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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 6, 1996
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K N ENERGY, INC.
(Exact name of registrant as specified in its charter)
KANSAS 1-6446 49-0290000
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
370 VAN GORDON STREET
P. O. BOX 281304
LAKEWOOD, CO 80228-8304
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 989-1740
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Item 5. Other Events.
On August 6, 1996, K N Energy, Inc. sold 1,715,000 shares of its
common stock pursuant to an underwritten public offering. Cabot Corporation
sold an additional 1,850,000 shares pursuant to such offering.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(c) Exhibits.
1.1 Purchase Agreement dated July 31, 1996 among K N Energy, Inc.,
Cabot Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Howard, Weil, Labouisse, Friedrichs
Incorporated, Petrie Parkman & Co., Inc. and Salomon Brothers
Inc, as Representatives of the Underwriters named in Schedule
A thereto.
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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.
Date: August 6, 1996 By: /s/ E. Wayne Lundhagen
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E. Wayne Lundhagen
Vice President and Treasurer
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EXHIBIT INDEX
1.1 Purchase Agreement dated July 31, 1996 among K N Energy, Inc.,
Cabot Corporation and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Howard, Weil, Labouisse, Friedrichs
Incorporated, Petrie Parkman & Co., Inc. and Salomon Brothers
Inc, as Representatives of the Underwriters named in Schedule
A thereto.
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EXHIBIT 1.1
CONFORMED COPY
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K N ENERGY, INC.
(a Kansas corporation)
3,100,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: July 31, 1996
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K N ENERGY, INC.
(a Kansas corporation)
3,100,000 Shares of Common Stock
(Par Value $5 Per Share)
PURCHASE AGREEMENT
July 31, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
PETRIE PARKMAN & CO., INC.
SALOMON BROTHERS INC
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
K N Energy, Inc., a Kansas corporation (the "Company"), and
Cabot Corporation, a Delaware corporation (the "Selling Stockholder"), confirm
their respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom Merrill Lynch, Howard Weil, Labouisse,
Friedrichs Incorporated, Petrie Parkman & Co., Inc. and Salomon Brothers Inc
are acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the Selling Stockholder, acting
severally and not jointly, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $5 per share, of the Company ("Common Stock") set
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forth in Schedule A hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 465,000 additional shares of
Common Stock to cover over-allotments, if any. The aforesaid 3,100,000 shares
of Common Stock (the "Initial Securities") to be purchased by the Underwriters
and all or any part of the 465,000 shares of Common Stock subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities."
The Company and the Selling Stockholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 dated June
27, 1994 (Registration No. 33-54317, the "1994 Registration Statement"),
including the related prospectus dated July 13, 1994 (the "1994 Prospectus"),
and a registration statement on Form S-3 dated May 23, 1996 (Registration No.
333-04385, the "1996 Registration Statement"), including the related prospectus
dated June 18, 1996 (the "1996 Prospectus" and, together with the 1994
Prospectus, the "Prospectuses"), for the registration of its Common Stock
(including the Securities) under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). Such registration statements and any Rule 462(b)
Registration Statement (as defined below) have each been declared effective by
the Commission. As provided in Section 3(a), a prospectus supplement relating
to the 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 of the
1933 Act Regulations. Such prospectus supplement, in the form first filed
after the date hereof pursuant to Rule 424, is herein referred to as the
"Prospectus Supplement." The 1994 Registration Statement and the 1996
Registration Statement, each as amended at the date hereof, including, in each
case, the exhibits thereto, are herein called the "Registration Statement," and
the Prospectuses included therein relating to all offerings of Securities under
the Registration Statement, as supplemented by the Prospectus Supplement, are
herein called the "Prospectus;" provided, however, that, if such Prospectuses
are 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 such Prospectuses as so amended or
supplemented and as supplemented by the Prospectus Supplement; and provided,
further, that all references to the "Registration Statement" and the
"Prospectus" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"); and provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then, after such
filing, all references to the "Registration Statement" shall also be deemed to
include the Rule 462(b) Registration
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Statement. For purposes of this Agreement, all references to the Registration
Statement, Prospectus, Prospectus Supplement or preliminary prospectus or to
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be.
Section 1. Representations and Warranties. (a) The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time (defined below) and as of each Date of Delivery (defined below),
and agrees with each Underwriter, as follows:
(i) At the respective times that the 1994 Registration
Statement, the 1996 Registration Statement, any Rule 462(b)
Registration Statement, and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on
Form 10-K with the Commission) became effective, on the date hereof
and at the Closing Time (and, if any Option Securities are purchased,
at the Date of Delivery), the Registration Statement, any Rule 462(b)
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and, subject
to the proviso in the next succeeding sentence, did not and will 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 (and, if any Option Securities are purchased, at such
Date of Delivery), the Prospectus and any amendments and supplements
thereto did not and will not 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, in light of the
circumstances under which they were made, 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
(A) information furnished in writing to the Company by or on behalf of
any Underwriter, directly or through Merrill Lynch, expressly for use
in the Registration Statement or the Prospectus, or
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(B) information relating to the Selling Stockholder appearing in the
Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 of the 1933 Act
Regulations, complied when so filed in all material respects with the
1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(ii) The documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they became
effective or 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 (and, if any Option
Securities are purchased, at such Date of Delivery), 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, in
light of the circumstances under which they were made, 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 Stockholders for 1995 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
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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.
(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 authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock, including the Securities to be purchased by
the Underwriters from the Selling Stockholder, have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock, including the
Securities to be purchased by the Underwriters from the Selling
Stockholder, was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
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(ix) The Securities to be purchased by the Underwriters
from the Company have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued and fully
paid and non-assessable; the Common Stock conforms in all material
respects to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Securities will be
subject to personal liability under the laws of the State of Kansas or
the State of Colorado by reason of being such a holder; and the
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(x) 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.
(xi) 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 issuance
and delivery of the 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 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 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,
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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.
(xii) At the Closing Time (and, if any Option Securities
are purchased, at such Date of Delivery), 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
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 1933 Act Regulations and the securities or
blue sky laws of the various states), is required for the valid
authorization, issuance, sale and delivery of the Securities by the
Company.
(xiii) 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.
(xiv) 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.
(xv) The Company and the Subsidiaries each has statutory
authority and owns, possesses or has obtained all material
governmental licenses, permits, franchises, 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.
(xvi) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder or
is exempt therefrom.
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(xvii) Except as described in the Registration Statement or
except as would not, singly or in the aggregate, result in 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, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are
each in compliance with their requirements, (C) there are no pending
or threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or any action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or any if its subsidiaries relating
to Hazardous Materials or any Environmental Laws.
(xviii) 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 ("PUHCA"), 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.
(b) The Selling Stockholder represents and warrants to
each Underwriter as of the date hereof and as of the Closing Time and agrees
with each Underwriter that:
(i) To the extent that any statements or omissions made
in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto are made in reliance
upon and in conformity with information relating to the Selling
Stockholder appearing therein, such preliminary prospectus and the
Registration Statement did, and the Prospectus and any further
amendments or
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supplements to the Registration Statement and the Prospectus will,
when they become effective or are filed with the Commission, as the
case may be, conform in all material respects to the requirements of
the 1933 Act and the 1933 Act Regulations and not contain any untrue
statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; the Selling Stockholder is not prompted to sell the
Securities to be sold by the Selling Stockholder hereunder by any
information concerning the Company or any subsidiary of the Company
which is not set forth in the Prospectus.
(ii) The Selling Stockholder has the full right, power and
authority to enter into this Agreement and to sell, transfer and
deliver the Securities to be sold by the Selling Stockholder
hereunder. The execution and delivery of this Agreement and the sale
and delivery of the Securities to be sold by the Selling Stockholder
and the consummation of the transactions contemplated herein and
compliance by the Selling Stockholder with its obligations hereunder
have been duly authorized by the Selling Stockholder and do not and
will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default
under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities to be sold by the Selling
Stockholder or any property or assets of the Selling Stockholder
pursuant to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, license, lease or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder may be bound, or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Selling Stockholder or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Selling Stockholder or any of its properties.
(iii) The Selling Stockholder has and will at the Closing
Time have good and marketable title to the Securities to be sold by
the Selling Stockholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance
of any kind, other than pursuant to this Agreement; and upon delivery
of such Securities and payment of the purchase price therefor as
herein contemplated, assuming each such Underwriter has no notice of
any adverse claim, each of the Underwriters will receive good and
marketable title to the Securities purchased by it from the Selling
Stockholder, free and clear of any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance of any kind.
(iv) The Selling Stockholder has not taken, and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might
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reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(v) No filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or
required for the performance by the Selling Stockholder of its
obligations hereunder or in connection with the sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously
been made or obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(vi) During a period of 90 days from the date hereof, the
Selling Stockholder will not, without prior written consent of Merrill
Lynch, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Securities to be sold hereunder.
(vii) Certificates for all of the Securities to sold by the
Selling Stockholder pursuant to this Agreement, in suitable form for
transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed, will have
been placed in custody with The Bank of New York, as transfer agent,
by the Closing Time with conditional instructions to deliver such
Securities to the Underwriters pursuant to this Agreement.
(viii) Neither the Selling Stockholder nor any of its
affiliates directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, or has
any other association with (within the meaning of Article I, Section
1(m) of the By-laws of the National Association of Securities Dealers,
Inc. (the "NASD")), any member firm of the NASD.
(c) Any certificate signed by any officer of the Company
or any of its subsidiaries delivered to the Representatives or to counsel for
the Underwriters in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby; and any certificate signed
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by or on behalf of the Selling Stockholder as such and delivered to the
Representatives or to counsel for the Underwriters pursuant to the terms of
this Agreement shall be deemed a representation and warranty by the Selling
Stockholder 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 and subject to the terms and
conditions herein set forth, the Company and the Selling Stockholder, severally
and not jointly, agree to sell to each Underwriter, severally and not jointly,
and each Underwriter, severally and not jointly, agrees to purchase from the
Company and the Selling Stockholder, at the price per share set forth in
Schedule C, that proportion of the number of Initial Securities set forth in
Schedule B opposite the name of the Company or the Selling Stockholder, as the
case may be, which the number of Initial Securities set forth in Schedule A
opposite the names of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters
as the Representatives in their sole discretion shall make to eliminate any
sales or purchases of fractional securities.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 465,000 shares of Common Stock, as
set forth in Schedule B, at the price per share set forth in Schedule C, less
an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part on not more than two dates of
delivery during such period only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be earlier
than two or later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
<PAGE> 13
12
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, or at such
other place as shall be agreed upon by the Representatives and the Company and
the Selling Stockholder, at 10:00 A.M. (Eastern time) on the third business day
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company and the
Selling Stockholder (such time and date of payment and delivery being herein
called the "Closing Time").
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase price
for, and delivery of certificates for, such Option Securities shall be made at
the above- mentioned offices, or at such other place as shall be agreed upon by
the Representatives and the Company and the Selling Stockholder, on each Date
of Delivery as specified in the notice from the Representatives to the Company.
Payment shall be made to the Company and the Selling
Stockholder by wire transfer of immediately available funds to bank accounts
designated by the Company and the Selling Stockholder, as the case may be,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Securities and the Option Securities, if any, which it
has agreed to purchase. Merrill Lynch, individually and not as representative
of the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(d) Certificates for the Initial Securities and the
Option Securities, if any, shall be in such denominations and registered in
such names as the Representatives may request in writing at least two full
business days before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time or the relevant Date of
Delivery, as the case may be.
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 Securities, the Company will prepare a preliminary
prospectus supplement containing such information as you and the
Company deem appropriate, and, prior to or
<PAGE> 14
13
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 number of Securities and their terms not otherwise specified
in the Prospectuses, the name of each Underwriter participating in the
offering and number of 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 Securities are to be purchased by the
Underwriters from the Company and the Selling Stockholder, any initial
public offering price, any selling concession and reallowance, and
such other information as you and the Company deem appropriate in
connection with the offering of the Securities. The Company will
promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 of the 1933 Act Regulations
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
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
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
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
Securities, the Company will inform you of its intention to file any
amendment to the Registration Statement (including any filing under
Rule 462(b) of the 1933 Act Regulations), 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
<PAGE> 15
14
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). The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the
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
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 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 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, but excluding any such documents filed by the
Company under the 1934 Act prior to the end of the most recent fiscal
year for which the Company has filed an Annual Report on Form 10-K).
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted
<PAGE> 16
15
copies thereof filed with the Commission pursuant to EDGAR, except to
the extent permitted by Regulation S-T.
(g) The Company will use its best efforts, in cooperation
with the Underwriters, to qualify the 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 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 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) The Company will comply with all rules and
regulations of the New York Stock Exchange in respect of the listing
of the Common Stock and will use its best efforts to cause the
Securities to be eligible for trading thereon.
(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) During a period of 90 days from the date hereof, the
Company will not, without the prior written consent of Merrill Lynch,
(i) directly or indirectly, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
<PAGE> 17
16
otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of
the Common Stock, whether any such swap or transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder,
(B) any shares of Common Stock issued by the Company upon the exercise
of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Prospectus or (C) any shares of
Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to
in the Prospectus, any non-employee director stock option plan or
dividend reinvestment plan.
(l) The Company will apply the proceeds from the sale of
the Securities for the purposes set forth under the caption "Use of
Proceeds" in the Prospectus.
Section 4. Payment of Expenses. The Company will pay all
costs and expenses incident to the performance of the obligations of the
Company and the Selling Stockholder 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 Securities and the Blue Sky Survey, (c) the delivery of the Securities to
the Underwriters, (d) the fees and disbursements of the Company's counsel and
accountants, (e) the fees and expenses of any transfer agent or registrar for
the Securities, and (f) the qualification of the Securities under the
applicable securities laws in accordance with Section 3(g) and any filing for
review of the offering with the NASD, including filing fees and reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and
in connection with the Blue Sky Survey. The Selling Stockholder will pay the
fees and disbursements of its counsel and any stock transfer taxes payable by
reason of its sale of Securities hereunder.
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. The
obligations of the several Underwriters to purchase and pay for the Securities
hereunder are subject to the accuracy of the representations and warranties of
the Company and the Selling Stockholder contained herein or in certificates of
any officer of the Company or Subsidiary or on behalf
<PAGE> 18
17
of the Selling Stockholder delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement shall have been issued under the 1933 Act and
no proceedings for that purpose shall have been initiated or
threatened 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, dated as of the Closing Time, of Vinson & Elkins L.L.P.,
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, together with signed or reproduced copies of
such opinion for each of the other Underwriters, to the effect set
forth in Exhibit A hereto and to such further effect as counsel to the
Underwriters may reasonably request.
(c) At the Closing Time, you shall have received a signed
opinion, dated the Closing Time, of Martha B. Wyrsch, Vice President
and Deputy General Counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such opinion for each of the other Underwriters,
to the effect set forth in Exhibit B hereto and to such further effect
as counsel to the Underwriters may reasonably request.
(d) At the Closing Time, you shall have received signed
opinions, dated as of the Closing Time, of local counsel in each of
Colorado, Kansas, Nebraska and Wyoming, in each case in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of each such opinion for each of the other
Underwriters, to the effect set forth in Exhibit C hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(e) At Closing Time, you shall have received the
favorable opinion, dated as of Closing Time, of Robert Rothberg, Vice
President and General Counsel to the Selling Stockholder, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit D hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(f) 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
<PAGE> 19
18
Underwriters, to the effect that the opinions delivered pursuant to
Sections 5(b), 5(c), 5(d) and 5(e) 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 respect to
the incorporation and legal existence of the Company, the Securities,
this Agreement, 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.
(g) At the Closing Time, (i) the Registration Statement
and the Prospectus, 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 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 Merrill Lynch,
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
<PAGE> 20
19
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.
(h) At Closing Time, you shall have received a
certificate of an officer or Attorney-in-Fact on behalf of the Selling
Stockholder, dated as of the Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholder contained in
Section 1(b) hereof are true and correct in all respects as though
expressly made at and as of the Closing Time and (ii) the Selling
Stockholder has complied with all agreements and all conditions on its
part to be performed under this Agreement at or prior to the Closing
Time.
(i) You shall have received the letter or letters
specified in Sections 1 and 2 of Exhibit E at the date hereof and the
letter specified in Section 3 of Exhibit E hereto at the Closing Time.
(j) 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 Ratings Group 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.
(k) The Securities shall be eligible for trading on the
New York Stock Exchange.
(l) In the event that the Underwriters exercise their
option provided in Section 2(b) hereof to purchase all or any portion
of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates
furnished by the Company and any subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have received:
(i) A certificate, dated such Date of Delivery,
of the Chairman, the President, a Vice President or the
Treasurer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(g) hereof
remains true and correct as of such Date of Delivery.
<PAGE> 21
20
(ii) The favorable opinion of Vinson & Elkins
L.L.P., counsel for the Company, together with the favorable
opinions of Polsinelli, White, Vardeman & Shalton, special
Kansas counsel for the Company, and Martha B. Wyrsch, Vice
President and Deputy General Counsel for the Company, each in
form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinions required by
Sections 5(b), 5(c) and 5(d) hereof.
(iii) The favorable opinion of Shearman & Sterling,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(f) hereof.
(iv) A letter from Arthur Andersen LLP, dated such
Date of Delivery, substantially in the same form as the letter
specified in Section 3 of Exhibit E and furnished to the
Representatives pursuant to Section 5(i) hereof, except that
the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(m) At the Closing Time and at each Date of Delivery,
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
Securities as herein contemplated and the matters referred to in
Section 5(f) and in order to evidence the accuracy and completeness of
any of the representations, warranties or statements of the Company
and the Selling Stockholder, 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 and the Selling
Stockholder at or prior to the Closing Time or such Date of Delivery
in connection with the authorization, issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriters and to counsel for the Underwriters.
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 or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities may be terminated by the Representatives on notice to the Company at
any time at or prior to the Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in
<PAGE> 22
21
Section 4. Notwithstanding any such termination, the provisions of Sections 6,
7 and 8 shall remain in effect.
Section 6. Indemnification. (a) The Company and the Selling
Stockholder, jointly and severally, agree 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 or Section 20 of the 1934 Act to the
extent and in the manner set forth in clauses (i), (ii) and (iii) below;
provided, however, that the Selling Stockholder's aggregate liability under
this Section 6 shall be limited to an amount equal to the net proceeds (after
deducting the underwriting discount but before deducting expenses) received by
the Selling Stockholder from the sale of its shares of Common Stock pursuant to
this Agreement:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an untrue
statement or alleged untrue statement 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, but, with respect to the Selling
Stockholder, only with reference to information relating to such
Selling Stockholder appearing in the Registration Statement (or any
amendment thereto), any preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto);
(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; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company and the
Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred
(including fees and disbursements of counsel chosen by you),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above;
<PAGE> 23
22
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 Merrill Lynch 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 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 or Section 20 of the 1934 Act,
and the Selling Stockholder, 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
Merrill Lynch 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 notice as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent that it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. 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 party, 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
<PAGE> 24
23
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 (in addition to any
local counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(d) If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its written consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice in
reasonable detail to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
(e) The provisions of this Section shall not affect any
agreement between the Company and the Selling Stockholder with respect to
indemnification.
Section 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling
<PAGE> 25
24
Stockholder on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholder 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 or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Securities (before deducting expenses) received by the Company or the Selling
Stockholder and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover page of the Prospectus Supplement, bear
to the aggregate initial public offering price of the Securities as set forth
on such cover.
The relative fault of the Company and the Selling Stockholder
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholder or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
considered one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7 (i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission and
(ii) the Selling Stockholder shall not be required to contribute any amount in
excess of
<PAGE> 26
25
the net proceeds (after deducting the underwriting discount but before
deducting expenses) received by such Selling Stockholder from the sale of its
shares of Common Stock pursuant to this Agreement.
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 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 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 or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities, agreements and
other statements contained in this Agreement or in certificates of officers of
the Company or any of its subsidiaries or in certificates of the Selling
Stockholder submitted pursuant hereto shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the Company
or the Selling Stockholder or any Underwriter or controlling person and will
survive delivery of and payment for the Securities.
Section 9. Termination of Agreement. (a) The
Representatives may terminate this Agreement, by notice to the Company and the
Selling Stockholder, 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 arising 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 Securities or enforce contracts for the sale of the
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.
<PAGE> 27
26
(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 or a Date of Delivery to purchase the Securities
that it or they are obligated to purchase (the "Defaulted Securities"), the
Representatives 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
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives have not completed such arrangements
within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery, the obligation of the
Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery 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 or, in the case of a Date of Delivery, which does
not result in a termination of the obligation of the Underwriters to purchase
and the Company to sell the relevant Option Securities, either the
Representatives or the Company and the Selling Stockholder shall have the right
to postpone the Closing Time or the relevant Date of Delivery, as the case may
be, 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. Default by the Selling Stockholder or the
Company. (a) If the Selling Stockholder shall fail at Closing Time to sell
and deliver the number of Securities which the Selling Stockholder is obligated
to sell hereunder, then the Underwriters may, at the option of the
Representatives, by notice from the Representatives to the Company, either
<PAGE> 28
27
(a) terminate this Agreement without any liability on the part of any
non-defaulting party except that the provisions of Sections 4, 6, 7 and 8 shall
remain in full force and effect or (b) elect to purchase the Securities which
the Company has agreed to sell hereunder. No action taken pursuant to this
Section 11 shall relieve the Selling Stockholder so defaulting from liability,
if any, in respect of such default.
In the event of a default by the Selling Stockholder as
referred to in this Section 11, each of the Representatives and the Company
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required change in the Registration Statement
or Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at a
Date of Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the
part of any non-defaulting party except that the provisions of Sections 4, 6, 7
and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
Section 12. 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 the Vice President and Chief Financial
Officer and of the General Counsel, or if delivered or transmitted, to it at
370 Van Gordon Street, Lakewood, Colorado 80228, Attention of the Vice
President and Chief Financial Officer and of the General Counsel, and notices
to the Selling Stockholder shall be directed to 75 State Street, Boston,
Massachusetts 02109-1809, Attention of the Chief Financial Officer and of the
General Counsel.
Section 13. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Stockholder and their respective successors and the controlling persons,
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Stockholder
and their respective successors, and said controlling persons, officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be
<PAGE> 29
28
a successor by reason merely of such purchase. If there are two or more
Underwriters, all of their obligations hereunder are several and not joint.
Section 14. 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 15. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
Section 16. 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.
<PAGE> 30
29
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the Selling
Stockholder a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement between the Company, the Selling
Stockholder and the Underwriters in accordance with its terms.
Very truly yours,
K N ENERGY, INC.
By: /s/ Clyde E. McKenzie
----------------------------------
Name: Clyde E. McKenzie
Title: Vice President and Chief
Financial Officer
CABOT CORPORATION
By: /s/ Kenyon C. Gilson
----------------------------------
Name: Kenyon C. Gilson
Title: Executive Vice President and
Chief Financial Officer
Confirmed and Accepted
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
PETRIE PARKMAN & CO., INC.
SALOMON BROTHERS INC
By: Merrill Lynch Pierce, Fenner & Smith
Incorporated
By: /s/ Anthony V. Leness
-------------------------------------
Authorized Signature
For themselves and as Representatives
of the other Underwriters named in Schedule A
<PAGE> 31
SCHEDULE A
to
Purchase Agreement
Dated July 31, 1996
<TABLE>
<CAPTION>
Number of
Name of Underwriter Initial Securities
- ------------------- ------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . 392,500
Howard, Weil, Labouisse, Friedrichs Incorporated . . . . . . . . . 392,500
Petrie Parkman & Co., Inc. . . . . . . . . . . . . . . . . . . . . 392,500
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . 392,500
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . 130,000
Dillon, Read & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . 130,000
Donaldson, Lufkin & Jenrette Securities Corporation . . . . . . . . 130,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . . . . 130,000
Jefferies & Company, Inc. . . . . . . . . . . . . . . . . . . . . . 130,000
Edward D. Jones & Co. . . . . . . . . . . . . . . . . . . . . . . . 130,000
Prudential Securities Incorporated . . . . . . . . . . . . . . . . 130,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 130,000
Wasserstein Perella Securities, Inc. . . . . . . . . . . . . . . . 130,000
Dain Bosworth Incorporated . . . . . . . . . . . . . . . . . . . . 60,000
EVEREN Securities, Inc. . . . . . . . . . . . . . . . . . . . . . . 60,000
Hanifen, Imhoff Inc. . . . . . . . . . . . . . . . . . . . . . . . 60,000
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Rauscher Pierce Refsnes, Inc. . . . . . . . . . . . . . . . . . . . 60,000
Rodman & Renshaw, Inc. . . . . . . . . . . . . . . . . . . . . . . 60,000
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,100,000
=============
</TABLE>
<PAGE> 32
SCHEDULE B
to
Purchase Agreement
Dated July 31, 1996
<TABLE>
<CAPTION>
Number of Initial Maximum Number of Option
Securities to be Sold Securities to be Sold
-------------------------------- ------------------------------------
<S> <C> <C>
K N Energy, Inc. . . . . . . . . 1,250,000 465,000
Cabot Corporation . . . . . . . . 1,850,000 0
--------- ----------
Total . . . . . . . . . . . . . . 3,100,000 465,000
========= =======
</TABLE>
<PAGE> 33
SCHEDULE C
to
Purchase Agreement
Dated July 31, 1996
K N ENERGY, INC.
3,100,000 Shares of Common Stock
(Par Value $5 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $32.25.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $31.16, being an amount equal to the initial
public offering price set forth above less $1.09 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities.
<PAGE> 34
EXHIBIT A
to
Purchase Agreement
Dated July 31, 1996
FORM OF OPINION OF VINSON & ELKINS L.L.P., COUNSEL
TO THE COMPANY, TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(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 Securities to be purchased by the Underwriters
from the Company have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when issued
and delivered by the Company pursuant to the Purchase Agreement
against payment therefor, will be validly issued and fully paid and
non-assessable and no holder of such Securities is or will be subject
to personal liability by reason of being such a holder.
(iii) The issuance and sale of the Securities by the
Company and the sale of the Securities by the Selling Stockholder are
not subject to preemptive or other similar charter or statutory rights
of any securityholder of the Company.
(iv) The Securities conform in all material respects as to
legal matters to the description thereof contained in the Prospectus.
(v) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(vi) No authorization, approval, consent or license of any
federal or State of Texas government, governmental instrumentality or
court (other than under the 1933 Act and the securities or blue sky
laws of the various states), is required for the valid authorization,
issuance, sale and delivery of the Securities of the Company.
(vii) The execution and delivery by the Company of the
Purchase Agreement, the issuance and delivery of the Securities, the
consummation by the Company of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Company with the terms of the Purchase Agreement do not and will
not result in any violation of the charter or by-laws of the Company.
<PAGE> 35
A-2
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared 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 or any Rule
462(b) Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are threatened
under the 1933 Act.
(ix) The Registration Statement, including any Rule 462(b)
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 or
geological data included therein or omitted therefrom, 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.
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 and geological
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 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 the Purchase 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 and geological 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 or a Date of Delivery, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
<PAGE> 36
A-3
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
In 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 (f) of Section 5 of the Purchase Agreement, 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.
<PAGE> 37
EXHIBIT B
to
Purchase Agreement
Dated July 31, 1996
FORM OF OPINION OF MARTHA B. WYRSCH, VICE PRESIDENT
AND DEPUTY GENERAL COUNSEL FOR THE COMPANY, TO BE
DELIVERED PURSUANT TO SECTION 5(c)
(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.
(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) The shares of issued and outstanding Common Stock,
including the Securities to be purchased by the Underwriters from the
Selling Stockholder, have been duly authorized and validly issued and
are fully paid and non-assessable; and (A) none of the outstanding
shares of Common Stock being sold by the Selling Stockholder to the
Underwriters pursuant to the Purchase Agreement was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company and (B) none of the other shares of
Common Stock was issued in violation of the preemptive or other
similar rights known to such counsel of any securityholder of the
Company.
(v) 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,
<PAGE> 38
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.
(vi) 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.
(vii) The execution and delivery by the Company of the
Purchase Agreement, the issuance and delivery of the Securities, the
consummation by the Company of the transactions contemplated therein
and in the Registration Statement and compliance by the Company with
the terms of the Purchase Agreement 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 instrumentality or court, domestic or foreign, known to
such counsel having jurisdiction over the Company or any Subsidiary or
any of its properties.
(viii) The documents incorporated by reference in the
Prospectus (except for the financial statements and other financial or
geological 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.
<PAGE> 39
B-3
(ix) 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.
(x) 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.
(xi) The Public Utilities Commission of Colorado and the
Public Service Commission of Wyoming have duly authorized the issue
and sale of the 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 Securities; the issue and
sale of the 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 and the securities or blue sky laws
of the various states), is required for the valid authorization,
issuance, sale and delivery of the 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.
(xii) 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. Each of the Company and the
Subsidiaries holds all material regulatory approvals, including all
material franchises, permits and rights, as are necessary in the state
of Kansas to own its properties and conduct its business as described
in the Prospectus.
(xiii) 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
PUHCA, 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
<PAGE> 40
B-4
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, 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 and geological information included or
incorporated by reference therein 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 the
Purchase 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 and
geological 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 or a Date of Delivery, as the case may be,
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 the Purchase Agreement and the
sale of the Securities under the Purchase Agreement 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 for
the Underwriters referred to in paragraphs (b), (d) and (f) of Section 5 of the
Purchase Agreement, in which case the opinion shall state that they believe you
and such counsel are entitled to so rely.
<PAGE> 41
EXHIBIT C
to
Purchase Agreement
Dated July 31, 1996
FORM OF OPINION OF COLORADO, KANSAS, NEBRASKA
AND WYOMING COUNSEL TO THE COMPANY, EACH TO BE
DELIVERED PURSUANT TO SECTION 5(d)
(i) The Company is duly qualified to transact business as
a foreign corporation and is in good standing in such state.
(ii) The Company holds all authority from all regulatory
authorities or bodies in 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) In the case of Colorado and Wyoming, the
authorizations referred to in clause (xiii) of Section 1 of the
Purchase Agreement are in full force and effect and constitute all
requisite authority under the laws and regulations of such State
(other than under the securities or blue sky laws of such State) for
the issuance and sale by the Company of the Securities.
(v) In the case of Kansas and Nebraska, no approval,
authorization, consent or other action (other than under the
securities or blue sky laws of such State) is required by any
regulatory authority or governmental body of such state for the valid
issuance, sale and delivery by the Company of the Securities.
In lieu of the opinions referred to in clause (i) - (iii)
above, the legal opinion of local counsel in the State of Kansas shall cover
the matters set forth in clauses (i), (ii) and (iii) of Exhibit A to the
Purchase Agreement, as well as the due authorization of the Purchase Agreement.
<PAGE> 42
EXHIBIT D
to
Purchase Agreement
Dated July 31, 199
FORM OF OPINION OF ROBERT ROTHBERG,
VICE PRESIDENT AND GENERAL COUNSEL
TO THE SELLING STOCKHOLDER, TO BE DELIVERED
PURSUANT TO SECTION 5(e)
(i) No filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than the
issuance of the order of the Commission declaring the Registration
Statement effective and such authorizations, approvals or consents as
may be necessary under state securities laws, as to which such counsel
need express no opinion) is necessary or required to be obtained by
the Selling Stockholder for the performance by the Selling Stockholder
of its obligations under the Purchase Agreement or in connection with
the offer, sale or delivery of Securities being sold by the Selling
Stockholder.
(ii) The Purchase Agreement and the stock power for the
transfer to you of the Securities being sold by the Selling
Stockholder pursuant to the Purchase Agreement have been duly
authorized, executed and delivered by or on behalf of the Selling
Stockholder.
(iii) The execution, delivery and performance of the
Purchase Agreement and the sale and delivery of the Securities and the
consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement and compliance by the
Selling Stockholder with its obligations under the Purchase Agreement
have been duly authorized by all necessary action on the part of the
Selling Stockholder and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
or any property or assets of the Selling Stockholder pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other instrument or agreement known
to me after due inquiry to which the Selling Stockholder is a party or
by which it is bound, or to which any of the property or assets of the
Selling Stockholder may be subject nor will such action result in any
violation of the provisions of the charter or by-laws of the Selling
Stockholder, or any law, administrative regulation, or, to my
knowledge after due inquiry, any judgment or order of any governmental
agency or body or any administrative or court decree having
jurisdiction over the Selling Stockholder or any of its properties.
<PAGE> 43
D-2
(iv) The Selling Stockholder is the sole registered owner
of the Securities being sold by the Selling Stockholder; upon
consummation of the sale of the Securities pursuant to the Purchase
Agreement, assuming the Underwriters purchase the Securities for value
in good faith and without notice of any adverse claim, the
Underwriters will have acquired all rights of the Selling Stockholder
in the Securities free of any adverse claim, including any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, or a
claim by the owner of the Securities, if other than the Selling
Stockholder, that the endorsement by the Selling Stockholder was
unauthorized or wrongful; and the Selling Stockholder has the full
power and authority (A) to enter into the Purchase Agreement and (B)
to sell, transfer and deliver the Securities to be sold by the Selling
Stockholder under the Purchase Agreement.
(v) On July 13, 1994, the Selling Stockholder filed with
the Commission an application in good faith for a declaration that the
Selling Stockholder is not a "holding company" as such term is defined
in Section 2(a)(7) of the Public Utility Holding Company Act of 1935,
as amended ("PUHCA") in relation to the Company. The Commission has
not yet acted on such application; and accordingly the Selling
Stockholder is currently exempt from any obligation, duty or liability
imposed by PUHCA.
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 and geological information
included or incorporated by reference therein 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 the
Purchase Agreement, contained an untrue statement of a material fact relating
to the Selling Stockholder or omitted to state a material fact relating to the
Selling Stockholder 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 and
geological 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 or a Date of Delivery, as the case may be,
contained an untrue statement of a material fact relating to the Selling
Stockholder or omitted to state a material fact relating to the Selling
Stockholder 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; provided, however, that with respect to (A) and (B) above, such
comment shall only relate to information relating to the Selling Stockholder
appearing in such Registration Statement, Prospectus or any amendment or
supplement to the Registration Statement or Prospectus.
<PAGE> 44
D-3
In rendering the opinion set forth in paragraph (iv) above, counsel
shall be permitted to assume that the laws of the State of New York and the
State of Kansas are the same as the laws of the State of Massachusetts in all
respects relevant to such opinion.
<PAGE> 45
EXHIBIT E
to
Purchase Agreement
Dated July 31, 1996
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> 46
E-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 stockholders, 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 l0-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 Exhibit E,
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 as
it applies to Form 10-Q and the related published 1934 Act
Regulations or that any material modifications should be made
to such unaudited condensed consolidated financial statements
for them to be in conformity with generally accepted
accounting principles, except as disclosed in the notes to
such unaudited
<PAGE> 47
E-3
condensed consolidated financial statements or as otherwise
described in such 10-Q 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 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 Exhibit E (but carried out to
the specified date referred to in Section 3(a) of Exhibit E),
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 l% (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
<PAGE> 48
E-4
(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
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 Exhibit E, 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 Exhibit E 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 Exhibit E shall be deemed to be references
to such single letter.
<PAGE> 49
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
