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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): JULY 26, 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 July 26, 1996, K N Energy, Inc. sold $125 million of its 7.35%
Debentures due August 1, 2026 pursuant to an underwritten public offering.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(c) Exhibits.
1.1 Purchase Agreement dated July 23, 1996 between K N Energy,
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J. P. Morgan Securities Inc. and Smith Barney Inc.
1.2 Specimen of 7.35% Debenture due August 1, 2026 in book-entry
form.
1.3 Ratios of Earnings to Fixed Charges (incorporated by reference
to Exhibit 12 to S-3 Registration Statement No. 333-04385
filed on May 23, 1996).
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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: July 26, 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 23, 1996 between K N Energy,
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J. P. Morgan Securities Inc. and Smith Barney Inc.
1.2 Specimen of 7.35% Debenture due August 1, 2026 in book-entry
form.
1.3 Ratios of Earnings to Fixed Charges (incorporated by reference
to Exhibit 12 to S-3 Registration Statement No. 333-04385
filed on May 23, 1996).
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EXHIBIT 1.1
K N ENERGY, INC.
(a Kansas corporation)
7.35% Debentures due August 1, 2026
PURCHASE AGREEMENT
July 23, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. MORGAN SECURITIES INC.
SMITH BARNEY INC.
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"),
proposes to issue and sell to the underwriter or underwriters named in Schedule
I hereto certain of its debt securities specified in Schedule II hereto (the
"Offered Securities") on the terms and conditions stated herein and in Schedule
II. The Offered Securities will be issued pursuant to an indenture dated as of
November 20, 1993 (the "Indenture"), between the Company and First Trust of
Illinois, National Association, as the successor trustee under the Indenture
(the "Trustee"). As used herein, unless the context otherwise requires, the
term "Underwriters" shall mean the firm or firms named as Underwriter or
Underwriters in Schedule I and the term "you" shall mean the Underwriter or
Underwriters, if no underwriting syndicate is purchasing the Offered
Securities, or the representative or representatives of the Underwriters, if an
underwriting syndicate is purchasing the Offered Securities, as indicated in
Schedule I.
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The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(Registration No. 33-51115), including the related prospectus, for the
registration of certain of its debt securities (including the Offered
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 statement, including any Rule 462(b)
Registration Statement (as defined below), has been declared effective by the
Commission and the Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"). As provided in Section 3(a), a
prospectus supplement reflecting the terms of the Offered Securities, the terms
of the offering thereof and the other matters set forth therein has been
prepared and will be filed pursuant to Rule 424 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."
Such registration statement on Form S-3 (Registration No. 33-51115), as amended
at the date hereof, including the exhibits thereto, is herein called the
"Registration Statement," and the basic prospectus included therein relating to
all offerings of securities under the Registration Statement, as supplemented
by the Prospectus Supplement, is herein called the "Prospectus;" provided,
however, that, if such basic prospectus is amended or supplemented on or after
the date hereof but prior to the date on which the Prospectus Supplement is
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the
basic prospectus as so amended or supplemented and as supplemented by the
Prospectus Supplement; 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 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 any 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
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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 and agrees with each Underwriter that:
(i) At the respective times that the 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 (as
defined below), 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 the 1939
Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 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, 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 information furnished in writing
to the Company by or on behalf of any Underwriter, directly or through
you, expressly for use in the Registration Statement or the
Prospectus. At the Closing Time, the Designated Indenture (as defined
below) will comply in all material respects with the requirements of
the 1939 Act and the 1939 Act Regulations.
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, if applicable, 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
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with the requirements of the 1934 Act, and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations") and, when
read together with the other information in the Prospectus, do not and
will not, on the date hereof and at the Closing Time, include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, 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 financial data, if any,
included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
latest audited consolidated financial statements included or
incorporated by reference in the Registration Statement.
(vi) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Kansas with corporate power and authority under such laws to own,
lease and operate its properties and conduct its business as described
in the Prospectus; and the Company is duly qualified to transact
business as a foreign corporation and is in good standing in each
other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
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(vii) Each subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
1933 Act Regulations (hereinafter referred to as a "Subsidiary") is
listed on Annex A hereto and is a corporation duly incorporated and
validly existing in good standing under the laws of the jurisdiction
of its incorporation with corporate power and authority under such
laws to own, lease and operate its properties and conduct its
business; and each Subsidiary is duly qualified to transact business
as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be
in good standing would not have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise. All of
the outstanding shares of capital stock of each Subsidiary have been
duly authorized and validly issued and are fully paid and
non-assessable and are owned by the Company, directly or through one
or more subsidiaries, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
(viii) The Indenture, each supplement thereto, if any, to
the date hereof and the supplement thereto or board resolution setting
forth the terms of the Offered Securities (the Indenture, as so
supplemented by such supplement or supplements and board resolution,
being herein referred to as the "Designated Indenture"), have been
duly authorized by the Company. A conformed copy of the Indenture as
executed is filed as Exhibit 4.1 to the Registration Statement. The
Designated Indenture, when duly executed and delivered (to the extent
required by the Indenture) by the Company and when duly authorized,
executed and delivered (to the extent required by the Indenture) by
the Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement
of creditors rights generally or by the provisions of Article Tenth of
the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Designated Indenture conforms, in all
material respects, to the description thereof contained in the
Prospectus.
(ix) The Offered Securities have been duly authorized by
the Company. When executed, authenticated, issued and delivered in
the manner provided for in the Designated Indenture and sold and paid
for as provided herein and in any Delayed Delivery Contracts (as
defined below), the Offered Securities will constitute valid and
binding obligations of the Company entitled to the benefits of the
Designated Indenture and enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting
enforcement of creditors' rights generally or by the
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provisions of Article Tenth of the Restated Articles of Incorporation
of the Company and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the Offered Securities
conform, in all material respects, to the description thereof
contained in the Prospectus.
(x) In the event that any of the Offered Securities are
purchased pursuant to Delayed Delivery Contracts, each of such Delayed
Delivery Contracts has been duly authorized by the Company and, when
executed and delivered on behalf of the Company and duly authorized,
executed and delivered on behalf of the purchaser thereunder, will
constitute a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditors' rights generally or by the provisions of Article Tenth of
the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein or contemplated thereby, there has not been
(A) any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or
not arising in the ordinary course of business, or (B) any transaction
entered into by the Company or any subsidiary, other than in the
ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise.
(xii) Neither the Company nor any Subsidiary is in default
in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which
it is a party or by which it may be bound or to which any of its
properties may be subject, except for such defaults that would not
have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, considered as one enterprise. The
execution and delivery by the Company of this Agreement, the
Designated Indenture and any Delayed Delivery Contracts, the issuance
and delivery of the Offered Securities, the consummation by the
Company of the transactions contemplated herein and in the
Registration Statement and compliance by the Company with the terms of
this Agreement, the Designated Indenture and any Delayed Delivery
Contracts, have been duly authorized by all necessary corporate action
on the part of the Company and do not and will not result in any
violation of the charter or by-laws of the Company or any Subsidiary,
and do not and will not
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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, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise) or (B) any existing applicable law, rule, regulation,
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of its properties.
(xiii) At the Closing Time, there shall have been issued and
there shall be in full force and effect, orders of the Public
Utilities Commission of Colorado and the Public Service Commission of
Wyoming, respectively, authorizing the issuance and sale of the
Offered Securities on the terms herein set forth or contemplated, and
no other authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act, the 1933 Act Regulations, the 1939
Act, the 1939 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 Offered Securities or for the
execution, delivery or performance of the Designated Indenture by the
Company.
(xiv) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against or affecting the Company
or any Subsidiary that is required to be disclosed in the Prospectus.
(xv) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(xvi) The Company and the Subsidiaries each has statutory
authority and owns, possesses or has obtained all material
governmental licenses, permits, franchises, 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.
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(xvii) To the knowledge of the Company no person or
corporation which is a "holding company" or a "subsidiary of a holding
company", within the meaning of such terms as defined in the Public
Utility Holding Company Act of 1935, directly or indirectly owns,
controls or holds with power to vote 10% or more of the outstanding
voting securities of the Company; and the Company is not a "holding
company" or to its knowledge a "subsidiary of a holding company" as so
defined.
(xviii) 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.
(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.
(b) Any certificate signed by any officer of the Company
or any of its subsidiaries and delivered to you or to counsel for the
Underwriters in connection with the offering of the Offered Securities shall be
deemed a representation and warranty by the Company to each Underwriter as to
the matters covered thereby.
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Section 2. Purchase and Sale. (a) On the basis of the
representations and warranties herein contained (except as may be otherwise
specified in Schedule II) and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the
purchase price to the Underwriters set forth in Schedule II, the aggregate
principal amount of Offered Securities set forth opposite the name of such
Underwriter in Schedule I.
(b) Payment of the purchase price for, and delivery of,
the Offered Securities shall be made at the date, time and location specified
in Schedule II, or at such other date, time or location as shall be agreed upon
by the Company and you, or as shall otherwise be provided in Section 10 (such
date and time of payment and delivery being herein called the "Closing Time").
Unless otherwise specified in Schedule II, payment shall be
made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to you for the respective
accounts of the several Underwriters of the Offered Securities. Unless
specified in Schedule II that the Offered Securities will be issued in
book-entry form, such Offered Securities shall be in such authorized
denominations and registered in such names as you may request in writing at
least two full business days before the Closing Time and such Offered
Securities will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the business day prior to the
Closing Time. If the Offered Securities will be issued in book-entry form, the
Company shall deposit the global certificate representing the Offered
Securities with The Depository Trust Company ("DTC"), or its designated
custodian, at the Closing Time, and the Company will deliver such global
certificate to the several Underwriters by causing DTC to credit the Offered
Securities to the respective accounts of the Underwriters at DTC.
(c) If specified in Schedule II, the Underwriters may
solicit offers to purchase Offered Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts") substantially in the
form of Exhibit E hereto with such changes therein as the Company may approve.
Any Delayed Delivery Contracts are to be with institutional investors of the
types set forth in the Prospectus. At the Closing Time, the Company will enter
into Delayed Delivery Contracts (for the minimum principal amount of Offered
Securities per Delayed Delivery Contract specified in Schedule II) with all
purchasers proposed by the Underwriters and previously approved by the Company
as provided below, but not for an aggregate principal amount of Offered
Securities less than the minimum, or greater than the maximum, aggregate
principal amounts specified in Schedule II. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
(d) You are to submit to the Company, at least three
business days prior to the Closing Time, the names of any institutional
investors with which it is proposed that the
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Company enter into Delayed Delivery Contracts, the principal amount of Offered
Securities to be purchased by each of them and the date of delivery thereof,
and the Company will advise you, at least two business days prior to the
Closing Time, of the names of the institutions with which the making of Delayed
Delivery Contracts is approved by the Company and the principal amount of
Offered Securities to be covered by each such Delayed Delivery Contract.
(e) As compensation for arranging Delayed Delivery
Contracts, the Company will pay (by wire transfer of immediately available
funds) to you at the Closing Time, for the accounts of the Underwriters, a fee
equal to that percentage of the principal amount of Offered Securities for
which Delayed Delivery Contracts are made at the Closing Time as is specified
in Schedule II or the amount of such fee may be deducted from the check
delivered pursuant to Section 2(b).
(f) The principal amount of Offered Securities agreed to
be purchased by each Underwriter shall be reduced by the principal amount of
Offered Securities covered by Delayed Delivery Contracts, as to such
Underwriter as set forth in a notice delivered by you to the Company; provided,
however, that the total principal amount of Offered Securities to be purchased
by all Underwriters shall be the principal amount of Offered Securities covered
by this Agreement, less the principal amount of Offered Securities covered by
all Delayed Delivery Contracts.
Section 3. Certain Covenants of the Company. The Company
covenants with each Underwriter as follows:
(a) If reasonably requested by you in connection with the
offering of the Offered Securities, the Company will prepare a
preliminary prospectus supplement containing such information as you
and the Company deem appropriate, and, prior to or immediately
following the execution of this Agreement, the Company will have
prepared or will prepare a Prospectus Supplement that complies with
the 1933 Act and the 1933 Act Regulations and that sets forth the
principal amount of the Offered Securities and their terms not
otherwise specified in the Indenture or the basic Prospectus, the name
of each Underwriter participating in the offering and the principal
amount of the Offered Securities that each severally has agreed to
purchase, the name of each Underwriter, if any, acting as
representative of the Underwriters in connection with the offering,
the price at which the Offered Securities are to be purchased by the
Underwriters from the Company, any initial public offering price, any
selling concession and reallowance and any delayed delivery
arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Offered Securities.
The Company will promptly transmit copies of the Prospectus Supplement
to the Commission for filing pursuant to Rule 424 of the 1933 Act
Regulations and will furnish to the Underwriters as many copies of any
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preliminary prospectus supplement and the Prospectus as you shall
reasonably request.
(b) If, at any time when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, any event shall occur or condition exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters
or counsel for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(d), such amendment or supplement as
may be necessary to correct such untrue statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements.
(c) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, the Company will, subject to Section 3(d), file promptly
all documents required to be filed with the Commission pursuant to
Section l3, 14 or 15(d) of the 1934 Act.
(d) During the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Offered
Securities, the Company will inform you of its intention to file any
amendment to the Registration Statement (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 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 Offered
Securities, the Company will notify you immediately, and confirm the
notice in writing, (i) of the effectiveness of
<PAGE> 12
12
any amendment to the Registration Statement, (ii) of the transmission
to the Commission for filing of any supplement to the Prospectus or
any document that would as a result thereof be incorporated by
reference in the Prospectus, (iii) of the receipt of any comments from
the Commission with respect to the Registration Statement, the
Prospectus or the Prospectus Supplement, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
supplement to the Prospectus or for additional information relating
thereto or to any document incorporated by reference in the Prospectus
and (v) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement, of the suspension of
the qualification of the Offered Securities for offering or sale in
any jurisdiction, or of the institution or threatening of any
proceeding for any of such purposes. The Company will use every
reasonable effort to prevent the issuance of any such stop order or of
any order suspending such qualification and, if any such order is
issued, to obtain the lifting thereof at the earliest possible moment.
(f) The Company has furnished or will furnish to you as
many signed copies of the Registration Statement (as originally filed)
and of all amendments thereto, whether filed before or after the
Registration Statement became effective, copies of all exhibits and
documents filed therewith or incorporated by reference therein
(through the end of the period when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the Offered
Securities) and signed copies of all consents and certificates of
experts, as you may reasonably request, and has furnished or will
furnish to you, for each of the Underwriters, one conformed copy of
the Registration Statement (as originally filed) and of each amendment
thereto (including documents incorporated by reference into the
Prospectus but without exhibits, 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 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 Offered Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions as you may designate and to maintain such qualifications
in effect for a period of not less than one year from the date hereof;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Offered
Securities have been
<PAGE> 13
13
qualified as above provided. The Company will also supply you with
such information as is necessary for the determination of the legality
of the Offered Securities for investment under the laws of such
jurisdictions as you may request.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than 45 days
after the close of the period covered thereby, an earnings statement
of the Company (in form complying with the provisions of Rule 158 of
the 1933 Act Regulations), covering (i) a period of 12 months
beginning after the effective date of the Registration Statement but
not later than the first day of the Company's fiscal quarter next
following such effective date and (ii) a period of 12 months beginning
after the date of this Agreement but not later than the first day of
the Company's fiscal quarter next following the date of this
Agreement.
(i) If and to the extent specified in Schedule II, the
Company will use its best efforts to cause the Offered Securities to
be duly authorized for listing on the New York Stock Exchange and to
be registered under the 1934 Act.
(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 l0-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission,
and such other documents, reports and information as shall be
furnished by the Company to its stockholders generally.
(k) Between the date hereof and the Closing Time or such
other date as may be specified in Schedule II, the Company will not,
without your prior consent, offer or sell, or enter into any agreement
to sell, any debt securities issued or guaranteed by the Company with
a maturity of more than one year in any public offering (other than
the Offered Securities). This limitation is not applicable to the
public offering of tax exempt securities guaranteed by the Company or
to such other public offering of long-term debt as may be specified in
Schedule II.
(l) The Company will apply the proceeds from the sale of
the Offered Securities for the purposes set forth under the caption
"Use of Proceeds" in the Prospectus.
Section 4. Payment of Expenses. The Company will pay and
bear all costs and expenses incident to the performance of its obligations
under this Agreement, including (a) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, any preliminary prospectus supplements and the
Prospectus and any amendments or supplements thereto, and the cost of
<PAGE> 14
14
furnishing copies thereof to the Underwriters, (b) the preparation, printing
and distribution of this Agreement, the Designated Indenture, the Offered
Securities, any Delayed Delivery Contracts and the Blue Sky Survey, (c) the
delivery of the Offered Securities to the Underwriters, (d) the fees and
disbursements of the Company's counsel and accountants, (e) the qualification
of the Offered Securities under the applicable securities laws in accordance
with Section 3(g) and any filing for review of the offering with the National
Association of Securities Dealers, Inc., including filing fees and reasonable
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the Blue Sky Survey, (f) any fees charged by rating
agencies for rating the Offered Securities and (g) the fees and expenses of the
Trustee, including the reasonable fees and disbursements of counsel for the
Trustee, in connection with the Designated Indenture and the Offered
Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or 9(a)(i), the Company shall reimburse the
Underwriters for all their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. Except
as otherwise provided in Schedule II, the obligations of the Underwriters to
purchase and pay for the Offered Securities hereunder are subject to the
accuracy of the representations and warranties of the Company contained herein
or in certificates of any officer of the Company or any Subsidiary delivered
pursuant to the provisions hereof, to the performance by the Company of its
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
<PAGE> 15
15
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 the Closing Time, you shall have received the
favorable opinion of Shearman & Sterling, counsel for the
Underwriters, dated as of the Closing Time, together with signed or
reproduced copies of such opinion for each of the other Underwriters,
to the effect that the opinions delivered pursuant to Sections 5(b),
5(c) and 5(d) appear on their face to be appropriately responsive to
the requirements of this Agreement except, specifying the same, to the
extent waived by you, and with respect to the incorporation and legal
existence of the Company, the Offered Securities, this Agreement, the
Designated Indenture, the Registration Statement, the Prospectus, the
documents incorporated by reference and such other related matters as
you may require. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law
of the State of New York and the federal law of the United States,
upon the opinions of counsel satisfactory to you. Such counsel may
also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of
officers of the Company and the Subsidiaries and certificates of
public officials.
(f) At the Closing Time, (i) the Registration Statement
and the 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 the 1939 Act and the 1939 Act Regulations, and neither
the Registration Statement nor the Prospectus, as they may then be
amended or supplemented, shall contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company shall have no liability for any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter, directly or through you, expressly for use in the
Registration Statement or Prospectus, (ii) there shall not have been,
since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary
<PAGE> 16
16
course of business, (iii) no action, suit or proceeding at law or in
equity shall be pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary that would be
required to be set forth in the Prospectus other than as set forth
therein and no proceedings shall be pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary before
or by any federal, state or other commission, board or administrative
agency wherein an unfavorable decision, ruling or finding could
materially adversely affect the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, other than as set
forth in the Prospectus, (iv) the Company shall have complied with and
satisfied all conditions on its part under this Agreement to be
performed and satisfied at or prior to the Closing Time and (v) the
other representations and warranties of the Company set forth in
Section 1(a) shall be accurate as though expressly made at and as of
the Closing Time. At the Closing Time, you shall have received a
certificate of the Chairman, the President, a Vice President or the
Treasurer, of the Company, dated as of the Closing Time, to such
effect.
(g) You shall have received the letter or letters
specified in Sections 1 and 2 of Exhibit D at the date hereof and the
letter specified in Section 3 of Exhibit D hereto at the Closing Time.
(h) Between the date of this Agreement and the Closing
Time, (i) no downgrading shall have occurred in the rating accorded to
any of the Company's debt securities or preference or preferred stock
by Standard & Poor's 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.
(i) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such documents, certificates and
opinions as they may request for the purpose of enabling them to pass
upon the issuance and sale of the Offered Securities as herein
contemplated and the matters referred to in Section 5(e) and in order
to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment
of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Offered Securities as herein
contemplated
<PAGE> 17
17
shall be satisfactory in form and substance to the Underwriters and to
counsel for the Underwriters.
(j) If listing is specified in Schedule II, the
Securities shall have been duly authorized for listing by the New York
Stock Exchange, subject only to official notice of issuance and notice
of a satisfactory distribution.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement to be fulfilled,
this Agreement may be terminated by you on notice to the Company at any time at
or prior to the Closing Time, and such termination shall be without liability
of any party to any other party, except as provided in Section 4.
Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
shall remain in effect.
Section 6. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of an untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including all
documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of an untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; 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
<PAGE> 18
18
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus supplement or the Prospectus (or any
amendment or supplement thereto); and provided further, however, that this
indemnity, as to any preliminary prospectus supplement, shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any loss, claim, damage, liability or litigation arising from the
sale of Offered Securities to any person by such Underwriter if such
Underwriter failed to send or give a copy of the Prospectus, as the same may be
supplemented or amended, to such person within the time required by the 1933
Act, and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact in such preliminary prospectus supplement
was corrected in the Prospectus, unless such failure resulted from
noncompliance by the Company with Section 3(a).
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in Section 6(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any preliminary
prospectus supplement or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus supplement or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give 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 parties receiving
such notice, may assume the defense of such
<PAGE> 19
19
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action, unless such indemnified party or parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying party or parties shall not be liable
for any fees and expenses of counsel for the indemnified party or parties
incurred thereafter in connection with such action. In no event shall the
indemnifying party or parties be liable for the fees and expenses of more than
one counsel (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.
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,
<PAGE> 20
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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 on the one hand and the Underwriters on the other hand from the
offering of the Offered Securities or (ii) if the allocation provided by clause
(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 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 on the one hand
and the Underwriters on the other hand in connection with the offering of the
Offered Securities shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Offered Securities (before
deducting expenses) received by the Company 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 Offered Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether 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 by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company 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, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
<PAGE> 21
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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 principal amount of Offered Securities set
forth opposite their respective names in Schedule I 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 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 any Underwriter or controlling person and will
survive delivery of and payment for the Offered Securities.
Section 9. Termination of Agreement. (a) You may terminate
this Agreement, by notice to the Company, at any time at or prior to the
Closing Time (i) if there has been, since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not 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 Offered Securities or enforce
contracts for the sale of the Offered Securities or (iii) if trading in any
securities of the Company has been suspended by the Commission or if trading
generally on the New York Stock Exchange or in the over-the-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange
or by order of the Commission or any other governmental authority or (iv) if a
banking moratorium has been declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party, except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
<PAGE> 22
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Section l0. Default. If one or more of the Underwriters
shall fail at the Closing Time to purchase the Offered Securities that it or
they are obligated to purchase (the "Defaulted Offered Securities"), you shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Offered Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, you
have not completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted
Offered Securities does not exceed l0% of the aggregate principal
amount of the Offered Securities to be purchased, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in
the proportions that their respective underwriting obligations bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted
Offered Securities exceeds 10% of the aggregate principal amount of
the Offered Securities to be purchased, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a
termination of this Agreement, either you or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed as set forth in Schedule II.
Notices to the Company shall be directed to it at P.O. Box 281304, Lakewood,
Colorado 80228-8304, Attention of 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.
Section 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company 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 and the Company and their respective successors and the
controlling persons, officers and directors referred to in
<PAGE> 23
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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 and the Company 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 Offered Securities from any Underwriter shall be deemed to be 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 l3. Governing Law and Time. THIS AGREEMENT SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
Section 14. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.
Section l5. 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> 24
24
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Company and the Underwriters in accordance with its terms.
Very truly yours,
K N ENERGY, INC.
By: /s/ E. WAYNE LUNDHAGEN
----------------------------------------
Name: E. Wayne Lundhagen
Title: Vice President & Treasurer
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. MORGAN SECURITIES INC.
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ ANTHONY V. LENESS
-----------------------------------
Authorized Signature
Acting on behalf of itself and
on behalf of the several other
Underwriters named in Schedule I
<PAGE> 25
SCHEDULE I
to
Purchase Agreement
Dated July 23, 1996
$125,000,000
K N ENERGY, INC.
7.35% Debentures due 2026
<TABLE>
<CAPTION>
Principal Amount of
Underwriter Offered Securities
----------- ---------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . . $41,700,000
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . . . . $41,650,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . $41,650,000
</TABLE>
<PAGE> 26
SCHEDULE II
to
Purchase Agreement
Dated July 23, 1996
$125,000,000
K N ENERGY, INC.
7.35% Debentures due August 1, 2026
<TABLE>
<S> <C>
Principal amount to be issued: $125,000,000
Current ratings: Standard & Poor's Ratings Group: BBB+
Moody's Investors Service: A3
Fitch Investors Service, Inc.: A
Interest rate: 7.35%, payable semiannually on February 1 and August 1 of each year, commencing
February 1, 1997
Date of maturity: August 1, 2026
Redemption
provisions: Redeemable, in whole or in part, at the option of the Company at any time after
August 1, 2006, at a redemption price equal to the greater of (i) 100% of their
principal amount and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon, discounted to the date of
redemption on a semiannual basis at the Treasury Yield plus 12.5 basis points,
plus, in each case, accrued interest thereon to the date of redemption.
Redeemable at the option of the registered holders thereof in integral multiples
of $1,000 on August 1, 2006, at a redemption price of 100% of their principal
amount plus accrued interest thereon to the date of redemption.
Sinking fund requirements: None
Initial public offering price: 100% of the principal amount plus accrued interest, if any, from July 26, 1996
</TABLE>
<PAGE> 27
II-2
<TABLE>
<S> <C>
Purchase price: 99.35% of the principal amount plus accrued interest, if any, from July 26, 1996
Closing date, time and location: July 26, 1996 at 10:00 a.m., New York City time, at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022
Delayed delivery contracts: None
Listing requirement: None
Book-entry arrangements: Authorized
Payment: Wire transfer of immediately available funds
Other terms and conditions: None
</TABLE>
<PAGE> 28
EXHIBIT A
to
Purchase Agreement
Dated July 23, 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 Designated Indenture has been duly authorized,
executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the original Trustee,
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting enforcement of
creditor's rights generally or by the provisions of Article Tenth of
the Restated Articles of Incorporation of the Company and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(iii) The Offered Securities have been duly authorized by
the Company and, assuming that any Offered Securities not represented
by a Global Security (as defined in the Indenture) have been duly
signed by the facsimile signature of an officer specified in Section
202 of the Indenture, the facsimile seal of the Company has been
reproduced thereon and duly attested by the facsimile signature of the
Secretary or an Assistant Secretary of the Company, and assuming that
the Offered Securities have been authenticated by the Trustee in the
manner described in its certificate delivered to you at the Closing
Time (which assumptions such counsel need not verify by an inspection
of the Offered Securities), the Offered Securities have been duly
executed, issued and delivered by the Company and constitute or, in
the case of Offered Securities, if any, to be delivered pursuant to
Delayed Delivery Contracts, when duly executed and authenticated as
provided in the Designated Indenture and issued, delivered and paid
for in accordance with such Delayed Delivery Contracts, will
constitute, valid and binding obligations of the Company entitled to
the benefits of the Designated Indenture and enforceable against the
Company in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally or
by the provisions of Article Tenth of the Restated Articles of
Incorporation of the Company and except as enforcement thereof is
subject to general
<PAGE> 29
A-2
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).
(iv) In the event that any of the Offered Securities are
to be purchased pursuant to Delayed Delivery Contracts, each Delayed
Delivery Contract that has been executed by the Company has been duly
authorized, executed and delivered by the Company and, assuming the
due authorization, execution and delivery by the purchaser thereunder,
is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting enforcement of creditors' rights
generally or by the provisions of Article Tenth of the Restated
Articles of Incorporation of the Company and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law).
(v) The Designated Indenture has been duly qualified
under the 1939 Act.
(vi) The Offered Securities and the Designated Indenture
conform in all material respects as to legal matters to the
descriptions thereof contained in the Prospectus.
(vii) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(viii) No authorization, approval, consent or license of any
federal or State of Texas government, governmental instrumentality or
court (other than under the 1933 Act, the 1939 Act and the securities
or blue sky laws of the various states), is required for the valid
authorization, issuance, sale and delivery of the Offered Securities.
(ix) The execution and delivery by the Company of the
Purchase Agreement, the Designated Indenture and any Delayed Delivery
Contracts, the issuance and delivery of the Offered Securities, the
consummation by the Company of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Company with the terms of the Purchase Agreement and the
Designated Indenture do not and will not result in any violation of
the charter or by-laws of the Company.
(x) The Registration Statement, 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
<PAGE> 30
A-3
no proceedings for that purpose have been instituted or are pending or
are threatened under the 1933 Act.
(xi) 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 and
geological data included therein or omitted therefrom and the
Statement of Eligibility and Qualification of the Trustee on Form T-l,
as to which such counsel need express no opinion), as of their
respective effective or issue dates, comply as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and the Designated Indenture filed with the Commission
complies as to form in all material respects with the requirements of
the 1939 Act and the 1939 Act Regulations.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the
Prospectus (other than the documents incorporated by reference therein) and
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
representatives of your legal counsel and representatives of the Underwriters
at which the contents of the Registration Statement and the Prospectus and
related matters were discussed. Such counsel shall also state that although
such counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus except as stated above and except as
they relate to such counsel, such counsel advises you that, on the basis of the
foregoing, no facts have come to such counsel's attention which lead such
counsel to believe that (A) the Registration Statement or any amendments
thereto (other than the financial statements and other financial and geological
information included or incorporated by reference therein and the Statement of
Eligibility and Qualification of the Trustee on Form T-l 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, 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
<PAGE> 31
A-4
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 (e) 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> 32
EXHIBIT B
to
Purchase Agreement
Dated July 23, 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) All of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable; all of such shares are owned by the
Company, directly or through one or more subsidiaries, free and clear
of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind; no holder thereof is subject to personal
liability by reason of being such a holder and none of such shares was
issued in violation of the preemptive rights of any stockholder of the
Subsidiaries.
(v) To the knowledge of such counsel, neither the Company
nor any Subsidiary is in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in
any contract, indenture, loan agreement, note, lease or other
agreement or instrument that is described or referred
<PAGE> 33
B-2
to in the Registration Statement or the Prospectus or filed as an
exhibit to the Registration Statement.
(vi) The execution and delivery by the Company of the
Purchase Agreement, the Designated Indenture and any Delayed Delivery
Contracts, the issuance and delivery of the Offered Securities, the
consummation by the Company of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by
the Company with the terms of the Purchase Agreement and the
Designated Indenture do not and will not result in any violation of
the charter or by-laws of the Company or any Subsidiary, and do not
and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary under (A) any
indenture, mortgage or loan agreement, or any other agreement or
instrument known to such counsel, to which the Company or any
Subsidiary is a party or by which it may be bound or to which any of
its properties may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise), (B) any existing
applicable law, rule or regulation (other than the securities or blue
sky laws of the various states, as to which such counsel need express
no opinion), or (C) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, known to
such counsel having jurisdiction over the Company or any Subsidiary or
any of its properties.
(vii) The documents incorporated by reference in the
Prospectus (except for the financial statements and other financial 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.
(viii) Such counsel does not know of any statutes or
regulations, or any pending or threatened legal or governmental
proceedings, required to be described in the Prospectus that are not
described as required, nor of any contracts or documents of a
character required to be described or referred to in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described, referred to or filed as
required.
<PAGE> 34
B-3
(ix) The descriptions in the Prospectus of the statutes,
regulations, legal or governmental proceedings, contracts and other
documents therein described (other than the Offered Securities, the
Designated Indenture and the Purchase Agreement, as to which such
counsel need express no opinion) are accurate and fairly summarize the
information required to be shown.
(x) The Public Utilities Commission of Colorado and the
Public Service Commission of Wyoming have duly authorized the issue
and sale of the Offered Securities; such authorizations are, to the
best of such counsel's knowledge, still in full force and effect and
are sufficient for the issue and sale of the Offered Securities; the
issue and sale of the Offered Securities are in conformity with the
terms of such authorizations; and no other authorization, approval,
consent or license of any governmental instrumentality or court,
domestic or foreign (other than the 1933 Act, the 1939 Act and the
securities or blue sky laws of the various states), is required for
the valid authorization, issuance, sale and delivery of the Offered
Securities, or, if so required, all such authorizations, approvals,
consents and licenses specifying the same, have been obtained and are,
to the best of such counsel's knowledge, in full force and effect.
(xi) The Company and its Subsidiaries hold all requisite
Certificates of Public Convenience and Necessity from the Federal
Energy Regulatory Commission to enable them to carry on the respective
businesses in which they are engaged.
(xii) To the knowledge of such counsel, after due inquiry,
no person or corporation which is a "holding company" or a "subsidiary
of a holding company", within the meaning of such terms as defined in
the Public Utility Holding Company Act of 1935, directly or indirectly
owns, controls or holds with power to vote 10% or more of the
outstanding voting securities of the Company; and the Company is not a
"holding company" or to the knowledge of such counsel, after due
inquiry, a "subsidiary of a holding company" as so defined.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement and the
Prospectus (including the documents incorporated by reference therein) and
participated in conferences with representatives of the independent public
accountants for the Company, representatives of your legal counsel and
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were discussed. Such counsel
shall also state that although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus 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
<PAGE> 35
B-4
statements and other financial and geological information included or
incorporated by reference therein and the Statement of Eligibility and
Qualification of the Trustee on Form T-l 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 l0-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, 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 Designated 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 (e) 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> 36
EXHIBIT C
to
Purchase Agreement
Dated July 23, 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 Offered 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 Offered Securities.
In lieu of the opinion referred to in clause (i) above, the
legal opinion of local counsel in the State of Kansas shall cover the matters
set forth in clause (i) of Exhibit A to the Purchase Agreement, as well as the
due authorization of the Purchase Agreement, the Designated Indenture and the
Offered Securities.
<PAGE> 37
EXHIBIT D
to
Purchase Agreement
Dated July 23, 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 l0-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 "l0-Q Letter") filed prior to the date hereof and
subsequent to the Company's most recently filed annual report on Form
l0-K, each to the effect that:
<PAGE> 38
D-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 l0-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 D,
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> 39
D-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 l0-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 D (but carried out to
the specified date referred to in Section 3(a) of Exhibit D),
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 l0% 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> 40
D-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 l0-K Letter and a l0-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 l0-K
pursuant to Sections 1 and 2 of this Exhibit D, Arthur Andersen LLP may furnish
to you a single letter, dated the date of the Purchase Agreement, to the effect
provided in Sections 1(a) and (b) and 2(b) of this Exhibit D 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 l0-K Letter and any 10-Q Letter in this Exhibit D shall be
deemed to be references to such single letter.
<PAGE> 41
EXHIBIT E
to
Purchase Agreement
Dated July 23, 1996
K N ENERGY, INC.
Debt Securities
DELAYED DELIVERY CONTRACT
K N Energy, Inc.
P.O. Box 281304
Lakewood, Colorado 80228-8304
Dear Sirs:
The undersigned hereby agrees to purchase from K N Energy,
Inc., a Kansas corporation (the "Company"), and the Company agrees to sell to
the undersigned on ______, 199_ (the "Delivery Date"), ________________________
______________________________________________________________________________
principal amount of the Company's [Title of Offered Securities] (the "Offered
Securities"), offered by the Company's Prospectus dated November 30, 1993, as
supplemented by its Prospectus Supplement dated __________, 199_, receipt of
which is hereby acknowledged, at a purchase price of ___% of the principal
amount thereof, plus interest accrued on the principal amount at the rate borne
by the Offered Securities from ___________, 199_ to the Delivery Date, and on
the further terms and conditions set forth in this contract.
Payment for the Offered Securities shall be made to the
Company or its order by immediately available funds, at the offices of Shearman
& Sterling, 599 Lexington Avenue, New York, New York, at 10:00 A.M., New York
City time, on the Delivery Date (or in such other funds and at such other place
as the Company and the undersigned may agree upon in writing), upon delivery of
the Offered Securities to the undersigned, in such authorized denominations and
registered in such names as the undersigned may request in writing addressed to
the Company not less than five business days prior to the Delivery Date.
The obligation of the Company to issue and deliver, and of the
undersigned to take delivery of and make payment for, the Offered Securities on
the Delivery Date shall be subject only to the conditions that (1) the purchase
of the Offered Securities by the undersigned shall not, on the Delivery Date,
be prohibited under the laws of any jurisdiction to which the undersigned is
subject and that govern such investment, and (2) the Company,
<PAGE> 42
E-2
on or before ______________, 199_, shall have sold to the Underwriters of the
Offered Securities (the "Underwriters") such principal amount of the Offered
Securities as is to be sold to them pursuant to the Purchase Agreement dated
the date hereof between the Company and the Underwriters. Promptly after
completion of the sale to the Underwriters, the Company will mail or deliver to
the undersigned, at its address set forth below, a notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered to
the Underwriters in connection therewith. The obligation of the undersigned to
take delivery of and make payment for the Offered Securities shall not be
affected by the failure of any Underwriter or other purchaser to take delivery
of and make payment for the Offered Securities pursuant to other contracts
similar to this contract.
By the execution hereof, the undersigned represents and
warrants to the Company that (1) its investment in the Offered Securities is
not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and that govern such investment, (2) all
necessary corporate action for the due execution and delivery of this contract
and the payment for and purchase of the Offered Securities has been taken by it
and no further authorization or approval of any governmental or other
regulatory authority is required for such execution, delivery, payment or
purchase and (3) upon the acceptance by the Company and the mailing or delivery
of a copy as provided below, this contract will constitute a valid and binding
agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed
Delivery Contracts for an aggregate principal amount of the Offered Securities
in excess of $__________ and that the acceptance of any Delayed Delivery
Contract is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company sign the form of
acceptance on a copy hereof and mail or deliver a signed copy to the
undersigned at its address set forth below. This will become a binding
contract between the Company and the undersigned when such copy is so mailed or
delivered.
<PAGE> 43
E-3
This contract shall be governed by the laws of the State of
New York.
Yours very truly,
---------------------------------------
[Name of Purchaser]
By
------------------------------------
Title
---------------------------------------
---------------------------------------
(Address)
Accepted as of the date
first above written:
K N Energy, Inc.
By
----------------------------
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the
purchaser with whom details of delivery on the Delivery Date may be discussed
is as follows: (Please print.)
<TABLE>
<CAPTION>
Telephone No.
Name (including Area Code)
---- ---------------------
<S> <C>
</TABLE>
<PAGE> 44
ANNEX A
SIGNIFICANT SUBSIDIARIES OF K N ENERGY, INC.
K N Gas Gathering Inc., a Colorado corporation
K N Gas Marketing, Inc., a Colorado corporation
K N Interstate Gas Transmission Co., a Colorado corporation
Northern Gas Company, a Wyoming corporation
Rocky Mountain Natural Gas Company, a Colorado corporation
American Oil & Gas Corporation, a Delaware corporation
<PAGE> 1
EXHIBIT 1.2
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN SUCH LIMITED CIRCUMSTANCES.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Company
or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
K N ENERGY, INC.
7.35% Debentures due August 1, 2026
No. BE-1 CUSIP No. 482620 AP6
K N ENERGY, INC., a corporation duly organized and existing under the
laws of the State of Kansas (herein called the "Company", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED TWENTY FIVE MILLION DOLLARS ($125,000,000) on
August 1, 2026, and to pay interest thereon from July 26, 1996 or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semiannually in arrears on August 1 and February 1 in each year,
commencing February 1, 1997, at the rate of 7.35% per annum, until the
principal hereof is fully paid or made available for full payment. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the January 15 or July 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
<PAGE> 2
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be then listed, and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security shall be made at the Corporate Trust Office of the Trustee in Chicago,
Illinois, or at such other office or agency of the Company as it may designate
for such purpose pursuant to the Indenture hereinafter referred to, in such
immediately available funds of the United States of America as at the time of
payment are legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security
set forth below, which further provisions shall for all purposes have the same
effect as if set forth in this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to below by manual signature of an authorized officer,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: July 26, 1996
K N ENERGY, INC.
By: /s/ E. W. Lundhagen
-------------------------------
Vice President
ATTEST:
/s/ Martha B. Wyrsch
- ----------------------------
Secretary
-2-
<PAGE> 3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------------------
Authorized Officer
-3-
<PAGE> 4
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of November 20, 1993 (herein called
the "Indenture"), between the Company and First Trust of Illinois, National
Association, as successor Trustee (herein called the "Trustee", which term
includes any additional successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitation of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is a Book-Entry Security
representing the entire principal amount of the series designated on the face
hereof, limited in aggregate principal amount to $125,000,000.
The Securities of this series shall be subject to redemption upon not
less than 30 nor more than 45 days' prior notice by first-class mail, as a
whole or in part, at the option of the Company at any time after August 1,
2006, at a Redemption Price equal to the greater of (i) 100% of their principal
amount or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (disregarding the Holders' optional
redemption right referred to below) discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Yield plus 12.5 basis points, plus in each case accrued
interest to the Redemption Date. For purposes of the preceding sentence,
"Treasury Yield" means, with respect to any Redemption Date, the rate per annum
equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. "Comparable Treasury Issue" means the United States
Treasury security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Securities of this series to
be redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Securities.
"Independent Investment Banker" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firm is unwilling or unable to select the Comparable
Treasury Issue, an independent investment banking institution of national
standing appointed by the Trustee. "Comparable Treasury Price" means, with
respect to any Redemption Date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption Date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Redemption Date.
-4-
<PAGE> 5
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc. and Smith Barney Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
Any Holder of Securities of this series shall have the right to
require the Company to redeem all or any portion (in integral multiples of
$1,000) of such Holder's Securities on August 1, 2006 (the "Put Redemption
Date"), at a Redemption Price of 100% of their principal amount plus accrued
interest thereon to the Put Redemption Date. In order to exercise such an
election, a Holder must deliver to the Trustee, at its Corporate Trust Office
in Chicago, Illinois, the Security as to which an election is being made,
together with a duly signed and completed notice of election in the form
attached hereto to have such Security, or a portion thereof, redeemed by the
Company. Such Security and such notice of exercise of a redemption option must
be delivered to the Trustee no earlier than July 1, 2006 and no later than July
15, 2006. Once made, the exercise of a redemption option by a Holder shall be
irrevocable. Such option may be exercised with respect to less than the entire
principal amount of a Security, but any such redemption in part must be in
integral multiples of $1,000. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any Security for
redemption pursuant to this paragraph shall be determined by the Company, whose
determination shall be final and binding.
In the event of redemption of this Security in part only, subject to
arrangements with the Depository, a new Security or Securities of this series
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
The Securities of this series shall not be subject to a sinking fund
requirement.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the unpaid principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all the Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults
-5-
<PAGE> 6
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series shall have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities of this series a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days; provided, however, that such limitations shall not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of (or premium, if any) or interest on this Security on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
This Security shall be exchangeable for Securities of this series
registered in the names of Persons other than the Depository with respect to
such series or its nominee only as provided in this paragraph. This Security
shall be so exchangeable if (x) such Depository notifies the Company that it is
unwilling or unable to continue as Depository for this Security or if at any
time such Depository ceases to be a clearing agency registered as such under
the Securities Exchange Act of 1934, (y) the Company executes and delivers to
the Trustee a written order providing that this Security shall be so
exchangeable or (z) there shall have occurred and be continuing an Event of
Default with respect to the Securities of this series. Securities so issued in
exchange for this Security shall be of the same series and of like tenor, in
authorized denominations and in the aggregate having the same unpaid principal
amount as this Security and registered in such names as such Depository shall
direct.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon on or more new Securities of
this series, and of like tenor, of authorized denominations and for the same
aggregate unpaid principal amount, shall be issued to the designated transferee
or transferees. At the date of the original issuance of this Security, such
office or agency of the Company is maintained by First
-6-
<PAGE> 7
Trust of Illinois, National Association, at 400 N. Michigan Avenue, Floor 25,
Chicago, Illinois 60611.
No service charge shall be made for any such exchange or registration
of transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on this Security as a convenience to the Holder hereof. No
representation is made as to the accuracy of such number and reliance may be
placed only on the other identifying information printed hereon.
Interest on this Security shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
-7-
<PAGE> 8
ASSIGNMENT FORM
I or we assign and transfer this Security to
------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
- --------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
--------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
----------------------- -------------------------------
(Sign exactly as name appears
above or on the other side of
this Security)
Signature Guarantee:
------------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
-8-
<PAGE> 9
NOTICE OF ELECTION OF HOLDER TO ELECT REDEMPTION
To: First Trust of Illinois,
National Association, Trustee
400 N. Michigan Avenue, Floor 25
Chicago, Illinois 60611
If you want to elect to have this Security purchased by the Company on
the Put Redemption Date, check box below:
[ ]
If you want to elect to have only part of this Security purchased by
the Company on the Put Redemption Date, state the amount (in integral multiples
of $1,000): $____________.
Dated: Signed:
----------------------- -------------------------------
(Sign exactly as name appears
above or on the other side of
this Security)
Signature Guarantee:
------------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
-9-
