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Securities And Exchange Commission
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported) March 4, 1998
K N ENERGY, INC.
(Exact name of registrant as specified in its charter)
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KANSAS 1-6446 48-0290000
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) Number)
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370 VAN GORDON STREET
P.O. BOX 281304
LAKEWOOD, COLORADO 80228-8304
(Address of principal executive offices)
(303) 989-1740
(Registrant's telephone number, including area code)
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Item 5. Other Events
Pursuant to the terms and conditions of Underwriting Agreements each
dated March 4, 1998, among K N Energy, Inc. (the "Registrant") and Morgan
Stanley & Co. Incorporated, BancAmerica Robertson Stephens, Chase Securities
Inc., Lehman Brothers Inc., J.P. Morgan Securities Inc. and NationsBanc
Montgomery Securities LLC as Lead Managers of the several underwriters, the
Registrant will issue on or about March 9, 1998, $500,000,000 aggregate
principal amount of its 6.45% Senior Notes Due 2003 (the "2003 Senior Notes"),
$500,000,000 aggregate principal amount of its 6.65% Senior Notes Due 2005 (the
"2005 Senior Notes"), $300,000,000 aggregate principal amount of its 6.80%
Senior Notes Due 2008 (the "2008 Senior Notes" and, together with the 2003
Senior Notes and the 2005 Senior Notes, the "Senior Notes"), $500,000,000
aggregate principal amount of its 7.25% Senior Debentures Due 2028 (the "2028
Senior Debentures"), $150,000,000 aggregate principal amount of its 7.45% Senior
Debentures Due 2098 (the "2098 Senior Debentures" and, together with the 2028
Senior Debentures, the "Senior Debentures") and $400,000,000 aggregate
principal amount of its 6.30% Reset Put Securities (REPS(SM)) Due 2021 (the
"2021 REPS" and, together with the Senior Notes and Senior Debentures, the "Debt
Securities").
Pursuant to the terms and conditions of an Underwriting Agreement dated
March 4, 1998, among the Registrant and Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Petrie Parkman & Co., Inc.
and Smith Barney Inc. as representatives of the several U.S. Underwriters and
Morgan Stanley & Co. International Limited, Merrill Lynch International, Petrie
Parkman & Co., Inc. and Smith Barney Inc. as representatives of the several
International Underwriters, the Registrant will issue on or about March 10,
1998, 11,000,000 shares of common stock, $5.00 par value (the "Common Stock"),
subject to the U.S. Underwriters' over-allotment option of 1,650,000 shares of
Common Stock.
Item 7. Exhibits
Exhibit 1.1 Underwriting Agreement Standard Provisions (Debt
Securities), dated March 4, 1998.
Exhibit 1.2 Underwriting Agreement for the 2003 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens, Chase
Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities LLC
as Lead Managers of the several underwriters named
therein.
Exhibit 1.3 Underwriting Agreement for the 2005 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens, Chase
Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities LLC
as Lead Managers of the several underwriters named
therein.
Exhibit 1.4 Underwriting Agreement for the 2008 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated,
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3
BancAmerica Robertson Stephens, Chase Securities Inc.,
Lehman Brothers Inc., J.P. Morgan Securities Inc. and
NationsBanc Montgomery Securities LLC as Lead Managers of
the several underwriters named therein.
Exhibit 1.5 Underwriting Agreement for the 2028 Senior Debentures,
dated March 4, 1998, among the Registrant and Morgan
Stanley & Co. Incorporated, BancAmerica Robertson
Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery
Securities LLC as Lead Managers of the several
underwriters named therein.
Exhibit 1.6 Underwriting Agreement for the 2098 Senior Debentures,
dated March 4, 1998, among the Registrant and Morgan
Stanley & Co. Incorporated, BancAmerica Robertson
Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery
Securities LLC as Lead Managers of the several
underwriters named therein.
Exhibit 1.7 Underwriting Agreement for the 2021 REPS, dated March
4, 1998, among the Registrant and Morgan Stanley & Co.
Incorporated, BancAmerica Robertson Stephens, Chase
Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities LLC
as Lead Managers of the several underwriters named
therein.
Exhibit 1.8 Underwriting Agreement (Common Stock), dated March 4,
1998, among the Registrant and Morgan Stanley & Co.
Incorporated, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Petrie Parkman & Co., Inc. and Smith Barney
Inc. as representatives of the several U.S. Underwriters
and Morgan Stanley & Co. International Limited, Merrill
Lynch International, Petrie Parkman & Co., Inc. and Smith
Barney Inc. as representatives of the several
International Underwriters.
Exhibit 4.1 Form of 2003 Senior Note.
Exhibit 4.2 Form of 2005 Senior Note.
Exhibit 4.3 Form of 2008 Senior Note.
Exhibit 4.4 Form of 2028 Senior Debenture.
Exhibit 4.5 Form of 2098 Senior Debenture.
Exhibit 4.6 Form of 2021 REPS.
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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.
(Registrant)
By: /s/ Martha B. Wyrsch, Esq.
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Name: Martha B. Wyrsch, Esq.
Title: Vice President, General
Counsel and Secretary
Date: March 6, 1998
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Exhibit Index
Exhibits to Form 8-K
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Number in
Exhibit Table Exhibit
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1.1 Underwriting Agreement Standard Provisions (Debt
Securities), dated March 4, 1998.
1.2 Underwriting Agreement for the 2003 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens,
Chase Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities
LLC as Lead Managers of the several underwriters named
therein.
1.3 Underwriting Agreement for the 2005 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens,
Chase Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities
LLC as Lead Managers of the several underwriters named
therein.
1.4 Underwriting Agreement for the 2008 Senior Notes, dated
March 4, 1998, among the Registrant and Morgan Stanley
& Co. Incorporated, BancAmerica Robertson Stephens,
Chase Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities
LLC as Lead Managers of the several underwriters named
therein.
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1.5 Underwriting Agreement for the 2028 Senior Debentures,
dated March 4, 1998, among the Registrant and Morgan
Stanley & Co. Incorporated, BancAmerica Robertson
Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery
Securities LLC as Lead Managers of the several
underwriters named therein.
1.6 Underwriting Agreement for the 2098 Senior Debentures,
dated March 4, 1998, among the Registrant and Morgan
Stanley & Co. Incorporated, BancAmerica Robertson
Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery
Securities LLC as Lead Managers of the several
underwriters named therein.
1.7 Underwriting Agreement for the 2021 REPS, dated March 4,
], 1998, among the Registrant and Morgan Stanley & Co.
Incorporated, BancAmerica Robertson Stephens, Chase
Securities Inc., Lehman Brothers Inc., J.P. Morgan
Securities Inc. and NationsBanc Montgomery Securities
LLC as Lead Managers of the several underwriters named
therein.
1.8 Underwriting Agreement (Common Stock), dated March 4,
1998, among the Registrant and Morgan Stanley & Co.
Incorporated, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Petrie Parkman & Co., Inc. and Smith
Barney Inc. as representatives of the several U.S.
Underwriters and Morgan Stanley & Co. International
Limited, Merrill Lynch International, Petrie Parkman &
Co., Inc. and Smith Barney Inc. as representatives of
the several International Underwriters.
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Exhibit 4.1 Form of 2003 Senior Note.
Exhibit 4.2 Form of 2005 Senior Note.
Exhibit 4.3 Form of 2008 Senior Note.
Exhibit 4.4 Form of 2028 Senior Debenture.
Exhibit 4.5 Form of 2098 Senior Debenture.
Exhibit 4.6 Form of 2021 REPS.
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[CONFORMED COPY]
K N ENERGY, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
March 4, 1998
From time to time, K N ENERGY, INC., a Kansas corporation (the "COMPANY"),
may enter into one or more underwriting agreements that provide for the sale of
designated securities to the several underwriters named therein. The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (an "UNDERWRITING AGREEMENT"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this "Agreement". Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The registration statement relating to the Debt
Securities also constitutes post-effective amendment number 2 to registration
statement no. 333-40869 (the "FIRST PRIOR REGISTRATION STATEMENT") and post-
effective amendment number 1 to registration statement no. 333-04385 (the
"SECOND PRIOR REGISTRATION STATEMENT"). The registration statement as amended at
the date of this Agreement, including information, if any, deemed to be part of
the registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act, together with the First Prior Registration Statement
and the Second Prior Registration Statement is hereinafter referred to as the
"REGISTRATION STATEMENT." The term "BASIC PROSPECTUS" means the prospectus
included in the Registration Statement. The term "PROSPECTUS" means the Basic
Prospectus
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together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms
"Registration Statement," "Basic Prospectus," "Prospectus" and "preliminary
prospectus" shall include in each case the documents, if any, incorporated by
reference therein. The terms "SUPPLEMENT," "AMENDMENT" and "AMEND" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of the Basic Prospectus by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). If the Company has filed an abbreviated
registration statement to register additional Debt Securities pursuant to Rule
462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then
any reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement. Concurrently with the offering of
the Offered Securities, the Company intends to offer, together with and
including the Offered Securities, up to 12,650,000 shares of Common Stock (the
"EQUITY OFFERING"). The Equity Offering and the offerings of the Offered
Securities are not conditioned upon each other.
On January 30, 1998, the Company acquired from Occidental Petroleum
Corporation ("OCCIDENTAL") all of the capital stock of MidCon Corp. ("MIDCON")
and a short term note in the aggregate principal amount of $1.39 billion for
$2.1 billion in cash and another short-term note in the aggregate principal
amount of $1.39 billion (the "ACQUISITION"). Upon the consummation of the
Acquisition, MidCon became a wholly owned subsidiary of the Company. MidCon,
MidCon Texas Pipeline Operator, Inc. and Natural Gas Pipeline Company of America
are referred to herein as "SIGNIFICANT MIDCON SUBSIDIARIES". K N Gas Gathering,
Inc., K N Interstate Gas Transmission Co. and K N Services Inc. are referred to
herein as "SIGNIFICANT COMPANY SUBSIDIARIES". The "Significant MidCon
Subsidiaries" and the "Significant Company Subsidiaries" are collectively
referred to herein as "SIGNIFICANT SUBSIDIARIES".
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
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and the applicable rules and regulations of the Commission thereunder,
(ii) on the original effective date of the Registration Statement, and at
the time of filing of the Company's annual report on Form 10-K for the
year ended December 31, 1997, the Registration Statement did not contain,
and, as amended or supplemented, if applicable, will not contain, any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement and the Prospectus
comply, and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply
(A) to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to
the Company in writing by such Underwriter through the Manager or its
counsel expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) under
the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"),
of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the state of Kansas, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) Each Significant Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of
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the issued shares of capital stock of each such Significant Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) Each of the Calculation Agency Agreement and the Securities
Purchase Option Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws relating to or affecting creditors'
rights generally and general principles of equity.
(g) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company
and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(h) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance
with the terms of the Underwriting Agreement, will be entitled to the
benefits of the Indenture, and will be valid and binding obligations of
the Company, in each case enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or similar laws
relating to or affecting creditors' rights generally and general
principles of equity.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Calculation Agency Agreement, the Securities Purchase Option Agreement,
the Indenture and the Offered Securities will not contravene any provision
of applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or
any of its Significant Subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any Significant Subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
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under this Agreement, the Indenture or the Offered Securities, except the
registration of the Offered Securities under the Securities Act and such
as have been obtained or may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Offered Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its subsidiaries
is subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or the documents incorporated
therein by reference or to be filed as an exhibit to the Registration
Statement that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries are in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and are in compliance with all terms and
conditions of any such permit, license or approval, except where such
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noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) 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.
(p) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities, including, without limitation, the Federal
Energy Regulatory Commission, necessary to conduct their respective
businesses as described in the Prospectus, except when the failure to
possess such certificates, authorizations or permits would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(q) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly in
all material respects the financial position and results of operations of
the entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout
the periods involved, except as otherwise stated therein.
(r) The pro forma financial statements of the Company, and the
related notes thereto, included in the Prospectus present fairly in all
material respects the pro forma financial position of the Company, as of
the dates indicated and the results of their operations for the periods
specified; the pro forma combined financial information, and the related
notes thereto, included in the Prospectus has been prepared in accordance
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with the applicable requirements of the Exchange Act and is based upon
good faith estimates and assumptions believed by the Company to be
reasonable.
(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and
its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other than
ordinary and customary dividends; and there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as
described in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
2. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Offered Securities as soon after this Agreement has been entered into as
in the Manager's judgment is advisable. The terms of the public offering of the
Offered Securities are set forth in the Prospectus.
3. Payment and Delivery. Payment for the Offered Securities shall be made
to the Company in Federal or other funds immediately available in New York City
at the time and place set forth in the Underwriting Agreement, upon delivery to
the Manager for the respective accounts of the several Underwriters of the
Offered Securities registered in such names and in such denominations as the
Manager shall request in writing not less than one full business day prior to
the date of delivery, with any transfer taxes payable in connection with the
transfer of the Offered Securities to the Underwriters duly paid.
4. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters are subject to the following conditions:
(a) no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the Securities Act and no
proceedings for that purpose shall have been instituted or shall be
pending or, to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel for the Underwriters.
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(b) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that is with negative
implications, in the rating accorded any of the Company's securities
by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that makes it,
in the judgment of the Manager, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the
Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by each of the chief
executive officer and the chief financial officer of the Company, to the
effect set forth in Section 4(b)(i) and to the effect that the
representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
(d) The Underwriters shall have received on the Closing Date an
opinion or opinions of Simpson Thacher & Bartlett, outside counsel for the
Company, to the effect set forth in Exhibit A-1, an opinion of Martha
Wyrsch, Esq., Vice President, General Counsel and Secretary of the
Company, to the effect set forth in Exhibit A-2, and an opinion of
Polsinelli, White, Vardeman & Shalton, Kansas counsel to the Company, to
the effect set forth in Exhibit A-3, in each case, dated the Closing Date.
Such opinions shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
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(e) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated the
Closing Date, in form and substance satisfactory to the Underwriters.
(f) The Underwriters shall have received on the date hereof and on
the Closing Date letters, dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to the Underwriters,
from Arthur Andersen LLP, the Company's independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information relating to each of
the Company and MidCon contained in or incorporated by reference in the
Registration Statement and the Prospectus; provided that such letters
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date of the Underwriting Agreement.
5. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish to the Manager, without charge, eight signed copies
of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to the Manager in New
York City, without charge, prior to 10:00 AM New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 5(b) below, as many copies of the Prospectus,
any documents incorporated by reference therein and any supplements and
amendments thereto or to the Registration Statement as the Manager may
reasonably request.
(b) During the period in which the Prospectus is required by law to
be delivered in connection with the sale of the Offered Securities, before
amending or supplementing the Registration Statement or the Prospectus
(including by filing any document that would as a result thereof be
incorporated by reference in the Prospectus), to furnish to you a copy of
each such proposed amendment, supplement or other document and not to file
any such proposed amendment, supplement or other document to which you
reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
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(c) If, during such period after the first date of the public
offering of the Offered Securities as in the reasonable opinion of counsel
for the Underwriters or counsel for the Company the Prospectus is required
by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Underwriters or counsel for the Company, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its
own expense, to the Underwriters and to the dealers (whose names and
addresses the Manager will furnish to the Company) to which Offered
Securities may have been sold by the Manager on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to the Company's security holders
and to the Manager as soon as practicable an earning statement that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase or otherwise acquire debt securities of
the Company substantially similar to the Offered Securities (other than
(i) the Offered Securities and (ii) commercial paper issued in the
ordinary course of business), without the prior written consent of the
Manager.
(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection
10
<PAGE> 11
with the registration and delivery of the Offered Securities under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Offered Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky memorandum in connection
with the offer and sale of the Offered Securities under state securities
law and all expenses in connection with the qualification of the Offered
Securities for offer and sale under state law as provided in Section 5(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters, if any,
incurred in connection with the review and qualification of the offering
of the Offered Securities by the National Association of Securities
Dealers, Inc., (v) any fees charged by the rating agencies for the rating
of the Offered Securities, (vi) if applicable, all costs and expenses
incident to listing the Offered Securities on any national securities
exchanges and foreign stock exchanges, (vii) the cost of printing
certificates representing the Offered Securities, (viii) the costs and
charges of any trustee, transfer agent, registrar or depositary, (ix) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the
offering of the Offered Securities, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection
with the road show, and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 6 entitled
"Indemnification and Contribution", and the last paragraph of Section 8
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, transfer taxes payable
on resale of any of the Offered Securities by them and any advertising
expenses connected with any offers they may make.
11
<PAGE> 12
6. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriters through the Manager or
its counsel expressly for use therein; provided however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Offered Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of sale of the Offered Securities to such person, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section 5(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager or its counsel expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 6(a) or 6(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
12
<PAGE> 13
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to Section 6(a) above, and by the Company, in the case of parties
indemnified pursuant to Section 6(b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for reasonable fees and expenses of counsel as contemplated by the second and
third sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 6(a) or 6(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
13
<PAGE> 14
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (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 6(d)(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 6(d)(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, claims, damages or liabilities, 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 net proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover of the Prospectus Supplement, bear to the aggregate public offering
price of the Offered Securities. 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 the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company (including information relating to MidCon)
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this Section
6 are several in proportion to the respective principal amounts of Offered
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 6(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, 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 that such Underwriter has otherwise
been required to pay by reason of such untrue or
14
<PAGE> 15
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 6
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Securities.
7. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
the New York Stock Exchange or the National Association of Securities Dealers,
Inc., (ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses 7(a)(i) through
7(a)(iv), such event, singly or together with any other such event, makes it, in
the judgment of the Manager, impracticable to market the Offered Securities on
the terms and in the manner contemplated in the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase Offered Securities that it has
or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of the Offered Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Offered Securities set forth opposite
their respective names in the Underwriting Agreement bears to the aggregate
principal amount of Offered Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Manager may
specify, to purchase the Offered Securities which such defaulting Underwriter or
Underwriters agreed but failed or
15
<PAGE> 16
refused to purchase on such date; provided that in no event shall the principal
amount of Offered Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 8 by an amount
in excess of one-ninth of such principal amount of Offered Securities without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Offered Securities
and the aggregate principal amount of Offered Securities with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Manager and the Company for the purchase of such Offered Securities are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case either the Manager or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
9. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
10. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
16
<PAGE> 17
EXHIBIT A-1
OPINION OF OUTSIDE COUNSEL
FOR THE COMPANY
The opinion of Simpson Thacher & Bartlett, outside counsel for the
Company to be delivered pursuant to Section 4(d) of the Underwriting Agreement,
shall be to the effect that:
(i) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued or proceeding for that purpose has
been instituted or threatened by the Commission;
(ii) The Indenture has been duly qualified under the Trust
Indenture Act and, assuming the Indenture has been duly authorized, executed and
delivered by the Company and the Trustee, constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principal of equity;
(iii) Assuming the Offered Securities have been duly authorized,
executed and delivered by the Company and duly authenticated by the Trustee, and
upon payment and delivery thereof in accordance with the Underwriting Agreement,
the Offered Securities will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture;
(iv) Assuming the Calculation Agency Agreement and the Securities
Purchase Option Agreement have been duly authorized, executed and delivered by
the parties thereto, each of such agreements constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity;
(v) The issue and sale of the Offered Securities, and the
compliance by the Company with all of the provisions of the Underwriting
Agreement, the Calculation Agency Agreement, the Securities Purchase Option
Agreement and the Indenture, will not violate any federal or New York statute or
any rule or
<PAGE> 18
regulation that has been issued pursuant to any federal or New York statute or
any order known by such counsel issued pursuant to any federal or New York
statute by any court or governmental agency or body or court having jurisdiction
over the Company or any of its subsidiaries or any properties, and no consent,
approval, authorization or order, registration, or qualification of or with, any
federal or New York governmental body or agency or, to our knowledge, any
federal or New York court is required for the issue and sale of the Offered
Securities by the Company and the compliance by the Company with all of the
provisions of this Agreement, the Indenture or the Offered Securities, except
for registration under the Act of the Offered Securities and such as may be
required by the securities or Blue Sky laws of the various states in connection
with the purchase and distribution of the Offered Securities;
(vi) The statements in the Prospectus under the caption
"Description of Offered Securities" insofar as they purport to constitute
summaries of the terms of the Offered Securities, constitute accurate summaries
of the terms of such Offered Securities in all material respects;
(vii) The statements made in the Prospectus under the caption
"Certain United States Federal Income Tax Considerations," insofar as they
purport to constitute summaries of matters of United States federal tax law and
regulations or legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material respects;
(viii) The Company is not an "investment company" within the meaning
of, and subject to regulation under, the Investment Company Act of 1940, as
amended; and
(ix) Such counsel (A) is of the opinion that the Registration
Statement, as of its effective date, and Prospectus, as of the date of the
Underwriting Agreement, (except for financial statements and schedules and other
financial data included therein as to which such counsel need not express any
opinion) comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (B) has no
reason to believe that (except for financial statements and schedules and other
financial data as to which such counsel need not express any belief) the
Registration Statement at the time the Registration Statement became effective
or 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 the Prospectus, at the
time the Prospectus Supplement was issued contained or contains any untrue
statements of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (C) has no reason to believe that (except for financial
statements and schedules and other financial or statistical
A-1-2
<PAGE> 19
data as to which such counsel need not express any belief) the Prospectus at the
time the Prospectus Supplement was issued or at the Closing Date contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
A-1-3
<PAGE> 20
EXHIBIT A-2
OPINION OF GENERAL COUNSEL OF THE COMPANY
The opinion of Martha B. Wyrsch, Esq., Vice President, General Counsel
and Secretary of the Company, to be delivered pursuant to Section 4(c) of the
Underwriting Agreement, shall be to the effect that:
A. Each of the Company and the Significant Subsidiaries (i) is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business, except where
the failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, and (ii)
holds all material approvals, authorizations, orders, licenses, certificates and
permits from governmental authorities necessary for the conduct of its business
as described in the Prospectus, except where the failure to hold such approvals,
authorizations, orders, licenses, certificates and/or permits would not,
singularly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
B. Each of the Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is incorporated, with full corporate power
and authority to own its properties and conduct its business as described in the
Prospectus 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, taken as
a whole;
C. All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all of such shares are owned by the Company either directly or
through one or more subsidiaries free and clear of any pledge, security
interest, claims, lien or other encumbrance;
D. 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
<PAGE> 21
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described, referred to or filed as required;
E. The descriptions included in or incorporated by reference in
the Prospectus of the statutes, regulations, legal or governmental proceedings,
contracts and other documents therein described are accurate and fairly
summarize the matters referred to therein;
F. No consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the Company or any
subsidiary for the consummation of the transactions contemplated herein in
connection with the purchase and sale of the Offered Securities by the
Underwriters, except such approvals (specified in such opinion) as have been
obtained;
G. The execution and delivery by the Company of the Underwriting
Agreement, the Calculation Agency Agreement, the Securities Purchase Option
Agreement and the Indenture, the issuance and delivery of the Offered
Securities, the consummation by the Company of the transactions contemplated
therein and compliance by the Company with the terms of the Underwriting
Agreement do not and will not result in any violation of the charter or by-laws
of the Company or any Significant Company Subsidiary, or to the best of such
counsel's knowledge, after due inquiry, any Significant MidCon 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 asset of the
Company or any Significant Company Subsidiary or to the best of such counsel's
knowledge, after due inquiry, any Significant MidCon 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 Significant Subsidiary is a
party or by which it may be bound or to which any of its properties may be
subject, (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 Significant Subsidiary or
any of its properties (except, in the case of subclauses (A) and (B) hereof, 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 the transactions contemplated
by the Underwriting Agreement);
A-2-2
<PAGE> 22
H. Each of the Underwriting Agreement, the Indenture, the
Calculation Agency Agreement and the Securities Purchase Option Agreement has
been duly executed and delivered by the Company.
I. The Offered Securities in global form have been duly executed
and delivered by the Company.
J. The Company and the Significant Company Subsidiaries and, to
the knowledge of such counsel (after due inquiry), the Significant MidCon
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;
K. To the knowledge of such counsel (after due inquiry), none of
the Company or any Significant Subsidiary is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the Registration
Statement or Prospectus or filed as an exhibit to the Registration Statement;
L. 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; and
M. The documents incorporated by reference in the Prospectus
(except for the consolidated financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such counsel
need express no opinion), 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, complied as to form in all material respects with the
requirements of the Exchange Act and the regulations thereunder.
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 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,
A-2-3
<PAGE> 23
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 statement and other
financial or statistical information included or incorporated by reference
therein as to which such counsel need not comment and except for that part of
the Registration Statement that constitutes the Form T-1 heretofore referred),
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
Underwriting 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 or statistical information included or incorporated by reference
therein as to which such counsel need not comment and except for that part of
the Registration Statement that constitutes the Form T-1 heretofore referred),
at the time the Prospectus Supplement was issued or at the Closing Date
contained or contains an untrue statement of a material fact or omitted or omits
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.
In rendering such opinions, such counsel may (A) state that her opinion
is limited to the laws of the State of Colorado and the federal laws of the
United States and (B) rely as to matters involving the application of laws of
any jurisdiction other than the State of Colorado or the United States, to the
extent deemed proper and specified in such opinion, upon the opinions of
Polsinelli, White, Vardeman & Shalton and other local counsel of good standing
believed to be reliable and who are satisfactory to counsel for the Underwriters
and as to matters of fact, to the extent deemed proper, on certificates of
responsible officers of the Company and public officials.
A-2-4
<PAGE> 24
EXHIBIT A-3
OPINION OF KANSAS COUNSEL OF THE COMPANY
The opinion of Polsinelli, White, Vardeman & Shalton, Kansas counsel to
the Company, to be delivered pursuant to Section 4(c) of the Underwriting
Agreement, shall be to the effect that:
A. The Company is duly incorporated, validly existing, and in
good standing under the laws of the State of Kansas, with corporate power and
authority under such laws to own its properties and conduct its business as
described in the Prospectus.
B. The execution and delivery of each of the Indenture, the
Calculation Agency Agreement, the Securities Purchase Option Agreement and the
Underwriting Agreement have been duly authorized by all necessary corporate
action of the Company.
C. The execution and delivery of the Offered Securities have been
duly authorized by all necessary corporate action of the Company.
D. No approval, authorization, consent or other action (other
than under the securities or blue sky laws of the State of Kansas) is required
by any regulatory authority or governmental body of the State of Kansas for the
valid issuance, sale, and delivery by the Company of the Offered Securities
pursuant to the Underwriting Agreement and to the best of our knowledge, do not
result in any breach or violation of any judgment, order or decree of any
governmental body, agency or court located in Kansas having jurisdiction over
the Company.
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $500 million aggregate initial
offering price of its 6.45% senior notes due 2003 (the "DEBT SECURITIES"). (The
Debt Securities are also referred to herein as the "OFFERED SECURITIES"). The
Debt Securities will be issued pursuant to the provisions of an Indenture dated
as of November 20, 1993 (the "INDENTURE") between the Company and First Trust
National Association, as Trustee (the "TRUSTEE"), as supplemented.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 99.222% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $100,000,000
BancAmerica Robertson Stephens $80,000,000
Chase Securities Inc. $80,000,000
Lehman Brothers Inc. $80,000,000
J.P. Morgan Securities Inc. $80,000,000
NationsBanc Montgomery Securities LLC $80,000,000
-------------
Total.......................................... $500,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2003
Interest Rate: 6.45%
Redemption Provisions: None
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
2
<PAGE> 3
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
3
<PAGE> 4
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
-------------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
-----------------------------
E. Wayne Lundhagen
Vice President and Treasurer
4
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $500 million aggregate initial
offering price of its 6.65% senior notes due 2005 (the "DEBT SECURITIES"). (The
Debt Securities are also referred to herein as the "OFFERED SECURITIES"). The
Debt Securities will be issued pursuant to the provisions of an Indenture dated
as of November 20, 1993 (the "INDENTURE") between the Company and First Trust
National Association, as Trustee (the "TRUSTEE"), as supplemented.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 99.130% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $100,000,000
BancAmerica Robertson Stephens $80,000,000
Chase Securities Inc. $80,000,000
Lehman Brothers Inc. $80,000,000
J.P. Morgan Securities Inc. $80,000,000
NationsBanc Montgomery Securities LLC $80,000,000
------------
Total........................................ $500,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2005
Interest Rate: 6.65%
Redemption Provisions: None
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
2
<PAGE> 3
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
3
<PAGE> 4
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
----------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
------------------------------
E. Wayne Lundhagen
Vice President and Treasurer
4
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $300 million aggregate initial
offering price of its 6.80% senior notes due 2008 (the "DEBT SECURITIES"). (The
Debt Securities are also referred to herein as the "OFFERED SECURITIES"). The
Debt Securities will be issued pursuant to the provisions of an Indenture dated
as of November 20, 1993 (the "INDENTURE") between the Company and First Trust
National Association, as Trustee (the "TRUSTEE"), as supplemented.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 99.102% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $60,000,000
BancAmerica Robertson Stephens $48,000,000
Chase Securities Inc. $48,000,000
Lehman Brothers Inc. $48,000,000
J.P. Morgan Securities Inc. $48,000,000
NationsBanc Montgomery Securities LLC $48,000,000
------------
Total.............................................. $300,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2008
Interest Rate: 6.80%
Redemption Provisions: Redeemable in whole or in part,
at the option of the Company at
any time, at redemption prices
as set forth in the form of note
security representing the Debt
Securities
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
2
<PAGE> 3
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
3
<PAGE> 4
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
------------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
----------------------------
E. Wayne Lundhagen
Vice President and Treasurer
4
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $500 million aggregate initial
offering price of its 7.25% senior debentures due 2028 (the "OFFERED
SECURITIES"). The Debt Securities will be issued pursuant to the provisions of
an Indenture dated as of November 20, 1993 (the "INDENTURE") between the Company
and First Trust National Association, as Trustee (the "TRUSTEE") as
supplemented.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 98.909% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $100,000,000
BancAmerica Robertson Stephens $80,000,000
Chase Securities Inc. $80,000,000
Lehman Brothers Inc. $80,000,000
J.P. Morgan Securities Inc. $80,000,000
NationsBanc Montgomery Securities LLC $80,000,000
------------
Total............................................. $500,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2028
Interest Rate: 7.25%
Redemption Provisions: Redeemable in whole or in part,
at the option of the Company at
any time, at redemption prices
as set forth in the form of note
security representing the Debt
Securities
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
2
<PAGE> 3
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
3
<PAGE> 4
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
-----------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
-------------------------------
E. Wayne Lundhagen
Vice President and Treasurer
4
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $150 million aggregate initial
offering price of its 7.45% senior debentures due 2098 (the "DEBT SECURITIES").
(The Debt Securities are also referred to herein as the "OFFERED SECURITIES").
The Debt Securities will be issued pursuant to the provisions of an Indenture
dated as of November 20, 1993 (the "INDENTURE") between the Company and First
Trust National Association, as Trustee (the "TRUSTEE"), as supplemented.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 98.371% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $30,000,000
BancAmerica Robertson Stephens $24,000,000
Chase Securities Inc. $24,000,000
Lehman Brothers Inc. $24,000,000
J.P. Morgan Securities Inc. $24,000,000
NationsBanc Montgomery Securities LLC $24,000,000
------------
Total............................................... $150,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2098
Interest Rate: 7.45%
Redemption Provisions: Redeemable in whole or in part,
at the option of the Company at
any time, at redemption prices
as set forth in the form of note
security representing the Debt
Securities
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
2
<PAGE> 3
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
3
<PAGE> 4
Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
-----------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
---------------------------
E. Wayne Lundhagen
Vice President and Treasurer
4
<PAGE> 1
UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
370 Van Gordon Street
Lakewood, CO 80228-8304
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $400 million aggregate initial
offering price of its 6.30% REPS due 2021 (the "DEBT SECURITIES"). (The Debt
Securities are also referred to herein as the "OFFERED SECURITIES"). The Debt
Securities will be issued pursuant to the provisions of an Indenture dated as of
November 20, 1993 (the "BASE INDENTURE") between the Company and First Trust
National Association, as Trustee (the "TRUSTEE"), as supplemented by a
supplemental indenture dated as of March 9, 1998 (the "SUPPLEMENTAL INDENTURE"
and, together with the Base Indenture, the "INDENTURE") between the Company and
the Trustee.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 99.579% of the principal amount of
Debt Securities:
<PAGE> 2
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated $80,000,000
BancAmerica Robertson Stephens $64,000,000
Chase Securities Inc. $64,000,000
Lehman Brothers Inc. $64,000,000
J.P. Morgan Securities Inc. $64,000,000
NationsBanc Montgomery Securities LLC $64,000,000
------------
Total....................................................... $400,000,000
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York,
NY 10017 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2021 (subject to "Call
Option; Mandatory Put" below)
Interest Rate: 6.30%
2
<PAGE> 3
Call Option; Mandatory Put: On March 1, 2003 holders of
the Debt Securities will be
entitled to receive 100% of the
principal amount thereof either
(i) through the exercise of a call
option, as provided for in the
Supplemental Indenture or (ii)
in the event the call option is
not exercised or the call price is
not paid, the automatic exercise
of a mandatory put to the
Company by the Trustee on
behalf of the holders of Debt
Securities, as provided for in
the Supplemental Indenture.
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
If at any time when a Prospectus is required by the Securities Act to be
delivered in connection with any sale of the Offered Securities by a Callholder,
any Dealer or any of their affiliates following any exercise of the Call Option,
any event shall occur or condition shall exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Callholder or any such
Dealer or for the Company, to amend any Registration Statement or amend or
supplement any Prospectus or Prospectus Supplement in order that such Prospectus
or Prospectus Supplement will not include any untrue statement of 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 such
counsel, at any such time to amend
3
<PAGE> 4
any Registration Statement or file a new registration statement or amend or
supplement any Prospectus or issue a new Prospectus or Prospectus Supplement in
order to comply with the requirements of the Securities Act or the SEC's
interpretations of the Securities Act, the Company shall prepare and file with
the SEC such amendment or supplement as may be necessary to correct such
statement or omission or to make any such Registration Statement or any such
Prospectus or Prospectus Supplement comply with such requirements, or prepare
and file any such new registration statement and prospectus as may be necessary
for such purpose, and furnish to such Callholder or any such Dealer such number
of copies of such amendment, supplement, Prospectus or other documents as they
may reasonably request. In addition, the Company shall, if at any time when a
Prospectus is required by the Securities Act to be delivered in connection with
any sale of the applicable principal amount of Offered Securities by a
Callholder or any Dealer or any of their affiliates following the exercise by
such Callholder of its Call Option, (i) execute and deliver or cause to be
executed and delivered legal documentation (including a purchase agreement or
underwriting agreement and registration rights agreement with customary
indemnities, covenants, representations and warranties, comfort letters and
legal opinions) in form and substance reasonably satisfactory to such Callholder
or Dealer, (ii) provide promptly upon request updated consolidated financial
statements to the date of its latest report filed with the SEC and (iii) to the
extent the Company and the Callholder or applicable Dealer deem reasonably
necessary for successful completion of the Coupon Reset Process, make available
senior management of the Company for road show and one-on-one presentations.
Terms used in this paragraph and not otherwise defined shall have the meaning
ascribed to them in the Calculation Agency Agreement dated as of March 9, 1998
between the Company and Morgan Stanley & Co. Incorporated, as Calculation Agent.
Assignment of Call Option
(a) In consideration for the sum of $11,800,000, the Company hereby
irrevocably assigns to Morgan Stanley & Co. International Limited (the
"CALLHOLDER") all of the Company's right, title and interest in, to and under
the Call Option (as defined in the Indenture). The Callholder may at any time
assign its rights and obligations under its Call Option to an affiliate;
provided that (i) such rights and obligations are assigned in whole and not in
part and (ii) it provides the Trustee and the Company with notice of such
assignment contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as Callholder for such Call
Option for all purposes. The Callholder may assign its rights under its Call
Option without notice to, or consent of, the holders of the Notes to which the
Call Option corresponds.
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<PAGE> 5
(b) The Company agrees that it will not take any action that is
inconsistent with such assignment and that it will, from time to time upon the
request of the Trustee, execute all instruments of further assurance and all
such supplemental instruments with respect to such assignment as the Trustee may
specify.
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<PAGE> 6
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
BANCAMERICA ROBERTSON STEPHENS
LEHMAN BROTHERS INC.
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Harold J. Hendershot III
---------------------------------
Harold J. Hendershot III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Wayne Lundhagen
-------------------------------
E. Wayne Lundhagen
Vice President and Treasurer
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<PAGE> 7
Accepted by Assignee of Call Option assigned hereunder:
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: /s/ Barry D. Kupferberg
--------------------------------
Barry D. Kupferberg
Principal
7
<PAGE> 1
11,000,000 SHARES
K N ENERGY, INC.
COMMON STOCK
(PAR VALUE $5.00 PER SHARE)
UNDERWRITING AGREEMENT
March 4, 1998
<PAGE> 2
March 4, 1998
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Petrie Parkman & C ., Inc.
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Morgan Stanley & Co. International Limited
Merrill Lynch International
Petrie Parkman & Co., Inc.
Smith Barney Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs and Mesdames:
K N Energy, Inc., a Kansas corporation, proposes to issue and sell to
the several Underwriters (as defined below) an aggregate of 11,000,000 shares of
its common stock, par value $5.00 per share (the "FIRM SHARES").
It is understood that, subject to the conditions hereinafter stated,
9,500,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and 1,500,000 Firm Shares (the "INTERNATIONAL SHARES") will be sold to the
several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Morgan Stanley & Co. Incorporated, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Petrie Parkman
& Co., Inc. and Smith Barney Inc. shall act as representatives (the "U.S.
1
<PAGE> 3
REPRESENTATIVES") of the several U.S. Underwriters, and Morgan Stanley & Co.
International Limited, Merrill Lynch International, Petrie Parkman & Co., Inc.
and Smith Barney Inc. shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the "UNDERWRITERS."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 1,650,000 shares of its common stock,
par value $5.00 per share, of the Company (the "ADDITIONAL SHARES") if and to
the extent that the U.S. Representatives shall have determined to exercise, on
behalf of the U.S. Underwriters, the right to purchase such shares of common
stock granted to the U.S. Underwriters in Section 2 hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "SHARES."
The shares of common stock, par value $5.00 per share, of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK." The Shares will have attached thereto rights
(the "RIGHTS") issued pursuant to a Rights Agreement (the "RIGHTS AGREEMENT")
dated as of August 21, 1995 between the Company and The Bank of New York, as
Rights Agent.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"SECURITIES ACT"), a registration statement on Form S-3 (registration no.
333-44421), including a related prospectus, relating to the registration of
certain shares of Common Stock including the Shares and the related Rights and
certain debt and other securities (the "SHELF SECURITIES"), to be sold from time
to time by the Company. Such registration statement also constitutes
post-effective amendment number 2 to registration statement no. 333-40869 (the
"FIRST PRIOR REGISTRATION STATEMENT") and post-effective amendment number 1 to
registration statement no. 333-04385 (the "SECOND PRIOR REGISTRATION
STATEMENT"). The registration statement as amended at the date of this
Agreement, including information, if any, deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act, together with the First Prior Registration Statement and the
Second Prior Registration Statement is hereinafter referred to as the
"REGISTRATION STATEMENT" and the prospectus included therein relating to the
Shelf Securities, in the form first used to confirm sales of the Shares, is
hereinafter referred to as the "BASIC PROSPECTUS." The Basic Prospectus, as
supplemented by the prospectus supplement dated March 4, 1998 (the "PROSPECTUS
SUPPLEMENT"), relating to the Shares, in the form first used to confirm sales of
the Shares is hereinafter referred to as the "PROSPECTUS". If the Company has
filed an abbreviated registration statement pursuant to Rule 462(b)
2
<PAGE> 4
under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any
reference herein to the term "Registration Statement" shall be deemed to include
such rule 462 Registration Statement. Any reference to the term Registration
Statement, the Basic Prospectus or the Prospectus shall include the documents
incorporated therein by reference. The terms "SUPPLEMENT" and "AMENDMENT" or
"AMEND" as used in this Agreement shall include all documents subsequently filed
by the Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), that are deemed to be incorporated by
reference in the Prospectus. Concurrently with the offering of Shares, the
Company intends to offer $2.35 billion aggregate principal amount of senior
notes of varying maturities (the "DEBT OFFERINGS"). The offering of Shares and
the Debt Offerings are not conditioned upon each other.
On January 30, 1998, the Company acquired from Occidental Petroleum
Corporation ("OCCIDENTAL") all of the capital stock of MidCon Corp. ("MIDCON")
and a short-term note in the aggregate principal amount of $1.39 billion for
$2.1 billion in cash and another short-term note in the aggregate principal
amount of $1.39 billion (the "ACQUISITION"). Upon the consummation of the
Acquisition, MidCon became a wholly owned subsidiary of the Company. MidCon,
MidCon Texas Pipeline Operator, Inc. and Natural Gas Pipeline Company of America
are referred to herein as "SIGNIFICANT MIDCON SUBSIDIARIES". K N Gas Gathering,
Inc., K N Interstate Gas Transmission Co. and K N Services Inc. are referred to
herein as "SIGNIFICANT COMPANY SUBSIDIARIES". The "SIGNIFICANT MIDCON
SUBSIDIARIES" and the "SIGNIFICANT COMPANY SUBSIDIARIES" are collectively
referred to herein as "SIGNIFICANT SUBSIDIARIES".
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) on the original effective date of the Registration
Statement and at the time of the filing of the Company's annual report
on Form 10-K for the year ended December 31, 1997, the Registration
Statement did not contain and, as amended or supplemented, if
applicable, will not contain, any untrue statement of a material fact
or omit to state a material fact required to be
3
<PAGE> 5
stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter or its counsel
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the state
of Kansas, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each Significant Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; all of the issued shares of capital
stock of each Significant Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable and, except as
otherwise set forth in the Prospectus, are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
4
<PAGE> 6
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(i) The Rights Agreement has been duly authorized, executed
and delivered by the Company; the Rights have been duly authorized by
the Company and, when issued upon issuance of the Shares, will be
validly issued, and the shares of Class B Junior Participating Series
Preferred Stock issuable upon exercise of the Rights have been duly
authorized by the Company and validly reserved for issuance, and when
issued upon the exercise of the Rights in accordance with the terms of
the Rights Agreement, will be validly issued, fully paid and
non-assessable.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its Significant
Subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
Significant Subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, except the registration of the Shares under the
Securities Act and such as have been obtained or as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
5
<PAGE> 7
(l) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or the documents incorporated therein by reference or to be
filed as an exhibit to the Registration Statement that are not
described or filed as required.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(n) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(o) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(p) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
6
<PAGE> 8
(q) 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.
(r) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities, including, without limitation, the
Federal Energy Regulatory Commission, necessary to conduct their
respective businesses as described in the Prospectus, except when the
failure to possess such certificates, authorizations or permits would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(s) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly
in all material respects the financial position and results of
operations of the entities purported to be shown thereby, at the dates
and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as otherwise stated
therein.
(t) The pro forma financial statements of the Company, and the
related notes thereto, included in the Prospectus present fairly in all
material respects the pro forma financial position of the Company, as
of the dates indicated and the results of their operations for the
periods specified; the pro forma combined financial information, and
the related notes thereto, included in the Prospectus has been prepared
in accordance with the applicable requirements of the Exchange Act and
is based upon good faith estimates and assumptions believed by the
Company to be reasonable.
(u) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the
Company
7
<PAGE> 9
and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (ii) the Company
has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $49.97 a share (the "PURCHASE PRICE") the number of Firm Shares set
forth in Schedules I and II hereto opposite the name of such Underwriter.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 1,650,000
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the final prospectus
supplement included in the Prospectus, (i) register, offer, pledge, sell,
contract to sell, sell any
8
<PAGE> 10
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock pursuant to, or the grant of
options under the Company's existing stock option, employee benefit or dividend
reinvestment plans, (C) the issuance of shares of Common Stock by the Company in
connection with future acquisitions provided that the recipients of such shares
agree to be bound by the transfer restrictions set forth herein or (D) the
issuance of securities contemplated by the Additional Offerings (as described in
the Prospectus).
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
$52.00 a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that represents a concession not in excess of $1.25 a share under
the Public Offering Price, and that any Underwriter may allow, and such dealers
may reallow, a concession, not in excess of $0.10 a share, to any Underwriter or
to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares to be sold by the
Company shall be made to the Company in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on the fourth business day after the date of this Agreement, or at such
other time on the same or such other date, not later than 9 business days after
the date of this Agreement as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several U.S.
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than 10 business days after expiration of the green
shoe
9
<PAGE> 11
option as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the following further conditions:
(a) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
and no proceedings for that purpose shall have been instituted or shall
be pending or, to your knowledge or the knowledge of the Company, shall
be contemplated by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that is with negative implications, in the rating accorded any
of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that,
10
<PAGE> 12
in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date, and signed by each of the chief
executive officer and the chief financial officer of the Company, to
the effect set forth in Section 5(b)(i) above and to the effect that
the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
(d) The Underwriters shall have received on the Closing Date
an opinion or opinions of Simpson Thacher & Bartlett, outside counsel
for the Company, to the effect set forth in Exhibit A-1, an opinion of
Martha Wyrsch, Esq., Vice President, General Counsel and Secretary of
the Company, to the effect set forth in Exhibit A-2, and an opinion of
Polsinelli, White, Vardeman & Shalton, Kansas counsel to the Company,
to the effect set forth in Exhibit A-3, in each case dated as of the
Closing Date. Such opinions shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
(e) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date, in form and substance satisfactory to the
Underwriters.
(f) The Underwriters shall have received on each of the date
hereof and on the Closing Date letters, dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Arthur Andersen LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information relating to each of the Company and MidCon contained in or
incorporated by reference in the Registration Statement and the
Prospectus; provided that the letters delivered on the Closing Date
shall use a "cut-off" date not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and the executive officers and
directors of the Company relating to sales and certain other
dispositions of shares of
11
<PAGE> 13
Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, six signed copies of
the Registration Statement (including exhibits and documents
incorporated by reference thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned
in Section 6(d) below, as many copies of the Prospectus and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request.
(b) During the period in which the Prospectus is required by
law to be delivered in connection with sales of the Shares, before
amending or supplementing the Registration Statement or the Prospectus,
(including by filing any document that would as a result thereof be
incorporated by reference in the Prospectus) to furnish to you a copy
of each such proposed amendment, supplement or other document and not
to file any such proposed amendment, supplement or other document to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) During the period when the Prospectus is required by law
to be delivered in connection with sales of the Shares, to file
promptly all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(d) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of counsel for the
Underwriters or counsel for the Company the Prospectus is required by
law to be
12
<PAGE> 14
delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if, in the
reasonable opinion of counsel for the Underwriters or counsel for the
Company, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements
to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so
that the Prospectus, as amended or supplemented, will comply with law.
(e) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to maintain such qualifications for as long as
the Underwriters shall reasonably request.
(f) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(g) To comply with all rules and regulations of the New York
Stock Exchange in respect of the listing of the Shares and to use its
best efforts to cause the Shares to be eligible for trading thereon.
(h) For a period of five years after the Closing Date, to
furnish to you and, upon request, to each Underwriter, copies of all
annual reports, quarterly reports and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as
may be designated by the Commission, and such other documents, reports
and information as shall be furnished by the Company to its
stockholders generally.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
13
<PAGE> 15
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky memorandum in connection with the
offer and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(c) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters, if any, incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all fees and expenses, if any, in connection with
the preparation and filing of the registration statement on Form 8-A relating to
the Common Stock and all costs and expenses incident to listing the Shares on
the NYSE, (vi) the cost of printing certificates representing the Shares, (vii)
the costs and charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged
in connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution", and
the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action
14
<PAGE> 16
or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you or through your counsel expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 6(a)
hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the officers of the
Company who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriters, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through you or through your counsel expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of
15
<PAGE> 17
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated in the case of parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (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 Shares or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable
16
<PAGE> 18
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(d)(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, claims, damages
or liabilities, 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 Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. 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 the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company (including information relating
to MidCon) or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Shares they
have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
17
<PAGE> 19
(f) The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
any person controlling the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, the New York
Stock Exchange or the National Association of Securities Dealers, Inc., (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 9(a)(i) through 9(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is
18
<PAGE> 20
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case you shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. If, on the Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
19
<PAGE> 21
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
K N Energy, Inc.
By: /s/ E. Wayne Lundhagen
--------------------------------
E. Wayne Lundhagen
Vice President and Treasurer
Accepted as of the date hereof
MORGAN STANLEY & CO.
INCORPORATED
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
PETRIE PARKMAN & CO., INC.
SMITH BARNEY INC.
Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule I
hereto.
By: MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Barry D. Kupferberg
-----------------------
Barry D. Kupferberg
Principal
20
<PAGE> 22
MORGAN STANLEY & CO.
INTERNATIONAL LIMITED
MERRILL LYNCH INTERNATIONAL
PETRIE PARKMAN & CO., INC.
SMITH BARNEY INC.
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: MORGAN STANLEY & CO.
INTERNATIONAL LIMITED
By: /s/ Barry D. Kupferberg
-----------------------
Barry D. Kupferberg
Principal
21
<PAGE> 23
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
U.S. UNDERWRITERS TO BE PURCHASED
- -------------------------------------------------------------- ---------------------
<S> <C>
Morgan Stanley & Co. Incorporated............................. 1,835,000
Merrill Lynch, Pierce, Fenner & Smith 1,835,000
Incorporated.........................................
Petrie Parkman & Co., Inc..................................... 1,835,000
Smith Barney Inc.............................................. 1,835,000
CIBC Oppenheimer Corp......................................... 180,000
Credit Suisse First Boston Corporation........................ 180,000
Dain Rauscher Incorporated.................................... 90,000
A.G. Edwards & Sons, Inc...................................... 180,000
Goldman, Sachs & Co........................................... 180,000
Howard, Weil, Labouisse, Friedrichs
Incorporated......................................... 180,000
Jefferies & Company, Inc...................................... 180,000
Edward D. Jones & Co., L.P.................................... 90,000
Lehman Brothers Inc........................................... 180,000
J.P. Morgan Securities Inc.................................... 180,000
PaineWebber Incorporated...................................... 180,000
Prudential Securities Incorporated............................ 180,000
Scotia Capital Markets (USA) Inc. 180,000
---------
Total:............................................... 9,500,000
=========
</TABLE>
<PAGE> 24
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES
INTERNATIONAL UNDERWRITERS TO BE PURCHASED
- --------------------------------------------------------------- ---------------------
<S> <C>
Morgan Stanley & Co. International Limited..................... 325,000
Merrill Lynch International.................................... 325,000
Petrie Parkman & Co., Inc...................................... 325,000
Smith Barney Inc............................................... 325,000
Kleinwort Benson Limited....................................... 100,000
UBS Limited.................................................... 100,000
---------
Total International Firm Shares....................... 1,500,000
=========
</TABLE>
<PAGE> 25
EXHIBIT A
LOCK-UP LETTER
February __, 1998
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Petrie Parkman & Co., Inc.
Smith Barney Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Morgan Stanley & Co. International Limited
Merrill Lynch International
Petrie Parkman & Co., Inc.
Smith Barney Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") and Morgan Stanley & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with K N Energy, Inc., a Kansas corporation (the "COMPANY"), providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Morgan Stanley and MSIL (the "UNDERWRITERS"), of shares (the "SHARES") of the
Common Stock (par value $5.00 per share) of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, the undersigned will not, during the
period commencing on the date of the Underwriting Agreement and ending 90 days
after the date of the
<PAGE> 26
final prospectus supplement relating to the Public Offering (except that none of
the following shall limit the undersigned's rights under any existing stock
option or employee benefit plans (as such plans are in effect on the date
hereof), it being understood that any Common Stock acquired pursuant to such
plans shall otherwise be subject to the terms of this lock-up letter), (1)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise.
The undersigned hereby acknowledges that, notwithstanding the
foregoing, if the undersigned is an individual, he or she may transfer any or
all of his or her shares of Common Stock either during his or her lifetime or on
death by gift, will or intestacy (i) to his or her immediate family, (ii) to a
trust, partnership or other entity, the beneficiaries, partners or equity
holders of which are exclusively the undersigned and/or a member or members of
his or her immediate family or (iii) to his or her alma mater; provided,
however, that in any such case, it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving and
holding the shares of Common Stock subject to the provisions of this lock-up
letter, and there shall be no further transfer of such shares of Common Stock
except in accordance with this lock-up letter. For purposes of this paragraph,
"immediate family" shall mean a lineal descendant, spouse, adopted child,
father, mother, brother or sister of the transferor and the spouses, adopted
children and lineal descendants of any of the foregoing.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------------------
(Name)
----------------------------------------
(Address)
2
<PAGE> 27
EXHIBIT A-1
OPINION OF OUTSIDE COUNSEL FOR
THE COMPANY
The opinion of Simpson Thacher & Bartlett, outside counsel for the
Company to be delivered pursuant to Section 5(d) of the Underwriting Agreement,
shall be to the effect that:
(i) The Registration Statement has become effective under the Act and,
to such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued or proceeding for that purpose has been
instituted or threatened by the Commission;
(ii) The issue and sale of the Shares by the Company and the compliance
by the Company with all of the provisions of the Underwriting Agreement will not
violate any federal or New York statute or any rule or regulation that has been
issued pursuant to any federal or New York statute or any order known to such
counsel issued pursuant to any federal or New York statute by any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or properties, and no consent, approval, authorization or order,
registration, or qualification of or with, any federal or New York governmental
body or agency or, to our knowledge, any federal or New York court is required
for the issue and sale of the Shares by the Company and the compliance by the
Company with all of the provisions of this Agreement, except for registration
under the Act of the Shares and such as may be required by the securities or
Blue Sky laws of the various states in connection with the purchase and
distribution of the Shares by the Underwriters;
(iii) The statements in the Prospectus under the captions "Description
of Capital Stock" insofar as they purport to constitute summaries of the terms
of the Company's capital stock (including the Shares), constitute accurate
summaries of the terms of such capital stock in all material respects;
(iv) The statements made in the Prospectus under the caption "Certain
United States Tax Consequences to Non-U.S. Holders," insofar as they purport to
constitute summaries of matters of United States federal tax law and regulations
or legal conclusions with respect thereto, constitute accurate summaries of the
matters described therein in all material respects;
A-1-1
<PAGE> 28
(v) The Company is not an "investment company" within the meaning of,
or subject to regulation under, the Investment Company Act of 1940, as amended;
and
(vi) Such counsel (A) is of the opinion that the Registration
Statement, as of its effective date, and Prospectus, as of the date of the
Underwriting Agreement, (except for financial statements and schedules and other
financial or statistical data included therein as to which such counsel need not
express any opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (B) has no reason to believe that (except for financial statements
and schedules and other financial or statistical data as to which such counsel
need not express any belief) the Registration Statement at the time the
Registration Statement became effective or on the date of the filing of the
latest annual report on Form 10-K after the initial effective date of the
Registration Statement, contained any untrue statements 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 and (C) has no reason to believe that
(except for financial statements and schedules and other financial or
statistical data as to which such counsel need not express any belief) the
Prospectus at the time the Prospectus Supplement was issued contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
A-1-2
<PAGE> 29
EXHIBIT A-2
OPINION OF GENERAL COUNSEL OF THE COMPANY
The opinion of Martha B. Wyrsch, Esq., Vice President, General Counsel and
Secretary of the Company, to be delivered pursuant to Section 5(d) of the
Underwriting Agreement, shall be to the effect that:
A. Each of the Company and the Significant Subsidiaries (i) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification wherein it owns
or leases material properties or conducts material business, except where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, and (ii) holds all
material approvals, authorizations, orders, licenses, certificates and permits
from governmental authorities necessary for the conduct of its business as
described in the Prospectus, except where the failure to hold such approvals,
authorizations, orders, licenses, certificates and/or permits would not,
singularly or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
B. Each of the Significant Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is incorporated, with full corporate power and
authority to own its properties and conduct its business as described in the
Prospectus 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, taken as
a whole;
C. All the outstanding shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the Prospectus, all of
such shares are owned by the Company either directly or through one or more
subsidiaries free and clear of any pledge, security interest, claim, lien or
other encumbrance;
D. The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus;
E. The shares of Common Stock outstanding prior to the issuance of the
Shares, have been duly authorized and validly issued and are fully paid and
non-assessable and none of the shares of Common Stock (including the Shares) was
issued in violation of the preemptive or other similar rights known to such
counsel of any securityholder of the Company;
A-2-1
<PAGE> 30
F. Each of the Underwriting Agreement and the Rights Agreement has been
duly executed and delivered by the Company;
G. 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;
H. The descriptions included in or incorporated by reference in the
Prospectus of the statutes, regulations, legal or governmental proceedings,
contracts and other documents therein described are accurate and fairly
summarize the matters referred to therein;
I. No consent, approval, authorization or order of any court or
governmental agency or body is required to be obtained by the Company or any
subsidiary for the consummation of the transactions contemplated herein in
connection with the purchase and sale of the Shares by the Underwriters, except
such approvals (specified in such opinion) as have been obtained;
J. The execution and delivery by the Company of the Underwriting
Agreement, the issuance and delivery of the Shares, the consummation by the
Company of the transactions contemplated therein and in the Registration
Statement and compliance by the Company with the terms of the Underwriting
Agreement do not and will not result in any violation of the charter or by-laws
of the Company or any Significant Company Subsidiary, or to the best of such
counsel's knowledge, after due inquiry, any Significant MidCon 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 asset of the
Company or any Significant Company Subsidiary or to the best of such counsel's
knowledge, after due inquiry, any Significant MidCon 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 Significant Subsidiary is a
party or by which it may be bound or to which any of its properties may be
subject, (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 Significant Subsidiary or
any of its properties (except, in the case of subclauses (A) and (B) hereof, for
such conflicts,
A-2-2
<PAGE> 31
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 the transactions contemplated by the
Underwriting Agreement);
K. The Company and the Significant Company Subsidiaries and, to the
knowledge of such counsel (after due inquiry), the Significant MidCon
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;
L. To the knowledge of such counsel (after due inquiry), none of the
Company or any Significant Subsidiary is in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the Registration
Statement or Prospectus or filed as an exhibit to the Registration Statement;
M. 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; and
N. The documents incorporated by reference in the Prospectus (except for
the consolidated financial statements and other financial or statistical data
included therein or omitted therefrom, as to which such counsel need express no
opinion), 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, complied as to form in all material respects with the requirements
of the Exchange Act and the regulations thereunder.
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 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
A-2-3
<PAGE> 32
and the Prospectus except as stated above, such counsel advises you that, on the
basis of the foregoing, no facts have come to such counsel's attention which
lead such counsel to believe that (A) the Registration Statement or any
amendments thereto (other than the financial statements, the Statements of
Eligibility and Qualification of the Trustee on Form T-1s and other financial or
statistical information included or incorporated by reference therein as to
which such counsel need not comment), at the time the Registration Statement
initially became effective, on the effective date of the most recent
post-effective amendment thereto, if any, on the date of the filing of the
latest annual report on Form 10-K after the initial effective date of the
Registration Statement, or on the date of the Underwriting 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 or statistical information
included or incorporated by reference therein as to which such counsel need not
comment), at the time the Prospectus Supplement was issued or at the Closing
Date contained or contains an untrue statement of a material fact or omitted or
omits 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.
In rendering such opinions, such counsel may (A) state that her opinion is
limited to the laws of the State of Colorado, the General Corporation Law of the
State of Delaware and the federal laws of the United States and (B) rely as to
matters involving the application of laws of any jurisdiction other than the
State of Colorado or the United States, to the extent deemed proper and
specified in such opinion, upon the opinions of Polsinelli, White, Vardeman &
Shalton and other local counsel of good standing believed to be reliable and who
are satisfactory to counsel for the Underwriters and as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of the Company
and public officials.
A-2-4
<PAGE> 33
EXHIBIT A-3
OPINION OF KANSAS COUNSEL OF THE COMPANY
The opinion of Polsinelli, White, Vardeman & Shalton, Kansas counsel to
the Company, to be delivered pursuant to Section 5(d) of the Underwriting
Agreement, shall be to the effect that:
A. The Company is duly incorporated, validly existing and in good standing
under the laws of the State of Kansas, with corporate power and authority under
such laws to own its properties and conduct its business as described in the
Prospectus.
B. The Shares have been duly authorized and, when issued and delivered in
accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights arising under the Company's articles
of incorporation or by-laws or under the laws of the State of Kansas.
C. The Underwriting Agreement has been duly authorized by the Company.
D. The Rights Agreement has been duly authorized by the Company; the
Rights have been duly authorized by the Company and, when issued upon issuance
of the Shares, will be validly issued, and the shares of Class B Junior
Participating Series Preferred Stock issuable upon exercise of the Rights have
been duly authorized by the Company and, when issued upon such exercise in
accordance with the terms of the Rights Agreement, will be validly issued, fully
paid and non-assessable; and
E. No approval, authorization, consent or other action (other than under
the securities or blue sky laws of the State of Kansas) is required by any
regulatory authority or governmental body of the State of Kansas for the valid
issuance, sale, and delivery by the Company of the Shares pursuant to the
Underwriting Agreement and to the best of our knowledge, do not result in any
breach or violation of any judgment, order or decree of any governmental body,
agency or court located in Kansas having jurisdiction over the Company.
A-3-1
<PAGE> 34
11,000,000 Shares
K N ENERGY, INC.
Common Stock, Par Value $5.00 Per Share
AGREEMENT AMONG INTERNATIONAL UNDERWRITERS
Exhibit A - Underwriting Agreement
Exhibit B - Agreement Between U.S. and
International Underwriters
Exhibit C - International Dealer Agreement
March 4, 1998
<PAGE> 35
Morgan Stanley & Co. International Limited
Merrill Lynch International
Petrie Parkman & Co., Inc.
Smith Barney, Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs:
We understand that K N Energy, Inc., a Kansas corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below) an
aggregate of 11,000,000 shares (the "FIRM SHARES") of its common stock, par
value $5.00 per share ("COMMON STOCK") pursuant to an underwriting agreement
(the "UNDERWRITING AGREEMENT"), substantially in the form attached hereto as
Exhibit A, with you as representatives (the "INTERNATIONAL REPRESENTATIVES") of
the international underwriters named in Schedule II thereto (the "INTERNATIONAL
UNDERWRITERS"), and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Petrie Parkman & Co., Inc. and Smith Barney Inc. as
representatives (the "U.S. REPRESENTATIVES") of the U.S. underwriters named in
Schedule I thereto (the "U.S. UNDERWRITERS"). The International Underwriters and
the U.S. Underwriters are hereinafter collectively referred to as the
Underwriters.
Of such Firm Shares 1,500,000 shares are to be offered outside the United
States and Canada by the International Underwriters (the "INTERNATIONAL SHARES")
and 9,500,000 shares are to be offered by the U.S. Underwriters in the United
States and Canada (the "U.S. FIRM SHARES").
In addition, the several U.S. Underwriters will have an option to purchase
from the Company an additional 1,650,000 shares (the "ADDITIONAL SHARES") to
provide for over-allotments. The term "U.S. SHARES" shall mean the U.S. Firm
Shares and the Additional Shares. The U.S. Shares and the International Shares
are hereinafter collectively referred to as the Shares.
<PAGE> 36
We further understand that the Company has filed with the U.S. Securities
and Exchange Commission (the "COMMISSION") a registration statement including a
U.S. prospectus and an international prospectus relating to the Shares.
I.
We hereby confirm our agreement with you that the International Shares
shall be purchased by you and the other several International Underwriters,
including ourselves, pursuant to the terms of and as set forth in the
Underwriting Agreement. We further understand that the International
Representatives propose to enter into an agreement with the U.S. Representatives
(the "AGREEMENT BETWEEN U.S. AND INTERNATIONAL UNDERWRITERS"), substantially in
the form attached hereto as Exhibit B, pursuant to Article I of which, and
subject to the conditions thereof, the several International Underwriters,
including ourselves, could become obligated to purchase Shares from, or sell
Shares to, the U.S. Underwriters.
We authorize you (a) to execute and deliver the Underwriting Agreement and
the Agreement Between U.S. and International Underwriters on our behalf in
substantially the forms of Exhibits A and B hereto, respectively, and to make
representations and agreements on our behalf as set forth therein, (b) to vary
the offering terms of the International Shares in effect at any time, including
the offering price, the concession and the reallowance, (c) to agree to the
price at which the International Shares are to be purchased from the Company,
(d) to agree, on our behalf, to any addition to, change in or waiver of any
provision of the Underwriting Agreement (other than a change in the purchase
price of the International Shares and the respective numbers of International
Shares set forth opposite our names in Schedule II thereto) or of the Agreement
Between U.S. and International Underwriters (other than a change in the price at
which the International Underwriters purchase Shares pursuant to Article I
thereof) and (e) to take any other action as may seem advisable to you in
respect of the offering of the International Shares. The number of Shares set
forth opposite each Underwriter's name in Schedule I or in Schedule II of the
Underwriting Agreement (or such amount increased as provided in Section 10 of
the Underwriting Agreement) is hereinafter referred to as the Original Purchase
Obligation of such Underwriter, and the ratio that such Original Purchase
Obligation of any International Underwriter bears to the total number of
International Shares, expressed as a percentage, is hereinafter referred to as
the International Underwriting Percentage of such International Underwriter.
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<PAGE> 37
II.
We authorize you to act as the Lead Managers of the offering by the
International Underwriters of the International Shares outside of the United
States and Canada and to take such action as may seem advisable to you in
respect thereof. The offering of the International Shares is to be made as soon
after the registration statement filed with the Commission relating to the
Shares becomes effective (as then amended, the "REGISTRATION STATEMENT") as in
your judgment and the judgment of the U.S. Representatives is advisable, at the
offering price set forth in, and on the other terms and conditions as you shall
determine in accordance with, the Underwriting Agreement. The offering of the
International Shares is to be made on the terms and conditions to be set forth
in the Underwriting Agreement, the Agreement Between U.S. and International
Underwriters and in the prospectus first used to confirm sales of the
International Shares (the "INTERNATIONAL PROSPECTUS"), whether or not filed
pursuant to Rule 424 under the U.S. Securities Act of 1933, as amended (the
"Act"). During the term of this Agreement, advertisement of the offering outside
of the United States and Canada will be made only by Morgan Stanley & Co.
International Limited. Such advertisement will be made on behalf of the
International Underwriters on such dates and in such countries as Morgan Stanley
& Co. International Limited shall determine.
We authorize Morgan Stanley & Co. International Limited to determine
whether to purchase, and, if such determination is made, to purchase, any Shares
for the account of the International Underwriters pursuant to the Agreement
Between U.S. and International Underwriters. We further authorize Morgan Stanley
& Co. International Limited to determine whether to sell, and, if such
determination is made, to sell, Shares for the account of the International
Underwriters pursuant to such Agreement.
We authorize Morgan Stanley & Co. International Limited to offer or to
sell for our account to dealers selected by it (among whom may be included any
International Underwriter) such Shares purchased by us from the Company or
pursuant to the Agreement Between U.S. and International Underwriters as Morgan
Stanley & Co. International Limited shall determine. Sales of Shares to dealers
shall be made for the account of each International Underwriter approximately in
the proportion that Shares of such International Underwriter held by Morgan
Stanley & Co. International Limited for such sales bear to the total Shares so
held. Such sales shall be made pursuant to dealer agreements substantially in
the form attached as Exhibit C hereto.
We authorize Morgan Stanley & Co. International Limited to offer or sell
for our account to certain persons (other than the persons to whom Shares are
sold pursuant to the terms of the immediately preceding paragraph) such Shares
purchased by us from the Company or pursuant to the Agreement Between U.S. and
International Underwriters as it shall determine at the offering price set forth
in the International Prospectus. Except for sales for the accounts of
International Underwriters designated by a purchaser,
3
<PAGE> 38
aggregate sales of Shares to such persons shall be made for the accounts of the
several International Underwriters as nearly as practicable in their respective
International Underwriting Percentages.
Morgan Stanley & Co. International Limited will advise us promptly as to
the number of Shares purchased by us that we shall retain for direct sale. At
any time prior to the termination of this Agreement, any Shares purchased by us
that are held by Morgan Stanley & Co. International Limited for sale for our
account as set forth above but not sold may, upon our request and at Morgan
Stanley & Co. International Limited's discretion, be released to us for direct
sale, and Shares so released to us shall no longer be deemed held for sale by
you.
From time to time prior to the termination of this Agreement, at Morgan
Stanley & Co. International Limited's request, we will advise it of the number
of Shares remaining unsold that were retained by or released to us for direct
sale and of the number of Shares remaining unsold that were delivered to us
pursuant to Article III and, at Morgan Stanley & Co. International Limited's
request, we will release to it any such Shares remaining unsold for sale by it
(i) for our account to dealers or certain other persons or (ii) if in its
opinion, such Shares are needed to make delivery against sales made pursuant to
Article III.
III.
We confirm that, pursuant to the Agreement Between U.S. and International
Underwriters, the International Underwriters are authorizing Morgan Stanley &
Co. Incorporated to buy and sell Common Stock for the accounts of the several
Underwriters, including the International Underwriters, in the open market or
otherwise, for long or short account, on such terms as it shall deem advisable
and to over-allot in arranging sales. Any shares of Common Stock that may have
been purchased by the U.S. Representatives for stabilizing purposes in
connection with the offering of the Shares prior to the execution of this
Agreement and the Agreement Between U.S. and International Underwriters shall be
treated as having been purchased pursuant to this paragraph and the Agreement
Between U.S. and International Underwriters for the accounts of the several
Underwriters. We authorize Morgan Stanley & Co. International Limited to
over-allot in arranging sales. We recognize that the International Primary
Market Association (IPMA) limits will not be complied with in connection with
stabilization losses and expenses. Subject to the provisions of the Agreement
Between U.S. and International Underwriters, all such purchases, sales and
over-allotments for the International Underwriters as a group shall be for the
accounts of the several International Underwriters as nearly as practicable in
their respective International Underwriting Percentages. At no time shall our
net commitment pursuant to the foregoing authorization exceed 15% of our
Original Purchase Obligation, and, in determining our
4
<PAGE> 39
net commitment for short account, there shall be subtracted any Shares that you
have agreed to purchase for our account pursuant to Article I of the Agreement
Between U.S. and International Underwriters. On demand we will take up and pay
for any shares of Common Stock so purchased for our account and deliver against
payment any shares of Common Stock so sold or over-allotted for our account. The
International Representatives agree to notify us of the date of termination of
stabilization when so notified by Morgan Stanley & Co. Incorporated pursuant to
the Agreement Between U.S. and International Underwriters.
If pursuant to the provisions of the preceding paragraph and prior to the
termination of this Agreement (or prior to such earlier date as the
International Representatives may have determined), the U.S. Representatives
purchase or contract to purchase in the open market or otherwise any Shares that
were retained by or released to us for direct sale, or any Shares that may have
been issued on transfer of or in exchange for such Shares, and which Shares were
therefore not effectively placed for investment by us, we authorize the
International Representatives either to charge our account with an amount equal
to the selling concession with respect thereto, which amount shall be credited
against the cost of such Shares, or to require us to repurchase such Shares at a
price equal to the total cost of such purchase, including commissions, if any,
and any taxes on redelivery.
IV.
On the Closing Date (as defined in the Underwriting Agreement), prior to
8:45 A.M. (New York City time) we will deliver to Morgan Stanley & Co.
International Limited, Federal or other funds immediately available in New York
City in the manner as you shall advise for (i) an amount equal to the offering
price less the selling concession in respect of the Shares to be purchased by
us, (ii) an amount equal to the offering price less the selling concession in
respect of such of the Shares to be purchased by us as shall have been retained
by or released to us for direct sale or (iii) the amount set forth or indicated
in a telex to us, as you shall advise. You will make payment to the Company
against delivery to you for our account of the Shares to be purchased by us and
you will deliver to us the Shares paid for by us which shall have been retained
by or released to us for direct sale. Unless we promptly give you written
instructions otherwise, if transactions in the Shares may be settled through the
facilities of The Depository Trust Company, payment for and delivery of Shares
purchased by us will be made through such facilities, if we are a member, or, if
we are not a member, settlement may be made through our ordinary correspondent
who is a member.
5
<PAGE> 40
V.
We authorize you as Lead Managers to charge our account, as compensation
for your services in connection with this issue, including the purchase from the
Company and the management of the offering, $49.97 a share for each Share that
we have agreed to purchase pursuant to Section 2 of the Underwriting Agreement.
We authorize you to charge to our account (i) our International
Underwriting Percentage of all expenses incurred by you under the terms of this
Agreement or in connection with or attributable to the purchase, carrying and
sale of Shares pursuant to this Agreement (including all expenses, if any,
incurred for the account of the International Underwriters pursuant to the
Agreement Between U.S. and International Underwriters), and (ii) all transfer
taxes paid or payable on our behalf on purchases, sales or transfers made for
our account pursuant to this Agreement.
VI.
We authorize you to advance your own funds for our account, charging
interest rates prevailing from time to time, or to arrange loans for our account
for the purpose of carrying out the provisions of this Agreement or the
Agreement Between U.S. and International Underwriters and in connection
therewith to hold or pledge as security therefor all or any Shares which you may
be holding for our account under this Agreement.
Out of payment received by you for Shares sold for our account which have
been paid for by us, you will remit to us promptly an amount equal to the price
paid by us for such Shares.
Morgan Stanley & Co. International Limited and Morgan Stanley & Co.
Incorporated may each deliver to us or transfer to our account from time to time
against payment, for carrying purposes only, any Shares purchased by us or for
our account under this Agreement that it is holding for sale for our account but
that are not sold and paid for. We will transfer back to Morgan Stanley & Co.
International Limited or Morgan Stanley & Co. Incorporated against payment any
Shares so transferred to us for carrying purposes at such times as it may
demand.
VII.
This Agreement shall terminate 30 days from the date hereof, unless sooner
terminated by you, provided that you may in your discretion extend this
Agreement for a
6
<PAGE> 41
further period or periods not exceeding an aggregate of 30 days. You may at your
discretion on notice to us prior to the termination of this Agreement alter any
of the terms or conditions of offering determined pursuant to Article II hereof
or Article III of the Agreement Between U.S. and International Underwriters, or
terminate or suspend in whole or in part the effectiveness of Article III hereof
or paragraphs five through nine of Article IV thereof. No termination or
suspension pursuant to this paragraph shall affect your or Morgan Stanley & Co.
Incorporated's authority under Article III to cover any short or close any long
position incurred under this Agreement prior to such termination or suspension.
Upon termination of this Agreement, or prior thereto at your discretion,
Morgan Stanley & Co. International Limited shall deliver to us or transfer to
our account any Shares purchased by us from the Company or pursuant to the
Agreement Between U.S. and International Underwriters and held by Morgan Stanley
& Co. International Limited for sale for our account to dealers or others but
not sold and paid for and any shares of Common Stock which are held by Morgan
Stanley & Co. Incorporated for our account pursuant to Article III. As soon as
practicable after termination of this Agreement our account hereunder shall be
settled and paid. Morgan Stanley & Co. International Limited may reserve from
distribution such amount as it deems advisable to cover possible additional
amounts due from us. Determination by Morgan Stanley & Co. International Limited
of amounts to be paid to or by us shall be final and conclusive. Any of our
funds in Morgan Stanley & Co. International Limited's hands may be held with its
general funds without accountability for interest.
Notwithstanding any settlement on the termination of this Agreement, each
International Underwriter agrees to pay its International Underwriting
Percentage of (i) all expenses incurred by you in investigating or defending
against any claim or proceeding which is asserted or instituted by any party
(including any governmental or regulatory body) other than an Underwriter
relating to the Registration Statement or the Prospectus (as defined in the
Underwriting Agreement) (or any amendment or supplement thereto) or any
preliminary prospectus and (ii) any liability, including attorneys' fees,
incurred by you in respect of any such claim or proceeding, whether such
liability shall be the result of a judgment or as a result of any settlement
agreed to by you, other than any such expense or liability as to which you
receive indemnity payments pursuant to the following paragraph, Article III of
the Agreement Between U.S. and International Underwriters or Section 8 of the
Underwriting Agreement.
We agree to indemnify and hold harmless each other Underwriter and each
person, if any, who controls any such Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the U.S. Securities Exchange Act of 1934,
as amended, to the extent and upon the terms which we agree to indemnify and
hold harmless the Company, its directors, the officers of the Company who sign
the Registration Statement and any person controlling the Company as set forth
in the Underwriting Agreement.
7
<PAGE> 42
Our agreements contained in the second through fourth paragraphs of
Article II and this Article VII shall remain operative and in full force and
effect regardless of any termination of this Agreement or the occurrence of any
of the events described in clauses (i) through (iii) of the last paragraph of
Section 8 of the Underwriting Agreement.
VIII.
We have examined the prospectus included in the Registration Statement as
amended to date and we are familiar with the terms of the securities being
offered and the other terms of offering which are to be reflected in the
International Prospectus. In addition, we confirm that the information relating
to us which has been furnished to the Company for use therein is correct. You
are authorized, with the approval of counsel for the Underwriters, to approve on
our behalf the International Prospectus and any further amendments or
supplements to the Registration Statement or the International Prospectus.
We represent that our commitment to purchase Shares hereunder and under
the Agreement Between U.S. and International Underwriters will not result in a
violation of any financial responsibility requirements of any laws, rules or
regulations applicable to us, including applicable rules of any securities
exchange.
IX.
If the Underwriting Agreement is terminated as permitted by the terms
thereof, our obligations hereunder shall immediately terminate except that (i)
our obligations as set forth in the last paragraph of Article VII shall remain
in full force and effect, (ii) we shall remain liable for our International
Underwriting Percentage of all expenses and for any purchases or sales which may
have been made for our account pursuant to the provisions of Article III,
including any taxes on any such purchases or sales and (iii) such termination
shall not affect any obligation of any defaulting International Underwriter.
In the event that any International Underwriter shall default in its
obligations (i) pursuant to the second paragraph of Article II or the first
paragraph of Article III, (ii) to pay amounts owed by it pursuant to Article V
or (iii) pursuant to the third or fourth paragraph of Article VII or the first
paragraph of this Article IX, we will assume our proportionate share (determined
on the basis of the International Underwriting Percentages of the non-defaulting
International Underwriters) of such obligations, but no such assumption shall
affect any obligation of any defaulting International Underwriter.
If any one or more of the Underwriters shall fail or refuse to purchase
any Shares which it or they have agreed to purchase under the Underwriting
Agreement, we agree, in the proportion which the number of Firm Shares set forth
opposite our name in
8
<PAGE> 43
Schedule II to the Underwriting Agreement bears to the aggregate number of Firm
Shares set forth opposite the names of all non-defaulting Underwriters, or in
such other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase;
provided that, in no event shall the Shares to be purchased by any International
Underwriter be increased pursuant to this Article IX to an amount in excess of
the maximum number of Shares which such International Underwriter has agreed to
purchase pursuant to the Underwriting Agreement. Morgan Stanley & Co.
International Limited is authorized to arrange for the purchase by others
(including itself and any other International Underwriter) of any Shares not
purchased by any defaulting International Underwriter or by the other
International Underwriters as provided in this paragraph and in Section 9 of the
Underwriting Agreement. If such arrangements are made, the respective numbers of
Shares to be purchased by the remaining International Underwriters and such
other person or persons, if any, shall be taken as the basis for all rights and
obligations hereunder. Any action taken under this paragraph shall not relieve
any defaulting International Underwriter from liability in respect of any
default of such International Underwriter under the Underwriting Agreement or
this Agreement.
Nothing herein contained shall constitute us partners with you or with the
other Underwriters and the obligations of ourselves and of each of the other
Underwriters are several and not joint. If for United States federal income tax
purposes the International Underwriters shall be deemed to constitute a
partnership, each International Underwriter elects to be excluded from the
application of Subchapter K, Chapter 1, Subtitle A, of the United States
Internal Revenue Code, as amended.
You shall be under no liability to us for any act or omission except in
respect of obligations expressly assumed by you herein.
This Agreement is being executed by us and delivered to you in duplicate.
Upon your confirmation hereof and agreements in identical form with each of the
other Underwriters, this Agreement shall constitute a valid and binding contract
between us.
Your authority hereunder and under the Underwriting Agreement and the
Agreement Between U.S. and International Underwriters may be exercised by Morgan
Stanley & Co. International Limited, Merrill Lynch International, Petrie Parkman
& Co., Inc. and Smith Barney Inc. jointly or by Morgan Stanley & Co.
International Limited alone. The authority of the U.S. Representatives hereunder
and under the Agreement Between U.S. and International Underwriters may be
exercised by Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce Fenner &
Smith Incorporated, Petrie Parkman & Co., Inc. and Smith Barney Inc. either
jointly or alone.
This Agreement may be executed in two or more counterparts which together
shall constitute one and the same instrument. If this Agreement is executed by
or on
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<PAGE> 44
behalf of any party hereto by a person acting under the power of attorney given
him by such party, such person hereby states that at the time of execution
hereof he has no notice of revocation of the power of attorney by which he has
executed this Agreement as such attorney.
10
<PAGE> 45
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and United States federal law.
Very truly yours,
MORGAN STANLEY & CO. INTERNATIONAL
LIMITED
By /s/ Barry D. Kupferberg
------------------------------------------
Barry D. Kupferberg
Principal
Attorney-in-fact for each of the several
International Underwriters named in
Schedule II to the Underwriting Agreement
Confirmed as of the date hereof
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
MERRILL LYNCH INTERNATIONAL
PETRIE PARKMAN & CO., INC.
SMITH BARNEY INC.
By Morgan Stanley & Co. International Limited
By /s/ Barry D. Kupferberg
------------------------------------------
Barry D. Kupferberg
Principal
11
<PAGE> 46
EXHIBIT B
10,000,000 Shares
K N ENERGY, INC.
Common Stock, Par Value $5.00 Per Share
AGREEMENT BETWEEN U.S. AND INTERNATIONAL UNDERWRITERS
March 4, 1998
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<PAGE> 47
March 4, 1998
To each of the Underwriters named in
Schedules I and II to the Underwriting
Agreement referred to below.
Dear Sirs:
We understand that K N Energy, Inc. (the "COMPANY") has entered into an
underwriting agreement (the "UNDERWRITING AGREEMENT") with Morgan Stanley & Co.
Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Petrie Parkman
& Co., Inc. and Smith Barney Inc. acting as representatives (the "U.S.
REPRESENTATIVES") of the U.S. underwriters named in Schedule I thereto (the
"U.S. UNDERWRITERS") and Morgan Stanley & Co. International Limited, Merrill
Lynch International, Petrie Parkman & Co., Inc. and Smith Barney Inc. as
representatives (the "INTERNATIONAL REPRESENTATIVES") of the international
underwriters named in Schedule II thereto (the "INTERNATIONAL UNDERWRITERS" and,
together with the U.S. Underwriters, the "UNDERWRITERS"), pursuant to which the
several Underwriters have agreed to purchase from the Company an aggregate of
11,000,000 shares of common stock, par value $5.00 per share of the Company
("COMMON STOCK"). In addition, the Company has granted the U.S. Underwriters the
option to purchase up to 1,650,000 additional shares of Common Stock (the
"ADDITIONAL SHARES"). All shares of Common Stock to be purchased by the U.S.
Underwriters and the International Underwriters under the Underwriting
Agreement, including any Additional Shares, are herein called the "U.S. SHARES"
and the "INTERNATIONAL SHARES," respectively. The U.S. Shares and the
International Shares are collectively referred to herein as the "SHARES."
I.
The U.S. Underwriters, acting through the U.S. Representatives, and the
International Underwriters, acting through the International Representatives,
agree that, in order to provide an orderly marketing effort for the offering,
they will consult with each other as to the availability of the Shares for sale
to the public, from time to time until the earlier of (a) notice from the U.S.
Representatives to the U.S. Underwriters of the completion of the distribution
of the U.S. Shares and (b) notice from the International Representatives to the
International Underwriters of the completion of the distribution of the
International Shares. From time to time as mutually agreed among the U.S.
Underwriters and the International Underwriters, acting through Morgan Stanley &
Co. Incorporated and Morgan Stanley & Co. International Limited, respectively,
the
<PAGE> 48
Underwriters may purchase and sell among each other such number of Shares to be
purchased pursuant to the Underwriting Agreement as may be so mutually agreed.
The price and currency of settlement of any Shares so purchased or sold
shall be the public offering price, in United States dollars, less an amount not
greater than the selling concession. Settlement with respect to any Shares
transferred hereunder prior to the Closing Date (as defined in the Underwriting
Agreement) shall be made on the Closing Date, and in the case of purchases and
sales made thereafter, as promptly as practicable but in no event later than
three business days after the transfer date. Certificates representing the
Shares so purchased shall be delivered on the respective settlement dates. The
liability of the Underwriters under the Underwriting Agreement for payment of
the purchase price of the Shares purchased thereunder shall not be affected by
the provisions of this Agreement.
The obligations of each U.S. Underwriter in respect of any purchase or
sale of Shares under this Article I by the U.S. Underwriters shall be pro rata
in accordance with the proportion of the total number of U.S. Shares that such
U.S. Underwriter is obligated to purchase under the Underwriting Agreement. The
obligations of each International Underwriter in respect of any purchase or sale
of Shares under this Article I by the International Underwriters shall be pro
rata in accordance with the proportion of the total number of International
Shares that such International Underwriter is obligated to purchase under the
Underwriting Agreement.
II.
Each of the Underwriters represents that it is a member in good standing
of the U.S. National Association of Securities Dealers, Inc. (the "NASD") or
that it is a foreign bank or dealer not eligible for membership in the NASD. In
making sales of Shares, if it is such a member, such Underwriter agrees to
comply with all applicable rules of the NASD, including, without limitation, the
NASD's Interpretation with Respect to Free-Riding and Withholding (IM-2110-1)
and NASD Rule 2740, or, if it is such a foreign bank or dealer, such Underwriter
agrees to comply with such Interpretation and NASD Rules 2730, 2740 and 2750 as
though it were such a member and NASD Rule 2420 as it applies to a non-member
broker or dealer in a foreign country.
III.
Each U.S. Underwriter represents and agrees that, except for (x) sales
between the U.S. Underwriters and the International Underwriters pursuant to
Article I of this Agreement and (y) stabilization transactions, contemplated in
Article IV of this Agreement, conducted through the U.S. Representatives as part
of the distribution of the Shares, (a) it is not purchasing any of the U.S.
Shares for the account of anyone other than a United States or Canadian Person
and (b) it has not offered or sold, and will not
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<PAGE> 49
offer or sell, directly or indirectly, any of the U.S. Shares or distribute any
prospectus relating to the U.S. Shares outside the United States or Canada or to
anyone other than a United States or Canadian Person, and any dealer to whom it
may sell any of the U.S. Shares will represent that it is not purchasing any of
the U.S. Shares for the account of anyone other than a United States or Canadian
Person and will agree that it will not offer or resell such U.S. Shares directly
or indirectly outside the United States or Canada or to anyone other than a
United States or Canadian Person or to any other dealer who does not so
represent and agree.
Each International Underwriter represents and agrees that, except for (x)
sales between the U.S. Underwriters and the International Underwriters pursuant
to Article I of this Agreement and (y) stabilization transactions, contemplated
in Article IV of this Agreement, conducted through the U.S. Representatives as
part of the distribution of the Shares, (a) it is not purchasing any of the
International Shares for the account of any United States or Canadian Person and
(b) it has not offered or sold, and will not offer or sell, directly or
indirectly, any of the International Shares or distribute any prospectus
relating to the International Shares in the United States or Canada or to any
United States or Canadian Person, and any dealer to whom it may sell any of the
International Shares will represent that it is not purchasing any of the
International Shares for the account of any United States or Canadian Person and
will agree that it will not offer or resell such International Shares directly
or indirectly in the United States or Canada or to any United States or Canadian
Person or to any other dealer who does not so represent and agree.
With respect to any Underwriter that is a U.S. Underwriter and an
International Underwriter, the foregoing representations and agreements (i) made
by it in its capacity as a U.S. Underwriter shall apply only to it in its
capacity as a U.S. Underwriter and (ii) made by it in its capacity as an
International Underwriter shall apply only to it in its capacity as an
International Underwriter. In addition, notwithstanding the foregoing
representations and agreements, if an Underwriter (including its affiliates) is
both a U.S. Underwriter and an International Underwriter, then the U.S.
Underwriter and its corresponding International Underwriter may, with the
consent of Morgan Stanley & Co. Incorporated, transfer between themselves at
cost any Shares allocated to them for direct sale by the U.S. Representatives or
the International Representatives so long as any Shares so transferred are
treated as U.S. Shares while held by the U.S. Underwriter and International
Shares while held by the International Underwriter for purposes of the foregoing
representations and agreements.
"UNITED STATES OR CANADIAN PERSON" shall mean any national or resident of
the United States or Canada, or any corporation, pension, profit-sharing or
other trust or other entity organized under the laws of the United States or
Canada or of any political subdivision thereof (other than a branch located
outside of the United States and Canada of any United States or Canadian
Person), and shall include any United States or Canadian branch of a person who
is otherwise not a United States or Canadian Person.
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<PAGE> 50
"UNITED STATES" shall mean the United States of America, its territories, its
possessions and all areas subject to its jurisdiction.
The agreements of the Underwriters set forth in the first and second
paragraphs of this Article III shall terminate upon the earlier of (a) the
mutual agreement of the U.S. Representatives and the International
Representatives and (b) 30 days after the date hereof, unless the U.S.
Representatives or the International Representatives shall have given notice to
the other to the effect that the distribution of the Shares by the U.S.
Underwriters or the International Underwriters, as the case may be, has not yet
been completed. If such notice is given, the agreements set forth in such
preceding paragraphs shall survive until the earlier of (x) the mutual agreement
referred to in the preceding sentence and (y) 30 days after the date of any such
notice.
Each U.S. Underwriter represents that it has not offered or sold, and
agrees not to offer or sell, any Shares, directly or indirectly, in any province
or territory of Canada or to, or for the benefit of, any resident of any
province or territory of Canada in contravention of the securities laws thereof
and, without limiting the generality of the foregoing, represents that any offer
of Shares in Canada will be made only pursuant to an exemption from the
requirement to file a prospectus in the province or territory of Canada in which
such offer is made. Each U.S. Underwriter further agrees to send to any dealer
who purchases from it any of the Shares a notice stating in substance that, by
purchasing such Shares, such dealer represents and agrees that it has not
offered or sold, and will not offer or sell, directly or indirectly, any of such
Shares in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of the
securities laws thereof and that any offer of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer is made, and that such
dealer will deliver to any other dealer to whom it sells any of such Shares a
notice containing substantially the same statement as is contained in this
sentence.
The Underwriters understand that no action has been or will be taken in
any jurisdiction by the Underwriters or the Company that would permit a public
offering of the Shares, or possession or distribution of the Prospectus (as
defined in the Underwriting Agreement), in preliminary or final form, in any
jurisdiction where, or in any circumstances in which, action for that purpose is
required, other than the United States.
Each International Underwriter agrees that it will comply with all
applicable laws and regulations, and make or obtain all necessary filings,
consents or approvals, in each jurisdiction in which it purchases, offers, sells
or delivers Shares (including, without limitation, any applicable requirements
relating to the delivery of the international prospectus, in preliminary or
final form), in each case at its own expense. In connection with sales of and
offers to sell Shares made by it, each International Underwriter will either
furnish to each person to whom any such sale or offer is made a copy of the then
4
<PAGE> 51
current international prospectus (in preliminary or final form and as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto), or inform such person that such international prospectus,
in preliminary or final form, will be made available upon request, and will keep
an accurate record of the names and addresses of all persons to whom it gives
copies of the registration statement relating to the offering of the Shares, the
international prospectus, in preliminary or final form, or any amendment or
supplement thereto, and, when furnished with any subsequent amendment to such
registration statement, any subsequent prospectus or any medium outlining
changes in the registration statement or any prospectus, will upon request of
the International Representatives, promptly forward copies thereof to such
persons or inform such persons that such amendment, subsequent prospectus or
other medium will be made available upon request.
Each International Underwriter further represents that it has not offered
or sold, and agrees not to offer or sell, directly or indirectly, in Japan or to
or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or sales
to Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and otherwise in compliance with applicable provisions of Japanese law. Each
International Underwriter further agrees to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing such
Shares, such dealer represents and agrees that it has not offered or sold, and
will not offer or sell, any of such Shares, directly or indirectly, in Japan or
to or for the account of any resident thereof except for offers or sales to
Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and other relevant laws and regulations of Japan, and that such dealer will send
to any other dealer to whom it sells any of such Shares a notice containing
substantially the same statement as is contained in this sentence.
Each International Underwriter further represents and agrees that (i) it
has not offered or sold and, during the period of six months from the date
hereof, will not offer or sell, any Shares to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995 (the "REGULATIONS"); (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 and the Regulations with respect to anything done by it in
relation to the Shares in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on to any
person in the United Kingdom any document received by it in connection with the
issue of the Shares if that person is of a kind described in Article 11(3) of
the Financial Services Act 1986
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<PAGE> 52
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such
document may otherwise lawfully be issued or passed on.
Each International Underwriter agrees to indemnify and hold harmless each
Underwriter and each person controlling any Underwriter from and against any and
all losses, claims, damages and liabilities (including fees and disbursements of
counsel) arising from any breach by it of any of the provisions of paragraphs
eight, nine and ten of this Article III.
IV.
The overall direction and planning of the stabilization transactions
contemplated herein shall be the responsibility of the U.S. Representatives and
the International Representatives, which will consult with one another on a
continuous basis so that such stabilization transactions shall be conducted in
accordance with such direction and planning as is mutually agreed upon.
All stabilization transactions shall be conducted only by Morgan Stanley &
Co. Incorporated and shall be conducted in compliance with any applicable laws
and regulations. Morgan Stanley & Co. Incorporated agrees to notify the
International Representatives of the date of termination of stabilization. Each
Underwriter agrees to file with Morgan Stanley & Co. Incorporated any reports
required of such Underwriter pursuant to Rule 17a-2 under the U.S. Securities
Exchange Act of 1934 and authorizes Morgan Stanley & Co. Incorporated to file
with the U.S. Securities and Exchange Commission any reports required by such
Rule on behalf of such Underwriter.
The International Primary Market Association (IPMA) limits will not be
complied with in connection with stabilization losses and expenses. All
stabilization transactions shall be for the respective accounts of the several
Underwriters and shall be allocated between the U.S. Underwriters and the
International Underwriters in the respective proportions that the number of U.S.
Shares and International Shares purchased pursuant to the Underwriting Agreement
bears to the total number of Shares purchased. In no event shall the net
commitment of any Underwriter, for either long or short account, resulting from
such stabilization transactions and from the over-allotments referred to in
Article V, exceed 15% of the total number of Shares that such Underwriter is
obligated to purchase under the Underwriting Agreement; provided that the net
commitment of any Underwriter for short account shall be calculated (x) in the
case of any U.S. Underwriter, after giving effect to the purchase of (i) any
Shares that the U.S. Representatives have agreed to purchase for the account of
such U.S. Underwriter pursuant to Article I of this Agreement and (ii) the
maximum number of Additional Shares that such U.S. Underwriter is entitled to
purchase under the Underwriting Agreement and (y) in the case of any
International Underwriter, after giving effect to the purchase of any Shares
that the
6
<PAGE> 53
International Representatives have agreed to purchase for the account of such
International Underwriter pursuant to Article I of this Agreement.
Each U.S. Underwriter represents that it has not offered or sold, and
agrees that it will not offer or sell, directly or indirectly, Shares to any
person at less than the public offering price, other than to (i) the
International Underwriters pursuant to Article I hereof or (ii) other U.S.
Underwriters or to dealers who have entered into the Master Dealer Agreement
with Morgan Stanley & Co. Incorporated and who have received a pricing wire from
the U.S. Representatives with respect to this offering that, among other things,
sets forth such dealer's agreement that it is not purchasing Shares for the
account of any persons other than United States or Canadian Persons and that it
will not offer or resell Shares outside the United States and Canada. Such sales
to U.S. dealers and other U.S. Underwriters shall be made in conformity with the
provisions of Article II and at a price that is not below the public offering
price less the maximum permissible reallowance to be specified in the
Prospectus. Each U.S. Underwriter agrees that prior to offering Shares to any
dealer at the public offering price less the reallowance, it will either
ascertain that such dealer has entered into such Master Dealer Agreement and
received such a pricing wire or make arrangements to ensure that such dealer
will enter into such Master Dealer Agreement and receive such a pricing wire.
Each International Underwriter represents that it has not offered or sold
and agrees that it will not offer or sell, directly or indirectly, Shares to any
person at less than the public offering price, other than to (i) the U.S.
Underwriters pursuant to Article I hereof or (ii) other International
Underwriters or to dealers who have entered into International Dealer Agreements
(the "INTERNATIONAL DEALERS") with the International Representatives in the form
of Exhibit C to the Agreement Among International Underwriters. Such sales to
International Dealers and other International Underwriters shall be made in
conformity with the provisions of Article II and at a price that is not below
the public offering price less the maximum permissible reallowance to be
specified in the Prospectus. Each International Underwriter agrees that prior to
offering Shares to any dealer at the public offering price less the reallowance,
it will either ascertain that such dealer has entered into such an International
Dealer Agreement or make arrangements to ensure that such dealer will enter into
an International Dealer Agreement.
The agreements of the Underwriters set forth in the foregoing two
paragraphs shall terminate upon the earlier of (a) the mutual agreement of the
U.S. Representatives and the International Representatives and (b) 30 days after
the date hereof, unless the U.S. Representatives or the International
Representatives shall have given notice to the other to the effect that the
distribution of the Shares by the U.S. Underwriters or the International
Underwriters, as the case may be, has not yet been completed. If such notice is
given, the agreements set forth in such preceding paragraphs shall survive until
the earlier of (x) the mutual agreement referred to in the preceding sentence
and (y) 30 days after the date of any such notice.
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<PAGE> 54
Each Underwriter agrees that it will not, without the advance approval of
Morgan Stanley & Co. Incorporated, for its own account or the account of a
customer, offer, bid for, buy, sell, deal, trade in or attempt to induce any
person to bid for or buy any Covered Security, except (a) as provided in the
Agreement Among International Underwriters, the Master Agreement Among
Underwriters, this Agreement, the Underwriting Agreement, the Master Dealer
Agreement or the International Dealer Agreement, (b) in brokerage transactions
on unsolicited orders which have not resulted from activities on its part in
connection with the solicitation of purchases and which are executed by it in
the ordinary course of its brokerage business, (c) in market making transactions
on Nasdaq or any similar market or quotation system executed by it in the
ordinary course of its business so long as its bids and purchases are made
consistent with the pricing restrictions set forth in Rule 103 of Regulation M
of the U.S. Securities and Exchange Commission ("REGULATION M") and the volumes
of such transactions are consistent with its past practice as a market maker,
(d) in basket transactions that meet the standards set forth in Rule 101(b)(6)
of Regulation M, (e) that it may convert, exchange or exercise any security
owned by it prior to the commencement of this restriction and that it may sell
any security obtained upon any such conversion, exchange or exercise, (f) that
it may deliver securities owned by it upon the exercise of any option written by
it as permitted by the provisions set forth herein, (g) that on or after the
date of the initial public offering of the Shares, it may execute covered
writing transactions for the accounts of customers in options to acquire Common
Stock, when such transactions are covered by Shares and (h) that it may engage
in principal purchases or sales with the intent of offsetting the market risk of
principal positions in over-the-counter derivatives on solicited orders that
were executed by it prior to the commencement of this restriction, and on
unsolicited orders that were executed by it at any time, so long as such orders
were executed by it in the ordinary course of its principal over-the-counter
derivatives business. "COVERED SECURITY" means (a) the Common Stock and (b) any
securities convertible into or exercisable or exchangeable for the Common Stock.
An opening uncovered writing transaction in options to acquire Common
Stock for an Underwriter's account or for the account of a customer shall be
deemed, for purposes of this Article IV, to be a sale of Common Stock which is
not unsolicited. The term "OPENING UNCOVERED WRITING TRANSACTION IN OPTIONS TO
ACQUIRE" as used above means a transaction in which the seller intends to become
a writer of an option to purchase Common Stock which he does not own. An opening
uncovered purchase transaction in options to sell Common Stock for an
Underwriter's account or for the account of a customer shall be deemed, for
purposes of this paragraph, to be a sale of Common Stock which is not
unsolicited. The term "OPENING UNCOVERED PURCHASE TRANSACTION IN OPTIONS TO
SELL" as used above means a transaction where the purchaser intends to become an
owner of an option to sell Common Stock which he does not own.
Each Underwriter represents that it has not participated, since it was
invited to participate in the offering of the Shares, in any transaction
prohibited by this Article IV
8
<PAGE> 55
and that it has at all times complied and agrees that it will at all times
comply with the provisions of Regulation M applicable to this offering.
V.
The overall direction and planning of any over-allotments to be made by
the Underwriters in arranging for sales of Shares, and the related transactions
required to cover such over-allotments, shall be the responsibility of the U.S.
Representatives. All profits and losses arising from such over-allotments
(excluding the excess, if any, of (i) the public selling price of any Additional
Shares and any Shares purchased pursuant to Article I of this Agreement over
(ii) the cost of such Additional Shares and such other Shares to the
Underwriters making such sales) shall be for the respective accounts of the
several Underwriters and shall be allocated between the U.S. Underwriters and
the International Underwriters in the respective proportions that the number of
U.S. Shares and International Shares purchased pursuant to the Underwriting
Agreement bears to the total number of Shares purchased.
VI.
Each of the Underwriters agrees that the expenses incurred in connection
with or attributable to the purchase, carrying or sale of the Shares, including
the fees and disbursements of Davis Polk & Wardwell (U.S. counsel to the
Underwriters), shall be for the respective accounts of the several Underwriters
and shall be allocated between the U.S. Underwriters and the International
Underwriters in the respective proportions that the number of U.S. Shares and
International Shares purchased pursuant to the Underwriting Agreement bears to
the total number of Shares purchased.
VII.
Changes in the offering price and in the concessions and reallowances to
dealers will be made only upon the mutual agreement of the Underwriters during
the period referred to in the first sentence of Article I hereof.
VIII.
The Representatives will keep one another fully informed of the progress
of the offering of the Shares.
The agreements of the Underwriters contained in Article II, the sixth
through eleventh paragraphs of Article III, the last paragraph of Article IV,
Article V and Article VI shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any termination of the
Underwriting Agreement, (iii) any investigation made by or on behalf of any
Underwriter or any person controlling any
9
<PAGE> 56
Underwriter or by or on behalf of the Company, its officers or directors or any
other person controlling the Company and (iv) acceptance of and payment for any
Shares.
IX.
This Agreement may be signed in counterparts, which together shall
constitute one and the same instrument.
This Agreement shall be governed and construed in all respects in
accordance with the laws of the State of New York and United States federal law.
IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written by the undersigned for themselves and for the
Underwriters as set forth above.
MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PETRIE PARKMAN & CO., INC.
SMITH BARNEY INC.
Acting severally on behalf of
themselves and the several U.S.
Underwriters named in Schedule I
to the Underwriting Agreement
referred to herein.
By MORGAN STANLEY & CO.
INCORPORATED
By /s/ Barry D. Kupferberg
---------------------------------
Barry D. Kupferberg
Principal
MORGAN STANLEY & CO. INTERNATIONAL
LIMITED
MERRILL LYNCH INTERNATIONAL
PETRIE PARKMAN & CO., INC.
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<PAGE> 57
SMITH BARNEY INC.
Acting severally on behalf of
themselves and the several
International Underwriters
named in Schedule II to the
Underwriting Agreement
referred to herein.
By MORGAN STANLEY & CO. INTERNATIONAL
LIMITED
By /s/ Barry D. Kupferberg
-----------------------
Barry D. Kupferberg
Principal
11
<PAGE> 58
EXHIBIT C
10,000,000 Shares
K N ENERGY, INC.
Common Stock, Par Value $5.00 Per Share
INTERNATIONAL DEALER AGREEMENT
March 4, 1998
12
<PAGE> 59
Morgan Stanley & Co. International Limited
Merrill Lynch International
Petrie Parkman & Co., Inc.
Smith Barney Inc.
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
England
Dear Sirs:
We understand that K N Energy, Inc., a Kansas corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below) an
aggregate of 1,500,000 shares (the "FIRM SHARES") of its common stock, par value
$5.00 per share ("COMMON STOCK") pursuant to an underwriting agreement (the
"UNDERWRITING AGREEMENT") with you as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the international underwriters named in Schedule II thereto
(the "INTERNATIONAL UNDERWRITERS"), and with Morgan Stanley & Co. Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Petrie Parkman & Co., Inc.
and Smith Barney Inc. as representatives (the "U.S. REPRESENTATIVES") of the
U.S. underwriters named in Schedule I thereto (the "U.S. UNDERWRITERS"). The
Firm Shares to be sold to the several U.S. Underwriters and to the several
International Underwriters shall hereinafter be referred to, respectively, as
the U.S. Firm Shares and the International Shares. The International
Underwriters and the U.S. Underwriters are hereinafter collectively referred to
as the Underwriters.
In addition, the several U.S. Underwriters will have an option to purchase
from the Company an additional 1,650,000 shares (the "ADDITIONAL SHARES") to
provide for over-allotments. The term "U.S. SHARES" shall mean the U.S. Firm
Shares and the Additional Shares. The U.S. Shares and the International Shares
are hereinafter collectively referred to as the "SHARES".
We acknowledge receipt of the Prospectus dated March 4, 1998 (hereinafter
called the international prospectus) relating to the offering of the
International Shares.
<PAGE> 60
We understand that the International Underwriters are severally offering,
through you, certain of the Shares for sale to certain dealers at the offering
price of U.S. $_____ less a concession not in excess of U.S. $.__ under the
offering price, and that any International Underwriter may allow, and dealers
may reallow, a concession not in excess of U.S. $_____ under the offering price
to other International Underwriters or to other dealers who enter into an
agreement in this form.
We hereby agree with you as follows with respect to any purchase of Shares
from you or from any other International Underwriter or from any dealer at a
concession from the offering price.
In purchasing Shares, we will rely only on the international prospectus
and on no other statements whatsoever, written or oral.
I.
We understand that no action has been or will be taken in any jurisdiction
by the International Underwriters or the Company that would permit a public
offering of the Shares, or possession or distribution of the international
prospectus, in preliminary or final form, in any jurisdiction where, or in any
circumstances in which, action for that purpose is required, other than the
United States. We agree that we will comply with all applicable laws and
regulations, and make or obtain all necessary filings, consents or approvals, in
each jurisdiction in which we purchase, offer, sell or deliver Shares
(including, without limitation, any applicable requirements relating to the
delivery of the international prospectus, in preliminary or final form), in each
case at our own expense. In connection with sales of and offers to sell Shares
made by us, we will either furnish to each person to whom any such sale or offer
is made a copy of the then current international prospectus (in preliminary or
final form and as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or inform such person that
such international prospectus will be made available upon request and we will
keep an accurate record of the names and addresses of all persons to whom we
give copies of the registration statement relating to the offering of the
Shares, the international prospectus, in preliminary or final form, or any
amendment or supplement thereto, and, when furnished with any subsequent
amendment to such registration statement, any subsequent prospectus or any
medium outlining changes in the registration statement or any prospectus, we
will upon request of the International Representatives, promptly forward copies
thereof to such persons or inform such persons that such amendment, subsequent
prospectus or other medium will be made available upon request.
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<PAGE> 61
We will not give any information or make any representation other than as
contained in the international prospectus, or act for the Company, any
International Underwriter or you.
We represent and agree that, except for (x) sales between the U.S.
Underwriters and the International Underwriters pursuant to Article I of the
Agreement Between U.S. and International Underwriters of even date herewith
(hereinafter called the Agreement Between U.S. and International Underwriters)
and (y) stabilization transactions contemplated in Article IV of the Agreement
Between U.S. and International Underwriters conducted through the U.S.
Representatives as part of the distribution of the Shares, (a) we are not
purchasing and have not purchased and will not purchase any Shares for the
account of any United States or Canadian Person and (b) we have not offered or
sold, and will not offer or sell, directly or indirectly, any Shares or
distribute any prospectus relating to the Shares, in the United States or Canada
or to any United States or Canadian Person and any dealer to whom we may sell
any Shares will represent that it is not purchasing any Shares for the account
of any United States or Canadian Person and will agree that it will not offer or
resell such Shares directly or indirectly in the United States or Canada or to
any United States or Canadian Person or to any other dealer who does not so
represent and agree. "UNITED STATES OR CANADIAN PERSON" shall mean any national
or resident of the United States or Canada, or any corporation, pension,
profit-sharing or other trust or other entity organized under the laws of the
United States or Canada or of any political subdivision thereof (other than a
branch located outside the United States and Canada of any United States or
Canadian Person), and shall include any United States or Canadian branch of a
person who is otherwise not a United States or Canadian Person. "UNITED STATES"
shall mean the United States of America, its territories, its possessions and
all areas subject to its jurisdiction. Our agreement set forth in this paragraph
shall terminate upon the earlier of (a) notice from you to such effect and (b)
30 days after the date of the initial offering of the Shares, unless you have
given notice that the distribution of the Shares has not yet been completed. If
such latter notice is given, the agreement set forth in this paragraph shall
survive until the earlier of (x) the notice of termination referred to in (a)
above and (y) 30 days after the date of any notice that the distribution of the
Shares has not yet been completed.
We further represent that we have not offered or sold, and agree not to
offer or sell, directly or indirectly, in Japan or to or for the account of any
resident thereof, any of the Shares acquired in connection with the distribution
contemplated hereby, except for offers or sales to Japanese International
Underwriters or dealers and except pursuant to any exemption from the
registration requirements of the Securities and Exchange Law and otherwise in
compliance with applicable provisions of Japanese law. We further agree to send
to any dealer who purchases from us any of such Shares a notice stating in
substance that, by purchasing such Shares, such dealer represents and agrees
that it has not offered or sold, and will not offer or sell, any of such Shares,
directly or indirectly, in
3
<PAGE> 62
Japan or to or for the account of any resident thereof, except for offers or
sales to Japanese International Underwriters or dealers and except pursuant to
any exemption from the registration requirements of the Securities and Exchange
Law and otherwise in compliance with applicable provisions of Japanese law, and
that such dealer will send to any other dealer to whom it sells any of such
Shares a notice containing substantially the same statement as is contained in
this sentence.
We further represent and agree that (i) we have not offered or sold and,
during the period of six months from the date hereof, will not offer or sell,
any Shares to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995 (the "REGULATIONS"); (ii) we have complied
and will comply with all applicable provisions of the Financial Services Act
1986 and the Regulations with respect to anything done by us in relation to the
Shares in, from or otherwise involving the United Kingdom; and (iii) we have
only issued or passed on and will only issue or pass on to any person in the
United Kingdom any document received by us in connection with the offering of
the Shares to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
We represent that we are a foreign bank or dealer not eligible for
membership in the U.S. National Association of Securities Dealers, Inc.
(hereinafter called the NASD), and we agree not to offer to sell or sell any
Shares in, or to persons who are nationals or residents of, the United States,
except for offers and Shares referred to in clause (x) of the third paragraph of
this Article I. In making sales of Shares, we agree to comply with the NASD's
Interpretation with Respect to Free-Riding and Withholding (IM-2110-1) and NASD
Rules 2730, 2740 and 2750 as though we were a member in good standing of the
NASD and NASD Rule 2420 as it applies to a non-member broker or dealer in a
foreign country.
We agree that we will not, during the period continuing until the
International Representatives shall have notified us of the completion of the
distribution of the Shares, for our own account or the account of a customer,
offer, bid for, buy, sell, deal, trade in or attempt to induce any person to bid
for or buy any Covered Security, except (a) as provided in the Agreement Among
International Underwriters, the Morgan Stanley & Co. Incorporated Master
Agreement Among Underwriters, the Agreement between U.S. and International
Underwriters, this Agreement, the Morgan Stanley & Co. Master Dealer Agreement
or the Underwriting Agreement, (b) in brokerage transactions on unsolicited
orders which have not resulted from activities on our part in connection with
the solicitation of purchases and which are executed by us in the ordinary
course of our
4
<PAGE> 63
brokerage business, (c) in market making transactions on Nasdaq or any similar
market or quotation system executed by us in the ordinary course of our business
so long as our bids and purchases are made consistent with the pricing
restrictions set forth in Rule 103 of Regulation M of the U.S. Securities and
Exchange Commission ("REGULATION M") and the volumes of such transactions are
consistent with our past practice as a market maker, (d) in basket transactions
that meet the standards set forth in Rule 101(b)(6) of Regulation M, (e) that we
may convert, exchange or exercise any security owned by us prior to the
commencement of this restriction and that we may sell any security obtained upon
any such conversion, exchange or exercise, (f) that we may deliver securities
owned by us upon the exercise of any option written by us as permitted by the
provisions set forth herein, (g) that on or after the date of the initial public
offering of the Shares, we may execute covered writing transactions for the
accounts of customers in options to acquire Common Stock, when such transactions
are covered by Shares and (h) that we may engage in principal purchases or sales
with the intent of offsetting the market risk of principal positions in
over-the-counter derivatives on solicited orders that were executed by us prior
to the commencement of this restriction, and on unsolicited orders that were
executed by us at any time, so long as such orders were executed by us in the
ordinary course of our principal over-the-counter derivatives business. "COVERED
SECURITY" means (a) the Common Stock and (b) any securities convertible into or
exercisable or exchangeable for the Common Stock.
An opening uncovered writing transaction in options to acquire Common
Stock for our account or for the account of a customer shall be deemed, for
purposes of this Article I, to be a sale of Common Stock which is not
unsolicited. The term "OPENING UNCOVERED WRITING TRANSACTION IN OPTIONS TO
ACQUIRE" as used above means a transaction where the seller intends to become a
writer of an option to purchase any Common Stock which he does not own. An
opening uncovered purchase transaction in options to sell Common Stock for our
account or for the account of a customer shall be deemed, for purposes of this
paragraph, to be a sale of Common Stock which is not unsolicited. The term
"OPENING UNCOVERED PURCHASE TRANSACTION IN OPTIONS TO SELL" as used above means
a transaction where the purchaser intends to become an owner of an option to
sell Common Stock which he does not own.
We represent that we have not participated, since we were invited to
participate in the offering of the Shares, in any transaction prohibited by this
Article I and that we have at all times complied and agree that we will at all
times comply with the provisions of Regulation M applicable to this offering.
We agree to indemnify and hold harmless the Company, each Underwriter and
each person controlling the Company or any Underwriter from and against any and
all losses, claims, damages and liabilities (including fees and disbursements of
counsel) arising from any breach by us of any of the provisions of this Article
I.
5
<PAGE> 64
II.
Shares purchased by us at a concession from the offering price shall be
promptly offered upon the terms set forth in the international prospectus or for
sale at a concession not in excess of the reallowance under the offering price
to any International Underwriter or to any other dealer who enters into an
agreement with you in this form with respect to this offering that, among other
things, sets forth such dealer's agreement that it is not purchasing Shares for
the account of any United States or Canadian Persons and that it will not offer
or resell Shares in the United States and Canada. Prior to offering Shares to
any dealer at the public offering price less the reallowance, you must either
ascertain that such dealer has entered into such an agreement or assure that
such dealer will enter into such an agreement.
We agree to advise you from time to time upon request, prior to the
termination of this Agreement, of the number of Shares remaining unsold which
were purchased by us from you or from any other International Underwriter or
dealer at a concession from the offering price and, on your request, we will
resell to you any such Shares remaining unsold at the purchase price thereof if,
in your opinion, such Shares are needed to make delivery against sales made to
others.
If prior to the termination of this Agreement (or prior to such earlier
date as you have determined) a U.S. Representative or International
Representative purchases or contracts to purchase in the open market or
otherwise any Shares which were purchased by us from you or from any other
International Underwriter or dealer at a concession from the offering price
(including any Shares represented by certificates which may have been issued on
transfer or in exchange for certificates originally representing such Shares),
and which Shares were therefore not effectively placed for investment by us, we
authorize you either to charge our account with an amount equal to such
concession which shall be credited against the cost of such Shares, or to
require us to repurchase such Shares at a price equal to the total cost of such
purchase, including any commissions and any taxes on redelivery.
We have not offered or sold, and we will not offer or sell, directly or
indirectly, Shares that were purchased by us from you or from any other
International Underwriter or dealer at a concession from the offering price
(including any Shares represented by certificates which may have been issued on
transfer or in exchange for certificates originally representing such Shares) to
any person at less than the offering price, other than to (i) U.S. Underwriters
pursuant to Article I of the Agreement Between U.S. and International
Underwriters or (ii) other International Underwriters or to dealers who have
entered into International Dealer Agreements with the International
Representatives (hereinafter called the International Dealer Agreements) and
then only in conformity with the provisions of Article I and at a price that is
not below the offering price less the
6
<PAGE> 65
maximum permissible reallowance to be specified in the international prospectus.
We agree that prior to offering Shares to any dealer at the public offering
price less the reallowance, we will either ascertain that such dealer has
entered into such an International Dealer Agreement or make arrangements to
assure that such dealer will enter into an International Dealer Agreement.
III.
If we purchase any Shares from you hereunder, we agree that such purchases
will be evidenced by your written confirmation and will be subject to the terms
and conditions set forth in the confirmation and in the international
prospectus.
Shares purchased by us from you in connection with our participation as
dealer in the offering shall be paid for in full at (i) the offering price, (ii)
such price less the applicable concession or (iii) the price set forth or
indicated in the pricing wire, as you shall advise, in Federal or other funds
immediately available in New York City in the manner, at such time and on such
day as you may advise us against delivery of the Shares. If we are called upon
to pay the offering price for the Shares purchased by us, the applicable
concession will be paid to us, less any amounts charged to our account pursuant
to Article II above, after termination of this Agreement. Unless we promptly
give you written instruction otherwise, if transactions in the Shares may be
settled through the facilities of The Depository Trust Company, payment for and
delivery of Shares purchased by us will be made through such facilities, if we
are a member, or, if we are not a member, settlement may be made through our
ordinary correspondent who is a member.
We authorize the International Representatives as principals to advance,
or to arrange the advance of, funds to us to cover any delay in the receipt of
funds necessary for payment for the Shares to be purchased by us and to charge,
or to arrange for the charging of, interest on such funds at current rates.
IV.
You will advise us of the date and time of termination of this Agreement
or of any designated provisions hereof. This Agreement shall in any event
terminate 30 days after the date of the initial offering of the Shares unless
sooner terminated by you, provided that you may in your discretion extend this
Agreement for a further period or periods not exceeding an aggregate of 30 days,
and provided further that the provisions of Article I hereof shall survive any
termination of this Agreement.
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<PAGE> 66
V.
We agree that you, as International Representatives, have full authority
to take such action as may seem advisable to you in respect of all matters
pertaining to the offering of the Shares. Neither you, as International
Representatives, nor any of the International Underwriters shall be under any
liability to us for any act or omission, except in respect of obligations
expressly assumed in this Agreement.
All communications to you relating to the subject matter of this Agreement
shall be addressed to the Syndicate Department, Morgan Stanley & Co.
International Limited, 25 Cabot Square, Canary Wharf, London E14 4QA, England,
and any notices to us shall be deemed to have been duly given if mailed or
telegraphed to us at the address shown below.
VI.
GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York and United States federal law.
Very truly yours,
--------------------------------------------
--------------------------------------------
--------------------------------------------
(ADDRESS)
By:
-----------------------------------------
8
<PAGE> 1
Exhibit 4.1
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.
6.45% Senior Notes due 2003
No. CUSIP No. 482620 AT 8
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 [ ] HUNDRED MILLION DOLLARS ($[]00,000,000) on March 1, 2003,
and to pay interest thereon from March 9, 1998 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on March 1 and September 1 in each year, commencing September 1,
1998, at the rate of 6.45% 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 fifteenth calendar day
(whether or not a Business Day (which shall be any day other than a Saturday,
Sunday or a day on which banking institutions in the cities of New York or
Chicago are authorized or obligated by law, executive order or governmental
decree to be closed)) immediately preceding such Interest Payment Date. Any such
interest which is payable, but is not punctually paid or duly provided for on
any Interest Payment Date ("Defaulted Interest") 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
<PAGE> 2
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be 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 on the reverse hereof, 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.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March , 1998
---
K N ENERGY, INC.
By:
----------------------------------
Treasurer
ATTEST:
By:
---------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: March , 1998
---
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
---------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
6.45% Senior Notes due 2003
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 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This is one of the Book-Entry Securities
representing the series designated on the face hereof, such series limited in
aggregate principal amount to $500,000,000.
The Securities of this series shall not be subject to redemption prior to
maturity.
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 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
5
<PAGE> 6
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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
6
<PAGE> 7
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> 1
Exhibit 4.2
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.
6.65% Senior Notes due 2005
No. CUSIP No. 482620 AU 5
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 [ ] HUNDRED MILLION DOLLARS ($[]00,000,000) on March 1, 2005,
and to pay interest thereon from March 9, 1998 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on March 1 and September 1 in each year, commencing September 1,
1998, at the rate of 6.65% 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 fifteenth calendar day
(whether or not a Business Day (which shall be any day other than a Saturday,
Sunday or a day on which banking institutions in the cities of New York or
Chicago are authorized or obligated by law, executive order or governmental
decree to be closed)) immediately preceding such Interest Payment Date. Any such
interest which is payable, but is not punctually paid or duly provided for on
any Interest Payment Date ("Defaulted Interest") 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
<PAGE> 2
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be 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 on the reverse hereof, 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.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March , 1998
---
K N ENERGY, INC.
By:
--------------------------------------
Treasurer
ATTEST:
By:
--------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: March , 1998
---
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
6.65% Senior Notes due 2005
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 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This is one of the Book-Entry Securities
representing the series designated on the face hereof, such series limited in
aggregate principal amount to $500,000,000.
The Securities of this series shall not be subject to redemption prior to
maturity.
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 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
5
<PAGE> 6
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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
6
<PAGE> 7
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> 1
Exhibit 4.3
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.
6.80% Senior Notes due 2008
No. CUSIP No. 482620 AV 3
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 [ ] HUNDRED MILLION DOLLARS ($[]00,000,000) on March 1, 2008,
and to pay interest thereon from March 9, 1998 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on March 1 and September 1 in each year, commencing September 1,
1998, at the rate of 6.80% 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 fifteenth calendar day
(whether or not a Business Day) immediately preceding such Interest Payment
Date. Any such interest which is payable, but is not punctually paid or duly
provided for on any Interest Payment Date ("Defaulted Interest") 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 inconsistent with the requirements of any
<PAGE> 2
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 on the reverse hereof, 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.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March , 1998
---
K N ENERGY, INC.
By:
------------------------------------
Treasurer
ATTEST:
By:
---------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: March , 1998
---
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
----------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
6.80% Senior Notes due 2008
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 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This is one of the Book-Entry Securities
representing the series designated on the face hereof, such series limited in
aggregate principal amount to $300,000,000.
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, 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 discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 12
1/2 basis points, plus in the case of each of clause (i) and (ii) accrued
interest to the Redemption Date. For purposes of the preceding sentence,
"Treasury Rate" means, with respect to any Redemption Date, (i) the yield, under
the heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the Remaining Life,
yields for the two published maturities most closely corresponding to the
Comparable Treasury Issue shall be determined and the Treasury Rate shall be
interpolated and extrapolated from such yields on a straight line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using 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. The
Treasury Rate shall be calculated on the third Business Day preceding the
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 ("Remaining Life") of the Securities 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 the Securities. "Independent Investment
Banker" means Morgan Stanley & Co. Incorporated or, if such firm is unwilling or
unable to
5
<PAGE> 6
select the Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee. "Comparable Treasury
Price" means (i) the average of four Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer
than five 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 Independent Investment Banker, 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 Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date. "Reference Treasury Dealer" means Morgan Stanley & Co. Incorporated,
BancAmerica Robertson Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery Securities LLC 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. "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the cities of New York or
Chicago are authorized or obligated by law, executive order or governmental
decree to be closed.
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 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.
6
<PAGE> 7
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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.
7
<PAGE> 8
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.
8
<PAGE> 9
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)
9
<PAGE> 1
EXHIBIT 4.4
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.
7.25% Senior Debentures due 2028
No. CUSIP No. 482620 AW 1
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 [ ] HUNDRED MILLION DOLLARS ($[]00,000,000) on March 1, 2028,
and to pay interest thereon from March 9, 1998 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on March 1 and September 1 in each year, commencing September 1,
1998, at the rate of 7.25% 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 fifteenth calendar day
(whether or not a Business Day) immediately preceding such Interest Payment
Date. Any such interest which is payable, but is not punctually paid or duly
provided for on any Interest Payment Date ("Defaulted Interest") 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 inconsistent with the requirements of any
<PAGE> 2
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 on the reverse hereof, 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.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March ___, 1998
K N ENERGY, INC.
By:
--------------------------------------
Treasurer
ATTEST:
By:
-----------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: March ___, 1998
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
----------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
7.25% Senior Debentures due 2028
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 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This is one of the Book-Entry Securities
representing the series designated on the face hereof, such series limited in
aggregate principal amount to $500,000,000.
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, 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 discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 15
basis points, plus in the case of each of clause (i) and (ii) accrued interest
to the Redemption Date. For purposes of the preceding sentence, "Treasury Rate"
means, with respect to any Redemption Date, (i) the yield, under the heading
which represents the average for the immediately preceding week, appearing in
the most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Remaining Life, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated and extrapolated
from such yields on a straight line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using 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. The Treasury Rate shall be calculated
on the third Business Day preceding the 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
("Remaining Life") of the Securities 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 the Securities. "Independent Investment Banker" means Morgan Stanley & Co.
Incorporated or, if such firm is unwilling or unable to
5
<PAGE> 6
select the Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee. "Comparable Treasury
Price" means (i) the average of four Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer
than five 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 Independent Investment Banker, 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 Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date. "Reference Treasury Dealer" means Morgan Stanley & Co. Incorporated,
BancAmerica Robertson Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery Securities LLC 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. "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the cities of New York or
Chicago are authorized or obligated by law, executive order or governmental
decree to be closed.
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 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.
6
<PAGE> 7
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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.
7
<PAGE> 8
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.
8
<PAGE> 9
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)
9
<PAGE> 1
EXHIBIT 4.5
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.
7.45% Senior Debentures due 2098
No. 1 CUSIP No. 482620 AX 9
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 FIFTY MILLION DOLLARS ($150,000,000) on March 1,
2098, and to pay interest thereon from March 9, 1998 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on March 1 and September 1 in each year, commencing
September 1, 1998, at the rate of 7.45% 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 fifteenth
calendar day (whether or not a Business Day) immediately preceding such Interest
Payment Date. Any such interest which is payable, but is not punctually paid or
duly provided for on any Interest Payment Date ("Defaulted Interest") 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 inconsistent with the requirements of any
<PAGE> 2
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 on the reverse hereof, 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.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March ___, 1998
K N ENERGY, INC.
By:
---------------------------------------
Treasurer
ATTEST:
By:
----------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated: March ___, 1998
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
---------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
7.45% Senior Debentures due 2098
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 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.
Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Indenture. This Security is a Book-Entry Security
representing the entire principal amount of the series designated on the face
hereof, such series limited in aggregate principal amount to $150,000,000.
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, 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 discounted to the Redemption Date on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20
basis points, plus in the case of each of clause (i) and (ii) accrued interest
to the Redemption Date. For purposes of the preceding sentence, "Treasury Rate"
means, with respect to any Redemption Date, (i) the yield, under the heading
which represents the average for the immediately preceding week, appearing in
the most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the Remaining Life, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated and extrapolated
from such yields on a straight line basis, rounding to the nearest month) or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using 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. The Treasury Rate shall be calculated
on the third Business Day preceding the 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
("Remaining Life") of the Securities 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 the Securities. "Independent Investment Banker" means Morgan Stanley & Co.
Incorporated or, if such firm is unwilling or unable to
5
<PAGE> 6
select the Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee. "Comparable Treasury
Price" means (i) the average of four Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest Reference Treasury
Dealer Quotations, or (ii) if the Independent Investment Banker obtains fewer
than five 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 Independent Investment Banker, 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 Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such Redemption
Date. "Reference Treasury Dealer" means Morgan Stanley & Co. Incorporated,
BancAmerica Robertson Stephens, Chase Securities Inc., Lehman Brothers Inc.,
J.P. Morgan Securities Inc. and NationsBanc Montgomery Securities LLC 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. "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the cities of New York or
Chicago are authorized or obligated by law, executive order or governmental
decree to be closed.
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.
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.
Upon the occurrence of a Tax Event (as defined below) the Company shall
have the right to shorten the maturity of this Security to the extent required,
in the opinion of a nationally recognized independent tax counsel experienced in
such matters to substantially reduce the risk that interest paid on this
Security will not be deductible for federal income tax purposes.
If the maturity of this Security is shortened on the occurrence of a Tax
Event, the Company shall mail a notice to each holder of record of this Security
by first-class mail not more than 60 days after the occurrence of such Tax
Event, stating the new maturity date of this Security. Such notice shall be
effective immediately upon mailing.
"Tax Event" shall mean that the Company has received an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that on or after the date of the issuance of this Security, as a result
of (a) any amendment to, clarification of, or change (including any announced
proposed change) in laws, or any regulations thereunder, of the United States;
(b) any judicial decision, official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action"); or (c) any amendment to, clarification of, or change
in the official position or the interpretation of such Administrative Action or
6
<PAGE> 7
judicial decision that differs from the theretofore generally accepted position,
in each case, on or after the date of the issuance of this Security, there is
more than an insubstantial risk that interest paid by the Company on this
Security is not, or will not be, deductible, in whole or in part, by the Company
for federal income tax purposes.
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.
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 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
7
<PAGE> 8
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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.
8
<PAGE> 9
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)
9
<PAGE> 1
EXHIBIT 4.6
SECURITY
CUSIP No.: 482620 AY 7
No. __ $_____________
THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO
A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY
OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
K N ENERGY, INC.
6.30% Reset Put Securities (REPS(SM)) Due 2021
K N Energy, Inc., a corporation duly organized and existing under the
laws of the State of Kansas (the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of [ ]
HUNDRED MILLION DOLLARS ($[ ],000,000) on March 1, 2021, and to pay interest
thereon from March 9, 1998 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for at the rate determined as set
forth on the reverse hereof, semi-annually on March 1 and September 1 of each
year (each an "Interest Payment Date"), commencing September 1, 1998, on said
principal sum. 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 fifteenth calendar day (whether or not a
Business Day) immediately preceding such Interest Payment Date. Any such
interest which is payable, but is not punctually paid or duly provided for on
any Interest Payment Date ("Defaulted Interest") 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
<PAGE> 2
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 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 made to the further provisions of this Security set forth
on the reverse hereof, including those describing the Call Option, the Mandatory
Put and the Coupon Reset Process, 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.
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: March ___, 1998
K N ENERGY, INC.
By:
------------------------------------
Treasurer
ATTEST:
By:
------------------------------------
Secretary
3
<PAGE> 4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: March ___, 1998
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
------------------------------------
Authorized Officer
4
<PAGE> 5
[REVERSE OF SECURITY]
K N ENERGY, INC.
6.30% Reset Put Securities (REPS(SM)) Due 2021
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities" or the "2021 REPS"), issued and to be
issued in one or more series under an Indenture, dated as of November 20, 1993
(as supplemented from time to time, the "Indenture"), between the Company and
First Trust 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. Capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Indenture. This is one of
the Book-Entry Securities representing the series designated as the "6.30% Reset
Put Securities (REPS(SM)) Due 2021", such series limited in aggregate principal
amount to $400,000,000. Subject to the Call Option and the Mandatory Put
described below, the 2021 REPS are not redeemable prior to maturity. The terms
of the 2021 REPS include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act as in effect from time to
time. The 2021 REPS are subject to all such terms and holders thereof are
referred to the Indenture and the Trust Indenture Act for a statement of those
terms.
Interest Payments
The 2021 REPS will bear interest, payable on each Interest Payment Date
to holders of record on the Regular Record Date preceding such Interest Payment
Date, at 6.30% per annum from March 9, 1998 or from the most recent Interest
Payment Date to which interest have been paid or duly provided for to but
excluding March 1, 2001 (the "Coupon Reset Date"), whereupon (x) if all of the
2021 REPS are purchased on such date by the Callholder pursuant to its Call
Option, the 2021 REPS shall bear interest from and including the Coupon Reset
Date to but excluding March 1, 2021 (the "Final Maturity Date") at the Coupon
Reset Rate determined in accordance with the Coupon Reset Process described
below, or (y) the 2021 REPS shall be purchased by the Company pursuant to the
exercise of the Mandatory Put by the Trustee on behalf of the holders of the
2021 REPS. Interest on this Security shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
If the Callholder elects to purchase the 2021 REPS pursuant to the Call
Option (as defined below), the Calculation Agent (as defined below) will reset
the interest rate for the 2021 REPS effective on the Coupon Reset Date, pursuant
to the Coupon Reset Process described below. In such circumstances, (i) this
Security will be purchased by the Callholder at 100% of the principal amount
hereof on the Coupon Reset Date, on the terms and subject to the conditions
described herein (interest accrued to but excluding the Coupon Reset Date
5
<PAGE> 6
will be paid by the Company on such date to the Holder hereof on the most recent
Regular Record Date), and (ii) from and including the Coupon Reset Date, the
Notes will bear interest at the rate determined by the Calculation Agent in
accordance with the procedures set forth under "Coupon Reset Process" below.
Maturity Date
The 2021 REPS will mature on the Final Maturity Date. On the Coupon
Reset Date, the Holder hereof will be entitled to receive 100% of the principal
amount hereof from either (i) the Callholder, if the Callholder purchases this
Security pursuant to the Call Option, or (ii) the Company, by exercise of the
Mandatory Put (as defined below) by the Trustee for and on behalf of the Holder
hereof, if the Callholder does not purchase this Security pursuant to the Call
Option.
Call Option; Mandatory Put
(i) Call Option. The Callholder, by giving notice to the Trustee (the
"Call Notice"), has the right to purchase the aggregate principal amount of this
Security, in whole but not in part (the "Call Option"), on the Coupon Reset
Date, at a price equal to 100% of the principal amount hereof (the "Call Price")
(interest accrued to but excluding the Coupon Reset Date will be paid by the
Company on such date to the Holder hereof on the most recent Regular Record
Date). The Call Notice is required to be given to the Trustee, in writing, prior
to 4:00 p.m., New York City time, no later than fifteen calendar days prior to
the Coupon Reset Date. The Call Notice must contain the requisite delivery
details, including the identity of the Callholder's DTC account.
If the Callholder exercises the Call Option, unless terminated in
accordance with its terms, (i) not later than 2:00 p.m., New York City time, on
the Business Day prior to the Coupon Reset Date, the Callholder will deliver the
Call Price in immediately available funds to the Trustee for payment thereof to
the holders of the 2021 REPS (including, if applicable, the Holder hereof) on
the Coupon Reset Date and (ii) the Holder hereof will be required to deliver and
will be deemed to have delivered this Security to the Callholder against payment
(degree)therefor on the Coupon Reset Date through the facilities of DTC. The
Callholder is not required to exercise the Call Option, and no holder of the
2021 REPS or any interest therein shall have any right or claim against the
Callholder as a result of the Callholder's decision whether or not to exercise
the Call Option or performance or non-performance of its obligations with
respect thereto.
The Callholder may at any time assign its rights and obligations under
its Call Option; provided, however, that (i) such rights and obligations are
assigned in whole and not in part and (ii) it provides the Trustee and the
Company with notice of such assignment contemporaneously with such assignment.
Upon receipt of notice of assignment, the Trustee will treat the assignee as
Callholder for all purposes hereunder. The Callholder may assign
6
<PAGE> 7
its rights under the Call Option without notice to, or consent of, the holders
of the 2021 REPS (including, if applicable, the Holder hereof).
The Indenture sets forth certain circumstances in which the Call Option
will automatically be terminated.
(ii) Mandatory Put. If the Call Option is not exercised or if the Call
Option otherwise terminates, the Trustee will exercise the right of the holders
of the 2021 REPS (including, if applicable, the Holder hereof) to require the
Company to purchase the aggregate principal amount of 2021 REPS, in whole but
not in part (the "Mandatory Put"), on the Coupon Reset Date at a price equal to
100% of the principal amount thereof (the "Put Price"), plus accrued but unpaid
interest to but excluding the Coupon Reset Date, in each case, to be paid by the
Company to the Holders of the 2021 REPS (including, if applicable, the Holder
hereof) in immediately available funds on the Coupon Reset Date. If the Trustee
exercises the Mandatory Put then the Company will deliver the Put Price in
immediately available funds to the Trustee by no later than 12:00 noon, New York
City time, on the Coupon Reset Date and the holders of the 2021 REPS will be
required to deliver and will be deemed to have delivered the 2021 REPS to the
Company against payment therefor on the Coupon Reset Date through the facilities
of DTC. By its purchase of the 2021 REPS, each Holder irrevocably agrees that
the Trustee shall exercise the Mandatory Put relating to such 2021 REPS for or
on behalf of the holders of the 2021 REPS as provided herein. No holder of any
2021 REPS or any interest therein has the right to consent or object to the
exercise of the Trustee's duties under the Mandatory Put.
Notice to Holders by Trustee
In anticipation of the exercise of the Call Option or the Mandatory Put
on the Coupon Reset Date, the Trustee will notify the Holder hereof, not less
than 30 days nor more than 60 days prior to the Coupon Reset Date, that all 2021
REPS will be delivered on the Coupon Reset Date through the facilities of DTC
against payment of the Call Price by the Callholder under the Call Option or
payment of the Put Price by the Company under the Mandatory Put. The Trustee
will notify the Holder hereof once it is determined whether the Call Price or
the Put Price will be delivered in accordance with the provisions hereof.
Coupon Reset Process
Pursuant to and subject to the terms of a calculation agency agreement,
dated as of March 9, 1998, between the Company and Morgan Stanley & Co.
Incorporated, Morgan Stanley & Co. Incorporated (or its successors or assigns)
will be the Calculation Agent. If the Callholder timely exercises its Call
Option and the Call Option does not otherwise terminate in accordance with the
terms of the Indenture, then the Company and the Calculation Agent shall
complete the following steps (the "Coupon Reset Process") in order to determine
the interest rate ("Coupon Reset Rate") to be paid on the 2021 REPS from and
including the Coupon Reset Date to but excluding the Final Maturity Date:
7
<PAGE> 8
(i) The Company shall provide the Calculation Agent with (a) a
list (a "Dealer List"), no later than five Business Days prior to the
Coupon Reset Date, containing the names and addresses of three dealers
(one of which shall be Morgan Stanley & Co. Incorporated) from which it
desires the Calculation Agent to obtain the Bids for the purchase of
the 2021 REPS and (b) such other material as may reasonably be
requested by the Calculation Agent to facilitate a successful Coupon
Reset Process.
(ii) Within one Business Day following receipt by the
Calculation Agent of the Dealer List, the Calculation Agent shall
provide to each dealer ("Dealer") on the Dealer List (a) a copy of the
Prospectus Supplement and accompanying Prospectus relating to the 2021
REPS, (b) a copy of the form of the 2021 REPS and (c) a written request
that each such Dealer submit a Bid to the Calculation Agent at 12:00
noon, New York City time, on the third Business Day prior to the Coupon
Reset Date (the "Bid Date"). The time on the Bid Date upon which Bids
will be requested may be changed by the Calculation Agent to as late as
3:00 p.m., New York City time. As used herein, "Business Day" means any
day other than a Saturday, Sunday or a day on which banking
institutions in the cities of New York or Chicago are authorized or
obligated by law, executive order or governmental decree to be closed.
"Bid" shall mean an irrevocable written offer given by a Dealer for the
purchase of the 2021 REPS, settling on the Coupon Reset Date, and shall
be quoted by such Dealer as a stated yield to maturity on the 2021 REPS
("Yield to Maturity"). Each Dealer shall be provided with (a) the name
of the Company, (b) an estimate of the Purchase Price (which shall be
stated as a U.S. dollar amount and be calculated by the Calculation
Agent in accordance with clause (iii) below), (c) the principal amount
and maturity of the 2021 REPS and (d) the method by which interest will
be calculated on the 2021 REPS.
(iii) The purchase price to be paid by any Dealer for the 2021
REPS (the "Purchase Price") shall be equal to (a) the principal amount
of the 2021 REPS plus (b) a premium (the "Notes Premium") which shall
be equal to the excess, if any, of (x) the discounted present value to
the Coupon Reset Date of a bond with a maturity of March 1, 2021 which
has an interest rate equal to 6.042%, semi-annual interest payments on
each March 1 and September 1, commencing September 1, 2001, and a
principal amount of $400,000,000, and assuming a discount rate equal to
the Treasury Rate over (y) $400,000,000. "Treasury Rate" means the per
annum rate equal to the offer side yield to maturity of the current
on-the-run twenty-year United States Treasury Security per Telerate
page 500 (or any successor or substitute page as may replace such page
on such service) at 11:00 a.m., New York City time, on the Bid Date (or
such other date or time that may be agreed upon by the Company and the
Calculation Agent) or, if such rate does not appear on Telerate page
500 (or any successor or substitute page as may replace such page on
such service) at such time, the rates on GovPx End-of-Day Pricing at
3:00 p.m., New York City time, on the Bid Date.
8
<PAGE> 9
(iv) The Calculation Agent shall immediately notify the
Company of (a) the names of each of the Dealers from whom the
Calculation Agent received Bids on the Bid Date, (b) the Bid submitted
by each such Dealer and (c) the Purchase Price as determined pursuant
to clause (iii) hereof. Unless the Call Option has terminated in
accordance with the terms of the Indenture, the Calculation Agent shall
thereafter select from the Bids received the Bid with the lowest Yield
to Maturity (the "Selected Bid") and set the Coupon Reset Rate equal to
the interest rate which would amortize the Notes Premium fully over the
term of the 2021 REPS at the Yield to Maturity indicated by the
Selected Bid, provided, however, that if the Calculation Agent has not
received a timely Bid from a Dealer, the Selected Bid shall be the
lowest of all Bids received by such time and provided, further that if
any two or more of the lowest Bids submitted are equivalent, the
Company shall in its sole discretion select any of such equivalent Bids
(and such selected Bid shall be the Selected Bid). In all cases, Morgan
Stanley & Co. Incorporated, in its capacity as a Dealer has the right
to match the Bid with the lowest Yield to Maturity, whereby Morgan
Stanley & Co. Incorporated's Bid becomes the Selected Bid. The
Calculation Agent shall promptly notify the Trustee of the Coupon Reset
Rate.
No Sinking Fund
The Securities of this series shall not be subject to a sinking fund
requirement.
Discharge and Defeasance
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.
Events of Default
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.
Amendments to Indenture; Waiver of Defaults
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
9
<PAGE> 10
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series 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.
Obligations Unconditional
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.
Transfer and Exchange
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,
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<PAGE> 11
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 one 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 Trust National
Association, at One Illinois Center, Suite 3000, 111 East Wacker Drive, Chicago,
Illinois 60601.
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.
Holders
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.
CUSIP Number
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.
Governing Law
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
11
<PAGE> 12
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)
12
