EXHIBIT 1.2
XXXXXX XXXXXX MANAGEMENT, LLC
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
January 31, 2003
Xxxxxx Xxxxxx Management, LLC, a Delaware limited liability company
(the "Company"), proposes to issue and sell from time to time its shares,
representing limited liability company interests ("Shares") registered under the
Securities Act of 1933, as amended (the "Securities Act"), as set forth in
Section 3.
From time to time, the Company may enter into one or more underwriting
agreements that provide for the sale of Shares to the underwriter or several
underwriters named therein (the "Underwriters"). 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 hereof incorporated therein by reference, is herein referred to as
this "Agreement."
1. Sale and Purchase of the Securities. On the basis of the
representations, warranties and agreements herein contained, the Company
proposes to issue and sell Shares. All or a portion of the Shares will be
purchased by the Underwriters for resale upon terms of offering determined at
the time of sale. The Shares so to be purchased in any such offering are
hereinafter referred to as the "Purchased Securities," and any firm or firms
acting as representatives of such Underwriters are hereinafter referred to as
the "Representatives." If with respect to the Purchased Securities such
Representatives are acting on behalf of the Underwriters, references herein to
the Underwriters (or a majority in interest thereof) or the Representatives in
the alternative shall be deemed to refer only to the Representatives.
The obligations of the Underwriters under this Agreement are several
and not joint.
2. Payment and Delivery. The closing of the purchase and sale of the
Purchased Securities shall take place at the offices of counsel for the Company,
on the date or dates and at the time or times specified in this Agreement, each
of which date and time may be postponed for not more than ten business days by
agreement between a majority in interest of the Underwriters or the
Representatives and the Company (each such date and time of delivery and payment
for the Purchased Securities is hereinafter referred to as the "Closing Date"),
except that physical delivery of the Purchased Securities may be made by or on
behalf of the Company through the offices of The Depository Trust Company or any
transfer agent. Delivery by the Company of the Purchased Securities shall be
made against payment by or on behalf of the Underwriters or the Representatives
of the purchase price therefor by wire transfer of immediately available funds
to a bank account designated by the Company.
Unless otherwise specified by the Underwriters or the Representatives,
the Purchased Securities shall be registered in the name of Cede & Co. If the
Underwriters or Representatives
in fact choose to specify otherwise, the Purchased Securities shall be
registered in such names and shall be in such denominations as the Underwriters
or the Representatives shall request at least one full business day prior to the
Closing Date and, if requested, shall be made available to the Underwriters or
Representatives for checking and packaging at least one full business day prior
to the Closing Date.
3. Registration Statement and Prospectus; Public Offering. The Company,
Xxxxxx Xxxxxx Energy Partners, L.P., a Delaware limited partnership (the
"Partnership"), and Xxxxxx Xxxxxx, Inc., a Kansas corporation ("KMI"), have
filed with the Securities and Exchange Commission (the "Commission"), pursuant
to the Securities Act and the rules and regulations adopted by the Commission
thereunder (the "Rules"), registration statements on Form S-3, including a
prospectus, relating to the Shares, including the deemed offering of the i-units
by the Partnership and the purchase obligation by KMI, and such registration
statements have become effective. Such registration statements referred to in
the first paragraph of the Underwriting Agreement, including financial
statements, exhibits and Incorporated Documents (as hereinafter defined), as
amended to the date of this Agreement, is or are hereinafter referred to as the
"Registration Statement," and the prospectus or prospectuses included in the
Registration Statement or deemed, pursuant to Rule 429 under the Securities Act,
to relate to the Registration Statement, as proposed to be supplemented by a
prospectus supplement (including any preliminary prospectus supplement) relating
to any Purchased Securities to be filed pursuant to Rule 424 under the
Securities Act, is or are hereinafter referred to as the "Prospectus." Any
reference herein to the Registration Statement or Prospectus shall be deemed to
include all documents incorporated, or deemed to be incorporated, therein by
reference pursuant to the requirements of Item 12 of Form S-3 under the
Securities Act (the "Incorporated Documents"). For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system (XXXXX), which XXXXX copy is
substantially identical to the other copies of such material, except to the
extent permitted by Regulation S-T.
The Company understands, and if this Agreement provides for sales by
one or more Selling Shareholders, each Selling Shareholder understands, that the
Underwriters propose to make a public offering of their respective portions of
the Purchased Securities, as set forth in and pursuant to the Prospectus
relating thereto.
4. Representations and Warranties.
(a) The Company, the Partnership, and, with respect to
information regarding itself, KMI, represents and warrants to each
Underwriter that:
(i) Each of the Company, the Partnership and KMI has
reasonable grounds to believe that it meets the requirements
for the use of Form S-3 under the Securities Act;
(ii) The Registration Statement, at the time it
became effective, and the prospectus contained therein,
complied, and on the date of the Underwriting Agreement and
the Closing Date and when any post-effective amendment to the
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Registration Statement becomes effective or any supplement to
such prospectus is filed with the Commission, the Registration
Statement, the Prospectus and any such amendment or
supplement, respectively, will comply, in all material
respects with the applicable requirements of the Securities
Act and the Rules; the Incorporated Documents, when they were
or are filed with the Commission, conformed or will conform as
of their respective dates in all material respects with the
applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the applicable
rules and regulations adopted by the Commission thereunder;
and each part of the Registration Statement and any amendment
thereto, at the time it became effective, and the Prospectus
and any amendment or supplement thereto, at the time it was
filed with the Commission pursuant to Rule 424 under the
Securities Act, when such part became effective, did not and
will not contain an untrue statement of a material fact or
omit to a state a material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading,
except that this representation and warranty does not apply to
statements or omissions in the Registration Statement or
Prospectus (or in amendments or supplements thereto) made in
reliance upon information furnished in writing to any of the
Company, the Partnership or KMI by any Underwriter or the
Representatives on behalf of any Underwriter or by any Selling
Shareholder expressly for use therein;
(iii) The consolidated financial statements included
in the Registration Statement and Prospectus present fairly
the financial position of each of the Company, the Partnership
and KMI and each of their respective consolidated subsidiaries
as of the dates shown and their results of operations, cash
flows, and shareholders equity, partners' capital or
stockholders' equity, as the case may be, for the periods
shown, and, except as otherwise disclosed in the Prospectus,
such financial statements have been prepared in conformity
with the generally accepted accounting principles in the
United States applied on a consistent basis; any schedules
included in the Registration Statement present fairly the
information required to be stated therein; and if pro forma
financial statements are included in the Registration
Statement and Prospectus, the assumptions used in preparing
the pro forma financial statements included in the
Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly
attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect
the proper application of those adjustments to the
corresponding historical financial statement amounts;
(iv) The Company, all of the shares of which that may
vote for the election of directors are owned by Xxxxxx Xxxxxx,
G.P., Inc., a Delaware corporation (the "General Partner"),
and which is the delegate of the General Partner, is a limited
liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all
necessary limited liability company power and authority to own
its properties and conduct its business as described in the
Prospectus and has been duly qualified as a foreign
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limited liability company for the transaction of business and
is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business
so as to require such qualification, except where the failure
to be so qualified would not individually or in the aggregate
have a material adverse effect on the consolidated financial
condition, results of operations or business of the Company,
its subsidiary, and the Partnership and its subsidiaries,
taken as a whole (a "Company Material Adverse Effect");
(v) The Partnership is a limited partnership duly
formed, validly existing and in good standing under the laws
of the State of Delaware, with all necessary partnership power
and authority to own its properties and conduct its business
as described in the Prospectus and has been duly qualified as
a foreign limited partnership for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any business so as to require such qualification, except where
the failure to be so qualified would not individually or in
the aggregate have a Company Material Adverse Effect;
(vi) KMI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Kansas, with all necessary corporate power and
authority to own its properties and conduct its business as
described in the Prospectus and has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to
be so qualified would not individually or in the aggregate
have a material adverse effect on the consolidated financial
condition, results of operations or business of KMI and its
subsidiaries, taken as a whole (a "KMI Material Adverse
Effect");
(vii) All of the outstanding shares of capital stock,
limited partner interests, general partner interests, or
limited liability company interests, as applicable, of each of
the Partnership's significant subsidiaries, as defined in the
rules and regulations of the Commission under the Securities
Act and Exchange Act, provided that the term "subsidiary" for
the purposes of applying such definition shall include any
subsidiary included in the consolidated financial statements
of the Partnership (the "Partnership Significant
Subsidiaries"), have been duly and validly authorized and
issued and are fully paid and (except (A) as required to the
contrary by the Delaware Limited Liability Company Act (the
"Delaware LLC Act") and the Delaware Revised Uniform Limited
Partnership Act (the "Delaware LP Act") and (B) with respect
to any general partner interests) non-assessable, and are
(unless otherwise stated on a Schedule to this Agreement)
owned by the Partnership directly or indirectly through one or
more wholly-owned subsidiaries or Kinder Xxxxxx X.X., Inc., a
Delaware corporation (the "General Partner"), free and clear
of any lien, encumbrance, security interest, equity or charge
(except for such liens, encumbrances, security interests,
equities or charges as are not, individually or in the
aggregate, material to such interest ownership or as described
in the Prospectus);
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(viii) All of the outstanding shares of capital stock
or limited liability company interests, as applicable, of each
of the KMI's significant subsidiaries, as defined in the rules
and regulations of the Commission under the Securities Act and
Exchange Act (the "KMI Significant Subsidiaries"), have been
duly and validly authorized and issued and are fully paid and
(except as required to the contrary by the Delaware LLC Act)
non-assessable, and are (unless otherwise stated on a Schedule
to this Agreement) owned by KMI directly or indirectly through
one or more wholly-owned subsidiaries, free and clear of any
lien, encumbrance, security interest, equity or charge (except
for such liens, encumbrances, security interests, equities or
charges as are not, individually or in the aggregate, material
to such interest ownership or as described in the Prospectus);
(ix) Each of the Partnership Significant Subsidiaries
and the KMI Significant Subsidiaries has been duly formed or
incorporated and is validly existing as a corporation, limited
partnership, general partnership, or limited liability
company, as the case may be, in good standing under the laws
of the jurisdiction in which it is chartered or organized,
with full entity power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Prospectus, and is duly qualified
to do business as a corporation, limited partnership, general
partnership, or limited liability company, as the case may be,
and is in good standing under the laws of each jurisdiction
which requires such qualification, other than any jurisdiction
where the failure to be so qualified would not, individually
or in the aggregate, have a Company Material Adverse Effect,
in the case of each of the Partnership Significant
Subsidiaries, or a KMI Material Adverse Effect in the case of
the KMI Significant Subsidiaries;
(x) All of the outstanding limited liability company
interests of Xxxxxx Xxxxxx Services LLC, a Delaware limited
liability company and wholly owned subsidiary of the Company,
have been duly and validly authorized and issued and are fully
paid and (except as required to the contrary by the Delaware
LLC Act) non-assessable, and are (unless otherwise stated on a
Schedule to this Agreement) owned by the Company free and
clear of any lien, encumbrance, security interest, equity or
charge (except for such liens, encumbrances, security
interests, equities or charges as are not, individually or in
the aggregate, material to such interest ownership or as
described in the Prospectus);
(xi) Xxxxxx Xxxxxx Services LLC is a limited
liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all
necessary limited liability company power and authority to own
its properties and conduct its business as described in the
Prospectus and has been duly qualified as a foreign limited
liability company for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to
be so qualified would not individually or in the aggregate
have a Company Material Adverse Effect;
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(xii) The General Partner is the sole general partner
of the Partnership; the General Partner owns a general partner
interest in the Partnership; such general partner interest is
duly authorized by the Agreement of Limited Partnership, as
amended, of the Partnership and was validly issued to or
acquired by the General Partner; the General Partner owns such
general partner interest and all equity securities of KMGP
Services Company, Inc. free and clear of all liens,
encumbrances, security interests, equities or charges (except
for such liens, encumbrances, security interests, equities or
charges as are not, individually or in the aggregate, material
to such ownership or as described in the Prospectus);
(xiii) Each of the General Partner and KMGP Services
Company, Inc. has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware; the General Partner is an indirect
wholly-owned subsidiary of KMI; and each of the General
Partner and KMGP Services Company, Inc. has all necessary
corporate power and authority to own its properties and
conduct its business as described in the Prospectus and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except where the failure to be so qualified
would not individually or in the aggregate have a Company
Material Adverse Effect;
(xiv) The Company has all necessary limited liability
company power and authority to authorize, issue and sell the
Purchased Securities; each of the Partnership and KMI has all
necessary partnership and corporate power and authority, as
appropriate, to authorize, issue and sell the corresponding
i-units and the purchase obligation, respectively, as
contemplated by this Agreement; and this Agreement has been
duly authorized, executed and delivered by the Company, the
Partnership, and KMI;
(xv) The Purchased Securities and the corresponding
i-units have been duly and validly authorized and when issued
and delivered against payment therefore pursuant to this
Agreement (or in the case of the i-units the Prospectus) on
the Closing Date, such Purchased Securities and i-units will
be validly issued, fully paid and (except as required to the
contrary by the Delaware LLC Act and the Delaware LP Act)
non-assessable and will conform in all material respects to
the descriptions thereof contained in the Prospectus; and the
shareholders of the Company have no preemptive rights with
respect to the Purchased Securities;
(xvi) The execution, delivery and performance of this
Agreement and the issuance and sale of the Purchased
Securities by the Company, the issuance and sale of the
i-units by the Partnership and the issuance of the purchase
obligation by KMI, will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company, the
Partnership, KMI, the General Partner, KMGP Services Company,
Inc., and Xxxxxx Xxxxxx Services LLC or any of the Partnership
Significant Subsidiaries or
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KMI Significant Subsidiaries is a party or by which the
Company, the Partnership, KMI, the General Partner, KMGP
Services Company, Inc., Xxxxxx Xxxxxx Services LLC or any of
the Partnership Significant Subsidiaries or KMI Significant
Subsidiaries is bound or to which any of the property of the
Company, the Partnership, KMI, the General Partner, KMGP
Services Company, Inc., Xxxxxx Xxxxxx Services LLC or the
property of any of the Partnership Significant Subsidiaries or
KMI Significant Subsidiaries is subject, except where any such
foregoing occurrence will not prevent the consummation of the
transactions contemplated herein or would not have a Company
Material Adverse Effect or KMI Material Adverse Effect, nor
will such action result in any violation of the provisions of
the partnership agreement, certificate of incorporation,
bylaws or other formation document, as the case may be, of the
Company, the Partnership, KMI, the General Partner, KMGP
Services Company, Inc., Xxxxxx Xxxxxx Services LLC or any of
the Partnership Significant Subsidiaries or KMI Significant
Subsidiaries, or any statute or any order, rule or regulation
of any court or governmental agency or body having
jurisdiction over the Company, the Partnership, KMI, the
General Partner, KMGP Services Company, Inc., Xxxxxx Xxxxxx
Services LLC or any of the Partnership Significant
Subsidiaries or KMI Significant Subsidiaries or any of the
properties of any such entities, and no consent, approval,
authorization, order, registration or qualification of or with
any court or governmental agency or body having jurisdiction
over the Company, the Partnership, KMI, the General Partner,
KMGP Services Company, Inc., Xxxxxx Xxxxxx Services LLC or any
of the Partnership Significant Subsidiaries or KMI Significant
Subsidiaries or any of the properties of such entities is
required for the issuance and sale of the Purchased Securities
by the Company, the issuance and sale of the i-units by the
Partnership or the issuance of the purchase obligation by KMI,
except such as have been obtained or made under the Securities
Act, and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
state securities or Blue Sky laws;
(xvii) Other than as set forth in the Prospectus,
there are no legal or governmental proceedings pending to
which any of the Company, the Partnership, KMI or any of their
respective subsidiaries is a party or of which any property of
any of the Company, the Partnership, KMI or any of their
respective subsidiaries is the subject which, if determined
adversely to such entity, would be reasonably likely to,
individually or in the aggregate, have, in the case of the
Company, the Partnership or their respective subsidiaries, a
Company Material Adverse Effect or, in the case of KMI and its
subsidiaries, a KMI Material Adverse Effect; and, to the
Company's and KMI's knowledge, no such proceedings are
threatened or contemplated;
(xviii) Except as disclosed in the Prospectus, none
of either the Company, the Partnership, KMI or any of their
respective subsidiaries has violated any federal or state law
or regulation relating to the protection of human health or
the environment except for any violations and remedial actions
as would not be reasonably likely to, individually or in the
aggregate, have, in the case of the Company, the Partnership
or their respective subsidiaries, a Company Material
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Adverse Effect or, in the case of KMI and its subsidiaries, a
KMI Material Adverse Effect;
(xix) Except as disclosed in the Prospectus, since
the date of the latest audited financial statements included
in the Prospectus there has been no change, nor any
development or event involving a prospective change that would
have, in the case of the Company, the Partnership or their
respective subsidiaries, a Company Material Adverse Effect or,
in the case of KMI and its subsidiaries, a KMI Material
Adverse Effect;
(xx) Each of the Company, the Partnership, the
General Partner, Xxxxxx Xxxxxx Services LLC, KMGP Services
Company, Inc. and the Partnership Significant Subsidiaries
owns or leases all properties as are necessary to the conduct
of its operations as described in the Prospectus, except where
the failure to own or lease any of such properties would not
individually or in the aggregate, have a Company Material
Adverse Effect;
(xxi) Each of KMI and the KMI Significant
Subsidiaries owns or leases all properties as are necessary to
the conduct of its operations as described in the Prospectus,
except where the failure to own or lease any of such
properties would not individually or in the aggregate, have a
KMI Material Adverse Effect;
(xxii) Each of the Company, the Partnership and KMI
is, and after giving effect to the offering and sale of the
Purchased Securities and the i-units and the application of
the proceeds thereof as described in the Prospectus will be,
exempt from regulation as (i) a "holding company" or a
"subsidiary company" of a "holding company" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as
amended, or (ii) an "investment company," as defined in the
Investment Company Act of 1940, as amended; and
(xxiii) None of the Company, the Partnership, KMI,
KMGP Services Company, Inc., Xxxxxx Xxxxxx Services LLC, the
General Partner or any of the Partnership Significant
Subsidiaries or KMI Significant Subsidiaries is involved in
any labor dispute and, to the knowledge of the Company and
KMI, no such dispute has been threatened, except for such
disputes as would not, individually or in the aggregate have,
in the case of the Company, the Partnership or their
respective subsidiaries, a Company Material Adverse Effect or,
in the case of KMI and its subsidiaries, a KMI Material
Adverse Effect.
(b) If this Agreement provides for sales by one or more
Selling Shareholders, each Selling Shareholder severally represents and
warrants to each Underwriter that such Selling Shareholder has (i) good
and valid title to, and full right, power and authority to convert,
convertible securities of the Company which are convertible into at
least the number of Purchased Securities to be sold by it pursuant to
this Agreement; and immediately after the execution of this Agreement
such Selling Shareholder will convert into Purchased Securities at
least such number of convertible securities; and upon such conversion
and on each Closing Date such Selling Shareholder will have good and
valid
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title to the Purchased Securities to be sold by such Selling
Shareholder or (ii) has and on each Closing Date will have good and
valid title to the Purchased Securities to be sold by such Selling
Shareholder. Such Selling Shareholder has full right, power and
authority to enter into this Agreement and to sell, assign, transfer
and deliver the Purchased Securities to be sold by such Selling
Shareholder hereunder; and upon the delivery of and payment for the
Purchased Securities hereunder the several Underwriters will acquire
good and valid title to the Purchased Securities to be sold by such
Selling Shareholder.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters hereunder to purchase and pay for the Purchased Securities are
subject to the following conditions:
(a) Promptly upon the execution of this Agreement by the
Company, the Partnership and KMI (or at such later time acceptable to
the Representatives, or if there are none, such firm as may be
designated by a majority in interest of the Underwriters) and on the
Closing Date, the Representatives or such designated firm shall have
received from the independent accountants of the Company, the
Partnership and KMI who have certified the financial statements of each
of the Company, the Partnership and KMI and its subsidiaries included
or incorporated by reference in the Registration Statement signed
letters dated the respective dates of delivery, in form and substance
satisfactory to the Underwriters or the Representatives.
(b) No stop order suspending the effectiveness of the
Registration Statement under the Securities Act shall be in effect and
no proceedings for such purpose shall be pending before or threatened
by the Commission and any requests for additional information on the
part of the Commission (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriters or the Representatives.
(c) Subsequent to the execution of this Agreement, there shall
not have been any material change in the limited liability company
interests, capital stock, partnership interests, as applicable, or
long-term debt of the Company, the Partnership, KMI or any material
adverse change in the general affairs, management, financial position
or results of operations of the Company and its subsidiary, taken as a
whole, KMI and its subsidiaries taken as a whole, or the Partnership
and its subsidiaries taken as a whole, or whether or not arising in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and Prospectus, if in the
reasonable judgment of a majority in interest of the Underwriters or of
the Representatives any such change makes it impracticable or
inadvisable to consummate the sale and delivery of the Purchased
Securities by the Underwriters as contemplated in the Prospectus.
(d) Subsequent to the execution of this Agreement, there shall
not have occurred any of the following (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension in trading in the Company's securities on
the New York Stock Exchange; (iii) a general moratorium on commercial
banking activities declared by either Federal or New York authorities;
or
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(iv) the outbreak or escalation of major hostilities involving the
United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this
clause (iv) in the reasonable judgment of a majority in interest of the
Underwriters or of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the sale of and
payment for the Purchased Securities.
(e) The representations and warranties of the Company, the
Partnership and KMI contained herein shall be true and correct on and
as of the Closing Date and each of the Company, the Partnership and KMI
shall have performed all covenants and agreements herein contained to
be performed on its part at or prior to the Closing Date.
(f) The Underwriters or Representatives shall have received on
the Closing Date certificates, dated the Closing Date, of the Chief
Executive Officer, the President, any Vice President or the Vice
President, Treasurer and Chief Financial Officer of the Company on
behalf of itself, the Company or the General Partner on behalf of the
Partnership, and KMI which shall certify that (i) no order suspending
the effectiveness of the Registration Statement has been issued and, to
the knowledge of such officer, no proceedings for such purpose are
pending before or threatened by the Commission, (ii) the
representations and warranties of the Company, the Partnership and KMI,
respectively, contained herein are true and correct on and as of the
Closing Date, and (iii) each of the Company, the Partnership and KMI,
respectively, has performed all covenants and agreements herein
contained to be performed on its part at or prior to the Closing Date.
(g) The Underwriters or the Representatives shall have
received on the Closing Date from Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
counsel for the Company, the Partnership, and KMI, an opinion, dated
the Closing Date, substantially to the effect as set forth in Schedule
I hereto.
(h) The Underwriters or the Representatives shall have
received on the Closing Date from counsel for the Underwriters an
opinion dated the Closing Date, with respect to the Company, the
Partnership, KMI, the Purchased Securities, the Registration Statement
and Prospectus and this Agreement. Such opinion shall also include
language substantially to the effect of the penultimate paragraph of
Schedule I hereto. The Company, the Partnership, KMI and, if this
Agreement provides for sales by Selling Shareholders, each Selling
Shareholder shall have furnished to counsel for the Underwriters such
documents as they may reasonably request for the purpose of enabling
them to render such opinions.
(i) If this Agreement provides for sales by Selling
Shareholders, the Underwriters or Representatives shall have received
on the Closing Date a certificate, dated the Closing Date, of the
President or any Vice President of each Selling Shareholder, which
shall certify that (i) the representations and warranties of such
Selling Shareholder contained herein are true and correct on and as of
the Closing Date, and (ii) such Selling Shareholder has performed all
covenants and agreements herein contained to be performed on its part
at or prior to the Closing Date.
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(j) If this Agreement provides for sales by Selling
Shareholders, the Underwriters or Representatives shall have received
on the Closing Date from counsel for each Selling Shareholder, an
opinion, dated the Closing Date, substantially to the effect as set
forth in Schedule II hereto.
6. Covenants. Each of the Company, the Partnership and KMI and, if this
Agreement provides for sales by Selling Shareholders, each Selling Shareholder
as to paragraphs (a), (c), (h), (k), (l) and (m), covenants and agrees with the
several Underwriters as follows:
(a) To advise the Underwriters or the Representatives promptly
of any amendment or supplement of the Registration Statement or the
Prospectus which is proposed to be filed and not to effect such
amendment or supplement in a form to which the Underwriters or the
Representatives reasonably object.
(b) To furnish to each of the Underwriters or the
Representatives and to the counsel for the Underwriters, one copy of
the Registration Statement filed pursuant to XXXXX, including exhibits
and Incorporated Documents, relating to the Shares in the form it
became effective and of all amendments thereto, including exhibits; and
to each such firm and counsel, copies of each preliminary prospectus
supplement and Prospectus and any amendment or supplement thereto
relating to the Shares.
(c) As soon as it is advised thereof, to advise the
Underwriters or the Representatives (i) of the initiation or
threatening by the Commission of any proceedings for the issuance of
any order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any preliminary prospectus
supplement, (ii) of receipt by it or any representative or attorney of
it of any other communication from the Commission relating to the
Company, the Partnership, KMI, any Selling Shareholders, the
Registration Statement or the Prospectus, or (iii) suspension of
qualification of the Purchased Securities for offering or sale in any
jurisdiction. The Company, the Partnership and KMI will make every
reasonable effort to prevent the issuance of an order suspending the
effectiveness of the Registration Statement, and if any such order is
issued, to obtain as soon as possible the lifting thereof.
(d) To deliver to the Underwriters or the Representatives,
without charge, as many conformed copies of the Registration Statement
(excluding exhibits but including the Incorporated Documents), each
preliminary prospectus supplement, the Prospectus and all amendments
and supplements to such documents as the Underwriters or the
Representatives may reasonably request.
(e) During such period as a prospectus is required by law to
be delivered by an Underwriter or dealer, to deliver, without charge,
to Underwriters and dealers, at such office or offices as the
Underwriters or the Representatives may designate, as many copies of
the Prospectus and any amendment or supplement thereto as the
Underwriters or the Representatives may reasonably request.
(f) During the period in which copies of the Prospectus are to
be delivered as provided in paragraph (e) above, if any event occurs as
a result of which the Prospectus
-11-
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if for any reason it shall be
necessary during such same period to file any document which will be
deemed an Incorporated Document in order to comply with the Exchange
Act and the rules and regulations thereunder, forthwith to prepare,
submit to the Underwriters or the Representatives, file with the
Commission and deliver, without charge to the Underwriters either (i)
amendments or supplements to the Prospectus so that the statements in
the Prospectus, as so amended or supplemented, will not be misleading
or (ii) documents which will effect such compliance. Delivery by
Underwriters of any such amendments or supplements to the Prospectus or
documents shall not constitute a waiver of any of the conditions set
forth in Section 5 hereof.
(g) To make generally available to the Company's shareholders,
as soon as practicable, an earnings statement which satisfies the
provisions of Section 11(a) of the Securities Act.
(h) To cooperate with the Underwriters or the Representatives
in qualifying the Purchased Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions as the Underwriters
or the Representatives may reasonably request; provided that in no
event shall the Company, the Partnership, KMI, nor any Selling
Shareholder be obligated to qualify to do business in any jurisdiction
where it is not now so qualified, to take any action which would
subject it to service of process in suits, other than those arising out
of the offering or sale of the Purchased Securities, in any
jurisdiction where it is not now so subject, qualify in any
jurisdiction as a broker-dealer or subject itself to any taxing
authority where it is not now so subject.
(i) Unless otherwise specified, to effect the listing of the
Purchased Securities on the New York Stock Exchange prior to the
Closing Date, subject to notice of issuance.
(j) During the period of five years from the date hereof, to
supply to the Representatives, if any, and to each other Underwriter
who may so request in writing, copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to its lenders or to the holders of any class of
its securities registered under Section 12 of the Exchange Act and to
furnish to the Underwriters or the Representatives a copy of each
annual or other report it shall be required to file with the
Commission.
(k) To pay all of its own expenses incurred in connection with
the performance of its obligations under this Agreement, and the
Company or KMI, as the case may be, will pay or cause to be paid, or
reimburse or cause to be reimbursed if paid by the Underwriters or the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all reasonable costs
and expenses incident to the performance of the obligations of the
Company, the Partnership and KMI under this Agreement, including those
relating to (i) the preparation, printing and filing of the
Registration Statement and exhibits thereto, each preliminary
prospectus, any preliminary prospectus supplement, the Prospectus, all
amendments and supplements
-12-
to the Registration Statement and the Prospectus, and the printing of
this Agreement (including any Agreement Among Underwriters), (ii) the
issuance, preparation and delivery of the Purchased Securities to the
Underwriters, including the costs and expenses of any Registrar,
Transfer Agent and any agent thereof, including any reasonable fees and
disbursements of counsel therefor, (iii) the registration or
qualification of the Purchased Securities for offer and sale under the
securities or "blue sky" laws of the various jurisdictions referred to
in paragraph (h) above, including the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and the
preparation and printing of legal investment and preliminary and
supplementary "blue sky" memoranda, (iv) the furnishing to the
Underwriters and the Representatives, if any, of copies of the
Prospectus and all amendments or supplements to the Prospectus, and of
the several documents required by this Section to be so furnished,
including costs of shipping and mailing, (v) the listing of the
Purchased Securities on any securities exchange, and (vi) the
furnishing to the Underwriters and the Representatives, if any, of
copies of all reports and information required by paragraph (j) above,
including costs of shipping and mailing. If a separate agreement
exists, either among the Company, the Partnership and KMI, or between
the Company and any Selling Shareholder which allocates such costs and
expenses in a manner different from that set forth above, such
agreement shall control as, either among the Company, the Partnership
and KMI, or between the Company and such Selling Shareholder only, but
such agreement shall not modify the obligations of the Company and the
Selling Shareholder to the Underwriters to cause the payment of costs
and expenses as set forth above.
(l) During the period beginning on the date of this Agreement
and continuing to the date specified in this Agreement, not to,
directly or indirectly, sell, offer to sell, contract to sell, hedge,
pledge, grant an option to purchase, issue any instrument convertible
or exchangeable for or representing the right to receive, or otherwise
dispose of any securities of the Company substantially similar to the
Purchased Securities, without the prior written consent of a majority
in interest of the Underwriters or the Representatives.
(m) If this Agreement provides for sales by Selling
Shareholders, each Selling Shareholder agrees to deliver to the
Underwriters or the Representatives on or prior to the Closing Date a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(n) To purchase from the Partnership on the Closing Date a
number of i-units equal to the number of Purchased Securities sold on
the Closing Date.
7. Indemnification.
(a) Each of the Company, the Partnership and, with respect to
information regarding itself, KMI, will indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, as follows:
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(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 7(e) below) any such settlement is effected
with the written consent of the Company, the Partnership or KMI, as the
case may be; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 7(d) hereof, the fees and disbursements
of counsel chosen by the Underwriters), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above; provided, however, that the indemnity set forth in this
Section 7(a) shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company, the
Partnership or KMI by or on behalf of any Underwriter expressly for use
in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any untrue
statement or alleged untrue statement contained in or omission or
alleged omission from a preliminary prospectus shall not inure to the
benefit of the Underwriter (or any person controlling such Underwriter)
from whom the person asserting any loss, liability, claim, damage or
expense purchased any of the Purchased Securities which are the subject
thereof if the Company shall sustain the burden of proving that such
person was not sent or given a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Purchased Securities to such person
and the untrue statement contained in or omission from such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) and the Company had previously furnished
copies thereof to such Underwriter.
-14-
(b) If this Agreement provides for sales by Selling
Shareholders, each of the Selling Shareholders severally will indemnify
and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of 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 each Underwriter, but only
insofar as losses, liabilities claims, damages, expenses or actions
arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which was made in the Registration
Statement, the prospectus or any amendment or supplement thereto, in
reliance on and in conformity with information furnished in writing to
the Company by such Selling Shareholder expressly for use therein.
(c) Each Underwriter, severally in proportion to its
respective purchase obligation and not jointly, agrees to indemnify and
hold harmless KMI, the Partnership, the General Partner, the Company,
the directors of the General Partner and the Company, the directors of
KMI, the officers of the Company and KMI who signed the Registration
Statement, and each person, if any, who controls KMI, the Partnership,
the General Partner or the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any and
all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto), or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
such Underwriter expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus
(or any amendment or supplement thereto).
(d) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 7(a) above, counsel to the
indemnified parties shall be selected by the Underwriters, and, in the
case of parties indemnified pursuant to Section 7(c) above, counsel to
the indemnified parties shall be selected by the Company, provided that
if it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties
receiving such notice, may assume the defense of such action with
counsel chosen by it and approved by the indemnified parties defendant
in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses
available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes
the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. An indemnifying
party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the
-15-
indemnified party) also be counsel to the indemnified party. In no
event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or
Section 8 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(e) 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, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii)
such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement
of the nature contemplated by Section 7(a)(ii) effected without its
consent if such indemnifying party (i) reimburses such indemnified
party in accordance with such request to the extent it considers such
request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
General Partner, the Partnership, KMI or the Selling Shareholder, if any (taking
into account the portion of the proceeds of the offering received by each), on
the one hand and the Underwriters on the other hand from the offering of the
Purchased Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, the General Partner, the
Partnership, KMI and the Selling Shareholder, if any, on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which
-16-
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company, the General Partner, the Partnership, KMI and the Selling
Shareholder, if any, on the one hand and the Underwriters on the other hand in
connection with the offering of the Purchased Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Purchased Securities pursuant to this
Agreement (before deducting expenses but after deducting the total underwriting
commission received by the Underwriters) received by the Company and the Selling
Shareholder, if any, and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Purchased Securities as set
forth on such cover. The relative fault of the Company, the General Partner, the
Partnership, KMI or the Selling Shareholder, if any, on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company, the General Partner, the Partnership, KMI or the
Selling Shareholder, if any, or by the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the General Partner, the Partnership,
KMI, the Selling Shareholder, if any, and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 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 which does not
take account of the equitable considerations referred to above in this Section
8. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 8 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Purchased Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Underwriter; each director of KMI, the General
Partner and the Company, each officer of KMI and the Company who signed the
Registration Statement, and each person, if any, who controls KMI, the
Partnership, the General Partner and the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as KMI, the Partnership, the General Partner and the
Company; and if this Agreement provides for sales by Selling Shareholders, each
person, if any, who controls a Selling Shareholder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as such Selling Shareholder. The Underwriters' respective
obligations to
-17-
contribute pursuant to this Section 8 are several in proportion to their
respective underwriting obligations and not joint.
9. Termination. This Agreement may be terminated by a majority in
interest of the Underwriters or by the Representatives by notifying the Company
at any time at or prior to the Closing Date, if any of the conditions specified
in Section 5 hereof shall not have been fulfilled when and as required by this
Agreement.
If this Agreement is terminated pursuant to any of the provisions
hereof, except as otherwise provided herein, neither the Company, the
Partnership, nor KMI shall be under any liability to any Underwriter or any
Selling Shareholder and no Underwriter shall be under any liability to the
Company, the Partnership, KMI or any Selling Shareholder, except that (a) if
this Agreement is terminated by the Underwriters or the Representatives because
of any failure or refusal on the part of the Company, the Partnership, KMI or
any Selling Shareholder to comply with the terms or to fulfill any of the
conditions of this Agreement, the Company shall cause to be reimbursed and each
Selling Shareholder will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including the reasonable fees and disbursement of their
counsel) reasonably incurred by them and (b) no Underwriter who shall have
failed or refused to purchase the Purchased Securities agreed to be purchased by
it hereunder, without some reason sufficient hereunder to justify its
cancellation or termination of its obligations hereunder, shall be relieved of
liability to the Company, the Partnership, KMI, any Selling Shareholder or the
other Underwriters for damages occasioned by its default.
10. Default of Underwriters. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the termination of this
Agreement) to purchase on the Closing Date the principal amount of Purchased
Securities agreed to be purchased by such Underwriter or Underwriters, the
Representatives, or if there are none, such firm as may be designated by a
majority in interest of the Underwriters may find one or more substitute
underwriters to purchase such Purchased Securities or make such other
arrangements as they may deem advisable or one or more of the remaining
Underwriters may agree to purchase such Purchased Securities in such proportions
as may be approved by the Representatives or such designated firm, in each case
upon the terms herein set forth. If no such arrangements have been made within
24 hours after the Closing Date, and
(a) the number of Shares of Purchased Securities to be
purchased by the defaulting Underwriter or Underwriters shall not
exceed 10% of the total number of Shares of Purchased Securities, each
of the non-defaulting Underwriters shall be obligated to purchase such
Purchased Securities on the terms herein set forth in proportion to
their respective obligations hereunder, or
(b) the number of Shares of Purchased Securities to be
purchased by the defaulting Underwriter or Underwriters shall exceed
10% of the number of Shares of Purchased Securities, the Company shall
be entitled to an additional period of 24 hours within which to find
one or more substitute underwriters satisfactory to the
Representatives, or if there are none, to such designated firm to
purchase such Purchased Securities upon the terms set forth herein.
-18-
In any such case, either the Representatives, or if there are none,
such designated firm or the Company shall have the right to postpone the Closing
Date for a period of not more than seven business days in order that necessary
changes and arrangements may be effected. If the number of Shares of the
Purchased Securities to be purchased by such defaulting Underwriters shall
exceed 10% of the number of Shares of Purchased Securities and neither the
non-defaulting Underwriters nor the Company shall make arrangements pursuant to
this Section 10 within the period stated for the purchase of the Purchased
Securities which the defaulting Underwriter or Underwriters agreed to purchase,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter and without liability on the part of the Company, the
Partnership, KMI or any Selling Shareholder, except, in each case, as provided
in Section 6(k), 7, 8 and 9 hereof. The provisions of this Section 10 shall not
in any way affect the liability of any defaulting Underwriter to the Company,
the Partnership, KMI, any Selling Shareholder or the non-defaulting Underwriters
arising out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
11. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in Sections 6(k), 7 and 8 hereof and the representations,
warranties, covenants and agreements of the Company, the Partnership, KMI and
any Selling Shareholder in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation (or
any statement as to the results thereof) made by or on behalf of any Underwriter
or any officer, director or controlling person of any Underwriter, or by or on
behalf of the Company, the Partnership, KMI, or any controlling person of the
Company, the Partnership, KMI, or any officer, director or controlling person of
the Company or KMI or by or on behalf of any Selling Shareholder or any officer,
director or controlling person, and (c) delivery of and payment for Purchased
Securities under this Agreement.
This Agreement has been and is made solely for the benefit of the
Underwriters, any Selling Shareholder, the Company, the Partnership, KMI and
their respective permitted successors and assigns, and, to the extent expressed
herein, for the benefit of persons controlling any of the Underwriters, any
Selling Shareholder, the Company, the Partnership, or KMI, and for the benefit
of the directors and officers of KMI and the Company, and their respective
successors and assigns, and no other person, partnership, association or
corporation shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Purchased Securities merely because of such purchase.
In dealings hereunder, the Representatives, if designated, shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such firm as the Representatives may designate to
the Company.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile copies of signatures shall constitute
original signatures for all purposes of this Agreement and any enforcement
hereof.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
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SCHEDULE I
[FORM OF OPINION OF XXXXXXXXX & XXXXXXXXX, L.L.P.
TO BE DELIVERED PURSUANT TO SECTION 5(f)]
(i) Each of the Company, the Partnership, the General Partner and KMI
is validly existing and in good standing as a limited liability company, limited
partnership or corporation, as the case may be, under the laws of its
jurisdiction of formation or incorporation, as applicable, and each such entity
has full limited liability company, partnership or corporate power and
authority, as the case may be, to own its properties and to conduct its business
as such business is described in the Prospectus;
(ii) The Agreement has been duly authorized, executed and delivered by
the Company, the Partnership, and KMI;
(iii) The Purchased Securities delivered on the Closing Date have been
duly authorized and, when issued and delivered against payment of the
consideration therefor pursuant to the Agreement, will be validly issued, fully
paid and (except as affected by the Delaware LLC Act) nonassessable; the
Purchased Securities, the i-units, and the purchase obligation of KMI conform as
to legal matters in all material respects to the descriptions thereof under the
appropriate captions in the Prospectus; the Purchased Securities are approved
for listing, subject to official notice of issuance, on the New York Stock
Exchange to such counsel's knowledge after due inquiry, the shareholders of the
Company have no preemptive rights with respect to the Purchased Securities; the
i-units being purchased from the Partnership by the Company on the Closing Date
have been duly authorized and, when issued and delivered as contemplated in the
Agreement against payment of the consideration therefore will be validly issued,
fully paid and (except as affected by the Delaware LP Act) nonassessable; and to
such counsel's knowledge after due inquiry, the limited partners of the
Partnership have no preemptive rights with respect to such i-units;
(iv) The Registration Statement has been declared effective under the
Securities Act; any filing of the Prospectus required to the Closing Date
pursuant to Rule 424(b) under the Securities Act has been made in the manner and
within the time period required by Rule 424(b); and, to such counsel's knowledge
after due inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or threatened by the
Commission;
(v) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made prior to the Closing Date, excluding the
documents incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting schedules and
other financial or accounting data included therein or omitted therefrom, as to
which such counsel need express no opinion) appeared on their face to comply as
to form in all material respects with the requirements of the Securities Act and
the rules and regulations thereunder;
(vi) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules and other financial or
accounting data included
therein or omitted therefrom, as to which such counsel need express no opinion)
when they became effective (if incorporated by reference to another registration
statement) or were filed with the Commission, as the case may be, appeared on
their face to comply as to form in all material respects with the requirements
of the particular form under the Securities Act or the Exchange Act and the
respective rules and regulations thereunder, as applicable;
(vii) The execution and delivery of the Agreement and the consummation
of the transactions therein contemplated will not violate (a) any of the terms
or provisions of any indenture, mortgage, deed of trust or loan agreement or
other agreement or instrument filed or incorporated by reference as an exhibit
to the Company's, the Partnership's or KMI's Annual Report on Form 10-K most
recently filed with the Commission or under any Form 10-Q or Form 8-K of each of
the Company, the Partnership or KMI filed since the filing of such Annual Report
on Form 10-K, (b) any provision of the certificate of limited partnership or
partnership agreement, the certificate of formation or limited liability company
agreement, or the charter or bylaws, as applicable, of the Partnership, the
Company, the General Partner or KMI, (c) an existing obligation of the
Partnership, the Company, KMI or the General Partner under any existing court or
administrative order, judgment or decree of which such counsel has knowledge
after due inquiry, or (d) any applicable provisions of the federal laws of the
United States (based on the limitations set forth below), the laws of the state
of Texas, or the General Corporation Law of the State of Delaware, the Delaware
LP Act or the Delaware LLC Act;
(viii) No consent, approval, authorization, order, or filing with, any
federal, Delaware or Texas court or governmental agency or body is required
under federal or Texas law, or the General Corporation Law of the State of
Delaware, the Delaware LP Act or the Delaware LLC Act, for the consummation by
the Company, the Partnership and KMI of the transactions contemplated by the
Agreement in connection with the issue and sale of the Purchased Securities by
the Company, except (a) as may be required under the Securities Act and the
regulations promulgated thereunder, (b) as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Purchased Securities by the Underwriters, and (c) such as the failure to
obtain or make would not reasonably be expected, individually or in the
aggregate, to have, in the case of the Company, the Partnership or their
respective subsidiaries, a Company Material Adverse Effect or, in the case of
KMI and its subsidiaries, a KMI Material Adverse Effect;
(ix) To such counsel's knowledge after due inquiry, and other than as
set forth in the Prospectus, there is no legal or governmental proceeding
pending or threatened against the Partnership, the General Partner, the Company,
KMI or any Partnership Significant Subsidiary or KMI Significant Subsidiary
which, if determined adversely to the Partnership, the General Partner, the
Company, KMI or such Partnership Significant Subsidiary or KMI Significant
Subsidiary would individually or in the aggregate reasonably be expected to
have, in the case of the Company, the Partnership or their respective
subsidiaries, a Company Material Adverse Effect or, in the case of KMI and its
subsidiaries, a KMI Material Adverse Effect;
(x) Neither the Company, the Partnership, nor KMI is an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended; and
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(xi) Each of the Company, the Partnership and KMI is exempt from
regulation as a "holding company" under the Public Utility Holding Company Act
of 1935, as amended.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the relevant federal law
of the United States of America, Texas law, the General Corporation Law of the
State of Delaware, the Delaware LP Act, the Delaware LLC Act and, with respect
to the opinion expressed in paragraph (i) and (ii) as it relates to KMI, the
Kansas General Corporation Code, and that they render no opinion with respect to
the state securities or blue sky laws of any jurisdiction or the law of any
other jurisdiction. Such counsel may note that they are not admitted to the
practice of law in the state of Delaware or in the state of Kansas. With respect
to paragraph (vii), such counsel may also state that they render no opinion with
respect to the anti-fraud provisions of the federal securities laws.
With respect to the opinion in paragraph (x), such counsel may rely on
the opinion of other counsel reasonably satisfactory to the Representatives or
the Underwriters, or such counsel may omit the opinion in paragraph (x) from its
opinion and have such opinion and rendered directly to the Underwriters by other
counsel reasonably satisfactory to the Representatives or the Underwriters, in
which case such counsel may state that they render no opinion with respect to
the Investment Company Act of 1940, as amended.
Such counsel may state that whenever its opinion is based on factual
matters that are "to its knowledge after due inquiry" such counsel has relied
exclusively on certificates of officers (after discussion of the contents
thereof with such officers) of the Company (for itself and on behalf of the
Partnership), the General Partner, KMI, the Partnership Significant Subsidiaries
or the KMI Significant Subsidiaries or certificates of others as to the
existence or nonexistence of the factual matters upon which such opinion is
predicated. Such counsel shall state that it has no reason to believe, however,
that any such certificate is untrue or inaccurate in any material respect.
Such counsel may also state that, because the primary purpose of such
counsel's engagement was not to establish or confirm factual matters or
financial or accounting matters and because of the wholly or partially non-legal
character of many of the statements contained in the Registration Statement and
the Prospectus and any amendment or supplement thereto, such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus and any amendment or supplement thereto (except to
the extent expressly set forth in the second clause of paragraph (iii) above)
and they have not independently verified the accuracy, completeness or fairness
of such statements (except as aforesaid); that, without limiting the foregoing,
they assume no responsibility for, have not independently verified and have not
been asked to comment on the accuracy, completeness or fairness of the financial
statements and other financial or accounting data included in the Registration
Statement, the Prospectus and any amendment or supplement thereto, or the
exhibits to the Registration Statement, and they have not examined the
accounting, financial or other records from which such financial statements and
other financial or accounting data contained therein were derived; and that they
are not experts with respect to any portion of the Registration Statement and
any amendment thereto, including, without limitation, such financial statements
and other financial
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or accounting data; such counsel did not participate in the preparation of the
documents incorporated by reference in the Prospectus; however, they have
participated in conferences with officers and other representatives of the
Company (on behalf of the Company and the Partnership), the General Partner, and
KMI, representatives of the independent accountants of the Company, the
Partnership, and KMI, and representatives of the Underwriters, including counsel
for the Underwriters, at which the contents of the Registration Statement, the
Prospectus and any amendment or supplement thereto and related matters were
discussed; and, based upon such participation and review, and relying as to
materiality in part upon the factual statements of officers and other
representatives of the Company (on behalf of the Company and the Partnership),
the General Partner and KMI and representatives of the Underwriters, no facts
have come to their attention that have caused them to believe that the
Registration Statement or any amendment thereto (except in each case for the
financial statements and related data and other financial or accounting data or
exhibits contained or incorporated by reference therein or omitted therefrom, as
to which such counsel need not comment), at the time such Registration Statement
or any such amendment became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except in each case for the
financial statements and related data and other financial or accounting data
contained or incorporated by reference therein or omitted therefrom, as to which
such counsel need not comment), at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Date, included or includes an 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.
Such counsel may state that its opinion is solely for the benefit of
the Underwriters or the Representatives pursuant to Section 5 of the Agreement,
and may not be used or relied upon by the Underwriters or the Representatives in
any other capacity or for any other purpose and may not be used or relied upon
by any other person or entity for any purpose without such counsel's express
prior written authorization. Such counsel may state that except for the use
permitted therein, such opinion may not be quoted, circulated or published, in
whole or in part, or otherwise referred to, filed with or furnished to any other
person or entity, without such counsel's prior written authorization; that the
opinion expressed therein is not a guarantee and should not be construed or
relied on as such; that the opinion expressed therein is as of the date thereof,
and such counsel expressly disclaims any responsibility to update such opinion
after the date thereof; and that such opinion is strictly limited to the matters
stated therein, and no other or more extensive opinion is intended, implied or
to be inferred beyond the matters expressly stated therein.
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SCHEDULE II
[FORM OF OPINION OF COUNSEL FOR
SELLING SHAREHOLDERS TO BE DELIVERED
PURSUANT TO SECTION 5(j)]
(i) Each Selling Shareholder had good and valid title to the Purchased
Securities sold by such Selling Shareholder free and clear of all liens,
encumbrances, equities or claims and had full right, power and authority to
sell, assign, transfer and deliver such Purchased Securities; and the several
Underwriters, assuming that the Underwriters are bona fide purchasers within the
meaning of Section 8-302 of the Uniform Commercial Code, have acquired good and
valid title to the Purchased Securities purchased by them from each Selling
Shareholder pursuant to the Agreement free and clear of all liens, encumbrances,
equities or claims;
(ii) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required to be obtained or made
by any Selling Shareholder for the consummation of the transactions contemplated
by the Agreement in connection with the sale of the Purchased Securities sold by
each Selling Shareholder, except such as have been obtained and made under the
Securities Act and such as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Purchased
Securities by the Underwriters;
(iii) The execution, delivery and performance of the Agreement and the
consummation of the transactions therein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over any Selling Shareholder or
any of their properties or any material agreement or instrument to which any
Selling Shareholder is a party or by which any Selling Shareholder is bound or
to which any of the properties of any Selling Shareholder is subject, or the
charter or by-laws of any Selling Shareholder which is a corporation; and
(iv) The Agreement has been duly authorized, executed and delivered by
each Selling Shareholder.
Such counsel's opinion may be subject to the same types of limitations
and qualifications as are set forth in Schedule II.
