EXHIBIT 1(a)
UTILICORP UNITED INC.
UTILICORP CAPITAL TRUST I
9 3/4% PREMIUM EQUITY PARTICIPATING
SECURITY UNITS--PEPS-SM- UNITS
UNDERWRITING AGREEMENT
----------------------
September 23, 1999
MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PAINEWEBBER INCORPORATED
As Representatives of the
several Underwriters
c/o MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
From time to time UtiliCorp Capital Trust I, a Delaware statutory
business trust formed under the laws of the State of Delaware (the "Trust"),
and UtiliCorp United Inc., a Delaware corporation (the "Company"), propose to
enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated herein
and therein, whereby the Trust and the Company will issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and
the securities specified therein) an aggregate of 9,000,000 __% Premium
Equity Participating Security Units--PEPS-SM- Units (the "PEPS Units"),
specified in Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Firm Securities") and, if set forth in the applicable
Pricing Agreement and solely for the purpose of covering over-allotments, an
additional number of PEPS Units specified in Schedule II to such Pricing
Agreement (the "Option Securities"). Each PEPS Units will initially consist
of (a) a stock purchase contract (a "Purchase Contract") under which (i) the
holder of a PEPS Units will purchase from the Company on November 16, 2002,
for an amount in cash equal to the stated amount per Security of $25 (the
"Stated Amount"), a number of shares of common stock, par value $1.00 per
share, of the Company, (the "Common Stock"), as set forth in such Purchase
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Contract and (ii) the Company will pay contract fees as set forth in such
Purchase Contract (the "Contract Fees") to the holder of PEPS Units, and (b)
a Trust Preferred Security (a "Trust Preferred Security") having a stated
liquidation amount of $25. per Trust Preferred Security, representing an
undivided beneficial ownership interest in the assets of the Trust and
guaranteed by the Company as to the payment of cash distributions, out of
moneys held by the Trust, and as to payments on liquidation or redemption and
described in any Prospectus (as defined in Section 2(a) hereof). In
accordance with the terms of a Purchase Contract Agreement (the "Purchase
Contract Agreement") to be entered into between the Company and Bank One
Trust Company, NA, as Purchase Contract Agent (the "Purchase Contract
Agent"), the holders of the PEPS Units will pledge the Trust Preferred
Securities to Chase Manhattan Trust Company, National Association, as
Collateral Agent (the "Collateral Agent"), pursuant to a Pledge Agreement
(the "Pledge Agreement") to be entered into between the Company and the
Collateral Agent, to secure the holders' obligations to purchase Common Stock
under the Purchase Contracts. In the event any Option Securities are
purchased, the holders will pledge to the Collateral Agent the additional
Trust Preferred Securities having an aggregate principal amount equal to the
aggregate Stated Amount times the number of Option Securities to be purchased
by the Underwriters upon the exercise of such option. The Firm Securities
and the Option Securities, if any, which the Underwriters elect to purchase
pursuant to Section 4 hereof will collectively be referred to herein as the
"Designated Securities". The Common Stock will have attached thereto rights
(the "Rights") issued pursuant to a Rights Agreement (the "Rights Agreement")
dated as of December 31, 1996 between the Company and First Chicago Trust
Company of New York, as Rights Agent. The Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement are herein collectively referred
to as the "PEPS Agreements".
The Company will own all of the beneficial ownership interests
represented by the common securities (the "Common Securities" and, together
with the Trust Preferred Securities, the "Trust Securities") of the Trust.
Concurrently with the issuance of the Trust Preferred Securities and the
Company's purchase of all of the Common Securities, the Trust will invest the
proceeds of each thereof in the Company's Senior Deferrable Notes due
November 16, 2004 (the "Senior Deferrable Notes") to be issued pursuant to an
Indenture, dated as of November 1, 1990 as supplemented by a Twelfth
Supplemental Indenture dated as of the Closing Date (the "Indenture"),
between the Company and Bank One Trust Company, NA (formerly The First
National Bank of Chicago), as trustee (the "Indenture Trustee"). The Company
will guarantee (the "Guarantee") the Trust Securities to the extent set forth
in a Guarantee Agreement (the "Guarantee Agreement") to be entered into
between the Company and Bank One Trust Company, NA, as trustee (the
"Guarantee Trustee"), for the benefit of the holders from time to time of the
Trust Securities. The Trust Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust (the "Amended
Declaration"), among the Company, as Sponsor, Dale J. Wolf, Ellen E.
Fairchild and Kenneth C. Jones, as trustees (the "Regular Trustees"), Bank
One Trust Company, NA, as property trustee (the "Property Trustee"), Bank One
Delaware, Inc. as the Delaware Trustee (the "Delaware Trustee" and, together
with the Property Trustee and the Regular Trustees, the "Trustees"), and the
holders from time to time of the undivided beneficial ownership interests in
the assets of the Trust. The Company together with the Trust shall be
hereinafter referred to as the "Issuers".
1. Particular sales of Designated Securities may be made from time to
time to the
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Underwriters of such Designated Securities, for whom the firms designated as
representatives of the Underwriters of such Designated Securities in the
Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act
without any firm being designated as their representative. This Underwriting
Agreement shall not be construed as an obligation of the Issuers to sell any
of the PEPS Units or as an obligation of any of the Underwriters to purchase
any of the PEPS Units. The obligation of the Issuers to issue and sell any
of the PEPS Units and the obligation of any of the Underwriters to purchase
any of the PEPS Units shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing
Agreement shall specify the aggregate number of Firm Securities, the
aggregate numbers of Option Securities, if any, the initial public offering
price of such Firm and Option Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm and Option Securities and payment therefor. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts),
and may be evidenced by an exchange of telegraphic communications or any
other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. Each of the Issuers jointly and severally represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement or registration statements relating
to the registration of certain securities of the Issuers including the
PEPS Units, the Purchase Contracts, the Trust Preferred Securities, the
Guarantee, the Senior Deferrable Notes (as hereafter defined) and the
Common Stock has been filed with the Securities and Exchange Commission
(the "Commission") on Form S-3; such registration statement or
registration statements and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to such registration statement
or registration statements, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives
for each of the other Underwriters have been declared effective by the
Commission in such form and the Indenture, the Amended Declaration and
the Guarantee Agreement were qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); except for the Form 8-K
filed with the Commission on September 23, 1999, no other document with
respect to such registration statement or registration statements or
document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; and no stop order suspending
the effectiveness of such registration statement or registration
statements has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in such registration statement or registration statements or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), being hereinafter called a "Preliminary
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Prospectus"); the various parts of such registration statement or
registration statements, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained therein
at the time such part of the registration statement or registration
statements became effective, each as amended at the time such part of
registration statement or registration statements became effective,
being hereinafter called the "Registration Statement"; the prospectus
relating to the PEPS Units, the Purchase Contracts, the Trust Preferred
Securities, the Senior Deferrable Notes, the Guarantee and the Common
Stock, in the form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of
this Agreement, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus, as amended
or supplemented, shall be deemed to refer to the Prospectus, as amended
or supplemented, in relation to the applicable Designated Securities in
the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including
any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Issuers by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus, as amended or supplemented, relating to such Designated
Securities;
(c) The Registration Statement and the Prospectus conform, and any
further
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amendments of supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder, and
do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Issuers by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus, as amended or supplemented, relating to such Designated
Securities;
(d) The Trust has no subsidiaries. Neither the Trust nor the
Company (including all of its subsidiaries taken as a whole, each a
"Subsidiary" and, collectively, the "Subsidiaries") has incurred any
liability or obligation, direct or contingent, or entered into any
transaction, not in the ordinary course of business, that is material to
the Trust or the Company and its Subsidiaries taken as a whole, or
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in
the capital stock, or material increase in the short-term debt or
long-term debt, of the Company or any of its Subsidiaries or any
material adverse change, or any development involving, or which may
reasonably be expected to involve, a prospective material adverse change
in or affecting the condition (financial or other), results of
operations, business, prospects, net worth or assets of the Company and
its Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) This Agreement and any applicable Pricing Agreement have been
duly authorized, executed and delivered by the Trust and the Company and
conform in all material respects to the descriptions thereof in the
Prospectus, as amended or supplemented, with respect to such Designated
Securities;
(g) The Designated Securities and the PEPS Agreements have been
duly authorized and, at the Closing Date or, in the case of Purchase
Contracts constituting part of the Option Securities, the Option Closing
Date, will have been duly executed and delivered by the Company, and, as
of the Closing Date or the Option Closing Date, as the case may be,
assuming due authorization, execution and delivery by parties other than
the Company thereunder, the PEPS Agreements will be valid and legally
binding obligations of the Company, 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. The Designated Securities and the PEPS
Agreements conform in all material respects to the descriptions thereof
contained in the Prospectus;
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(h) The shares of Common Stock to be issued and sold by the
Company pursuant to the Purchase Contracts upon settlement thereof have
been duly and validly authorized and reserved for issuance. Such Common
Stock, when issued and delivered in accordance with the provisions of
the PEPS Agreements, will be duly authorized, validly issued, fully paid
and non-assessable, and the issuance of such Common Stock will not be
subject to any preemptive or similar rights;
(i) The shares of Common Stock outstanding prior to the issuance
of the Designated Securities have been duly authorized and are validly
issued, fully paid and non-assessable;
(j) The authorized capital stock of the Company conforms as to
legal matters as to the description thereof contained in the Prospectus;
(k) The Rights Agreement has been duly authorized, executed and
delivered by the Company;
(l) The Remarketing Agreement (the "Remarketing Agreement") to be
entered into by and among the Company, the Trust and Morgan, Stanley &
Co. Incorporated, as Remarketing Agent, has been duly authorized by the
Company and when validly executed and delivered by the Company will
constitute a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights and remedies generally,
as from time to time in effect, and by applicable principles of equity
and considerations of public policy (regardless of whether
enforceability is considered in a proceeding in equity or at law); and
the Remarketing Agreement will conform to the description thereof in the
Prospectus;
(m) Each of the Company and its Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with full power
and authority (corporate and other) to own or lease its properties and
conduct its business as described in the Prospectus, and is duly
qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of
the properties owned or leased by it makes such qualification necessary.
All of the shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable. All of
the outstanding shares of capital stock of each Subsidiary are owned
directly or indirectly by the Company (except for United Networks
Limited, of which the Company owns 79% of the outstanding shares of
capital stock), free and clear of any claim, lien, encumbrance or
security interest except as otherwise disclosed in writing to the
Representatives;
(n) The Indenture and the Senior Deferrable Notes to be issued
thereunder, have been duly authorized and, at the Closing Date, will have
been duly executed and delivered and will constitute,
and the Senior Deferrable Notes, when duly executed and authenticated in
accordance with the Indenture and issued and delivered under the
circumstances provided in the Prospectus, as amended or supplemented,
will constitute,
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valid and legally binding obligations of the Company enforceable in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights and remedies generally,
as from time to time in effect, and by applicable principles of equity
and considerations of public policy (regardless of whether
enforceability is considered in a proceeding in equity or at law); and
the Indenture and the Senior Deferrable Notes will conform to the
description thereof in the Prospectus;
(o) The Amended Declaration has been duly authorized by the
Company, and when duly executed by the proper officers of the Company
and the Regular Trustees (assuming due execution and delivery by the
Property Trustee and the Delaware Trustee) and delivered by the Company,
will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general principles of equity
(whether considered in a proceeding in equity or at law);
(p) Each of the Guarantee and the Guarantee Agreement has been
duly authorized and when validly executed and delivered by the Company
will constitute a legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights generally or any Pricing
Agreement and general principles of equity (regardless of whether
enforceability is sought in a proceeding in equity or at law); and the
Guarantee will conform to the description thereof in the Prospectus;
(q) Neither the Company nor any of its Subsidiaries is, nor with the
giving of notice or lapse of time or both would be, in violation of or in
default under, nor will the execution, delivery and performance by the
Company of its obligations under, this Agreement or any Pricing Agreement,
the PEPS Agreements, the Amended Declaration, the Guarantee Agreement, the
Indenture and the Remarketing Agreement and the consummation of the
transactions (the "Transactions") contemplated in this Agreement or any
Pricing Agreement, the PEPS Agreements, the Amended Declaration, the
Guarantee Agreement, the Indenture and the Remarketing Agreement, nor will
compliance by the Company with its obligations under this Agreement, the
PEPS Agreements, the Amended Declaration and the Remarketing Agreement, the
issuance and delivery of the PEPS Units, the Guarantee, the Senior
Deferrable Notes and the Common Stock, result in a violation of, or
constitute a default under, (1) the certificate of incorporation, by-laws
or other governing documents of the Company or any of its Subsidiaries,
(2) any agreement, indenture or other instrument to which the Company or
any of its Subsidiaries is a party or by which any of them is bound, or to
which any of their properties is subject, or (3) any law, rule,
administrative regulation or decree of any court or any governmental agency
or body having jurisdiction over the Company, its Subsidiaries or any of
their properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company or
any of its Subsidiaries which
7
would be material to the Company and its Subsidiaries taken as a whole.
Except for permits and similar authorizations required under the Act,
the Trust Indenture Act, the Federal Power Act, the laws of the States
of Colorado and West Virginia and the securities or Blue Sky laws of
certain jurisdictions, and except for such permits and authorizations as
have been obtained, no consent, approval, authorization or order of any
court, governmental agency or body or financial institution is required
for the issuance of the PEPS Units, the Guarantee, the Senior Deferrable
Notes or the Common Stock or the consummation of the Transactions;
(r) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act
of the State of Delaware (the "Delaware Trust Act") with the trust power
and authority to own property and conduct its business as described in
the Prospectus, and has conducted and will conduct no business other
than the transactions contemplated by this Agreement as described in the
Prospectus; the Trust is not a party to or bound by any agreement or
instrument and after the Trust executes the Amended Declaration, the
Trust will not be a party to or bound by any agreement or instrument
other than this Agreement, the Remarketing Agreement, the Amended
Declaration and the other agreements entered into in connection with the
transactions contemplated hereby; the Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement, the Remarketing Agreement and the
Amended Declaration and described in the Prospectus; and the Trust is
not a party to or subject to any action, suit or proceeding of any
nature;
(s) The Amended Declaration has been duly authorized by the
Company, as Sponsor, and, when duly executed and delivered by the
Company, as Sponsor, and the Regular Trustees (assuming due
authorization, execution and delivery by the Property Trustee and the
Delaware Trustee), will constitute a legal, valid and binding obligation
of the Trust, enforceable against the Trust in accordance with its
terms, except as the enforceability thereof may be limited by the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general principles of equity
(whether considered in a proceeding in equity or at law), and will
conform to the description thereof contained in the Prospectus;
(t) The Trust Securities, upon issuance and delivery and payment
therefor in the manner described herein, will be duly authorized,
validly issued, fully paid and, in the case of the Trust Preferred
Securities, non-assessable and will conform to the descriptions
contained in the Prospectus;
(u) The Remarketing Agreement has been duly authorized by the
Trust and will be, when delivered by the Trust, duly executed and
delivered by the Trust;
(v) The Trust is not, nor with the giving of notice or lapse of time
or both would be, in violation of or in default under, nor will the
execution, delivery and performance by the Trust of its obligations under
this Agreement or any Pricing Agreement; the Amended Declaration, the
Remarketing Agreement and the Trust Securities by the Trust, the purchase
of the Senior Deferrable Notes by the Trust from the Company, the
distribution of the Senior Deferrable Notes upon the liquidation of the
Trust in the circumstances
8
contemplated by the Amended Declaration, and the consummation by the
Trust of the transactions contemplated herein and in the Amended
Declaration and the Remarketing Agreement (the "Trust Transactions"),
result in a violation of any statute or order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Trust
or any of its assets. Except for permits and similar authorizations
required under the Act, the qualification of the Amended Declaration
under the Trust Indenture Act, the Exchange Act, the Federal Power Act,
the laws of the States of Colorado and West Virginia and the securities
or Blue Sky laws of certain jurisdictions, and except for such permits
and authorizations as have been obtained, no consent, approval,
authorization or order of any court, governmental agency or body or
financial institution is required for the consummation of the Trust
Transactions;
(w) The Trust, the Company and its Subsidiaries have good and
marketable title to all material real and personal property owned by
them, in each case free and clear of all mortgages, liens, encumbrances
and defects, except such as are described or referred to in the
Prospectus, as amended or supplemented, or such as do not materially
affect the values of such property and do not interfere with the use
made or proposed to be made of such property by the Trust or the Company
or such Subsidiaries; and any real property and buildings held under
lease by the Trust and the Company and its Subsidiaries are held by them
under valid, existing and enforceable leases with such exceptions as are
not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Trust and the Company or such
Subsidiaries;
(x) Except as described in the Prospectus, as amended or
supplemented, there is no litigation or governmental proceeding to which
the Trust or the Company or any of its Subsidiaries is a party or to
which any property of the Trust, or the Company or any of its
Subsidiaries is subject or which is pending or, to the knowledge of the
Trust or the Company, contemplated against the Trust or the Company or
any of its Subsidiaries which might result in any material adverse
change in the condition (financial or other), results of operations,
business, prospects, net worth or assets of the Trust and the Company
and its Subsidiaries taken as a whole;
(y) The Trust, the Company and its Subsidiaries are not in
violation of any law, ordinance, governmental rule or regulation or
court decree to which it is subject which violation would have a
material adverse effect on the condition (financial or other), results
of operations, business, prospects, net worth or assets of the Trust and
the Company and its Subsidiaries taken as a whole;
(z) The Issuers have not distributed and will not distribute prior
to the Closing Date or the Option Closing Date (each as defined herein)
any offering material in connection with the offering and sale of the
Designated Securities other than the Registration Statement, the
Prospectus, the Prospectus Supplement, or other materials, if any,
permitted by the Act;
(aa) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
9
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences;
(bb) The accountants who have audited and reported upon the
financial statements filed with the Commission as part of the
Registration Statement and the Prospectus, as amended or supplemented,
are independent accountants as required by the Act and the regulations
thereunder. The consolidated financial statements and schedules
(including the related notes) included or incorporated by reference in
the Registration Statement or Prospectus, as amended or supplemented,
fairly present the consolidated financial position, the results of
operations and changes in financial condition of the entity or entities
to which such statements relate at the respective dates and for the
respective periods to which they apply. Such financial statements have
been prepared in accordance with generally accepted accounting
principles consistently applied, except as set forth in the Registration
Statement and Prospectus, as amended or supplemented. The other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus, as amended or supplemented,
are fairly presented and have been prepared on a basis consistent with
such financial statements and the books and records of the entities
purported to be shown thereby;
(cc) Neither the Trust nor the Company is an "investment company"
required to register under, or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended, nor will
be required to so register, nor will be such after giving effect to the
transactions contemplated hereby; and
(dd) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem (that is, any significant risk that computer hardware or
software applications used by the Company and its subsidiaries will not,
in the case of dates or time periods occurring after December 31, 1999,
function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000); as a result of such review, (i) the
Company has no reason to believe, and does not believe, that (A) there
are any issues related to the Company's preparedness to address the Year
2000 Problem that are of a character required to be described or
referred to in the Registration Statement or Prospectus which have not
been accurately described in the Registration Statement or Prospectus
and (B) the Year 2000 Problem will have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole, or result in any material loss or interference with the business
or operations of the Company and its subsidiaries, taken as a whole; and
(ii) the Company reasonably believes, after due inquiry, that the
suppliers, vendors, customers or other material third parties used or
served by the Company and such subsidiaries are addressing or will
address the Year 2000 Problem in a timely manner, except to the extent
that a failure to address the Year 2000 Problem by any supplier, vendor,
customer or material third party would not have a material adverse
10
effect on the condition, financial or otherwise, or on the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale upon the terms and conditions set forth in the
Prospectus, as amended or supplemented.
4. Delivery to the Underwriters of and payment for the Firm
Securities shall be made at the place and time and date specified in the
applicable Pricing Agreement or at such other place and time and date as the
Representatives and the Issuers may agree upon in writing (the "Closing
Date").
Delivery to the Underwriters of and payment for any Option
Securities shall be made at the place specified in the applicable Pricing
Agreement at such time and date (the "Option Closing Date"), which may be the
same as the Closing Date but shall in no event be earlier than the Closing
Date nor earlier than three nor later than ten business days after the giving
of the notice hereinafter referred to, as shall be specified in a written
notice from the Representatives on behalf of the Underwriters to the Issuers
of the determination of the Underwriters to purchase a number, specified in
such notice, of Option Securities. Such notice may be given to the Issuers
within 30 days after the date of the applicable Pricing Agreement.
Except as set forth in the Pricing Agreement, one or more
fully-registered global certificates for the Firm Securities and Option
Securities to be purchased by each Underwriter pursuant to the Pricing
Agreement relating thereto, in definitive form registered in the name of the
nominee of The Depository Trust Company, shall be delivered by or on behalf
of the Issuers to The Depository Trust Company, which shall release such Firm
Securities and Option Securities to the accounts of the Representatives for
the account of such Underwriter, at Closing Date or the Option Closing Date,
as the case may be, against payment by such Underwriter or on its behalf of
the purchase price therefor by certified or official bank check or checks,
payable to the order of the Issuer in the funds specified in such Pricing
Agreement.
The Trust Preferred Securities underlying the PEPS Units will be
pledged with the Collateral Agent to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. Such pledge shall be
effected by the transfer to the Securities Intermediary of the Trust
Preferred Securities to be pledged to the Collateral Agent in accordance with
the Pledge Agreement.
5. Each of the Issuers jointly and severally agrees with each of
the Underwriters of any Designated Securities:
(a) To prepare the Prospectus, as amended and supplemented, in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b); to make
no further amendment or any
11
supplement to the Registration Statement or Prospectus, as amended or
supplemented, after the date of the Pricing Agreement relating to such
Designated Securities and prior to the later of the Closing Date or the
Option Closing Date, if any, for the Designated Securities which shall
be disapproved by the Representatives for the Designated Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after the Closing Date, if
any, and furnish the Representatives with copies thereof; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of such Designated Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the PEPS Units, the Common Stock,
the Preferred Securities and the Guarantee, of the suspension of the
qualification of such Preferred Securities or the Guarantee for offering
or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such sto order or of any such order preventing or
suspending the use of any prospectus relating to the PEPS Units, the
Common Stock, the Preferred Securities and the Guarantee or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the PEPS Units, the
Common Stock, the Preferred Securities and the Guarantee for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of such PEPS
Units, Common Stock, Preferred Securities, the Guarantee and the Senior
Deferrable Notes provided that in connection therewith neither the Trust
nor the Company shall be required to qualify as a foreign corporation or
to file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus, as
amended or supplemented, in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the PEPS
Units, the Common Stock, the Preferred Securities and the Guarantee and if
at such time any event shall have occurred as a result of which the
Prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to
12
comply with the Act or the Exchange Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance;
(d) In the case of the Company, to make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c)), an earnings statement of the Company and
its Subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including at the option of the Company Rule 158);
(e) The Issuers hereby agree that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the
Underwriters, they will not, during the period beginning from the date
of the Pricing Agreement for such Designated Securities and continuing
to and including the earlier of (i) the date, after the later of the
Closing Date or the Option Closing Date, if any, on which the
distribution of the Designated Securities ceases as determined by Morgan
Stanley & Co. Incorporated and (ii) the date which is 90 days after the
later of the Closing Date or the Option Closing Date, if any, for the
Designated Securities, (i) register, 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 Designated
Securities, Purchase Contracts or shares of Common Stock or any
securities convertible into or exercisable or exchangeable for
Designated Securities, Purchase Contract or 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
Designated Securities, Purchase Contracts or Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled
by delivery of Designated Securities, Purchase Contracts or Common Stock
or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Designated Securities 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, director benefit or dividend reinvestment plans or (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;
(f) To the extent necessary to comply with New York Stock Exchange
rules and regulations or the rules and regulations of any other exchange
on which the PEPS Units are listed, to furnish to the holders of PEPS
Units as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries audited by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the first such fiscal quarter ending after
the effective date of the Registration Statement), consolidated summary
financial information of the Company and its Subsidiaries for such
quarter in reasonable detail;
13
(g) To cause the Designated Securities and the Common Stock, to be
issued and sold pursuant to the Purchase Contracts, to be approved for
listing subject only to official notice of issuance on the New York
Stock Exchange;
(h) The Issuers will apply the net proceeds of the sale of the
Designated Securities as set forth in the Prospectus, as amended or
supplemented.
6. The Issuers jointly and severally covenant and agree with the
several Underwriters that the Issuers will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Trust's and the
Company's counsel and accountants in connection with the registration of the
PEPS Units, the Common Stock, the Preferred Securities, the Guarantee and the
Senior Deferrable Notes under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the costs incident to the authorization, issuance, sale and
delivery of the Senior Deferrable Notes, Trust Securities, Guarantees,
Purchase Contracts, Common Stock to be issued and sold pursuant to the
Purchase Contracts and PEPS Units and any taxes payable in connection
therewith; (iii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Pricing Agreement, any Blue Sky and/or
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Designated Securities; (iv) all
expenses in connection with the qualification of the PEPS Units, the Common
Stock, the Preferred Securities, the Purchase Contracts, the Guarantee and
the Senior Deferrable Notes for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and/or legal investment surveys; (v) any filing
fees incident to any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Designated
Securities; (vi) the cost of preparing certificates for the Designated
Securities, including all taxes on the transfer and sale of the Designated
Securities; (vii) the fees and expenses of any transfer agent and registrant
for the Designated Securities; (viii) any fees charged by securities services
for rating the Designated Securities; (ix) all costs and expenses incident to
listing the Designated Securities on the New York Stock Exchange and the cost
of registering the Designated Securities under Section 12 of the Exchange
Act; (x) the cost of qualifying the Designated Securities with The Depository
Trust Company; and (xi) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 12 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Designated Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Representatives, to the condition
that all representations and warranties and other statements of the Issuers
in or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Closing Date or the Option
Closing Date for the Designated Securities, true and correct, the condition
that the Issuers shall have performed all of their obligations hereunder
theretofore to be performed, and the following additional conditions:
14
(a) The Prospectus, as amended or supplemented, in relation to the
applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof or
suspending the qualification of the Indenture, the Guarantee Agreement
or the Amended Declaration shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission;
and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives'
reasonable satisfaction;
(b) Milbank, Tweed, Hadley & McCloy LLP, counsel for the
Underwriters, shall have furnished to the Representatives such opinion
or opinions, dated the Closing Date for such Designated Securities, with
respect to the validity of the Designated Securities, the Registration
Statement, the Prospectus, as amended or supplemented, and other related
matters as the Representatives may reasonably request, such counsel
being able to rely on the opinions, dated the Closing Date for the
Designated Securities of Blackwell Sanders Pepper Martin LLP, of
Richards, Layton & Finger, P.A. or of local counsel, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Blackwell Sanders Pepper Martin LLP, counsel for the Issuers,
shall have furnished to the Representatives their written opinion, dated
the Closing Date for the Designated Securities, in form and substance
satisfactory to the Representatives and their counsel, to the effect
that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, 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, has duly obtained or has succeeded to and holds all
material franchises and other governmental and corporate authority
necessary to carry on the public utility business in which it is
engaged and to own, lease and operate the properties in use in such
business and the maintenance of such franchises and other authority
is not subject to any burdensome restriction or condition of an
unusual character (except as described in the Registration
Statement);
(ii) Each Subsidiary of the Company (other than the Company's
foreign subsidiaries) has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
failure so to qualify would have a materially adverse effect on the
condition (financial or other), results of operations, business,
prospects, net worth or assets of the Company and its Subsidiaries
taken as a whole;
(iii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer
of, (A) any shares of Common Stock issuable pursuant to the
Purchase Contracts or (B) the Senior
15
Deferrable Notes pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such counsel;
(iv) The Designated Securities and the PEPS Agreements have
been duly authorized and, at the Closing Date or, in the case of
Purchase Contracts constituting part of the Option Securities, the
Option Closing Date, will have been duly executed and delivered by
the Company, and, as of the Closing Date or the Option Closing
Date, as the case may be, assuming due authorization, execution and
delivery by parties other than the Company thereunder, the PEPS
Agreements will be valid and legally binding obligations of the
Company, 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. The Designated Securities and the PEPS
Agreements conform in all material respects to the descriptions
thereof contained in the Prospectus;
(v) The shares of Common Stock to be issued and sold by the
Company pursuant to the Purchase Contracts upon settlement thereof
have been duly and validly authorized and reserved for issuance.
Such Common Stock, when issued and delivered in accordance with the
provisions of the PEPS Agreements, will be duly authorized, validly
issued, fully paid and non-assessable, and the issuance of such
Common Stock will not be subject to any preemptive or similar
rights;
(vi) Each of the Guarantee Agreement and the Guarantee has
been duly authorized and when validly executed and delivered by the
Company will constitute a valid and binding obligation of the
Company, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
and the Guarantee Agreement and the Guarantee conform to the
description thereof in the Prospectus, as amended or supplemented;
(vii) The Amended Declaration has been duly authorized by the
Company, and when duly executed by the proper officers of the
Company and the Regular Trustees (assuming due execution and
delivery by the Property Trustee and the Delaware Trustee) and
delivered by the Company, will constitute a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law); and the Amended
Declaration conforms to the description thereof in the Prospectus;
(viii) The Indenture and the Senior Deferrable Notes to be
issued
16
thereunder, have been duly authorized by the Company; the Indenture
has been duly qualified under the Trust Indenture Act, and, at the
Closing Date will have been duly executed and delivered and will
constitute, and the Senior Deferrable Notes, when duly executed and
authenticated in accordance with the Indenture and issued and
delivered under the circumstances provided in the Prospectus, as
amended or supplemented, will constitute, valid and binding
obligations of the Company enforceable in accordance with their
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
and the Indenture and the Senior Deferrable Notes conform to the
descriptions thereof in the Prospectus;
(ix) The Purchase Contract Agreement, the Pledge Agreement
and the Purchase Contracts constituting a part of the Designated
Securities being delivered at the Closing Date or Option Closing
Date, as the case may be, and the Designated Securities have been
duly authorized, executed and delivered by the Company, and each is
a valid and binding agreement 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 principals of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
provided, however, that based on a review of applicable case law,
upon the occurrence of a Termination Event, Section 365(e)(1) of
the Bankruptcy Code (11 U.S.C. Sections 101-1330, as amended)
should not substantively limit the provisions of Section 3.16 and
5.8 of the Purchase Contract Agreement and Section 5.4 of the
Pledge Agreement that require termination of the Purchase Contracts
and release of the Collateral Agent's security interest in the
Trust Preferred Securities or the Treasury Securities;
(x) The Pledge Agreement creates in favor of the Collateral
Agent for the benefit of the Company to secure the obligations of
the holder under the Purchase Contracts, a valid and perfected
security interest under the New York Uniform Commercial Code as in
effect on the date hereof in the State of New York in the Pledged
Trust Preferred Securities (as defined in the Pledge Agreement) and
the Pledged Treasury Securities (as defined in the Pledge
Agreement) from time to time credited to the Collateral Account;
(xi) The Company has full corporate power and corporate
authority to enter into and perform its obligations under this
Agreement, the PEPS Units, the Common Stock and the Pricing
Agreement with respect to the Designated Securities and to issue
the Senior Deferrable Notes and the Guarantee;
(xii) This Agreement and the Pricing Agreement with respect
to the Designated Securities have been duly authorized, executed
and delivered by each of the Trust and the Company;
(xiii) The orders of the Federal Energy Regulatory Commission,
the State
17
Corporation Commission and the Public Utilities Commission of the
State of Colorado and the Public Service Commission of West
Virginia authorizing the issuance and sale of the Designated
Securities, the Senior Deferrable Note, the Guarantee and the
Purchase Contracts are in effect at the Closing Date and no other
approval, authorization, consent or order of any federal, state or
local commission or governmental authority (other than under state
securities or Blue Sky laws as to which such counsel is not called
upon to express an opinion) is required for the issuance and sale
of the Designated Securities, the Senior Deferrable Note, the
Guarantee and the Purchase Contracts, the performance by the Trust
or the Company of its other obligations under this Agreement or any
applicable Pricing Agreement, the issuance and sale of the Senior
Deferrable Note, the capital contribution by the Company to the
Trust (the "Contribution"), the issuance and sale of the Designated
Securities, the issuance and sale of the Senior Deferrable Note and
the issuance and sale of the Guarantee, are in conformity with each
such approval, authorization, consent and order;
(xiv) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Issuer or the Company or its Subsidiaries is a party or to which
any of the properties of the Issuer or the Company is subject that
is required to be described in the Registration Statement or the
Prospectus, as amended or supplemented, and is not so described or
of any contract or other document that is required to be described
in the Registration Statement or the Prospectus, as amended or
supplemented, or to be filed as an exhibit to the Registration
Statement that is not described or filed as required;
(xv) The statements made in the Registration Statement and
the Prospectus, as amended or supplemented, under the captions,
"Prospectus Supplement Summary", "Description of the PEPS Units",
"Description of the Purchase Contracts", "Certain Provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement", "Description of the Trust Preferred Securities",
"Description of the Senior Deferrable Notes", "Description of the
Guarantee", "Underwriting", "ERISA Considerations", "The Trust",
"Description of Common Stock", "Description of Debt Securities",
"Description of Subordinated Debentures", "Description of Trust
Preferred Securities", "Description of the Guarantee", "Description
of Stock Purchase Contracts And Stock Purchase Units", insofar as
such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings;
(xvi) The execution, delivery and performance by the Trust and
the Company of this Agreement and the Pricing Agreement with respect
to the Designated Securities, the performance and consummation by the
Company of the Transactions, the execution, delivery and performance
by the Company of the Guarantee Agreement, the Indenture, the PEPS
Agreements and the Remarketing Agreement, and the issuance of the
Guarantee, the Senior Deferrable Note, the
18
Common Stock and the PEPS Units will not violate any provision of
applicable law or the charter or the by-laws of the Company or any
agreement or other instrument binding upon the Trust or the Company
known to such counsel;
(xvii) The authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus, as amended or supplemented;
(xviii) The shares of Common Stock outstanding prior to the
issuance of the Designated Securities have been duly authorized and
are validly issued, fully paid and non-assessable;
(ix) The unissued shares of Common Stock to be issued and
sold by the Company pursuant to the Purchase Contracts have been
duly and validly authorized and reserved for issuance and when
issued and delivered in accordance with the provisions of the
Purchase Contracts, will be duly and validly issued, fully paid and
non-assessable.
(xx) The issuance and sale of the PEPS Units do not
contravene the Commodity Exchange Act or the regulations of the
Commodity Futures Trading Commission.
(xxi) The documents incorporated by reference in the
Prospectus, as amended or supplemented (except the financial
statements and related schedules and other financial information
and data therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and they have no reason to believe that any of such
documents (except for the financial statements and related
schedules and other financial information and data therein, as to
which such counsel need express no opinion), when they became
effective or were so filed, as the case may be, contained in the
case of a registration statement which became effective under the
Act, 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, in the case of other
documents which were filed under the Act or the Exchange Act with
the Commission, an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading;
(xxii) The Registration Statement has become effective under
the Act, and the Indenture, the Amended Declaration and the
Guarantee Agreement were qualified under the Trust Indenture Act
and no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending before or contemplated by the
Commission and all filings required by Rule 424 under the Act have
been made; the Registration Statement and the Prospectus, as
amended or supplemented, and
19
any further amendments and supplements thereto made by either the
Trust or the Company prior to the Closing Date for the Designated
Securities (except for the financial statements and related
schedules and the other financial information and data therein, as
to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder; they
have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by
either the Trust or the Company prior to the Closing Date for the
Designated Securities (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) 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 that, as
of its date, the Prospectus, as amended or supplemented, or any
further amendment or supplement thereto made by either the Trust or
the Company prior to the Closing Date for the Designated Securities
(except for the financial statements and related schedules and the
other financial information and data therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they
ere made, not misleading or that, as of the Closing Date for the
Designated Securities, either the Registration Statement or the
Prospectus, as amended or supplemented, or any further amendment or
supplement thereto made by either the Trust or the Company prior to
the Closing Date for the Designated Securities (except for the
financial statements and related schedules and the other financial
information and data therein, as to which such counsel need express
no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or
other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by
reference into the Prospectus, as amended or supplemented, or
required to be described in the Registration Statement or the
Prospectus, as amended or supplemented, which are not filed or
incorporated by reference or described as required; and
(xxiii) Under current law and interpretations of current law
issued by the Commission, neither the Trust nor the Company is an
"investment company" required to register under, or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended, nor will be required to so
register, nor will be such after giving effect to the transactions
contemplated hereby.
In giving the foregoing opinions, such counsel may rely on (1) the
opinion of Richards, Layton & Finger, with respect to all matters of
Delaware law, (2) the opinions of local counsel, with respect to the
opinion set forth in paragraph (i) above, (3) the opinions heretofore
rendered by Gary J. Brouillette, Esq. and Messrs. Gage & Tucker with
respect to the opinions set forth in paragraphs (iii), (v) and (xviii)
above and (4) the
20
opinions of local counsel and the opinion of Hogan & Hartson L.L.P.,
with respect to the opinion set forth in paragraph (xiii) above. Such
counsel shall state that you and they are justified in relying on such
opinions, policies and certificates.
(d) Richards, Layton & Finger, P.A. shall have furnished to the
Underwriters its written opinion, as special Delaware counsel to the
Issuers, addressed to the Underwriters and dated such Closing Date, in
form and substance satisfactory to the Underwriters, to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Trust Act.
Under the Delaware Trust Act and the Amended Declaration, the Trust
has the business trust power and authority to own property and to
conduct its business as described in the Prospectus, as amended and
supplemented, and to enter into and perform its obligations under
this Agreement and the Trust Securities.
(ii) The Common Securities have been duly authorized by the
Amended Declaration and, when issued and delivered by the Trust to
the Company against payment therefor in accordance with the terms
of the Amended Declaration and as described in the Prospectus, will
be validly issued and (subject to the terms in this paragraph)
fully paid undivided beneficial interests in the assets of the
Trust (such counsel may note that the holders of Common Securities
will be subject to the withholding provisions of Section 10.4 of
the Amended Declaration, will be required to make payment or
provide indemnity or security as set forth in the Amended
Declaration and will be liable for the debts and obligations of the
Trust to the extent provided in Section 9.1(b) of the Amended
Declaration); under the Delaware Trust Act and the Amended
Declaration, the issuance of the Common Securities is not subject
to preemptive rights.
(iii) The Trust Preferred Securities have been duly
authorized by the Amended Declaration and, when issued and
delivered in accordance with the terms of the Amended Declaration
against payment therefor as set forth herein, the Trust Preferred
Securities will be validly issued and (subject to the terms in this
paragraph) fully paid and non-assessable undivided beneficial
interests in the assets of the Trust, the Holders of the Trust
Preferred Securities will be entitled to the benefits of the
Amended Declaration (subject to the limitations set forth in clause
(v) below) and will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware (such counsel may note that the holders of Trust Preferred
Securities will be subject to the withholding provisions of Section
10.4 of the Amended Declaration and will be required to make
payment or provide indemnity or security as set forth in the
Amended Declaration); under the Delaware Trust Act and the Amended
Declaration, the issuance of the Trust Preferred Securities is not
subject to preemptive rights.
(iv) Under the Delaware Trust Act and the Amended Declaration,
all necessary trust action has been taken to duly authorize the
execution, delivery and
21
performance by the Trust of the Underwriting Agreement and the
Remarketing Agreement.
(v) Assuming the Amended Declaration has been duly authorized
by the Company and has been duly executed and delivered by the
Company and the Regular Trustees, and assuming due authorization,
execution and delivery of the Amended Declaration by the Property
Trustee and the Delaware Trustee, the Amended Declaration
constitutes a valid and binding obligation of the Company and the
Regular Trustees, enforceable against the Company and the Regular
Trustees in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(vi) The issuance and sale by the Trust of the Trust
Securities, the purchase by the Trust of the Senior Deferrable
Notes, the execution, delivery and performance by the Trust of the
Underwriting Agreement and the Pricing Agreement, the consummation
by the Trust of the transactions contemplated by the Underwriting
Agreement and compliance by the Trust with its obligations
thereunder do not violate any of the provisions of the Certificate
of Trust or the Amended Declaration or any applicable Delaware law
or administrative regulation.
(vii) Assuming that the Trust derives no income from or
connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware Trustee as
required by the Delaware Trust Act and the filing of documents with
the Secretary of State of Delaware) or employees in the State of
Delaware, no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
Delaware court or Delaware governmental authority or agency (other
that as may be required under the securities or blue sky laws of
the state of Delaware, as to which such counsel need express no
opinion) is necessary or required to be obtained by the Trust
solely in connection with the due authorization, execution and
delivery by the Trust of the Underwriting Agreement or the
offering, issuance, sale or delivery of the Trust Preferred
Securities.
(e) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to Bank One Trust Company, NA, as Property Trustee
and Guarantee Trustee, addressed to the Underwriters and dated such Closing
Date, in form and substance satisfactory to the Underwriters, to the effect
that:
(i) Each of the Property Trustee and the Guarantee Trustee is a
national banking association with all necessary power and authority
to execute and deliver and perform their respective obligations under
the terms of the Amended
22
Declaration and the Guarantee Agreement.
(ii) The execution, delivery and performance by the Property
Trustee of the Amended Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Guarantee Agreement
have been duly authorized by all necessary corporate action on the
part of the Property Trustee and the Guarantee Trustee,
respectively. The Amended Declaration has been duly executed and
delivered by the Property Trustee and the Guarantee Agreement has
been duly executed and delivered by the Guarantee Trustee and each
constitutes the valid and binding agreement of the Property Trustee
and the Guarantee Trustee, respectively, enforceable against the
Property Trustee and the Guarantee Trustee, respectively, in
accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(iii) The execution, delivery and performance of the Amended
Declaration and the Guarantee Agreement by the Property Trustee and
the Guarantee Trustee, respectively, do not conflict with or
constitute a breach of the charter or by-laws of the Property
Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any federal banking authority is
required for the execution, delivery or performance by the Property
Trustee and the Guarantee Trustee of the Amended Declaration and
the Guarantee Agreement, respectively.
(f) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to Bank One Delaware, Inc., as Delaware Trustee,
addressed to the Underwriters and dated such Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Delaware Trustee has been duly incorporated and is
validly existing as a Delaware corporation in good standing under
the laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of the Amended Declaration.
(ii) The execution, delivery and performance by the Delaware
Trustee of the Amended Declaration has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee. The
Amended Declaration has been duly executed and delivered by the
Delaware Trustee and constitutes the valid and binding agreement of
the Delaware Trustee enforceable against the Delaware Trustee in
accordance with its terms, subject to bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance or transfer and other similar laws relating to or
affecting the rights and remedies of creditors generally,
principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable
public policy on the
23
enforceability of provisions relating to indemnification or
contribution.
(v) The execution, delivery and performance of the Amended
Declaration by the Delaware Trustee do not conflict with or
constitute a breach of the charter or by-laws of the Delaware
Trustee.
(vi) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance by
the Delaware Trustee of the Amended Declaration.
(g) A written opinion of counsel shall have been furnished to
the Underwriters by counsel to Bank One Trust Company, NA, as Purchase
Contract Agent, addressed to the Underwriters and dated such Closing Date,
in form and substance satisfactory to the Underwriters, to the effect that:
(i) The Purchase Contract Agent is duly incorporated as a New
York banking corporation with all necessary power and authority to
execute, deliver and perform its obligations under the Purchase
Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the PEPS Units
and the Treasury PEPS Units have been duly authorized by all
necessary corporate action on the part of the Purchase Contract
Agent. The Purchase Contract Agreement and the Pledge Agreement
have been duly executed and delivered by the Purchase Contract
Agent, and constitute the valid and binding agreements of the
Purchase Contract Agent, enforceable against the Purchase Contract
Agent in accordance with their terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(iii) The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase
Contract Agent does not conflict with or constitute a breach of the
charter or by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or
registration with or notice to, any state or federal governmental
authority or agency is required for the execution, delivery or
performance by the Purchase Contract Agent of the Purchase Contract
Agreement and the Pledge Agreement.
(h) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to Chase Manhattan Trust Company, National
Association, NA, as Collateral Agent and Securities Intermediary, addressed
to the Underwriters and dated such Closing Date, in form and substance
satisfactory to the Underwriters, to the effect that:
24
(i) The Collateral Agent and Securities Intermediary are duly
incorporated as a New York banking corporation with all necessary
power and authority to execute, deliver and perform its obligations
under the Pledge Agreement.
(ii) The execution, delivery and performance by the
Collateral Agent and Securities Intermediary of the Pledge
Agreement have been duly authorized by all necessary corporate
action on the part of the Collateral Agent and Securities
Intermediary. The Pledge Agreement has been duly executed and
delivered by the Collateral Agent and Securities Intermediary, and
constitute the valid and binding agreements of the Collateral Agent
and Securities Intermediary, enforceable against the Collateral
Agent and Securities Intermediary in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.
(iii) The execution, delivery and performance of the Pledge
Agreement by the Collateral Agent and Securities Intermediary does
not conflict with or constitute a breach of the charter or by-laws
of the Collateral Agent and Securities Intermediary.
(iv) No consent, approval or authorization of, or
registration with or notice to, any state or federal governmental
authority or agency is required for the execution, delivery or
performance by the Collateral Agent and Securities Intermediary of
the Pledge Agreement.
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preference stock by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implication, its
rating of any of the Company's debt securities or preference stock;
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market or in the over-the-counter market,
or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) 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 (iv) there shall have occurred such a
material adverse change in general economic, political or financial
conditions as to make it, in the judgment of a majority in interest of
the several Underwriters, impracticable or inadvisable to proceed with
the public offering
25
or delivery of the PEPS Units being delivered on such Closing Date on
the terms and in the manner contemplated in the Prospectus.
(k) Blackwell Sanders Peper Martin LLP, special tax counsel for
the Issuers, shall have furnished to the Representatives at each Closing
Date their written opinion to the effect that: (i) the Trust will be
classified as a grantor trust for United States federal income tax
purposes and not as an association taxable as a corporation; (ii)
although the issues are not free from doubt, the Senior Deferrable Notes
should be classified as indebtedness of the Company and deductions for
interest on the Senior Deferrable Notes should not be disallowed under
section 163(l) of the Internal Revenue Code and (iii) the statements set
forth in the Prospectus under the caption "Certain United States Federal
Income Tax Consequences" insofar as they purport to constitute summaries
of matters of United States federal tax laws and regulations or legal
conclusions with respect thereto, constitute accurate summaries of the
matters described therein in all material respects.
(l) On the date of the Pricing Agreement for such Designated
Securities and at the Closing Date for the Designated Securities, Arthur
Andersen LLP and any of the other independent accountants of the Company
or the Subsidiaries who have certified the financial statements of the
Company and/or the Subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to the Representatives a
letter, dated the date of the Pricing Agreement, and a letter, dated
such Closing Date, respectively, to the effect set forth in Annex II
hereto, and as to such other matters as the Representatives may
reasonably request and in form and substance satisfactory to the
Representatives.
(m) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Indenture,
the Amended Declaration, the Guarantee Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Remarketing Agreement, the Senior
Deferrable Note, the Trust Securities, the Guarantee, the Purchase
Contracts, the Common Stock to be issued and sold pursuant to the
Purchase Contracts, the Registration Statement, any Prospectus, as
amended or supplemented, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters,
and the Issuers shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(n) (i) The Trust, the Company or any of the Subsidiaries shall
not have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, as
amended or supplemented, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, as amended or supplemented, and (ii) since the respective
dates as of which information is given in the Prospectus, as amended or
supplemented, there shall not have been any material change in the
capital stock, or material increase in the short-term debt or long-term
debt, of the
26
Company or any of its Subsidiaries or any change, or any development
involving, or which may reasonably be expected to involve, a prospective
change in or affecting the condition (financial or other), results of
operations, business, prospects, net worth or assets of the Company and
its Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, as amended or supplemented, the effect
of which, in any such case described in Clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated in the Prospectus, as amended or supplemented.
(o) The Federal Energy Regulatory Commission, the Public Utilities
Commission of Colorado, the Public Service Commission of West Virginia
and any other commission or governmental authority having jurisdiction
over any of the Company's public utility businesses shall have issued
all approvals, authorizations, consents and orders (the "Regulatory
Actions") required thereby for the issuance and sale of the PEPS Units,
the Guaranty, the Debenture, the Common Stock, the Purchase Contracts
and the Trust Preferred Securities, the performance by the Trust and the
Company of its other obligations under this Agreement and the Pricing
Agreement relating to such Designated Securities, the issuance and sale
by the Company of the Senior Deferrable Note, the Contribution, the
Purchase Contracts and the Guarantee; each Regulatory Action shall be in
effect; no proceedings to suspend the effectiveness of any Regulatory
Actions shall be pending or threatened; no Regulatory Action shall
contain any provision or condition that is unacceptable to the
Underwriters; and the issuance and sale of the Designated Securities to
the Underwriters hereunder, the issuance and sale of the Senior
Deferrable Notes, the Contribution, the Guarantee and the Purchase
Contracts shall be in conformity with each Regulatory Action.
(p) The Company shall have furnished or caused to be furnished to
the Representatives at the Closing Date for the Designated Securities a
certificate or certificates of the Regular Trustees of the Trust and of
the chief executive officer or the chief financial officer of the
Company (or such other officer as is acceptable to you) satisfactory to
the Representatives as to the accuracy of the representations and
warranties of the Trust and the Company herein at and as of such Closing
Date, as to the performance by the Trust and the Company of all of their
obligations hereunder to be performed at or prior to such Closing Date,
as to the matters set forth in subsections (a), (n) and (o) of this
Section with respect to the Company and (a) and (n) of this Section with
respect to the Trust and as to such other matters as the Representatives
may reasonably request.
(q) The PEPS Units shall have been approved for listing, subject
only to official notice of issuance, on the New York Stock Exchange.
The several obligations of the Underwriters to purchase Option
Securities pursuant to a Pricing Agreement are subject to the satisfaction on
and as of the Option Closing Date specified therein of the conditions set
forth in this Section 7, except that, if the Option Closing Date is other
than the Closing Date, the certificates, opinions and
27
letters referred to in paragraphs (b)-(h) and (k) shall be dated the Option
Closing Date and the opinions called for by paragraphs (b) and (c) shall be
revised to reflect the sale of the Option Securities.
8. (a) The Trust and the Company will jointly and severally
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus, as
amended or supplemented, and any other prospectus relating to the
Designated Securities, the Senior Deferrable Notes, the Trust Preferred
Securities and the Guarantee, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
neither the Trust nor the Company shall be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the
Prospectus, as amended or supplemented, and any other prospectus
relating to the Designated Securities, the Senior Deferrable Notes and
the Guarantee, or any such amendment or supplement in reliance upon and
in conformity with written information relating to the Underwriters
furnished to the Trust and the Company by any Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus, as amended or supplemented, relating to such Designated
Securities.
(b) Each Underwriter will indemnify and hold harmless the Trust
and the Company against any losses, claims, damages or liabilities to
which the Trust and the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus, as amended or supplemented, and
any other prospectus relating to the Designated Securities, the Senior
Deferrable Notes and the Guarantee, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and
any other prospectus relating to the Designated Securities, the Senior
Deferrable Notes and the Guarantee, or any such amendment or supplement
in reliance upon and in conformity with written information relating to
the Underwriters furnished to the Trust
28
and the Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Trust and the Company
for any legal or other expenses reasonably incurred by the Trust and the
Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Trust and the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in
respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative benefits but also
the relative fault of the Trust and the Company on the one hand and the
Underwriters of the Designated Securities on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received
by the Trust and the Company on the one hand and such Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the
Trust and the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or
29
the omission or alleged omission to state a material fact relates to
information supplied by the Trust and the Company on the one hand or
such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Trust, the Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this subsection (d) 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 which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include 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 subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of 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
Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Designated Securities and not joint.
(e) 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 fees and expenses of counsel, 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.
(f) The obligations of the Trust and the Company under this
Section 8 shall be in addition to any liability which the Trust and the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under
30
this Section 8 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Trust and
the Company and to each person, if any, who controls the Trust and the
Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Firm Securities or Option Securities which it has agreed to
purchase under the Pricing Agreement relating to the Designated
Securities, the Representatives may in their discretion arrange for
themselves or another party or other parties, to purchase such Firm
Securities or Option Securities on the terms contained herein. If
within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Securities
or Option Securities, then the Trust and the Company shall be entitled
to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase
such Firm Securities or Option Securities on such terms. In the event
that, within the respective prescribed period, the Representatives
notify the Trust and the Company that they have so arranged for the
purchase of such Firm Securities or Option Securities, or the Trust or
the Company notifies the Representatives that it has so arranged for the
purchase of such Firm Securities or Option Securities, the
Representatives or the Trust or the Company shall have the right to
postpone the Closing Date or the Option Closing Date, as the case may
be, for such Firm Securities or Option Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, as
amended or supplemented, or in any other documents or arrangements, and
the Trust and the Company agree to file promptly any amendments or
supplements to the Registration Statement or the Prospectus which in the
opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to the
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Firm Securities or Option Securities of a defaulting Underwriter
or Underwriters by the Representatives and the Trust and the Company as
provided in subsection (a) above, the aggregate number of shares of such
Firm Securities or Option Securities which remains unpurchased does not
exceed one-eleventh of the aggregate number of Firm Securities or the
Option Securities, as such case may be, then the Trust and the Company
shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Securities or Option Securities which such
Underwriter agreed to purchase under the Pricing Agreement relating to
the Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of shares of the Firm Securities or Option Securities which such
Underwriter agreed to purchase under such Pricing Agreement) of the Firm
Securities or the Option Securities, as such case may be, of such
defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Securities or Option Securities of a defaulting Underwriter or
Underwriters by the
31
Representatives and the Trust and the Company as provided in subsection
(a) above, the aggregate number of Firm Securities or Option Securities
which remains unpurchased exceeds one-eleventh of the aggregate
principal amount of the Firm Securities or the Option Securities, as the
case may be, as referred to in subsection (b) above, or if the Issuer
and the Company shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Firm Securities
or Option Securities, as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm or Option
Securities shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Trust or the Company, except for
the expenses to be borne by the Trust, the Company and the Underwriters
as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. This Agreement and any applicable Pricing Agreement shall be
subject to termination in the absolute discretion of the Representatives,
without liability on the part of any Underwriter of the Designated Securities
relating to such Pricing Agreement by notice to the Issuer and the Company,
if prior to the Closing Date for the Designated Securities or the Option
Closing Date (if different from the Closing Date and then only as to the
Option Securities), as the case may be, there shall have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York or Missouri declared by either
Federal or New York State or Missouri State authorities; or (iii) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if the effect
of any such event specified in this Clause (iii) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms and
in the manner contemplated in the Prospectus as amended or supplemented.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Trust, the Company, or any officer or director or
controlling person of the Issuer or the Company, and shall survive delivery
of and payment for the Designated Securities.
12. If any Pricing Agreement shall be terminated pursuant to Section
9 hereof, the Trust and the Company shall not then be under any liability to any
Underwriter with respect to the Firm Securities or Option Securities covered by
such Pricing Agreement except as provided in Section 6 and Section 8 hereof;
but, if for any other reason Designated Securities are not delivered by or on
behalf of the Trust (or the Guarantee is not concurrently issued by the Company)
as provided herein, the Trust and the Company will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Trust and the Company shall then
be under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Section 6 and
32
Section 8 hereof.
13. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by such Representatives jointly or by such of the Representatives,
if any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Representatives as set
forth in the Pricing Agreement; and if to the Trust, shall be delivered to
the address of the Trust set forth in the Registration Statement, and if to
the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Trust set forth in the Registration
Statement; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Trust or the Company by the Representatives
upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
14. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Trust and the
Company and, to the extent provided in Section 8 and Section 11 hereof the
officers and directors of the Company and each person who controls the Trust
or the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Designated Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Time shall be of the essence of each Pricing Agreement. As
used herein, "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
16. This Agreement and each Pricing Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
17. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original but all such
respective counterparts shall together constitute one and the same instrument.
33
If the foregoing is in accordance with your understanding, please
sign and return to us five (6) counterparts hereof.
Very truly yours,
UTILICORP CAPITAL TRUST I
By: UTILICORP UNITED INC.,
as Sponsor
By: /s/ Dale J. Wolf
------------------------------
Name: Dale J. Wolf
Title: Regular Trustee
UTILICORP UNITED INC.
By: /s/ Dwayne L. Hart
------------------------------
Name: Dwayne L. Hart
Title: Chief Financial Officer
Confirmed as of the date first above mentioned.
MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PAINEWEBBER INCORPORATED
As Representatives of the
several Underwriters
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ William H. Wright II
---------------------------
Name: William H. Wright II
Title: Managing Director
34
ANNEX I
PRICING AGREEMENT
-----------------
[Date]
MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PAINEWEBBER INCORPORATED
As Representatives of the
several Underwriters
c/o MORGAN STANLEY & CO. INCORPORATED
1585 Broad Street
New York, New York 10036
Ladies and Gentlemen:
UtiliCorp Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and UtiliCorp United Inc., a
Delaware corporation (the "Company", and together with the Trust, the
"Issuers"), propose, subject to the terms and conditions stated herein and in
the Underwriting Agreement, dated September __, 1999 (the "Underwriting
Agreement"), between the Trust and the Company on the one hand and Morgan
Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, PaineWebber Incorporated, as representatives of the several
underwriters on the other hand, to issue and sell to the Underwriters named
in Schedule I hereto (the "Underwriters") the PEPS Units (including the
Guarantee) specified in Schedule II hereto (the "Firm Securities"). In
addition, solely for the purpose of covering over-allotments, the Issuers
propose to issue and sell to the Underwriters, subject to the terms and
conditions stated herein and in the Underwriting Agreement, the PEPS Units
(including the Guarantee) specified in Schedule II hereto (the "Option
Securities"). The Firm Securities, the Option Securities and the Guarantee
are hereinafter collectively called the "Designated Securities". Each of the
provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall be deemed to have
been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of
the Underwriting Agreement shall be deemed to be a representation or warranty
as of the date of the Underwriting Agreement in relation to the Prospectus
(as therein defined), and also a representation and warranty as of the date
of this Pricing Agreement in relation to the Prospectus, as amended or
supplemented, relating to the Designated Securities which are the subject of
this Pricing Agreement. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms
defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives and on
behalf of each of the Underwriters of the Designated Securities pursuant to
Section 13 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 13 are set forth at the end of
Schedule II hereto.
35
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Issuers agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Issuers, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the number of Firm Securities set forth opposite the names of such
Underwriter in Schedule I hereto. Subject to the terms and conditions set
forth herein and in the Underwriting Agreement incorporated herein by
reference, the Issuers also agrees to issue and sell to each of the
Underwriters, and the Underwriters shall have the right to purchase from the
Issuers, up to the number of Option Securities set forth in Schedule II
hereto. The Option Securities may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm
Securities. If any Option Securities are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Issuers the number of
Option Securities (subject to such adjustments as you may determine in order
to avoid fractional shares) which bears the same proportion to the number of
Option Securities to be sold by the Issuers as the number of Firm Securities
set forth opposite the name of such Underwriter in Schedule I hereto (or such
number of Firm Securities increased as set forth in Section 9 of the
Underwriting Agreement) bears to the total number of Firm Securities.
The Company hereby guarantees the timely performance by the Trust
of its obligations under this Pricing Agreement and the Underwriting
Agreement. As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the Trust
Preferred Securities will be invested in Senior Deferrable Notes, the Company
hereby agrees to pay at the Closing Date of the Designated Securities to the
Representatives for the accounts of the several Underwriters an amount or
amounts set forth in Schedule II hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us five (6) counterparts hereof, and upon acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters, the Trust and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Trust and the Company for examination upon request, but without warranty on
the part of the Representatives as to the authority of the signers thereof.
36
Very truly yours,
UTILICORP CAPITAL TRUST I
By: UTILICORP UNITED INC.
as Sponsor
By:______________________________
Name:
Title:
UTILICORP UNITED INC.
By:______________________________
Name:
Title:
Confirmed as of the date
first above mentioned on
behalf of themselves and
the other several Underwriters
named in Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PAINEWEBBER INCORPORATED
As Representatives of the
several Underwriters
By: MORGAN STANLEY & CO. INCORPORATED
By:___________________________________
Name:
Title:
37
SCHEDULE I
Maximum Number
of Option
Securities to be
Number of Purchased if
Firm Securities Maximum Option
Underwriter Purchased to Be Purchased Exercised
--------------------- --------------- --------------
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
PaineWebber Incorporated
Total 9,000,000 1,000,000
38
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
REGISTRATION STATEMENT:
Registration Statement No. 333-
NUMBER OF FIRM SECURITIES:
NUMBER OF OPTION SECURITIES:
GUARANTEE:
PRICE TO PUBLIC:
PURCHASE PRICE BY UNDERWRITERS:
COMMISSION PAYABLE TO UNDERWRITERS:
$____ Per Designated Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
DIVIDEND RATE:
__% of the stated liquidation preference of $25 per Designated Security per
annum
DIVIDEND PAYMENT DATES:
DIVIDEND RIGHTS:
VOTING RIGHTS:
LIQUIDATION RIGHTS:
REDEMPTION PROVISIONS:
STOCK EXCHANGE LISTING:
New York Stock Exchange
CLOSING DATE:
CLOSING LOCATION:
39
NAMES AND ADDRESSES OF REPRESENTATIVES:
Morgan Stanley & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
PaineWebber Incorporated
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
[OTHER TERMS]:
40
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, each of the
independent accountants shall furnish letters to the Underwriters to the
effect that, severally:
(i) They are independent certified public accountants with
respect to the Company and/or its Subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
supporting schedule(s) of the Company and/or the Subsidiaries audited
and reported upon by such accountants and incorporated by reference in
the Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the Act and the
regulations thereunder with respect to registration statements on Form
S-3 and the Exchange Act and the regulations thereunder;
(iii) With respect to the entity and entities for which such
accountants have certified the financial statements of the Company
and/or the Subsidiaries included or incorporated by reference in the
Registration Statement (hereinafter, with respect to each of such
accountants severally referred to as an "Audited Entity"), they have
performed specified procedures, not constituting an audit, including a
reading of all of the available interim consolidated financial
statements of the Audited Entity since the end of the most recent fiscal
year with respect to which an audit report has been issued, inquiries of
and discussions with certain officials of the Audited Entity and certain
of its subsidiaries responsible for financial and accounting matters
with respect to the unaudited consolidated financial statements
incorporated by reference in the Registration Statement and Prospectus,
as amended or supplemented, and all of the available interim unaudited
consolidated financial statements of the Audited Entity since the end of
the most recent fiscal year, and such other inquiries and procedures as
may be specified in such letter, and on the basis of such inquiries and
procedures nothing came to such accountants' attention that caused them
to believe that: (A) the unaudited consolidated financial statements of
the Audited Entity incorporated by reference in the Registration
Statement and Prospectus, as amended or supplemented, do not comply as
to form in all material respects with the applicable accounting
requirements of the Exchange Act and the rules and regulations
thereunder or were not fairly presented on a basis substantially
consistent with that of the corresponding audited financial statements
incorporated by reference therein, or (B) at a specified date not more
than five days prior to the date of such letter, there was any change in
the outstanding capital stock (in the case of a corporation) of the
Audited Entity or consolidated long-term debt of the Audited Entity, or
any increase in preferred stock of the Audited Entity, in each case as
compared with the amounts shown on the most recent consolidated balance
sheet of the Audited Entity incorporated by reference in the
Registration Statement and Prospectus, as amended or supplemented,
except in each such case as set forth in or contemplated by the
Registration Statement and Prospectus, as amended or supplemented, or
except for such exceptions enumerated in
41
such letter as shall have been agreed to by the Underwriters, the Issuer
and the Company; and
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement and
the Prospectus, as amended or supplemented, and the limited procedures
referred to in clause (iii) above, such accountants have carried out
certain other specified procedures, not constituting an audit, with
respect to certain financial information which is included or
incorporated by reference in the Registration Statement and Prospectus,
as amended or supplemented, which are specified by the Underwriters or
their counsel, and have found such financial information to be in
agreement with the relevant accounting, financial and other records of
the Audited Entity identified in such letter.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the
letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus, as amended or supplemented (including the
documents incorporated by reference therein), in relation to the applicable
Designated Securities for purposes of the letter delivered at the Closing
Date for such Designated Securities.
42