Exhibit 4.25
Execution Copy
WESTERN RESOURCES, INC.
$400,000,000
Senior Notes, 9 3/4% Series Due 2007
Purchase Agreement
New York, New York
May 7, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxx Securities Inc.
BNY Capital Markets, Inc.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Western Resources, Inc., a corporation organized under the laws of the
State of Kansas (the "Company"), proposes to issue and sell to the several
parties named in Schedule I hereto (the "Initial Purchasers"), $400,000,000
principal amount of its Senior Notes, 9 3/4% Series Due 2007 (the "Securities").
The Securities are to be issued under an indenture (the "Indenture") dated as of
August 1, 1998, between the Company and Deutsche Bank Trust Company Americas,
(formerly known as Bankers Trust Company), as trustee (the "Trustee"). The
Securities have the benefit of a Registration Rights Agreement (the
"Registration Rights Agreement"), dated as of May 10, 2002, between the Company
and the Initial Purchasers, pursuant to which the Company has agreed to register
the Securities under the Act subject to the terms and conditions therein
specified. The use of the neuter in this Agreement shall include the feminine
and masculine wherever appropriate. Certain terms used herein are defined in
Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Act in reliance upon exemptions from
the registration requirements of the Act.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated April 24, 2002 (including any and all
exhibits thereto and any information incorporated by reference therein, the
"Preliminary Memorandum"), and a final offering memorandum, dated May 7, 2002
(including any and all exhibits thereto and any information incorporated by
reference therein, the "Final Memorandum"). Each of the Preliminary Memorandum
and the Final Memorandum sets forth certain information concerning the Company
and the Securities. The Company hereby confirms that it has authorized the use
of the Preliminary Memorandum and the Final Memorandum in connection with the
offer and sale of the Securities by the Initial Purchasers. Unless stated to the
contrary, any references herein to the terms "amend,"
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"amendment" or "supplement" with respect to the Final Memorandum shall be deemed
to refer to and include any information filed under the Exchange Act, subsequent
to the Execution Time and prior to the completion of the distribution of the
Securities by the Initial Purchasers, which is incorporated by reference into
the Final Memorandum.
The Preliminary Memorandum and the Final Memorandum also relate to the sale
by the Company of $365,000,000 principal amount of First Mortgage Bonds, 7 7/8%
Series Due 2007 (the "Bonds Due 2007"). While the Securities and the Bonds Due
2007 are expected to be sold on the same date, the consummation of the sale of
the Securities and Bonds Due 2007 are not conditioned upon each other.
1. Representations and Warranties. The Company represents and warrants to
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each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. At the Execution Time and on the Closing Date
(as defined in Section 3 hereof), the Final Memorandum did not, and will not
(and any amendment or supplement thereto, at the date thereof and on the Closing
Date, will not), contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. However, the
Company makes no representation or warranty as to the information contained in
or omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the Initial
Purchasers through Xxxxxxx Xxxxx Xxxxxx Inc. specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum.
(b) The Company will not resell any Securities that have been acquired by
it.
(c) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf has, directly or indirectly, made any offers or sales of
any security, or solicited offers to buy any security, under circumstances that
would require the registration of the Securities under the Act.
(d) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(e) The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Act.
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(f) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf has engaged in any directed selling efforts with respect
to the Securities, and each of them has complied with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them in Regulation S.
(g) The Company has been advised by the NASD's PORTAL Market that the
Securities have been designated PORTAL-eligible securities in accordance with
the rules and regulations of the NASD.
(h) The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Final Memorandum will not be, an "investment company" within the meaning of the
Investment Company Act, without taking account of any exemption arising out of
the number of holders of the Company's securities.
(i) The Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act.
(j) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities (except as
contemplated by this Agreement).
(k) The Company has not taken, directly or indirectly, any action designed
to cause or which has constituted or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(l) The information provided by the Company pursuant to Section 5(g) hereof
will not, at the date thereof, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(m) Each of the Company and the Principal Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized with full
corporate power and authority to carry on the electric utility business in which
it is engaged, and 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 except where the failure to so qualify would not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business,
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except as set forth in or contemplated in the Final Memorandum (a "Material
Adverse Effect").
(n) All the outstanding shares of capital stock of the Principal Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the Principal Subsidiary owned by the
Company, as described in the Final Memorandum, are owned by it free and clear of
any perfected security interest or any other security interests, claims, liens
or encumbrances.
(o) The Company's authorized equity capitalization is as set forth in the
Final Memorandum, and the capital stock of the Company conforms in all material
respects to the description thereof contained in the Final Memorandum.
(p) The statements in the Final Memorandum under the headings "Certain U.S.
Federal Income Tax Considerations," "Description of Bonds," "Description of
Notes" and "Exchange Offers; Registration Rights" fairly summarize the matters
therein described.
(q) This Agreement has been duly authorized, executed and delivered by the
Company; the Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery thereof by the
Trustee, constitutes a legal, valid, binding instrument enforceable against the
Company in accordance with its terms except that (x) the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights or remedies generally; (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought (regardless of whether enforcement is sought
in a proceeding at law or in equity); and (iii) any indemnification or
contribution provision that may be contrary to or inconsistent with public
policy and (y) the enforceability of provisions imposing liquidated damages,
penalties or an increase in interest rate upon the occurrence of certain events
may be limited in certain circumstances (collectively, the "Enforceability
Limitations"); the 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 Initial Purchasers, will have been duly executed and
delivered by the Company and will constitute the legal, valid and binding
obligations of the Company entitled to the benefits of the Indenture subject to
the Enforceability Limitations; the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Company, will constitute the
legal, valid, binding and enforceable instrument of the Company subject to the
Enforceability Limitations; and the New Securities (as such term is defined in
the Registration Rights Agreement) have been duly
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authorized by the Company for issuance and sale pursuant to the Indenture and
the Registration Rights Agreement, and such New Securities, when executed,
authenticated, issued and delivered in the manner provided for in the
Registration Rights Agreement and the Indenture against payment of consideration
therefor in the form of the Securities, will constitute valid and legally
binding obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms subject to the
Enforceability Limitations.
(r) No consent, approval, authorization, filing with or order of the State
Corporation Commission of the State of Kansas (the "KCC") or any court or
governmental agency or body is required in connection with the transactions
contemplated herein or in the Indenture or the Registration Rights Agreement,
except (i) the June 15, 2000 authorization from the Federal Energy Regulatory
Commission (the "FERC") in Federal Power Act docket numbers ES00-39-000 and
ES00-39-001 and the filing with the FERC of the reports required by 18 CFR
Section 34.10; (ii) such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
by the Initial Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreement; and (iii) the filing with the
KCC of a copy of the registration statement contemplated by the Registration
Rights Agreement.
(s) Neither the execution and delivery of this Agreement, the Indenture or
the Registration Rights Agreement, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein or therein contemplated,
nor the fulfillment of the terms hereof or thereof will conflict with, result in
a breach or violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Principal Subsidiary pursuant to: (i)
the charter or by-laws of the Company or the Principal Subsidiary; (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or the Principal Subsidiary is a party or bound
or to which its or their property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or the Principal
Subsidiary of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or the
Principal Subsidiary or any of its or their properties.
(t) The consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final Memorandum
present fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of the
Act and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise
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noted therein); the selected financial data set forth under the caption "Summary
Consolidated Financial Data" in the Final Memorandum fairly present, on the
basis stated in the Final Memorandum, the information included therein; the
information set forth under the captions "Summary Approximate Restricted Group
Pro Forma Financial Data" and "Summary Approximate Restricted Group EBITDA
Reconciliation" fairly present, on the basis stated in the Final Memorandum, the
information included therein; and the capitalization set forth under the columns
"Actual" and "As Adjusted" fairly present the information included therein.
(u) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to have a Material
Adverse Effect on the performance of this Agreement, the Indenture or the
Registration Rights Agreement, or the consummation of any of the transactions
contemplated hereby or thereby; or (ii) could reasonably be expected to have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(v) Each of the Company and each of its subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted, except where the failure to own or lease such properties would not
reasonably be expected to have a Material Adverse Effect.
(w) Neither the Company nor the Principal Subsidiary is in violation or
default of (i) any provision of its charter or by-laws; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or the Principal Subsidiary is a party or bound or to which
its property is subject; or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or the Principal Subsidiary of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or the Principal Subsidiary
or any of its properties, as applicable, except for violations or defaults which
would not reasonably be expected to have a Material Adverse Effect.
(x) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"), who have certified certain
financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Final Memorandum, are independent
public accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
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(y) The Company has received from Xxxxxx Xxxxxxxx (i) a letter dated March
27, 2002 concerning Xxxxxx Xxxxxxxx'x quality controls in connection with
Xxxxxx Xxxxxxxx'x audit of the audited financial statements of the Company and
its consolidated subsidiaries included in the Final Memorandum (the "AA
Representation Letter"), including representations regarding the continuity of
Xxxxxx Xxxxxxxx'x personnel working on the audit, the availability of national
office consultation and the availability of personnel at foreign affiliates of
Xxxxxx Xxxxxxxx to conduct relevant portions of the audit. The AA Representation
Letter has not been rescinded and the Company has no reason to believe that the
representations contained in the AA Representation Letter are not true and
correct in all respects.
(z) There are no stamp or other issuance or transfer taxes or duties or
other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company
of the Securities to the Initial Purchasers.
(aa) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not reasonably be
expected to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto)) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as would not reasonably be
expected to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).
(bb) No labor problem or dispute with the employees of the Company or the
Principal Subsidiary exists or is threatened or imminent, and the Company is not
aware of any existing or imminent labor disturbance by the employees of any of
its or the Principal Subsidiary's principal suppliers, contractors or customers,
that would reasonably be expected to have a Material Adverse Effect, except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(cc) The Company and the Principal Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or the Principal Subsidiary or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
the Principal Subsidiary are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
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the Principal Subsidiary under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Company nor
(cc) the Principal Subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor the Principal Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not reasonably be expected to have a Material Adverse Effect and except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(dd) The Principal Subsidiary is not currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on its capital stock, from repaying to the Company any loans or
advances to the Principal Subsidiary from the Company or from transferring any
of the Principal Subsidiary's property or assets to the Company, except as
described in or contemplated by the Final Memorandum.
(ee) Each of the Company and the Principal Subsidiary possesses valid and
subsisting franchises, certificates of convenience and authority, licenses and
permits authorizing it to carry on the electric utility business in which it is
engaged, subject to the expiration of the Principal Subsidiary's franchise
agreement with the City of Wichita, and neither the Company nor the Principal
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such franchise, certificate of convenience and authority,
license or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(ff) The Company and the Principal Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(gg) The Company and the Principal Subsidiary are (i) 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
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("Environmental Laws"); have received and are in compliance with all permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses; and (iii) have not received notice of
any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws, failure
to receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto); except as set forth in the
Final Memorandum, neither the Company nor any of the subsidiaries has been named
as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(hh) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(ii) The offerings are in the ordinary course of business of the Company
and the Company does not believe that an exemption from the July 20, 2001 Order
of the KCC is required.
Any certificate signed by any officer of the Company and delivered to the
Initial Purchasers or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
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upon the representations and warranties herein set forth, the Company agrees to
sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 98.125% of the
principal amount thereof, the principal amount of Securities set forth opposite
such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall
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be made at 10:00 A.M., New York City time, on May 10, 2002, or at such time on
such later date (not later than May 17, 2002) as the Initial Purchasers and the
Company shall agree, which date and time may be postponed by agreement between
the Initial Purchasers and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Initial
Purchasers for their respective accounts against payment by the several Initial
Purchasers of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to the account specified by the Company.
Delivery of the Securities shall be made through the facilities of The
Depository Trust Company.
4. Offering by Initial Purchasers. Each Initial Purchaser, severally and
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not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any Securities
except (i) to those it reasonably believes to be "Qualified Institutional
Buyers" (as defined in Rule 144A under the Act) and that, in connection with
each such sale, it has taken or will take reasonable steps to ensure that the
purchaser of such Securities is aware that such sale is being made in reliance
on Rule 144A or (ii) in accordance with the restrictions set forth in Exhibit A
hereto.
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Securities in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States.
5. Agreements. The Company agrees with each Initial Purchaser that:
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(a) The Company will furnish to each Initial Purchaser and to counsel for
the Initial Purchasers, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as it may reasonably request.
(b) The Company will not (except as is necessary to comply with applicable
law) amend or supplement the Final Memorandum, other than by filing documents
under the Exchange Act that are incorporated by reference therein, without the
prior written consent of the Initial Purchasers; provided, however, that, prior
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to the completion of the distribution of the Securities by the Initial
Purchasers (as determined by the Initial Purchasers), the Company will not file
any document under the Exchange Act that is incorporated by reference in the
Final Memorandum unless, prior to such proposed filing, the Company has
furnished the Initial Purchasers with a copy of such document for their review
and the Initial Purchasers have not reasonably objected to the filing of such
document.
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(c) If at any time prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by the Initial Purchasers),
any event occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company promptly (i) will notify the Initial Purchasers of
any such event; (ii) subject to the requirements of paragraph (b) of this
Section 5, will prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (iii) will supply any
supplemented or amended Final Memorandum to the several Initial Purchasers and
counsel for the Initial Purchasers without charge in such quantities as the
Initial Purchasers may reasonably request.
(d) The Company will not, and will not permit any of its Affiliates to,
resell any Securities (other than to other Affiliates) that have been acquired
by any of them.
(e) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(f) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(g) So long as any of the Securities are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, the Company will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(h) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any directed selling efforts with respect
to the Securities, and each of them will comply with the offering restrictions
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requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(i) The Company will cooperate with the Initial Purchasers and use its best
efforts to permit the Securities to be eligible for clearance and settlement
through The Depository Trust Company.
(j) The Company will not for a period of 90 days following the Execution
Time, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer,
sell or contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the Company or any Affiliate of the Company
or any person in privity with the Company or any Affiliate of the Company),
directly or indirectly, or announce the offering of, any debt securities issued
or guaranteed by the Company (other than (i) the Securities; (ii) the Bonds Due
2007; and (iii) indebtedness under the Company's Credit Agreement dated as of
June 28, 2000, the Five-Year Competitive Advance and Revolving Credit Facility
Agreement dated as of March 17, 1998 and the WR Receivables Corporation Purchase
and Sale Agreement dated as of July 28, 2000); provided, however that the
Company may incur indebtedness under credit facilities that replace the credit
facilities described in clause (iii) above.
(k) The Company will not take, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(l) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Registration Rights Agreement, the
issuance of the Securities and the fees of the Trustee; (ii) the preparation,
printing or reproduction of the Preliminary Memorandum and Final Memorandum and
each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Preliminary Memorandum and
Final Memorandum, and all amendments or supplements to either of them, as may,
in each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (v) the printing (or reproduction) and delivery of this Agreement
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (vi) admitting the Securities
for trading in the PORTAL Market; (vii) the reasonable transportation and other
expenses incurred by or on behalf of
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Company representatives (which shall exclude expenses of the Initial Purchasers)
in connection with presentations to prospective purchasers of the Securities;
(viii) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company; and
(ix) all other costs and expenses incident to the performance by the Company of
its obligations hereunder.
(m) The Company will cause Westar Industries, Inc., contemporaneously with
the consummation of the issuance of the Securities, to transfer to the Company
in exchange for equity, Company debt in an amount equal to the sum of any
offering expenses, Initial Purchasers' discounts, and the amount, if any, by
which the debt incurred under and in connection with the issuance of the
Securities and the Bonds Due 2007 exceeds the amount of the debt of the Company
retired by application of the proceeds of the sale of the Securities and the
Bonds Due 2007.
6. Conditions to the Obligations of the Initial Purchasers. The obligations
----------------------------------------------------------
of the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein at the Execution Time and the Closing Date, to the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Initial Purchasers shall have received from Xxxxx X. Xxxxx, Esq.,
Vice President and Corporate Secretary of the Company, and from other counsel
(which may be Company counsel) acceptable to the Initial Purchasers, one or more
legal opinions, dated the Closing Date and addressed to the Initial Purchasers,
to the cumulative effect that:
(i) each of the Company and the Principal Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Kansas, with full corporate 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 Final Memorandum, and 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 and where the failure to be so
qualified would be materially adverse to the Company and its subsidiaries
considered as a whole;
(ii) each of the Company and the Principal Subsidiary possesses valid and
subsisting franchises, certificates of convenience and authority, licenses and
permits authorizing it to carry on the electric utility business in which it is
engaged, subject to the expiration of the Principal Subsidiary's franchise
agreement with the City of Wichita, in each case as described in the Final
Memorandum;
142
(iii) the Indenture has been duly authorized, executed and delivered, and
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms subject to the Enforceability Limitations;
(iv) the Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers under this Agreement,
will constitute legal, valid, binding and enforceable obligations of the Company
entitled to the benefits of the Indenture subject to the Enforceability
Limitations;
(v) the Registration Rights Agreement has been duly authorized, executed
and delivered and constitutes the legal, valid, binding and enforceable
instrument of the Company subject to the Enforceability Limitations;
(vi) neither the execution and delivery of the Indenture, the Registration
Rights Agreement, the Securities or this Agreement, nor the consummation of the
transactions therein contemplated, nor compliance with the terms and provisions
thereof, will conflict with, violate or result in a breach of any law, any
administrative regulation or any court decree known to such counsel to be
applicable to the Company or the Principal Subsidiary, conflict with or result
in a breach of any of the terms, conditions or provisions of the charter or
by-laws of the Company or the Principal Subsidiary or of any agreement or
instrument known to such counsel to which the Company or the Principal
Subsidiary is a party or by which the Company or the Principal Subsidiary is
bound or constitute a default thereunder;
(vii) this Agreement has been duly authorized, executed and delivered by
the Company;
(viii) the Securities, the Indenture and the Registration Rights Agreement
conform as to legal matters in all material respects with the statements
concerning them set forth in the Final Memorandum under the captions
"Description of Notes" and "Exchange Offers; Registration Rights," insofar as
such statements purport to summarize certain provisions;
(ix) an appropriate order has been entered by the FERC in Federal Power Act
dockets ES00-39-000 and ES00-39-001 authorizing the issuance and sale of the
Securities and the transactions related thereto as contemplated by this
Agreement and the Registration Rights Agreement, and no additional consent,
approval, authorization, filing with or order of
152
the FERC, the KCC or any court or governmental agency or body is required in
connection with the transactions contemplated herein or in the Indenture and the
Registration Rights Agreement, except (i) such as may be required under the blue
sky or securities laws of any jurisdiction in connection with the purchase and
sale of the Securities by the Initial Purchasers in the manner contemplated in
this Agreement and the Final Memorandum and the Registration Rights Agreement;
(ii) the filing with the FERC of the reports required by 18 CFR Section 34.10;
and (iii) the filing with the KCC of a copy of the registration statement
contemplated by the Registration Rights Agreement and such other approvals
(specified in such opinion) as have been obtained;
(x) to the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or the Principal
Subsidiary or its or their property that is not adequately disclosed in the
Final Memorandum, except in each case for such proceedings that, if the subject
of an unfavorable decision, ruling or finding would not singly or in the
aggregate, result in a material adverse change in the condition (final or
otherwise), prospects, earnings, business or properties of the Company and its
Restricted Subsidiaries, taken as a whole;
(xi) the statements in the Final Memorandum under the heading "Certain U.S.
Federal Income Tax Considerations" and the statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001 (the "Annual Report")
under the heading "Legal Proceedings" fairly summarize the matters therein
described;
(xii) no facts have come to such counsel's attention that lead him to
believe that the Final Memorandum at the Execution Time and on the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (in
each case, other than the statistical information, financial statements and
other financial information contained therein, as to which such counsel need
express no opinion);
(xiii) assuming the accuracy of the representations and warranties and
compliance with the agreements contained herein, no registration of the
Securities under the Act, and no qualification of an indenture under the Trust
Indenture Act, are required for the offer and sale by the Initial Purchasers of
the Securities in the manner contemplated by this Agreement; and
162
(xiv) the documents of the Company incorporated by reference in the Final
Memorandum, as of the respective dates on which they were filed with the
Commission pursuant to the Exchange Act, complied as to form in all material
respects with the Exchange Act and the applicable published rules and
regulations of the Commission under the Exchange Act.
In rendering such opinion, counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials. References to the Final Memorandum in this Section 6(a)
include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have requested and caused Morris, Laing, Xxxxx, Xxxxx
& Xxxxxxx, Chartered, special counsel for the Company, to furnish to the Initial
Purchasers its opinion, dated the Closing Date, addressed to the Initial
Purchasers and in form reasonably satisfactory to the Initial Purchasers, to the
effect that:
(i) unless the issue and sale of the Securities pursuant to this
Agreement violates an existing valid order of the KCC, no consent,
approval, authorization, order, registration, waiver, exemption or
qualification of or with the KCC is required for the issue and sale of the
Securities by the Company pursuant to this Agreement;
(ii) the issue and sale of the Securities should not be interpreted by
the KCC to violate the July 20, 2001 Order of the KCC; and
(iii) if the KCC were to determine that the issue and sale of the
Securities violates the July 20, 2001 Order, (i) any such violation should
not affect the validity of the Securities; (ii) any such violation should
not impair the legal enforceability of such Securities; and (iii) the
Company should not be prevented from making timely payments of interest,
premium, if any, and principal pursuant to the terms of the Securities, or
otherwise complying with the terms of the Securities.
(c) The Initial Purchasers shall have received from Xxxxxx Xxxxxx &
Xxxxxxx, special counsel to the Company, a legal opinion dated the Closing Date
and addressed to the Initial Purchasers and in form reasonably satisfactory to
the Initial Purchasers, covering the matters referred to in clauses (iii), (iv),
(v), (vii), (viii), the statement with respect to "Certain U.S. Federal Income
Tax Considerations" in (xi) and (xiii) of Section 6(a) above. In rendering such
opinions, such counsel may rely as to matters of fact, to the extent they deem
proper on certificates of responsible officers of the Company and public
officials, and as to matters relating to the FERC authorization and Kansas law
(including matters relating to the KCC), upon the opinions rendered pursuant to
Sections 6(a)
172
and 6(b) above. In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent certified
public accountants for the Company and the Initial Purchasers at which
conferences the contents of the Final Memorandum were discussed and that
although they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except as to matters referred to in their opinion described in
clauses (viii) and (xi) referred to above, on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of officers,
counsel and other representatives of the Company), no facts came to their
attention which lead them to believe that the Final Memorandum, as of its date,
or (as amended or supplemented) as of the Closing Date, 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, in light of the
circumstances under which they were made, not misleading (except in each case as
to the financial statements and other financial and statistical data contained
therein or incorporated by reference therein, with respect to which they need
make no comment).
(d) The Initial Purchasers shall have received from Sidley Xxxxxx Xxxxx &
Xxxx LLP, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date and addressed to the Initial Purchasers, with respect to the
issuance and sale of the Securities, the Indenture, the Registration Rights
Agreement, the Final Memorandum (as amended or supplemented at the Closing Date)
and other related matters as the Initial Purchasers may reasonably require, and
the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters. Sidley Xxxxxx Xxxxx
& Xxxx LLP may rely on the opinion of one or more of the foregoing counsel for
the Company.
(e) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by two of its executive officers (one of whom
shall be a principal financial or accounting officer of the Company), dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date; and
(ii) since the date of the most recent financial statements included in the
Final Memorandum (exclusive of any amendment or supplement thereto),
182
there has been no material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(f) Subject to such modifications as the Initial Purchasers may, in their
discretion, deem acceptable to accommodate the current uncertainty relating to
the ongoing operations of Xxxxxx Xxxxxxxx, at the Execution Time and at the
Closing Date, the Company shall have requested and caused Xxxxxx Xxxxxxxx to
furnish to the Initial Purchasers letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance satisfactory to
the Initial Purchasers, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the applicable rules and
regulations thereunder, and that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Final Memorandum and
reported on by them comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations thereunder;
(ii) on the basis of carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the minutes
of the meetings of the stockholders, directors and committees thereof
committees of the Company and its subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to transactions
and events subsequent to December 31, 2001, nothing came to their attention
which caused them to believe that:
(1) with respect to the period subsequent to December 31, 2001
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the total long-term liabilities of
the Company and its subsidiaries or cumulative preferred stock or
common stock of the Company or decreases in the shareholders' equity
of the Company as compared with the amounts shown on the December 31,
2001 consolidated balance sheet included in the Annual Report, or for
the period from January 1, 2002 to such specified date there were any
decreases, as compared with the corresponding period in the preceding
year in total sales or earnings (loss) before income taxes or in total
or per
192
share amounts of net income of the Company and its subsidiaries,
except in all instances for changes or decreases set forth in such
letter (including decreases as a result of the impairment charge in
the first quarter of 2002 of approximately $657 million), in which
case the letter shall be accompanied by an explanation by the Company
as to the significance thereof unless said explanation is not deemed
necessary by the Initial Purchasers; or
(2) the information included under the headings "Selected
Financial Data" in the Annual Report is not in conformity with the
disclosure requirements of Regulation S-K; or
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Final Memorandum, the
information included in Items 1, 2, 6, 7 and 11 of the Annual Report agrees
with the accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
References to the Final Memorandum in this Section 6(f) include any
amendment or supplement thereto at the date of the applicable letter.
(g) On the Closing Date, the AA Representation Letter shall not have
been rescinded and the Company shall have no reason to believe that the
representations in the AA Representation Letter are not true and correct in
all respects.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (f)
of this Section 6; or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
Restricted Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Initial Purchasers, so
material and adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
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(i) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(j) Subsequent to the Execution Time, there shall not have been any
(i) downgrading in the rating accorded the Company's debt securities by a
"nationally recognized securities rating organization," as that term is
defined by the Commission for purposes of its Rule 436(g)(2); and (ii) no
such rating organization shall have announced publicly that it has placed,
or informed the Company or the Initial Purchasers that it intends to place,
any of the Company's debt securities on what is commonly referred to as a
"watchlist" for possible downgrading, in a manner or to an extent
indicating a materially greater likelihood of a downgrading in rating as
described in clause (i) above occurring than was the case as of the date
hereof.
(k) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Initial
Purchasers. Notice of such cancellation shall be given to the Company in writing
or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of counsel for the Initial Purchasers, at 000 Xxxxx Xxxxxx, Xxx
Xxxx, XX 00000, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
-------------------------
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
212
indemnify and hold harmless each Initial Purchaser, the directors and officers
of each Initial Purchaser and each person who controls any Initial Purchaser
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Memorandum, the Final Memorandum (or
in any supplement or amendment thereto) or any information provided by the
Company to any holder or prospective purchaser of Securities pursuant to Section
5(g), or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchasers
through the Initial Purchasers specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to the Company by or on behalf of such
Initial Purchaser through the Initial Purchasers specifically for inclusion in
the Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in (i) the last paragraph of the
cover page regarding the delivery of the Securities, the fourth full paragraph
on page (ii) and the related disclosure on page 73 (in the third full paragraph
from the bottom of page 73) concerning stabilization, syndicate covering
transactions and penalty bids and, under the heading "Plan of Distribution";
(ii) the sentences related to concessions and reallowances; (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids in
the Preliminary Memorandum and the Final Memorandum and (iv) paragraphs three,
five and seven under the heading "Plan of Distribution," constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or
222
supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
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satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchasers agree to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of the
Initial Purchasers may be subject in such proportion as
232
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; provided, however, that in no case shall any Initial Purchaser
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(except as may be provided in any agreement among the Initial Purchasers
relating to the offering of the Securities) be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Initial Purchasers on the other, the intent of
the parties and their relative knowledge, information and opportunity to correct
or prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director and officer of an Initial Purchaser shall have
the same rights to contribution as such Initial Purchaser, and each person who
controls the Company within the meaning of either the Act or the Exchange Act
and each officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d). The Initial Purchasers' respective obligations
to contribute pursuant to this Section 8 are several in proportion to the
principal amount of Securities set forth opposite their respective names in
Schedule 1 hereto, and not joint.
9. Default by an Initial Purchaser. If any one or more Initial Purchasers
-------------------------------
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or
242
Initial Purchasers agreed but failed to purchase; provided, however, that in the
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event that the aggregate amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate amount of Securities set forth in Schedule I hereto, the
remaining Initial Purchasers shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Initial Purchasers shall
determine in order that the required changes in the Final Memorandum or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company or any nondefaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities; or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
------------------------------------------
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchasers or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and effective
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only on receipt, and, if sent to the Initial Purchasers, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney
Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Western Resources, Inc. Legal Department (fax no.: (000) 000-0000) and confirmed
to Xx. Xxxxx X. Xxxxx, Vice
252
President and Corporate Secretary, at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx
00000.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) hereof, no other person will have any
right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only and
--------
shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall
-----------
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York, New York and Topeka,
Kansas.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
262
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Principal Subsidiary" shall mean Kansas Gas and Electric Company.
"Restricted Subsidiaries" shall have the same meaning as in the
Indenture.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
272
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
Western Resources, Inc.
By /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
X.X. Xxxxxx Securities Inc.
BNY Capital Markets, Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By /s/ Xxxxxx Xxxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Managing Director
For itself and the other several
Initial Purchasers named in
Schedule I to the foregoing
Agreement.
282
SCHEDULE I
Principal
Amount of Securities
Initial Purchasers to be Purchased
------------------ ---------------
Xxxxxxx Xxxxx Xxxxxx Inc. ............................... $ 232,752,000
X.X. Xxxxxx Securities Inc. ............................. 155,168,000
BNY Capital Markets, Inc. ............................... 12,080,000
-----------
Total............................................. $ 400,000,000
===========
EXHIBIT A
Selling Restrictions for Offers and
-----------------------------------
Sales outside the United States
-------------------------------
(1)(a) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Initial Purchaser represents and agrees that, except as otherwise
permitted by Section 4(a)(i) of the Agreement to which this is an exhibit, it
has offered and sold the Securities, and will offer and sell the Securities, (i)
as part of their distribution at any time; and (ii) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, only
in accordance with Rule 903 of Regulation S under the Act. Accordingly, each
Initial Purchaser represents and agrees that neither it, nor any of its
Affiliates nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities (other than a sale of Securities pursuant
to Section 4(a)(i) of the Agreement to which this is an exhibit), it shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons (i)
as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the closing date of
the offering, except in either case in accordance with Regulation S or Rule
144A under the Act. Terms used above have the meanings given to them by
Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with
its Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that (i) it has not offered or sold and, prior to the date six months
after the Closing Date, will not offer or sell any Securities to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services and Markets Act 2000 (the "FSMA") with respect to anything done by it
in relation to the Securities in, from or otherwise involving
X-0
00
xxx Xxxxxx Xxxxxxx; and (iii) it has only communicated, or caused to be
communicated, and will only communicate, or cause to be communicated, any
invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the FSMA) received by it in connection with the issue or sale of
the Securities in circumstances in which Section 21(1) of the FSMA does not
apply to the Company.
A-2
