section 4(b)(i) and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
(d) The Underwriters shall have received on the Closing Date an
opinion or opinions of Xxxxxxx Xxxxxxx & Xxxxxxxx, outside counsel for the
Company, to the effect set forth in Exhibit A-1, an opinion of Xxxxxx
Xxxxxx, Esq., Vice President, General Counsel and Secretary of the
Company, to the effect set forth in Exhibit A-2, and an opinion of
Polsinelli, White, Xxxxxxxx & Xxxxxxx, Kansas counsel to the Company, to
the effect set forth in Exhibit A-3, in each case, dated the Closing Date.
Such opinions shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
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(e) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, in form and substance satisfactory to the Underwriters.
(f) The Underwriters shall have received on the date hereof and on
the Closing Date letters, dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
from Xxxxxx Xxxxxxxx LLP, the Company's independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information relating to each of
the Company and MidCon contained in or incorporated by reference in the
Registration Statement and the Prospectus; provided that such letters
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date of the Underwriting Agreement.
5. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to the Manager, without charge, eight signed copies
of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to the Manager in New
York City, without charge, prior to 10:00 AM New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 5(b) below, as many copies of the Prospectus,
any documents incorporated by reference therein and any supplements and
amendments thereto or to the Registration Statement as the Manager may
reasonably request.
(b) During the period in which the Prospectus is required by law to
be delivered in connection with the sale of the Offered Securities, before
amending or supplementing the Registration Statement or the Prospectus
(including by filing any document that would as a result thereof be
incorporated by reference in the Prospectus), to furnish to you a copy of
each such proposed amendment, supplement or other document and not to file
any such proposed amendment, supplement or other document to which you
reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
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(c) If, during such period after the first date of the public
offering of the Offered Securities as in the reasonable opinion of counsel
for the Underwriters or counsel for the Company the Prospectus is required
by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Underwriters or counsel for the Company, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its
own expense, to the Underwriters and to the dealers (whose names and
addresses the Manager will furnish to the Company) to which Offered
Securities may have been sold by the Manager on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to the Company's security holders
and to the Manager as soon as practicable an earning statement that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase or otherwise acquire debt securities of
the Company substantially similar to the Offered Securities (other than
(i) the Offered Securities and (ii) commercial paper issued in the
ordinary course of business), without the prior written consent of the
Manager.
(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection
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with the registration and delivery of the Offered Securities under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Offered Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky memorandum in connection
with the offer and sale of the Offered Securities under state securities
law and all expenses in connection with the qualification of the Offered
Securities for offer and sale under state law as provided in Section 5(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters, if any,
incurred in connection with the review and qualification of the offering
of the Offered Securities by the National Association of Securities
Dealers, Inc., (v) any fees charged by the rating agencies for the rating
of the Offered Securities, (vi) if applicable, all costs and expenses
incident to listing the Offered Securities on any national securities
exchanges and foreign stock exchanges, (vii) the cost of printing
certificates representing the Offered Securities, (viii) the costs and
charges of any trustee, transfer agent, registrar or depositary, (ix) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Offered Securities, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection
with the road show, and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 6 entitled
"Indemnification and Contribution", and the last paragraph of Section 8
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, transfer taxes payable
on resale of any of the Offered Securities by them and any advertising
expenses connected with any offers they may make.
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6. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriters through the Manager or
its counsel expressly for use therein; provided however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Offered Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of sale of the Offered Securities to such person, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 5(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager or its counsel expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 6(a) or 6(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
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sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to Section 6(a) above, and by the Company, in the case of parties
indemnified pursuant to Section 6(b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for reasonable fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or 6(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
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under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the Offered
Securities or (ii) if the allocation provided by clause 6(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 6(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Offered Securities shall be deemed to be in the same respective proportions as
the net proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover of the Prospectus Supplement, bear to the aggregate public offering
price of the Offered Securities. The relative fault of the Company on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company (including information relating to MidCon)
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
6 are several in proportion to the respective principal amounts of Offered
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 6(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or
14
15
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Securities.
7. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
the New York Stock Exchange or the National Association of Securities Dealers,
Inc., (ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses 7(a)(i) through
7(a)(iv), such event, singly or together with any other such event, makes it, in
the judgment of the Manager, impracticable to market the Offered Securities on
the terms and in the manner contemplated in the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase Offered Securities that it has
or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Offered Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Offered Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
principal amount of Offered Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed or
15
16
refused to purchase on such date; provided that in no event shall the principal
amount of Offered Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 8 by an amount
in excess of one-ninth of such principal amount of Offered Securities without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Offered Securities
and the aggregate principal amount of Offered Securities with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Manager and the Company for the purchase of such Offered Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case either the Manager or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
9. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16
17
EXHIBIT A-1
OPINION OF OUTSIDE COUNSEL
FOR THE COMPANY
The opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, outside counsel for the
Company to be delivered pursuant to Section 4(d) of the Underwriting Agreement,
shall be to the effect that:
(i) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued or proceeding for that purpose has
been instituted or threatened by the Commission;
(ii) The Indenture has been duly qualified under the Trust
Indenture Act and, assuming the Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principal of equity;
(iii) Assuming the Offered Securities have been duly authorized,
executed and delivered by the Company and duly authenticated by the Trustee, and
upon payment and delivery thereof in accordance with the Underwriting Agreement,
the Offered Securities will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture;
(iv) Assuming the Calculation Agency Agreement and the Securities
Purchase Option Agreement have been duly authorized, executed and delivered by
the parties thereto, each of such agreements constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity;
(v) The issue and sale of the Offered Securities, and the
compliance by the Company with all of the provisions of the Underwriting
Agreement, the Calculation Agency Agreement, the Securities Purchase Option
Agreement and the Indenture, will not violate any federal or New York statute or
any rule or
18
regulation that has been issued pursuant to any federal or New York statute or
any order known by such counsel issued pursuant to any federal or New York
statute by any court or governmental agency or body or court having jurisdiction
over the Company or any of its subsidiaries or any properties, and no consent,
approval, authorization or order, registration, or qualification of or with, any
federal or New York governmental body or agency or, to our knowledge, any
federal or New York court is required for the issue and sale of the Offered
Securities by the Company and the compliance by the Company with all of the
provisions of this Agreement, the Indenture or the Offered Securities, except
for registration under the Act of the Offered Securities and such as may be
required by the securities or Blue Sky laws of the various states in connection
with the purchase and distribution of the Offered Securities;
(vi) The statements in the Prospectus under the caption
"Description of Offered Securities" insofar as they purport to constitute
summaries of the terms of the Offered Securities, constitute accurate summaries
of the terms of such Offered Securities in all material respects;
(vii) The statements made in the Prospectus under the caption
"Certain United States Federal Income Tax Considerations," insofar as they
purport to constitute summaries of matters of United States federal tax law and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects;
(viii) The Company is not an "investment company" within the meaning
of, and subject to regulation under, the Investment Company Act of 1940, as
amended; and
(ix) Such counsel (A) is of the opinion that the Registration
Statement, as of its effective date, and Prospectus, as of the date of the
Underwriting Agreement, (except for financial statements and schedules and other
financial data included therein as to which such counsel need not express any
opinion) comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and schedules and other
financial data as to which such counsel need not express any belief) the
Registration Statement at the time the Registration Statement became effective
or on the date of the filing of the latest annual report on Form 10-K after the
initial effective date of the Registration Statement or the Prospectus, at the
time the Prospectus Supplement was issued contained or contains any untrue
statements of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for financial
statements and schedules and other financial or statistical
A-1-2
19
data as to which such counsel need not express any belief) the Prospectus at the
time the Prospectus Supplement was issued or at the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
A-1-3
20
EXHIBIT A-2
OPINION OF GENERAL COUNSEL OF THE COMPANY
The opinion of Xxxxxx X. Xxxxxx, Esq., Vice President, General Counsel
and Secretary of the Company, to be delivered pursuant to Section 4(c) of the
Underwriting Agreement, shall be to the effect that:
A. Each of the Company and the Significant Subsidiaries (i) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business, except where
the failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, and (ii)
holds all material approvals, authorizations, orders, licenses, certificates and
permits from governmental authorities necessary for the conduct of its business
as described in the Prospectus, except where the failure to hold such approvals,
authorizations, orders, licenses, certificates and/or permits would not,
singularly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
B. Each of the Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is incorporated, with full corporate power
and authority to own its properties and conduct its business as described in the
Prospectus except to the extent that the failure to be in good standing would
not have a material adverse effect on the Company and its subsidiaries, taken as
a whole;
C. All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all of such shares are owned by the Company either directly or
through one or more subsidiaries free and clear of any pledge, security
interest, claims, lien or other encumbrance;
D. Such counsel does not know of any statutes or regulations, or
any pending or threatened legal or governmental proceedings, required to be
described in the Prospectus that are not described as required, nor of any
contracts or documents of a character required to be described or referred to in
the Registration
21
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described, referred to or filed as required;
E. The descriptions included in or incorporated by reference in
the Prospectus of the statutes, regulations, legal or governmental proceedings,
contracts and other documents therein described are accurate and fairly
summarize the matters referred to therein;
F. No consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the Company or any
subsidiary for the consummation of the transactions contemplated herein in
connection with the purchase and sale of the Offered Securities by the
Underwriters, except such approvals (specified in such opinion) as have been
obtained;
G. The execution and delivery by the Company of the Underwriting
Agreement, the Calculation Agency Agreement, the Securities Purchase Option
Agreement and the Indenture, the issuance and delivery of the Offered
Securities, the consummation by the Company of the transactions contemplated
therein and compliance by the Company with the terms of the Underwriting
Agreement do not and will not result in any violation of the charter or by-laws
of the Company or any Significant Company Subsidiary, or to the best of such
counsel's knowledge, after due inquiry, any Significant MidCon Subsidiary, and
do not and will not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or asset of the
Company or any Significant Company Subsidiary or to the best of such counsel's
knowledge, after due inquiry, any Significant MidCon Subsidiary, under (A) any
indenture, mortgage or loan agreement, or any other agreement or instrument
known to such counsel, to which the Company or any Significant Subsidiary is a
party or by which it may be bound or to which any of its properties may be
subject, (B) any existing applicable law, rule or regulation (other than the
securities or blue sky laws of the various states, as to which such counsel need
express no opinion), or (C) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, known to such
counsel having jurisdiction over the Company or any Significant Subsidiary or
any of its properties (except, in the case of subclauses (A) and (B) hereof, for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise or the transactions contemplated
by the Underwriting Agreement);
X-0-0
00
X. Each of the Underwriting Agreement, the Indenture, the
Calculation Agency Agreement and the Securities Purchase Option Agreement has
been duly executed and delivered by the Company.
I. The Offered Securities in global form have been duly executed
and delivered by the Company.
J. The Company and the Significant Company Subsidiaries and, to
the knowledge of such counsel (after due inquiry), the Significant MidCon
Subsidiaries, hold all requisite Certificates of Public Convenience and
Necessity from the Federal Energy Regulatory Commission to enable them to carry
on the respective businesses in which they are engaged;
K. To the knowledge of such counsel (after due inquiry), none of
the Company or any Significant Subsidiary is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the Registration
Statement or Prospectus or filed as an exhibit to the Registration Statement;
L. To the knowledge of such counsel, after due inquiry, no person
or corporation which is a "holding company" or a "subsidiary of a holding
company," within the meaning of such terms as defined in the Public Utility
Holding Company Act of 1935, directly or indirectly owns, controls or holds with
power to vote 10% or more of the outstanding voting securities of the Company;
and the Company is not a "holding company" or to the knowledge of such counsel,
after due inquiry, a "subsidiary of a holding company" as so defined; and
M. The documents incorporated by reference in the Prospectus
(except for the consolidated financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such counsel
need express no opinion), as of the dates they were filed with the Commission or
to the extent such documents were subsequently amended prior to the date hereof,
at the time so amended, complied as to form in all material respects with the
requirements of the Exchange Act and the regulations thereunder.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the Prospectus
(including the documents incorporated by reference therein) and participated in
conferences with representatives of your legal counsel and representatives of
the Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed. Such counsel shall also state
that although such counsel is not passing upon and does not assume any
responsibility for the accuracy,
A-2-3
23
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus except as stated above, such counsel advises you
that, on the basis of the foregoing, no facts have come to such counsel's
attention which lead such counsel to believe that (A) the Registration Statement
or any amendments thereto (other than the financial statement and other
financial or statistical information included or incorporated by reference
therein as to which such counsel need not comment and except for that part of
the Registration Statement that constitutes the Form T-1 heretofore referred),
at the time the Registration Statement initially became effective, on the
effective date of the most recent post-effective amendment thereto, if any, on
the date of the filing of the latest annual report on Form 10-K after the
initial effective date of the Registration Statement, or on the date of the
Underwriting Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (B) the Prospectus or any
amendment or supplement thereto (other than the financial statements and other
financial or statistical information included or incorporated by reference
therein as to which such counsel need not comment and except for that part of
the Registration Statement that constitutes the Form T-1 heretofore referred),
at the time the Prospectus Supplement was issued or at the Closing Date
contained or contains an 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 under which they were
made, not misleading.
In rendering such opinions, such counsel may (A) state that her opinion
is limited to the laws of the State of Colorado and the federal laws of the
United States and (B) rely as to matters involving the application of laws of
any jurisdiction other than the State of Colorado or the United States, to the
extent deemed proper and specified in such opinion, upon the opinions of
Polsinelli, White, Xxxxxxxx & Xxxxxxx and other local counsel of good standing
believed to be reliable and who are satisfactory to counsel for the Underwriters
and as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
A-2-4
24
EXHIBIT A-3
OPINION OF KANSAS COUNSEL OF THE COMPANY
The opinion of Polsinelli, White, Xxxxxxxx & Shalton, Kansas counsel to
the Company, to be delivered pursuant to Section 4(c) of the Underwriting
Agreement, shall be to the effect that:
A. The Company is duly incorporated, validly existing, and in
good standing under the laws of the State of Kansas, with corporate power and
authority under such laws to own its properties and conduct its business as
described in the Prospectus.
B. The execution and delivery of each of the Indenture, the
Calculation Agency Agreement, the Securities Purchase Option Agreement and the
Underwriting Agreement have been duly authorized by all necessary corporate
action of the Company.
C. The execution and delivery of the Offered Securities have been
duly authorized by all necessary corporate action of the Company.
D. No approval, authorization, consent or other action (other
than under the securities or blue sky laws of the State of Kansas) is required
by any regulatory authority or governmental body of the State of Kansas for the
valid issuance, sale, and delivery by the Company of the Offered Securities
pursuant to the Underwriting Agreement and to the best of our knowledge, do not
result in any breach or violation of any judgment, order or decree of any
governmental body, agency or court located in Kansas having jurisdiction over
the Company.
