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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event reported: October 18, 1994
K N ENERGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Kansas 1-6446 48-0290000
--------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
</TABLE>
370 Van Gordon Street, P.O. Box 281304, Lakewood, CO 80228-8304
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, include area code: (303) 989-1740
1
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Item 5: Other Events
On October 18, 1994, K N Energy, Inc. sold $75 million of its
8.75% Debentures due October 15, 2024 pursuant to an
underwritten public offering.
Item 7: Financial Statements, Pro-Forma Financial Information and Exhibits
(a) Financial Statements - None
(b) Pro-Forma Financial Statements - None
(c) Exhibits
1.1 Purchase Agreement dated October 11, 1994
between K N Energy, Inc. and Merrill Lynch &
Co. and Salomon Brothers Inc.
1.2 Specimen of 8.75% Debenture due October 15,
2024
2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
K N ENERGY, INC.
By: /s/ William S. Garner, Jr.
William S. Garner, Jr.
Vice President, General Counsel
and Secretary
Date: October 18, 1994
3
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Exhibit Description Page
- -------- ------------------- ----
<S> <C> <C>
1.1 Purchase Agreement dated October 11, 1994 between 5
K N Energy, Inc. and Merrill Lynch & Co. and
Salomon Brothers Inc.
1.2 Specimen of 8.75% Debenture due October 15, 2024 43
</TABLE>
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EXHIBIT 1.1
EXECUTION COPY
________________________________________________________________________________
________________________________________________________________________________
$75,000,000
K N ENERGY, INC.
(a Kansas corporation)
8-3/4% Debentures due October 15, 2024
PURCHASE AGREEMENT
Dated: October 11, 1994
________________________________________________________________________________
________________________________________________________________________________
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K N ENERGY, INC.
(a Kansas corporation)
8-3/4% Debentures due October 15, 2024
PURCHASE AGREEMENT
October 11, 1994
To: MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
SALOMON BROTHERS INC
c/o Merrill Lynch & Co.
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Dear Sirs:
K N Energy, Inc., a Kansas corporation (the "Company"),
proposes to issue and sell to the underwriter or underwriters named in Schedule
I certain of its debt securities specified in Schedule II (the "Offered
Securities") on the terms and conditions stated herein and in Schedule II. The
Offered Securities will be issued pursuant to an indenture, dated as of
November 20, 1993 (the "Indenture"), between the Company and Bank of America
Illinois, Trustee (the "Trustee"). As used herein, unless the context otherwise
requires, the term "Underwriters" shall mean the firm or firms named as
Underwriter or Underwriters in Schedule I and the term "you" shall mean the
Underwriter or Underwriters, if no underwriting syndicate is purchasing the
Offered Securities, or the representative or representatives of the
Underwriters, if an underwriting syndicate is purchasing the Offered
Securities, as indicated in Schedule I.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
33-51115), including a prospectus, relating to certain of its debt securities
(including the Offered Securities) and the offering thereof from time to time
in accordance with Rule 415 under the Securities Act of 1933, as amended (the
"1933 Act"). Such registration statement has been declared effective
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2
by the Commission. As provided in Section 3(a), a prospectus supplement
reflecting the terms of the Offered Securities, the terms of the offering
thereof and the other matters set forth therein has been prepared and will be
filed pursuant to Rule 424 under the 1933 Act. Such prospectus supplement, in
the form first filed after the date hereof pursuant to Rule 424, is herein
referred to as the "Prospectus Supplement". Such registration statement on Form
S-3 (File No. 33-51115), as amended at the date hereof, including the exhibits
thereto and the documents incorporated by reference therein, is herein called
the "Registration Statement", and the basic prospectus included therein
relating to all offerings of securities under the Registration Statement, as
supplemented by the Prospectus Supplement, is herein called the "Prospectus",
except that, if such basic prospectus is amended or supplemented on or after
the date hereof but prior to the date on which the Prospectus Supplement is
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the
basic prospectus as so amended or supplemented and as supplemented by the
Prospectus Supplement, in either case including the documents filed by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference therein.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to and agrees with each Underwriter that:
(i) On the original effective date of the Registration
Statement, on the effective date of the most recent post-effective
amendment thereto, if any, and on the date of the filing by the
Company of the latest annual report on Form 10-K after the original
effective date of the Registration Statement, the Registration
Statement complied in all material respects with the requirements of
the 1933 Act and the rules and regulations of the Commission
thereunder (the "1933 Act Regulations"), the Trust Indenture Act of
1939, as amended (the "1939 Act"), and the rules and regulations of
the Commission under the 1939 Act (the "1939 Act Regulations") and did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; on the date hereof and at the
Closing Time (as defined below), the Registration Statement, and any
amendments thereof, and the Prospectus, and any amendments thereof and
supplements thereto, comply and will comply in all material respects
with the requirements of the 1933 Act, the 1933 Act Regulations, the
1939 Act and the 1939 Act Regulations and none of such documents
includes or will include an untrue statement of a material fact or
omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company makes no representations or
warranties as to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Underwriter, directly or through you, expressly for
use in the Registration Statement or the Prospectus. At the Closing
Time, the Designated Indenture (as defined below) will comply in all
material respects with the requirements of the 1939 Act and the 1939
Act Regulations.
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(ii) The documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission, or to the
extent such documents were subsequently amended prior to the date
hereof, at the time so amended, complied in all material respects with
the requirements of the 1934 Act, and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, do not and will
not, on the date hereof and at the Closing Time, include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(iii) Arthur Andersen LLP, who have reported upon the
audited financial statements and schedules included or incorporated by
reference in the Registration Statement, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The audited consolidated financial statements
included in the Company's Annual Report to Shareholders for 1993 and
incorporated by reference in the Registration Statement, and any more
recent consolidated financial statements included or incorporated by
reference in the Registration Statement, present fairly the
consolidated financial position of the Company and its subsidiaries as
of the dates indicated and the consolidated results of operations and
cash flows of the Company and its subsidiaries for the periods
specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis (except as may be otherwise stated therein) throughout the
periods involved. The related supplemental schedules, if any, included
in the Registration Statement present fairly the information required
to be stated therein. The selected financial data, if any, included in
the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with that of the latest audited
consolidated financial statements included or incorporated by
reference in the Registration Statement.
(vi) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Kansas with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus; and the Company is duly qualified to transact
business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
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(vii) Each subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
1933 Act Regulations (hereinafter referred to as a "Subsidiary") is
listed on Annex A hereto and is a corporation duly incorporated and
validly existing in good standing under the laws of the jurisdiction
of its incorporation with corporate power and authority under such
laws to own, lease and operate its properties and conduct its
business; and each Subsidiary is duly qualified to transact business
as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise. All of the
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable
and are owned by the Company, directly or through one or more
subsidiaries, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind.
(viii) The Indenture, each supplement thereto, if any, to
the date hereof and the supplement thereto or board resolution setting
forth the terms of the Offered Securities (the Indenture, as so
supplemented by such supplement or supplements and board resolution,
being herein referred to as the "Designated Indenture"), have been
duly authorized by the Company. A conformed copy of the Indenture as
executed is filed as Exhibit 4.1 to the Registration Statement. The
Designated Indenture, when duly executed and delivered (to the extent
required by the Indenture) by the Company and when duly authorized,
executed and delivered (to the extent required by the Indenture) by
the Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement
of creditors rights generally or by the provisions of Article Tenth of
the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Designated Indenture conforms, in all
material respects, to the description thereof contained in the
Prospectus.
(ix) The Offered Securities have been duly authorized by
the Company. When executed, authenticated, issued and delivered in the
manner provided for in the Designated Indenture and sold and paid for
as provided herein and in any Delayed Delivery Contracts (as defined
below), the Offered Securities will constitute valid and binding
obligations of the Company entitled to the benefits of the Designated
Indenture and enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement
of creditors' rights generally or by the provisions of Article Tenth
of the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless
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5
of whether enforcement is considered in a proceeding in equity or at
law); and the Offered Securities conform, in all material respects, to
the description thereof contained in the Prospectus.
(x) In the event that any of the Offered Securities are
purchased pursuant to Delayed Delivery Contracts, each of such Delayed
Delivery Contracts has been duly authorized by the Company and, when
executed and delivered on behalf of the Company and duly authorized,
executed and delivered on behalf of the purchaser thereunder, will
constitute a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditors' rights generally or by the provisions of Article Tenth of
the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, there has not been
(A) any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, or (B) any transaction
entered into by the Company or any subsidiary, other than in the
ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise.
(xii) Neither the Company nor any Subsidiary is in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which
it is a party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that would not
have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise. The
execution and delivery by the Company of this Agreement, the
Designated Indenture and any Delayed Delivery Contracts, the issuance
and delivery of the Offered Securities, the consummation by the
Company of the transactions contemplated herein and in the
Registration Statement and compliance by the Company with the terms of
this Agreement, the Designated Indenture and any Delayed Delivery
Contracts, have been duly authorized by all necessary corporate action
on the part of the Company and do not and will not result in any
violation of the charter or by-laws of the Company or any Subsidiary,
and do not and will not conflict with, or result in a breach of any of
the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any Subsidiary under (A) any
indenture, mortgage, loan agreement, note, lease or other agreement or
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6
instrument to which the Company or any Subsidiary is a party or by
which it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as
one enterprise) or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of its properties.
(xiii) At the Closing Time, there shall have been issued and
there shall be in full force and effect, orders of the Public
Utilities Commission of Colorado and the Public Service Commission of
Wyoming, respectively, authorizing the issuance and sale of the
Offered Securities on the terms herein set forth or contemplated, and
no other authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act, the 1939 Act and the securities or
blue sky laws of the various states), is required for the valid
authorization, issuance, sale and delivery of the Offered Securities
or for the execution, delivery or performance of the Designated
Indenture by the Company.
(xiv) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company
or any Subsidiary that is required to be disclosed in the Prospectus.
(xv) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(xvi) The Company and the Subsidiaries each has statutory
authority and owns, possesses or has obtained all material
governmental licenses, permits, franchises (except for franchises for
the cities of Casper and Laramie, Wyoming), certificates, consents,
orders, approvals and other authorizations necessary to own or lease,
as the case may be, and to operate its properties and to carry on its
business as presently conducted, and neither the Company nor any
Subsidiary has received any notice of proceedings relating to
revocation or modification of any such licenses, permits, franchises,
certificates, consents, orders, approvals or authorizations.
(xvii) To the knowledge of the Company no person or
corporation which is a "holding company" or a "subsidiary of a holding
company", within the meaning of such terms as defined in the Public
Utility Holding Company Act of 1935, directly or indirectly owns,
controls or holds with power to vote 10% or more of the outstanding
voting securities of the Company; and the Company is not a "holding
company" or to its knowledge a "subsidiary of a holding company" as so
defined.
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(b) Any certificate signed by any officer of the Company
or any Subsidiary and delivered to you or to counsel for the Underwriters in
connection with the offering of the Offered Securities shall be deemed a
representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
Section 2. Purchase and Sale. (a) On the basis of the
representations and warranties herein contained (except as may be otherwise
specified in Schedule II) and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the
purchase price to the Underwriters set forth in Schedule II, the principal
amount of Offered Securities set forth opposite the name of such Underwriter in
Schedule I.
(b) Payment of the purchase price for, and delivery of,
the Offered Securities shall be made at the date, time and location specified
in Schedule II, or at such other date, time or location as shall be agreed upon
by the Company and you, or as shall otherwise be provided in Section 10 (such
date and time of payment and delivery being herein called the "Closing Time").
Unless otherwise specified in Schedule II, payment shall be made to the Company
by you hereunder by certified or official bank check or checks in New York
Clearing House funds payable to the order of the Company, against delivery to
you for the respective accounts of the several Underwriters of the Offered
Securities. Such Offered Securities shall be in such authorized denominations
and registered in such names as you may request in writing at least two full
business days before the Closing Time. Such Offered Securities will be made
available in New York City for examination and packaging by you not later than
10:00 A.M. on the business day prior to the Closing Time.
(c) If specified in Schedule II, the Underwriters may
solicit offers to purchase Offered Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts") substantially in the
form of Schedule IV with such changes therein as the Company may approve. Any
Delayed Delivery Contracts are to be with institutional investors of the types
set forth in the Prospectus. At the Closing Time, the Company will enter into
Delayed Delivery Contracts (for the minimum principal amount of Offered
Securities per Delayed Delivery Contract specified in Schedule II) with all
purchasers proposed by the Underwriters and previously approved by the Company
as provided below, but not for an aggregate principal amount of Offered
Securities less than the minimum, or greater than the maximum, aggregate
principal amounts specified in Schedule II. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
(d) You are to submit to the Company, at least three
business days prior to the Closing Time, the names of any institutional
investors with which it is proposed that the Company enter into Delayed
Delivery Contracts, the principal amount of Offered Securities to be purchased
by each of them and the date of delivery thereof, and the Company will advise
you, at least two business days prior to the Closing Time, of the names of the
institutions with which the making of Delayed Delivery Contracts is approved by
the
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Company and the principal amount of Offered Securities to be covered by each
such Delayed Delivery Contract.
(e) As compensation for arranging Delayed Delivery
Contracts, the Company will pay (by certified or official bank check in New
York Clearing House funds) to you at the Closing Time, for the accounts of the
Underwriters, a fee equal to that percentage of the principal amount of Offered
Securities for which Delayed Delivery Contracts are made at the Closing Time as
is specified in Schedule II or the amount of such fee may be deducted from the
check delivered pursuant to Section 2(b).
(f) The principal amount of Offered Securities agreed to
be purchased by each Underwriter shall be reduced by the principal amount of
Offered Securities covered by Delayed Delivery Contracts, as to such
Underwriter as set forth in a notice delivered by you to the Company; provided,
however, that the total principal amount of Offered Securities to be purchased
by all Underwriters shall be the principal amount of Offered Securities covered
by this Agreement, less the principal amount of Offered Securities covered by
all Delayed Delivery Contracts.
Section 3. Certain Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) If reasonably requested by you in connection with the
offering of the Offered Securities, the Company will prepare a
preliminary prospectus supplement containing such information as you
and the Company deem appropriate, and, prior to or immediately
following the execution of this Agreement, the Company will have
prepared or will prepare a Prospectus Supplement that complies with
the 1933 Act and the 1933 Act Regulations and that sets forth the
principal amount of the Offered Securities and their terms not
otherwise specified in the Indenture or the basic Prospectus, the name
of each Underwriter participating in the offering and the principal
amount of the Offered Securities that each severally has agreed to
purchase, the name of each Underwriter, if any, acting as
representative of the Underwriters in connection with the offering,
the price at which the Offered Securities are to be purchased by the
Underwriters from the Company, any initial public offering price, any
selling concession and reallowance and any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Offered Securities.
The Company will promptly transmit copies of the Prospectus Supplement
to the Commission for filing pursuant to Rule 424 under the 1933 Act
and will furnish to the Underwriters as many copies of any preliminary
prospectus supplement and the Prospectus as you shall reasonably
request.
(b) If, at any time when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters
or counsel for the Company, to amend the Registration Statement or
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9
amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(d), such amendment or supplement as
may be necessary to correct such untrue statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements.
(c) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, the Company will, subject to Section 3(d), file promptly
all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the 1934 Act.
(d) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, the Company will inform you of its intention to file any
amendment to the Registration Statement, any supplement to the
Prospectus or any document that would as a result thereof be
incorporated by reference in the Prospectus; will furnish you with
copies of any such amendment, supplement or other document a
reasonable time in advance of filing; and will not file any such
amendment, supplement or other document in a form to which you or your
counsel shall reasonably object; except that the Company shall inform
you of its intention to file documents pursuant to Section 14(d) of
the 1934 Act and shall furnish you with copies of such documents
immediately upon the filing thereof, and you or your counsel shall not
be entitled to object thereto other than pursuant to Section 3(b).
(e) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, the Company will notify you immediately, and confirm the
notice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the transmission to the Commission for
filing of any supplement to the Prospectus or any document that would
as a result thereof be incorporated by reference in the Prospectus,
(iii) of the receipt of any comments from the Commission with respect
to the Registration Statement, the Prospectus or the Prospectus
Supplement, (iv) of any request by the Commission for any amendment to
the Registration Statement or any supplement to the Prospectus or for
additional information relating thereto or to any document
incorporated by reference in the Prospectus and (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement, of the suspension of the qualification of the
Offered Securities for offering or sale in any jurisdiction, or of the
institution or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the
<PAGE> 11
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issuance of any such stop order or of any order suspending such
qualification and, if any such order is issued, to obtain the lifting
thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you as
many signed copies of the Registration Statement (as originally filed)
and of all amendments thereto, whether filed before or after the
Registration Statement became effective, copies of all exhibits and
documents filed therewith or incorporated by reference therein
(through the end of the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the Offered
Securities) and signed copies of all consents and certificates of
experts, as you may reasonably request, and has furnished or will
furnish to you, for each of the Underwriters, one conformed copy of
the Registration Statement (as originally filed) and of each amendment
thereto (including documents incorporated by reference into the
Prospectus but without exhibits).
(g) The Company will use its best efforts, in cooperation
with the Underwriters, to qualify the Offered Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications
in effect for a period of not less than one year from the date hereof;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Offered
Securities have been qualified as above provided. The Company will
also supply you with such information as is necessary for the
determination of the legality of the Offered Securities for investment
under the laws of such jurisdictions as you may request.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than 45 days
after the close of the period covered thereby, an earnings statement
of the Company (in form complying with the provisions of Rule 158 of
the 1933 Act Regulations), covering (i) a period of 12 months
beginning after the effective date of the Registration Statement but
not later than the first day of the Company's fiscal quarter next
following such effective date and (ii) a period of 12 months beginning
after the date of this Agreement but not later than the first day of
the Company's fiscal quarter next following the date of this
Agreement.
(i) If and to the extent specified in Schedule II, the
Company will use its best efforts to cause the Offered Securities to
be duly authorized for listing on the New York Stock Exchange and to
be registered under the 1934 Act.
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11
(j) For a period of five years after the Closing Time,
the Company will furnish to you and, upon request, to each
Underwriter, copies of all annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission,
and such other documents, reports and information as shall be
furnished by the Company to its stockholders generally.
(k) Between the date hereof and the Closing Time or such
other date as may be specified in Schedule II, the Company will not,
without your prior consent, offer or sell, or enter into any agreement
to sell, any debt securities issued or guaranteed by the Company with
a maturity of more than one year in any public offering (other than
the Offered Securities). This limitation is not applicable to the
public offering of tax exempt securities guaranteed by the Company or
to such other public offering of long-term debt as may be specified in
Schedule II.
(l) The Company will apply the proceeds from the sale of
the Offered Securities for the purpose set forth under the caption
"Use of Proceeds" in the Prospectus.
Section 4. Payment of Expenses. The Company will pay and bear
all costs and expenses incident to the performance of its obligations under
this Agreement, including (a) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, any preliminary prospectus supplements and the
Prospectus and any amendments or supplements thereto, and the cost of
furnishing copies thereof to the Underwriters, (b) the preparation, printing
and distribution of this Agreement, the Designated Indenture, the Offered
Securities, any Delayed Delivery Contracts, the Blue Sky Survey and the Legal
Investment Survey, (c) the delivery of the Offered Securities to the
Underwriters, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the qualification of the Offered Securities under the
applicable securities laws in accordance with Section 3(g) and any filing for
review of the offering with the National Association of Securities Dealers,
Inc., including filing fees and reasonable fees and disbursements of counsel
for the Underwriters in connection therewith and in connection with the Blue
Sky Survey and the Legal Investment Survey, (f) any fees charged by rating
agencies for rating the Offered Securities and (g) the fees and expenses of the
Trustee, including the reasonable fees and disbursements of counsel for the
Trustee, in connection with the Designated Indenture and the Offered
Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse the
Underwriters for all their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. Except as
otherwise provided in Schedule II, the obligations of the Underwriters to
purchase and pay for the Offered Securities pursuant to this Agreement are
subject to the accuracy of the
<PAGE> 13
12
representations and warranties of the Company contained herein or in
certificates of any officer of the Company or any Subsidiary delivered pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act and no proceedings for that purpose shall have been
instituted or shall be pending or, to your knowledge or the knowledge
of the Company, shall be contemplated by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the satisfaction of counsel for the
Underwriters.
(b) At the Closing Time, you shall have received a signed
opinion of Vinson & Elkins L.L.P., counsel for the Company, dated as
of the Closing Time, together with signed or reproduced copies of such
opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the
laws of the State of Kansas with corporate power and authority
under such laws to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(ii) The Designated Indenture has been duly
authorized, executed and delivered by the Company and,
assuming the due authorization, execution and delivery by the
Trustee, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditor's rights generally or by the
provisions of Article Tenth of the Restated Articles of
Incorporation of the Company and except as enforcement thereof
is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or
at law).
(iii) The Offered Securities have been duly
authorized by the Company and, assuming that any Offered
Securities not represented by a Global Security (as defined in
the Indenture) have been duly signed by the facsimile
signature of an officer specified in Section 202 of the
Indenture, the facsimile seal of the Company has been
reproduced thereon and duly attested by the facsimile
signature of the Secretary or an Assistant Secretary of the
Company and such Offered Securities have been authenticated by
the Trustee in the manner described in its certificate
delivered to you at the Closing Time (which facts such counsel
need not determine by an inspection of the Offered
Securities), the Offered Securities have been duly executed,
issued and
<PAGE> 14
13
delivered by the Company and constitute or, in the case of
Offered Securities, if any, to be delivered pursuant to
Delayed Delivery Contracts, when duly executed and
authenticated as provided in the Designated Indenture and
issued, delivered and paid for in accordance with such Delayed
Delivery Contracts, will constitute, valid and binding
obligations of the Company entitled to the benefits of the
Designated Indenture and enforceable against the Company in
accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights
generally or by the provisions of Article Tenth of the
Restated Articles of Incorporation of the Company and except
as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(iv) In the event that any of the Offered
Securities are to be purchased pursuant to Delayed Delivery
Contracts, each Delayed Delivery Contract that has been
executed by the Company has been duly authorized, executed and
delivered by the Company and, assuming the due authorization,
execution and delivery by the purchaser thereunder, is a valid
and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditors' rights generally or by the provisions of Article
Tenth of the Restated Articles of Incorporation of the Company
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(v) The Designated Indenture has been duly
qualified under the 1939 Act.
(vi) The Offered Securities and the Designated
Indenture conform in all material respects as to legal matters
to the descriptions thereof contained in the Prospectus.
(vii) This Agreement has been duly authorized,
executed and delivered by the Company.
(viii) No authorization, approval, consent or
license of any federal or State of Texas government,
governmental instrumentality or court (other than under the
1933 Act, the 1939 Act and the securities or blue sky laws of
the various states), is required for the valid authorization,
issuance, sale and delivery of the Offered Securities.
(ix) The execution and delivery by the Company of
this Agreement, the Designated Indenture and any Delayed
Delivery Contracts, the issuance
<PAGE> 15
14
and delivery of the Offered Securities, the consummation by
the Company of the transactions contemplated herein and in the
Registration Statement and compliance by the Company with the
terms of this Agreement and the Designated Indenture do not
and will not result in any violation of the charter or by-laws
of the Company.
(x) The Registration Statement is effective under
the 1933 Act and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are
threatened under the 1933 Act.
(xi) The Registration Statement and the
Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement thereto (except for
the financial statements and other financial, geological or
statistical data included therein or omitted therefrom and the
Statement of Eligibility and Qualification of the Trustee on
Form T-1, as to which such counsel need express no opinion),
as of their respective effective or issue dates, comply as to
form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations, and the Designated
Indenture filed with the Commission complies as to form in all
material respects with the requirements of the 1939 Act and
the 1939 Act Regulations.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the
Prospectus (other than the documents incorporated by reference
therein) and participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants for the Company, representatives of your legal
counsel and representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus and related matters
were discussed. Such counsel shall also state that although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus except as stated above
and except as they relate to such counsel, such counsel advises you
that, on the basis of the foregoing, no facts have come to such
counsel's attention which lead such counsel to believe that (A) the
Registration Statement or any amendments thereto (other than the
financial statements and other financial, geological and statistical
information included or incorporated by reference therein and the
Statement of Eligibility and Qualification of the Trustee on Form T-1
as to which such counsel need not comment, and except to the extent
that any statement therein is modified or superseded in the
Registration Statement), at the time the Registration Statement
initially became effective, on the effective date of the most recent
post-effective amendment thereto, if any, on the date of the filing of
the latest annual report on Form 10-K after the initial effective date
of the Registration Statement, or on the date of this Agreement,
contained an untrue
<PAGE> 16
15
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (B) the Prospectus or any amendment
supplement thereto (other than the financial statements and other
financial, geological and statistical information included or
incorporated by reference therein as to which such counsel need not
comment, and except to the extent that any statement therein is
modified or superseded in the Prospectus), at the time the Prospectus
Supplement was issued or at the Closing Time, 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, in light of the circumstances under which they
were made, not misleading.
Such opinion shall be to such further effect with respect to
other legal matters relating to this Agreement and the sale of the
Offered Securities hereunder as counsel for the Underwriters may
reasonably request. In giving such opinion, such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the
law of the State of Texas and the federal law of the United States,
upon opinions of local counsel, general counsel for the Company and
counsel for the Underwriters referred to in paragraphs (c), (d) and
(e) of this Section 5, in which case the opinion shall state that they
believe you and such counsel are entitled to so rely. Such counsel
may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of
officers of the Company and the Subsidiaries and certificates of
public officials.
(c) At the Closing Time, you shall have received a signed
opinion of William S. Garner, Jr., Vice President, General Counsel and
Secretary for the Company, dated as of the Closing Time, together with
signed or reproduced copies of such opinion for each of the other
Underwriters, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company is duly qualified to transact
business as a foreign corporation and is in good standing in
each jurisdiction, other than the state of its incorporation,
in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, considered as one
enterprise.
(ii) Each Subsidiary is a corporation duly
incorporated and validly existing in good standing under the
laws of the jurisdiction of its incorporation with corporate
power and authority under such laws to own, lease and operate
its properties and conduct its business, except to the extent
that the failure to be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
considered as one enterprise.
<PAGE> 17
16
(iii) Each Subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing as a
foreign corporation in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of
a type, that would make such qualification necessary, except
to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
(iv) All of the outstanding shares of capital
stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and non-assessable; all of such
shares are owned by the Company, directly or through one or
more subsidiaries, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any
kind; no holder thereof is subject to personal liability by
reason of being such a holder and none of such shares was
issued in violation of the preemptive rights of any
stockholder of the Subsidiaries.
(v) To the knowledge of such counsel, neither the
Company nor any Subsidiary is in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, loan
agreement, note, lease or other agreement or instrument that
is described or referred to in the Registration Statement or
the Prospectus or filed as an exhibit to the Registration
Statement.
(vi) The execution and delivery by the Company of
this Agreement, the Designated Indenture and any Delayed
Delivery Contracts, the issuance and delivery of the Offered
Securities, the consummation by the Company of the
transactions contemplated herein and in the Registration
Statement and compliance by the Company with the terms of this
Agreement and the Designated Indenture do not and will not
result in any violation of the charter or by-laws of the
Company or any Subsidiary, and do not and will not conflict
with, or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary under (A)
any indenture, mortgage or loan agreement, or any other
agreement or instrument known to such counsel, to which the
Company or any Subsidiary is a party or by which it may be
bound or to which any of its properties may be subject (except
for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise), (B) any existing
applicable law, rule or regulation (other than the securities
or blue sky laws of the various states, as to which such
counsel need express no opinion), or (C) any judgment, order
or decree of any government, governmental
<PAGE> 18
17
instrumentality or court, domestic or foreign, known to such
counsel having jurisdiction over the Company or any Subsidiary
or any of its properties.
(vii) The documents incorporated by reference in
the Prospectus (except for the financial statements and other
financial, geological or statistical data included therein or
omitted therefrom, as to which such counsel need express no
opinion, and except to the extent that any statement therein
is modified or superseded in the Prospectus), as of the dates
they were filed with the Commission or to the extent such
documents were subsequently amended prior to the date hereof,
at the time so amended, comply as to form in all material
respects with the requirements of the 1934 Act and the 1934
Act Regulations.
(viii) Such counsel does not know of any statutes or
regulations, or any pending or threatened legal or
governmental proceedings, required to be described in the
Prospectus that are not described as required, nor of any
contracts or documents of a character required to be described
or referred to in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described, referred to or filed as required.
(ix) The descriptions in the Prospectus of the
statutes, regulations, legal or governmental proceedings,
contracts and other documents therein described are accurate
and fairly summarize the information required to be shown.
(x) The Public Utilities Commission of Colorado
and the Public Service Commission of Wyoming have duly
authorized the issue and sale of the Offered Securities; such
authorizations are, to the best of such counsel's knowledge,
still in full force and effect and are sufficient for the
issue and sale of the Offered Securities; the issue and sale
of the Offered Securities are in conformity with the terms of
such authorizations; and no other authorization, approval,
consent or license of any governmental instrumentality or
court, domestic or foreign (other than the 1933 Act, the 1939
Act and the securities or blue sky laws of the various
states), is required for the valid authorization, issuance,
sale and delivery of the Offered Securities, or, if so
required, all such authorizations, approvals, consents and
licenses specifying the same, have been obtained and are, to
the best of such counsel's knowledge, in full force and
effect.
(xi) The Company and its Subsidiaries hold all
requisite Certificates of Public Convenience and Necessity
from the Federal Energy Regulatory Commission to enable them
to carry on the respective businesses in which they are
engaged.
<PAGE> 19
18
(xii) To the knowledge of such counsel, after due
inquiry, no person or corporation which is a "holding company"
or a "subsidiary of a holding Company", within the meaning of
such terms as defined in the Public Utility Holding Company
Act of 1935, directly or indirectly owns, controls or holds
with power to vote 10% or more of the outstanding voting
securities of the Company; and the Company is not a "holding
company" or to the knowledge of such counsel, after due
inquiry, a "subsidiary of a holding company" as so defined.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the
Prospectus (including the documents incorporated by reference therein)
and participated in conferences with representatives of the
independent public accountants for the Company, representatives of
your legal counsel and representatives of the Underwriters at which
the contents of the Registration Statement and the Prospectus and
related matters were discussed. Such counsel shall also state that
although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus,
such counsel advises you that, on the basis of the foregoing, no facts
have come to such counsel's attention which lead such counsel to
believe that (A) the Registration Statement or any amendments thereto
(other than the financial statements and other financial, geological
and statistical information included or incorporated by reference
therein and the Statement of Eligibility and Qualification of the
Trustee on Form T-1 as to which such counsel need not comment), at the
time the Registration Statement initially became effective, on the
effective date of the most recent post-effective amendment thereto, if
any, on the date of the filing of the latest annual report on Form
10-K after the initial effective date of the Registration Statement,
or on the date of this Agreement, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or (B) the Prospectus or any amendment or supplement
thereto (other than the financial statements and other financial,
geological and statistical information included or incorporated by
reference therein as to which such counsel need not comment), at the
time the Prospectus Supplement was issued or at the Closing Time,
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, in light of the circumstances under which
they were made, not misleading.
Such opinion shall be limited to the laws of the State of
Colorado and the federal laws of the United States and it shall be to
such further effect with respect to other legal matters relating to
this Agreement and the sale of the Designated Securities hereunder by
the Company, as counsel for the Underwriters may reasonably request.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the laws of the State
of Colorado and the federal law of the United States, upon opinions of
Vinson & Elkins L.L.P., local counsel, and counsel
<PAGE> 20
19
for the Underwriters referred to in paragraphs (b), (d) and (e) of
this Section 5, in which case the opinion shall state that they
believe you and such counsel are entitled to so rely.
(d) At the Closing Time, you shall have received signed
opinions of local counsel in each of Colorado, Kansas, Nebraska and
Wyoming, dated as of the Closing Time, together with signed or
reproduced copies of each such opinion for each of the other
Underwriters, in each case in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company is duly qualified to transact
business as a foreign corporation and is in good standing in
each of the respective States.
(ii) The Company holds all authority from all
regulatory authorities or bodies in each such State necessary
to permit it to own such properties as it owns and to carry on
such business as it conducts in such State.
(iii) The material franchises, permits and rights
of the Company and the Subsidiaries in each such state are
valid and adequate for the business in which it is engaged,
and except to the extent disclosed in such opinion there do
not exist, to the knowledge of such counsel, any burdensome
restrictions in connection therewith.
(iv) The authorizations referred to in clause
(c)(x) of this Section 5 are in full force and effect and
constitute all requisite authority under the laws and
regulations of the respective States for the issuance and sale
by the Company of the Offered Securities.
(v) The Designated Indenture complies with
respect to form with all applicable laws of the respective
States.
Such legal opinions shall be to such further effect with
respect to other legal matters relating to this Agreement and the sale
of the Designated Securities hereunder by the Company, as counsel for
the Underwriters may reasonably request. The legal opinion of local
counsel in the State of Kansas shall also cover the matters set forth
in clause (b)(i) of this Section 5, as well as the due authorization
of this Agreement, the Designated Indenture and the Offered
Securities.
(e) At the Closing Time, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the
Underwriters, dated as of the Closing Time, together with signed or
reproduced copies of such opinion for each of the other Underwriters,
to the effect that the opinions delivered pursuant to Sections 5(b),
5(c) and 5(d) appear on their face to be appropriately responsive to
the requirements of this Agreement except, specifying the same, to the
extent waived by you, and with
<PAGE> 21
20
respect to the incorporation and legal existence of the Company, the
Offered Securities, this Agreement, the Designated Indenture, the
Registration Statement, the Prospectus, the documents incorporated by
reference and such other related matters as you may require. In giving
such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to you. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the
Subsidiaries and certificates of public officials.
(f) At the Closing Time, (i) the Registration Statement
and the Propectus, as they may then be amended or supplemented, shall
contain all statements that are required to be stated therein under
the 1933 Act and the 1933 Act Regulations and in all material respects
shall conform to the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the 1939 Act Regulations, and neither
the Registration Statement nor the Prospectus, as they may then be
amended or supplemented, shall contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall have no liability for any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter, directly or through you, expressly for use in the
Registration Statement or Prospectus, (ii) there shall not have been,
since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business,
(iii) no action, suit or proceeding at law or in equity shall be
pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary that would be required to be set forth in
the Prospectus other than as set forth therein and no proceedings
shall be pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary before or by any federal, state
or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding could materially adversely
affect the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, other than as set forth in the
Prospectus, (iv) the Company shall have complied with and satisfied
all conditions on its part under this Agreement to be performed and
satisfied at or prior to the Closing Time and (v) the other
representations and warranties of the Company set forth in Section
1(a) shall be accurate as though expressly made at and as of the
Closing Time. At the Closing Time, you shall have received a
certificate of the Chairman, the President, a Vice President or the
Treasurer, of the Company, dated as of the Closing Time, to such
effect.
<PAGE> 22
21
(g) You shall have received the letter or letters
specified in Sections 1 and 2 of Schedule III at the date hereof and
the letter specified in Section 3 of Schedule III at the Closing Time.
(h) Between the date of this Agreement and the Closing
Time, (i) no downgrading shall have occurred in the rating accorded to
any of the Company's debt securities or preference or preferred stock
by Standard & Poor's Corporation or Moody's Investors Service and (ii)
neither such rating organization shall have, announced publicly that
it has placed, or informed the Company or you that it intends to
place, any of the Company's debt securities or preference or preferred
stock 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 of the type described in clause
(i) above occurring than was the case as of the date of this
Agreement.
(i) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such documents, certificates and
opinions as they may request for the purpose of enabling them to pass
upon the issuance and sale of the Offered Securities as herein
contemplated and the matters referred to in Section 5(e) and in order
to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment
of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Offered Securities as herein
contemplated shall be satisfactory in form and substance to the
Underwriters and to counsel for the Underwriters.
(j) If listing is specified in Schedule II, the
Securities shall have been duly authorized for listing by the New York
Stock Exchange, subject only to official notice of issuance and notice
of a satisfactory distribution.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement to be fulfilled,
this Agreement may be terminated by you on notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without liability
of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement
<PAGE> 23
22
of a material fact contained in the Registration Statement (or any
amendment thereto), including all documents incorporated therein by
reference, 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 an untrue statement or
alleged untrue statement of a material fact included in any
preliminary prospectus supplement 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 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, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any
litigation, or 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 subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto); and provided further, however, that this
indemnity, as to any preliminary prospectus supplement, shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any loss, claim, damage, liability or litigation arising from the
sale of Offered Securities to any person by such Underwriter if such
Underwriter failed to send or give a copy of the Prospectus, as the same may be
supplemented or amended, to such person within the time required by the 1933
Act, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact in such preliminary prospectus supplement
was corrected in the Prospectus, unless such failure resulted from
noncompliance by the Company with Section 3(a).
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act,
<PAGE> 24
23
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 6(a), 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 supplement or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus supplement or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice, in
writing or by telephone confirmed in writing, 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 it
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. 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 party or
parties defendant in such action, unless such indemnified party or 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 party or parties shall not be liable
for any fees and expenses of counsel for the indemnified party or parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one 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.
Section 7. Contribution. In order to provide for just and
equitable contribution in circumstances under which the indemnity provided for
in Section 6 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity incurred by
the Company and one or more of the Underwriters, as incurred, (i) in such
proportions that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discount hereunder with respect to the
offering of the Offered Securities bears to the initial public offering price
of the Offered Securities, and the Company is responsible for the balance or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportions as are appropriate to reflect not only the
percentage that such underwriting discount bears to such initial public
offering price referred to in clause (i) above, but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
liabilities, claims, damages and expenses, such relative fault to be determined
by reference to, among other things, whether the untrue statement or alleged
<PAGE> 25
24
untrue statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission, as well as any other relevant equitable
considerations; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements of the Company or its officers set forth in or made pursuant
to this Agreement will remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Company or any Underwriter or
controlling person and will survive delivery of and payment for the Offered
Securities.
Section 9. Termination of Agreement. (a) You may terminate
this Agreement, by notice to the Company, at any time at or prior to the
Closing Time (i) if there has been, since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not rising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any new outbreak of hostilities or escalation of existing
hostilities or other calamity or crisis the effect of which is such as to make
it, in your judgment, impracticable to market the Offered Securities or enforce
contracts for the sale of the Offered Securities or (iii) if trading in any
securities of the Company has been suspended by the Commission or if trading
generally on the New York Stock Exchange or in the over-the-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange
or by order of the Commission or any other governmental authority or (iv) if a
banking moratorium has been declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
Section 10. Default. If one or more of the Underwriters shall
fail at the Closing Time to purchase the Offered Securities that it or they are
obligated to purchase (the
<PAGE> 26
25
"Defaulted Offered Securities"), you shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Offered Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted
Offered Securities does not exceed 10% of the aggregate principal
amount of the Offered Securities to be purchased, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligations bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted
Offered Securities exceeds 10% of the aggregate principal amount of
the Offered Securities to be purchased, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed as set forth in Schedule II.
Notices to the Company shall be directed to it at P.O. Box 281304, Lakewood,
Colorado 80228-8304, Attention of Vice President-Finance and Accounting and the
General Counsel, or if delivered or telegraphed, to it at 370 Van Gordon
Street, Lakewood, Colorado 80228, Attention of Vice President-Finance and
Accounting and the General Counsel.
Section 12. Parties. The agreement herein set forth is made
solely for the benefit of the several Underwriters, the Company and, to the
extent expressed, any person controlling the Company or any of the
Underwriters, and the directors of the Company, its officers who have signed
the Registration Statement, and their respective executors, administrators,
successors and assigns and, subject to the provisions of Section 10, no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include any purchaser, as such
purchaser, from any Underwriter of the Offered Securities. If there are two or
more Underwriters, all of their obligations hereunder are several and not
joint.
<PAGE> 27
26
Section 13. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New York. Specified times of day refer to
New York City time.
Section 14. Counterparts. This Agreement may be executed in
one or more counterparts and, when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
_______________________________
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this instrument will become a binding agreement between the Company and each
Underwriter in accordance with its terms.
Very truly yours,
K N ENERGY, INC.
By _______________________________________
Name: E. Wayne Lundhagen
Title: Vice President
Finance & Accounting
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By_________________________________________
Name: Anthony V. Leness
Investment Banking Group
Acting on behalf of itself and
on behalf of the several other
Underwriters named in Schedule I
<PAGE> 28
SCHEDULE I
to
Purchase Agreement
Dated October 11, 1994
$75,000,000
K N ENERGY, INC.
8-3/4% Debentures due October 15, 2024
<TABLE>
<CAPTION>
Principal Amount of
Underwriter Offered Securities
----------- -------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . $37,500,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . $37,500,000
</TABLE>
<PAGE> 29
SCHEDULE II
to
Purchase Agreement
Dated October 11, 1994
$75,000,000
K N ENERGY, INC.
8-3/4% Debentures due October 15, 2024
Principal amount to be issued: $75,000,000
Current ratings: Standard & Poor's Corporation: A
Moody's Investors Service, Inc.: A2
Fitch Investors Service, Inc.: A
Interest rate: 8-3/4%, payable semiannually on April 15
and October 15, commencing April 15, 1995
Date of maturity: October 15, 2024
Redemption
provisions: Not redeemable prior to October 15, 2004;
on and after that date, redeemable, at the
option of the Company, as set forth in the
following table:
<TABLE>
<CAPTION>
12-Month Period Redemption 12-Month Period Redemption
Beginning October 15 Price Beginning October 15 Price
-------------------- ----- -------------------- -----
<S> <C> <C> <C>
2004 104.000% 2009 102.000%
2005 103.600% 2010 101.600%
2006 103.200% 2011 101.200%
2007 102.800% 2012 100.800%
2008 102.400% 2013 100.400%
</TABLE>
and thereafter at 100% of the principal
amount plus accrued interest.
Sinking fund requirements: None
<PAGE> 30
II-2
Initial public offering price: 99.250% of the principal amount plus accrued
interest from October 18, 1994, if any
Purchase price: 98.375% of the principal amount plus accrued
interest from October 18, 1994, if any
Closing date, time and location: October 18, 1994 at 10:00 a.m., New York
City time, at the offices of the Company,
370 Van Gordon Street, Lakewood, Colorado
80228
Delayed delivery contracts: None
Listing requirement: None
Book-entry arrangements: Authorized
Payment: Certified or bank check payable in next-day
funds
Other terms and conditions: None
<PAGE> 31
SCHEDULE III
to
Purchase Agreement
Dated October 11, 1994
MATTERS TO BE COVERED BY LETTER OR LETTERS
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Arthur Andersen LLP shall have furnished to you the following
letter or letters (in each case in form and substance satisfactory to you):
(1) At the date hereof, a letter dated as of the date of
the Company's most recently filed report on Form 10-K as amended (the
"10-K Letter"), to the effect that:
(a) They are independent accountants with respect
to the Company and its subsidiaries within the meaning of the
1933 Act and the applicable published 1933 Act Regulations.
(b) In their opinion, except as disclosed in the
Registration Statement, the audited consolidated financial
statements and the related financial statement schedules of
the Company included or incorporated by reference in such
annual report on Form 10-K comply as to form in all material
respects with the applicable accounting requirements of the
1933 Act and the published 1933 Act Regulations with respect
to Registration Statements on Form S-3 and the 1934 Act and
the published 1934 Act Regulations with respect to annual
reports on Form 10-K.
(c) Such letter shall further state that, in
addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such
other procedures, specified by you, not constituting an audit,
as they have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Form 10-K and have compared
certain of such amounts, percentages, numerical data and
financial information with, and have found such items to be in
agreement with or derived from, the detailed accounting
records of the Company and its subsidiaries.
(2) At the date hereof, a letter or letters, if any,
dated as of the date of each of the Company's quarterly reports on
Form 10-Q (each a "10-Q Letter") filed prior to the date hereof and
subsequent to the Company's most recently filed annual report on Form
10-K, each to the effect that:
<PAGE> 32
III-2
(a) They reaffirm as of the date of such letter
(and as though made on the date of such letter) all statements
made in the 10-K Letter, and, if there are two or more 10-Q
Letters, all statements made in each preceding 10-Q Letter,
except that the inquiries and procedures specified therein
shall have been carried out to a specified date not more than
five days prior to the date of such 10-Q Letter.
(b) On the basis of procedures (but not an
examination in accordance with generally accepted auditing
standards) consisting of:
(i) a reading of minutes of all meetings
of the Company's shareholders, Board of Directors and
Executive Committee from the date of the latest
audited consolidated financial statements of the
Company and its subsidiaries;
(ii) a reading of the unaudited condensed
consolidated financial statements of the Company and
its subsidiaries included or incorporated by
reference in the quarterly report on Form 10-Q dated
the date of such 10-Q Letter; and
(iii) inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters as to (A) whether the unaudited
condensed consolidated financial statements referred
to in (ii) above comply as to form in all material
respects with the applicable accounting requirements
of the 1934 Act and the published 1934 Act
Regulations with respect to Form 10-Q and (B) whether
such unaudited condensed consolidated financial
statements are in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements referred to above;
all such inquiries and procedures being carried out to the
specified date referred to in Section 2(a) of Schedule III,
nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements
included or incorporated by reference in such quarterly report
on Form 10-Q do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act
and the published 1934 Act Regulations with respect to Form
10-Q, or that such unaudited condensed consolidated financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of audited consolidated financial
statements referred to above, except as disclosed in the notes
to such unaudited condensed consolidated financial statements
or as otherwise described in such 10-Q Letter.
<PAGE> 33
III-3
(c) Such letter shall further state that, in
addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such
other procedures, specified by you, not constituting an audit,
as they have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Form 10-Q and have compared
certain of such amounts, percentages, numerical data and
financial information with, and have found such items to be in
agreement with, or derived from, the detailed accounting
records of the Company and its subsidiaries.
(3) At the Closing Time, a letter dated the Closing Time
(the "Closing Letter") to the effect that:
(a) They reaffirm as of the date of the Closing
Letter (and as though made on the date of the Closing Letter)
all statements made in the 10-K Letter and in each 10-Q
Letter, if any, except that the inquiries and procedures
specified therein shall have been carried out to a specified
date not more than five days prior to the date of the Closing
Letter.
(b) On the basis of the inquiries and procedures
referred to in Section 2(b) of Schedule III (but carried out
to the specified date referred to in Section 3(a) of Schedule
III), nothing came to their attention that caused them to
believe that, from the date of the latest balance sheet of the
Company and its subsidiaries included or incorporated by
reference in the Prospectus to such specified date, there was:
(i) any change greater than 1% (other
than by issuance of shares related to employee
benefit plans or pursuant to the Company's Dividend
Reinvestment Plan) in the common stock of the
Company, as compared with the amount shown in such
latest balance sheet, or any issuance of shares of
any other class of capital stock of the Company;
(ii) any increase greater than 10% in the
total amount of consolidated short-term and long-term
debt of the Company and its subsidiaries (excluding
construction costs incurred in the normal course of
business and gas purchases), as compared with the
corresponding total amount of such debt outstanding
at the date of such latest balance sheet; or
(iii) any decrease greater than 10% from
the date of such latest balance sheet to such
specified date in consolidated operating income of
the Company and its subsidiaries or in the total
amount or per share amount (on a primary and fully
diluted basis) of consolidated net income of the
Company and its subsidiaries, as compared with the
<PAGE> 34
III-4
corresponding period of the preceding year, except in
all instances for changes or decreases that the
Prospectus discloses have occurred or may occur or
that are described in the Closing Letter.
(c) Such letter shall further state that, in
addition to their examinations, inspections, inquiries and
other procedures referred to therein, they have performed such
other procedures specified by you, not constituting an audit,
as they have agreed to perform and report on with respect to
certain amounts, percentages, numerical data and other
financial information in the Registration Statement, the
Prospectus and the exhibits to the Registration Statement or
in the documents incorporated by reference in the Prospectus,
and have compared certain of such amounts, percentages,
numerical data and financial information with, and have found
such items to be in agreement with or derived from, the
detailed accounting records of the Company and its
subsidiaries.
In lieu of a separate 10-K Letter and a 10-Q Letter for each
of the Company's quarterly reports on Form 10-Q filed prior to the date hereof
and subsequent to the Company's most recently filed annual report on Form 10-K
pursuant to Sections 1 and 2 of this Schedule III, Arthur Andersen LLP may
furnish to you a single letter, dated at the date hereof, to the effect
provided in Sections 1(a) and (b) and 2(b) of this Schedule III except that the
specified date referred to in Section 2(b) to which inquiries and procedures
are to be carried out shall be not more than five business days prior to the
date of such letter. In the event of a delivery of such a single letter, all
references to the 10-K Letter and any 10-Q Letter in this Schedule III shall be
deemed to be references to such single letter.
<PAGE> 35
SCHEDULE IV
to
Purchase Agreement
Dated October 11, 1994
K N ENERGY, INC.
Debt Securities
DELAYED DELIVERY CONTRACT
K N Energy, Inc.
P.O. Box 281304
Lakewood, Colorado 80228-8304
Dear Sirs:
The undersigned hereby agrees to purchase from K N Energy,
Inc., a Kansas corporation (the "Company"), and the Company agrees to sell to
the undersigned on _________, 199_ (the "Delivery Date"), ____________________
___________________________________________________ principal amount of the
Company's (Title of Offered Securities) (the "Offered Securities"), offered by
the Company's Prospectus dated November 30, 1993, as supplemented by its
Prospectus Supplement dated ___________, 199_, receipt of which is hereby
acknowledged, at a purchase price of ___% of the principal amount thereof, plus
interest accrued on the principal amount at the rate borne by the Offered
Securities from ___________, 199_ to the Delivery Date, and on the further
terms and conditions set forth in this contract.
Payment for the Offered Securities shall be made to the
Company or its order by certified or official bank check in New York Clearing
House funds, at the offices of Shearman & Sterling, 599 Lexington Avenue, New
York, New York, at _____ A.M., New York City time, on the Delivery Date (or in
such other funds and at such other place as the Company and the undersigned may
agree upon in writing), upon delivery of the Offered Securities to the
undersigned, in such authorized denominations and registered in such names as
the undersigned may request in writing addressed to the Company not less than
five business days prior to the Delivery Date.
The obligation of the Company to issue and deliver, and of the
undersigned to take delivery of and make payment for, the Offered Securities on
the Delivery Date shall be subject only to the conditions that (1) the purchase
of the Offered Securities by the undersigned shall not, on the Delivery Date,
be prohibited under the laws of any jurisdiction to which the undersigned is
subject and that govern such investment, and (2) the Company,
<PAGE> 36
IV-2
on or before ______________, 199_, shall have sold to the Underwriters of the
Offered Securities (the "Underwriters") such principal amount of the Offered
Securities as is to be sold to them pursuant to the Purchase Agreement dated
the date hereof between the Company and the Underwriters. Promptly after
completion of the sale to the Underwriters, the Company will mail or deliver to
the undersigned, at its address set forth below, a notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to
the Underwriters in connection therewith. The obligation of the undersigned to
take delivery of and make payment for the Offered Securities shall not be
affected by the failure of any Underwriter or other purchaser to take delivery
of and make payment for the Offered Securities pursuant to other contracts
similar to this contract.
By the execution hereof, the undersigned represents and
warrants to the Company that (1) its investment in the Offered Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and that govern such investment, (2) all
necessary corporate action for the due execution and delivery of this contract
and the payment for and purchase of the Offered Securities has been taken by it
and no further authorization or approval of any governmental or other
regulatory authority is required for such execution, delivery, payment or
purchase and (3) upon the acceptance by the Company and the mailing or delivery
of a copy as provided below, this contract will constitute a valid and binding
agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed
Delivery Contracts for an aggregate principal amount of the Offered Securities
in excess of $__________ and that the acceptance of any Delayed Delivery
Contract is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company sign the form of
acceptance on a copy hereof and mail or deliver a signed copy to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned when such copy is so mailed or
delivered.
<PAGE> 37
IV-3
This contract shall be governed by the laws of the State of
New York.
Yours very truly,
__________________________________
(Name of Purchaser)
By _______________________________
Title
__________________________________
__________________________________
(Address)
Accepted as of the date
first above written:
K N Energy, Inc.
By _______________________
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
purchaser with whom details of delivery on the Delivery Date may be discussed
is as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (including Area Code)
---- ---------------------
<S> <C>
</TABLE>
<PAGE> 38
ANNEX A
SIGNIFICANT SUBSIDIARIES OF K N ENERGY, INC.
K N Gas Gathering Inc., a Colorado corporation
K N Gas Marketing, Inc., a Colorado corporation
K N Interstate Gas Transmission Co., a Colorado corporation
Northern Gas Company, a Wyoming corporation
Rocky Mountain Natural Gas Company, a Colorado corporation
American Oil & Gas Corporation, a Delaware corporation
<PAGE> 1
EXHIBIT 1.2
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES).
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
K N ENERGY, INC.
8.75% Debentures due October 15, 2024
No. BE-1 CUSIP #482620AM3
K N ENERGY, INC., a corporation duly organized and existing under the
laws of Kansas (herein called the "Company", which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or registered assigns the principal sum
of SEVENTY-FIVE MILLION DOLLARS on October 15, 2024, and to pay interest
thereon from October 18, 1994 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semiannually in arrears on
April 15 and October 15 in each year, commencing April 15, 1995 at the rate of
8.75% per annum, until the principal hereof is fully paid or made available for
full payment. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be April 1 or October 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to
1
<PAGE> 2
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in Lakewood, Colorado in such immediately available funds of the
United States of America as at the time of payment are legal tender for payment
of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth below, which further provisions shall for all purposes have the same
effect as if set forth in this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to below by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: October 18, 1994
K N ENERGY, INC.
By ______________________________
Vice President and Treasurer
ATTEST:
________________________
Assistant Secretary
2
<PAGE> 3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
BANK OF AMERICA ILLINOIS,
as Trustee
By ____________________________________________________________________
Authorized Officer
3
<PAGE> 4
This Security is one of a duly authorized issue of securities of the
Company (here in called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated November 20, 1993 (herein called the
"Indenture"), between the Company and Bank of America Illinois, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitation
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is Book-Entry Security
representing the entire principal amount of the series designated on the face
hereof, limited in aggregate principal amount to $75,000,000.
This Security shall be subject to redemption upon not less than 30 nor
more than 45 days' notice by mail at any time on or after October 15, 2004, as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount) if redeemed during
the twelve-month period beginning October 15 of the years indicated:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
<S> <C> <C> <C>
2004 104.000% 2009 102.000%
2005 103.600% 2010 101.600%
2006 103.200% 2011 101.200%
2007 102.800% 2012 100.800%
2008 102.400% 2013 100.400%
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in each case with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to above, all as provided in the Indenture. The
Securities of this series shall not be subject to a sinking fund requirement;
In the event of redemption of this Security in part only, subject to
arrangements with the Depository, a new Security or Securities of this series
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive
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covenants upon compliance by the Company with certain conditions set forth
therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the unpaid principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provision permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all the Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Securities of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Outstanding
Securities of this series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days; provided, however,
that such limitations do not apply to a suit instituted by the Holder hereof
for the enforcement of payment of the principal of (or premium, if any) or
interest on this Security on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency herein prescribed.
This Security shall be exchangeable for Securities registered in the
names of Persons other than the Depository with respect to
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such series or its nominee only as provided in this paragraph. This Security
shall be so exchangeable if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Security or if at any
time such Depository ceases to be a clearing agency registered as such under
the Securities Exchange Act of 1934, (y) the Company executes and delivers to
the Trustee a written order providing that this Security shall be so
exchangeable or (z) there shall have occurred and be continuing an Event of
Default with respect to the Securities of such series. Securities so issued in
exchange for this Security shall be of the same series and of like tenor, in
authorized denominations and in the aggregate having the same unpaid principal
amount as this Security and registered in such names as the Depository for such
Book-Entry Security shall direct.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon on or more new Securities of
this series, and of like tenor, of authorized denominations and for the same
aggregate unpaid principal amount, will be issued to the designated transferee
or transferees. At the date of the Indenture such office of the Company is
located at 370 Van Gordon Place, Lakewood, Colorado 80228, and its mailing
address is P.O. Box 281304, Lakewood, Colorado 80228-8304.
No service charge shall be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
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