Exhibit 1.1
KEYSPAN CORPORATION
$307,200,000 5.803% SENIOR NOTES DUE 2035
Underwriting and Exchange Agreement
March 29, 2005
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
KeySpan Corporation, a New York corporation (the "Company"), proposes to
issue and sell to the underwriters named in Schedule II hereto (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), $307,200,000 aggregate principal amount of its 5.803% Senior
Notes due 2035 (the "Notes"), to be issued under the indenture specified in
Schedule I hereto (the "Indenture") between the Company and the Trustee
identified in such Schedule (the "Trustee"), in exchange for (i) $300,000,000
aggregate principal amount of the Company's 4.90% Senior Notes due 2008 (the
"Old Notes") and (ii) $9,902.50 in immediately available funds. If the firm or
firms listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives", as used
herein, shall each be deemed to refer to such firm or firms.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of Securities
Act of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Securities Act"), a registration statement (file
number 333-119491) on Form S-3, relating to certain securities (the "Shelf
Securities") to be issued from time to time by the Company. The Company also has
filed with, or proposes to file with, the Commission pursuant to Rule 424 under
the Securities Act a prospectus supplement specifically relating to the Notes.
The registration statement as amended to the date of this Underwriting and
Exchange Agreement (the "Agreement") is hereinafter referred to as the
"Registration Statement" and the related prospectus covering the Shelf
Securities in the form first used to confirm sales of the Notes is hereinafter
referred to as the "Base Prospectus". The Base Prospectus as supplemented by the
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Notes in the form first used to confirm sales of the Notes is hereinafter
referred to as the "Prospectus". Any reference in this Agreement to the
Registration Statement, the Base Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act which were filed under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") on or before the
date of this Agreement or the date of the Prospectus Supplement, respectively;
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed under the Exchange Act after the date
of this Agreement or the date of the Prospectus Supplement, respectively, which
are deemed to be incorporated by reference therein.
1. Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no order suspending the effectiveness of
the Registration Statement has been issued by the Commission and no proceeding
for that purpose has been initiated or threatened by the Commission; as of the
applicable effective dates of the Registration Statement and any amendment
thereto, the Registration Statement complied and will comply in all material
respects with the requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Trust Indenture Act"), and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and as of the date of the Prospectus Supplement and any amendment or
supplement to the Prospectus, the Prospectus, as amended or supplemented,
complied in all material respects with the requirements of the Securities Act
and as of the date of the Prospectus Supplement and any amendment or supplement
to the Prospectus and as of the Closing Date (as specified in Schedule I
hereto), as the case may be, the Prospectus, as amended or supplemented, did not
and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation and warranty with respect to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of the Trustee and (ii) any statements or
omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in the Registration Statement or the
Prospectus and any amendment or supplement thereto;
(b) the documents incorporated by reference in the Prospectus, when they
were filed with the Commission, complied in all material respects to the
requirements of the Exchange Act, as applicable, 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,
in light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Prospectus,
as amended, when such documents are filed with the Commission, will comply in
all material respects to the requirements of the Exchange Act and will not
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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, in
light of the circumstances under which they were made, not misleading;
(c) the financial statements, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and present fairly the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the consolidated results of their operations and
their consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and the supporting schedules included
or incorporated by reference in the Registration Statement present fairly the
information required to be stated therein;
(d) except for stock issuances pursuant to the Company's employee benefit
plans and dividend reinvestment plans, since the respective dates as of which
information is given in the Prospectus or since the date of the Prospectus, (i)
there has not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or, except as described in the Prospectus
and for customary dividends paid on the Company's capital stock, any dividend or
distribution of any kind declared, set aside for payment, paid or made by the
Company on any class of capital stock, (ii) there has not been any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and (iii) except as set forth or contemplated in
the Prospectus neither the Company nor any of its subsidiaries has entered into
any transaction or agreement (whether or not in the ordinary course of business)
material to the Company and its subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operation (a "Material Adverse Effect") on the Company and its
subsidiaries, taken as a whole;
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(f) each of the Company's Significant Subsidiaries (as such term is defined
in Rule 1-02 of Regulation S-X promulgated under the Securities Act) has been
duly incorporated and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
other than where the failure to be so qualified or in good standing would not
have a Material Adverse Effect on the Company and its Significant Subsidiaries,
taken as a whole; and, except as set forth in the Prospectus, all the
outstanding shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued, are fully-paid and non-assessable, and
(except in the case of foreign subsidiaries, for directors' qualifying shares)
are owned by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(g) this Agreement has been duly authorized, executed and delivered by the
Company;
(h) the Indenture (as defined in Schedule I hereto) has been duly
authorized, executed and delivered, duly qualified under the Trust Indenture Act
and constitutes a valid and binding instrument, enforceable against the Company
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally,
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing; and the Indenture
conforms in all material respects to the descriptions thereof in the Prospectus;
(i) the Notes have been duly authorized, and, when issued and delivered
pursuant to this Agreement, will have been duly executed, authenticated, issued
and delivered and will constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture, enforceable against the
Company in accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally,
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing; and the Notes conform in
all material respects to the descriptions thereof in the Prospectus;
(j) neither the Company nor any of its Significant Subsidiaries is, or with
the giving of notice or lapse of time or both would be, (i) in violation of or
in default under its Certificate of Incorporation, as amended, or By-Laws, as
amended, or (ii) in violation of or in default under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which it or any
of them or any of their respective properties is bound, or in violation of any
law or statute or any judgment, order, rule or regulation of any court or
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arbitrator or governmental or regulatory authority, except for violations and
defaults which individually and in the aggregate are not material to the holders
of the Notes or would not have a Material Adverse Effect on the Company and its
Significant Subsidiaries, taken as a whole; the issue and sale of the Notes and
the performance by the Company of all its obligations under the Notes, the
Indenture and this Agreement and the consummation of the transactions herein and
therein contemplated do not and will not conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the Certificate of Incorporation or
the By-Laws of the Company or any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company, its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, license, registration or qualification
of or with any such court or governmental agency or body is required for the
issue and sale of the Notes or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act, the Trust
Indenture Act and the Public Utility Holding Company Act of 1935, as amended
(the "Public Utility Holding Company Act") and as may be required under state
securities laws in connection with the purchase and distribution of the Notes by
the Underwriters;
(k) other than as set forth or contemplated in the Prospectus, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the knowledge of the Company, threatened against or affecting the Company or
any of its Significant Subsidiaries or any of their respective properties or to
which the Company or any of its Significant Subsidiaries is or may be a party or
to which any property of the Company or any of its Significant Subsidiaries is
or may be the subject which, if determined adversely to the Company or any of
its Significant Subsidiaries, could (i) individually or in the aggregate have,
or reasonably be expected to have, a Material Adverse Effect on the Company and
its Significant Subsidiaries, taken as a whole, or (ii) materially and adversely
affect the ability of the Company to perform its obligations under the Notes,
the Indenture or this Agreement; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others; and there are no statutes, regulations, contracts or other
documents that are required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration Statement or the
Prospectus which are not filed or described as required;
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(l) immediately after any sale of Notes by the Company hereunder, the
aggregate amount of Notes which have been issued and sold by the Company
hereunder and of any securities of the Company (other than the Notes) that shall
have been issued and sold pursuant to the Registration Statement will not exceed
the amount of securities registered under the Registration Statement;
(m) the accountants who have certified certain financial statements and any
supporting schedules thereto included in the Registration Statement or the
Prospectus are an independent registered public accounting firm as required by
the Securities Act;
(n) the Company and its Significant Subsidiaries have good and marketable
title in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company and its Significant Subsidiaries; and any real property and
buildings held under lease by the Company and its Significant 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 Company or its Significant
Subsidiaries;
(o) no relationship, direct or indirect, exists between or among the
Company or any or its Significant Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or any
of its subsidiaries on the other hand, which is required by the Securities Act
to be described in the Registration Statement and the Prospectus which is not so
described;
(p) the Company is not and, after giving effect to the offering and sale of
the Notes, will not be an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(q) the Company and its Significant Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith with such exceptions as would not singly or in the aggregate
result in a Material Adverse Effect on the Company and its Significant
Subsidiaries, taken as a whole; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been or might
reasonably be expected to be asserted or threatened against the Company or any
Significant Subsidiary with such exceptions as would not singly or in the
aggregate result in a Material Adverse Effect on the Company and its Significant
Subsidiaries, taken as a whole;
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(r) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
Significant Subsidiaries which are likely to have a Material Adverse Effect on
the Company and its Significant Subsidiaries taken as a whole;
(s) the Company and each of its Significant Subsidiaries possess such
permits, licenses, franchises, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them except where the failure to obtain such
Governmental Licenses would not have a Material Adverse Effect on the Company
and its Significant Subsidiaries, taken as a whole; the Company and each of its
Significant Subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure to so comply would not,
singly or in the aggregate, result in a Material Adverse Effect on the Company
and its Significant Subsidiaries, taken as a whole; all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not result in a Material Adverse Effect on the
Company and its Significant Subsidiaries, taken as a whole; and none of the
Company or any of its Significant Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect on the
Company and its Significant Subsidiaries, taken as a whole;
(t) except as otherwise stated in the Registration Statement and the
Prospectus, and except as would not, singly or in the aggregate, result in a
Material Adverse Effect on the Company and its Significant Subsidiaries, taken
as a whole, (i) neither of the Company nor any of its Significant Subsidiaries
is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (ii) the Company and its Significant Subsidiaries have
all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (iii)
there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
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claims, liens, notices of noncompliance or violation, investigations or
proceedings relating to any Environmental Law against the Company or any of its
Significant Subsidiaries and (iv) to the knowledge of the Company, there are no
events or circumstances that may reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company
or any of its Significant Subsidiaries relating to Hazardous Materials or any
Environmental Laws;
(u) an appropriate order (the "Order") of the Commission under the Public
Utility Holding Company Act, necessary to permit the issuance and sale of the
Notes has been entered, and the Order is in full force and effect and has not
been modified or repealed in any respect; no filing with, or approval,
authorization, consent, license, registration, qualification, order or decree
of, any court or governmental authority or agency, domestic or foreign, is
necessary or required for the due authorization, execution and delivery by the
Company of this Agreement, the Indenture and the Notes, as applicable, or for
the performance by the Company of the transactions contemplated in this
Agreement, the Indenture or the Prospectus, except (i) such as have been
obtained under the Securities Acts, (ii) under the Public Utility Holding
Company Act and (iii) as may be required to be obtained under state securities
laws;
(v) the Significant Subsidiaries of the Company are KeySpan New England,
LLC, The Brooklyn Union Gas Company d/b/a KeySpan Energy Delivery New York,
KeySpan Gas East Corporation d/b/a KeySpan Energy Delivery Long Island,
KeySpan-Ravenswood Inc., Boston Gas Company d/b/a KeySpan Energy Delivery New
England and KeySpan Energy Corporation;
(w) except as described in the Prospectus, no subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company; and
(x) no person has the right to require the Company or any of its
subsidiaries to register any securities for sale under the Securities Act by
reason of the filing of the Registration Statement with the Commission or the
issuance and sale of the Notes.
2. Issuance, Exchange and Delivery of the Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, (i) the Representatives agree to deliver
$300,000,000 aggregate principal amount of Old Notes to the Company with a value
of $304,525,500 (the "Surrender Value") and $9,902.50 in immediately available
funds; and (ii) the Company agrees to issue and deliver to the Representatives
on behalf of the Underwriters, severally, $307,200,000 aggregate principal
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amount of the Notes on the Closing Date (as defined below) in the respective
principal amount of Notes set forth opposite the names of the Underwriters in
Schedule II hereto plus the respective principal amount of such additional Notes
which each underwriter may become obligated to purchase pursuant to the
provisions of Section 9 hereof. The Representatives will deliver the Old Notes
and cash, against delivery by the Company of the Notes, at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, or at such
other place as shall be mutually agreed upon by the Representatives and the
Company, at 10:00 A.M., New York City time, on March 31, 2005 (unless postponed
in accordance with the provisions of Section 9 hereof) or such other time and
date as shall be agreed upon in writing by the Representatives and the Company
(the "Closing Date").
Payment for the Notes shall be made against delivery to the nominee of The
Depository Trust Company or its custodian for the respective accounts of the
several Underwriters of the Notes of one or more global notes (the "Global
Note") representing the Notes, with any transfer taxes payable in connection
with the transfer to the Underwriters of the Notes duly paid by the Company. The
Global Note will be made available for inspection by the Representatives at the
office of the Trustee, not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date. As used herein, the term "Business Day"
means any day other than a day on which banks are permitted or required to be
closed in New York City.
3. Covenants of the Representatives. The Representatives covenant and
warrant to the Company that, at the Closing Date, the Representatives will have
valid and unencumbered title to the Old Notes to be delivered by the
Representatives and full right, power and authority to exchange and deliver the
Old Notes.
4. Offering by the Underwriters. The Company understands that the several
Underwriters intend (i) to make a public offering of their respective portions
of the Notes and (ii) initially to offer the Notes upon the terms set forth in
the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each of
the several Underwriters as follows:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, subparagraph (5)) not later than the
second business day following the execution and delivery of this Agreement;
and, if applicable, the Company will file any Rule 462(b) Registration
Statement with the Commission not later than 10:00 P.M. on the date of
execution and delivery of this Agreement (or such later time or date as may
be consented to by the Representatives);
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Representatives promptly of the filing of any such
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amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued;
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act in connection with sales
by any Underwriter or any dealer, any event occurs 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
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Securities Act, the Company
promptly will notify the Representatives of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither the Representatives' consent to,
nor any Underwriter's delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6 hereof;
(d) As soon as practicable, but not later than 16 months after the
date of this Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Notes, (ii) the effective date of
the most recent post-effective amendment to the Registration Statement to
become effective prior to the date of this Agreement and (iii) the date of
the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of this Agreement, which will satisfy the
provisions of Section 11(a) of the Securities Act;
(e) The Company will furnish to each Underwriter and counsel for the
Underwriters, at the expense of the Company, copies of the Registration
Statement in the form it became effective (of which will be signed and will
include all exhibits) and of all amendments thereto and, so long as a
prospectus relating to the Notes is required to be delivered under the Act
in connection with sales by any Underwriter or any dealer, the Prospectus
and all amendments and supplements to such documents, in each case in such
quantities as such Underwriter requests. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the Business Day
following the execution and delivery of this Agreement. All other documents
shall be so furnished as soon as available;
(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as the Representatives designate
and will continue such qualifications in effect so long as required for the
distribution; provided that the Company shall not be required to qualify as
a foreign corporation, file a general consent to service of process or
become subject to taxation in any jurisdiction;
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(g) During the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of or
guaranteed by the Company which are substantially similar to the Notes;
(h) 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 the Notes, and during such same period, to
advise you promptly, and to confirm such advice in writing, (i) when any
amendment to the Registration Statement has been filed or becomes
effective; (ii) when any supplement to the Prospectus or any amendment to
the Prospectus has been filed; (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or the receipt of any comments from the Commission
relating to the Registration Statement or any other request by the
Commission for any additional information, (iv) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus or the
initiation or threatening of any proceeding for that purpose; (v) of the
occurrence of any event within such period of time after the Closing Date
as in the opinion of counsel for the Underwriters (after consultation with
the Company) a prospectus relating to the Notes is required by law to be
delivered in connection with sales of the Notes by any Underwriter or
dealer as a result of such occurrence or event the Prospectus as then
amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading; (vi) of the receipt
by the Company of any notice with respect to any suspension of the
qualification of the Notes for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to use
its reasonable best efforts to prevent the issuance of any such order
suspending the effectiveness of the Registration Statement, preventing or
suspending the use of the Prospectus or suspending any such qualification
of the Notes and, if any such order is issued, will obtain as soon as
possible the withdrawal thereof;
(i) to use the net proceeds received by the Company from the sale of
the Notes pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds"; and
(j) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation, issuance, execution,
authentication and delivery of the Notes, including any expenses of the
Trustee, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and the Prospectus (including
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in each case all exhibits, amendments and supplements thereto), (iii)
incurred in connection with the registration or qualification and
determination of eligibility for investment of the Notes under the laws of
such jurisdictions as the Underwriters may designate (including fees of
counsel for the Underwriters and their disbursements), (iv) related to any
filing with National Association of Securities Dealers, Inc., (v) in
connection with the printing (including word processing and duplication
costs) and delivery (including mailing and shipping) of the Prospectus and
any other materials furnished to the Underwriters in connection with the
issuance and sale of the Notes, as herein provided and (vi) payable to
rating agencies in connection with the rating of the Notes.
6. Conditions to Obligations of the Underwriters. The several obligations
of the Underwriters hereunder shall be subject to the following conditions:
(a) the accuracy of the representations and warranties of the Company
contained herein as of the date hereof;
(b) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date as if made on and as of
the Closing Date and the Company shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date;
(c) the Prospectus shall have been filed with the Commission pursuant
to Rule 424 within the applicable time periods prescribed for such filings
by the rules and regulations under the Securities Act; no stop order
suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to your
satisfaction;
(d) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of (i) any downgrading, (ii) any
intended or potential downgrading or (iii) any review or possible change
that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally recognized
statistical rating organization", as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(e) since the respective dates as of which information is given in the
Prospectus (exclusive of any amendment or supplement thereto after the
execution and delivery hereof), there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus (exclusive of
12
any amendment or supplement), the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
exchange or the delivery or public offering of the Notes on the terms and
in the manner contemplated in the Prospectus (exclusive of any amendment or
supplement); and neither the Company nor any of its subsidiaries has
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 (exclusive of any amendment or
supplement);
(f) the Representatives shall have received on and as of the Closing
Date a certificate of an executive officer of the Company, with specific
knowledge about the Company's financial matters, satisfactory to you to the
effect set forth in subsections (b) through (d) (with respect to the
respective representations, warranties, agreements and conditions of the
Company) of this Section 6 and to the further effect that there has not
occurred any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole from that set forth or contemplated in the Prospectus (exclusive of
any amendment or supplement);
(g) the Representatives shall have received on and as of the Closing
Date the opinion of the General Counsel or Deputy General Counsel of the
Company, or such other legal counsel employed by the Company agreed to in
writing by the Representatives, to the effect set forth in Exhibit A hereto
dated as of the Closing Date and in form and substance satisfactory to
them;
(h) the Representatives shall have received on and as of the Closing
Date the opinion of Simpson Thacher & Bartlett LLP, counsel to the Company,
to the effect set forth in Exhibit B-1 hereto and the letter related to
certain matters to the effect set forth in Exhibit B-2 hereto, each dated
as of the Closing Date and in form and substance satisfactory to them;
(i) the Representatives shall have received on and as of the Closing
Date an opinion of Davis Polk & Wardwell, counsel to the Underwriters, in
form and substance reasonably satisfactory to the Underwriters, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
13
(j) on the date hereof and on the Closing Date, Deloitte & Touche LLP
shall have furnished to you letters, dated such respective dates, in form
and substance satisfactory to you, containing statements and information of
the type customarily included in accountants "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a
"cut-off" date of the date hereof;
(k) an order of the Commission under the Public Utility Holding
Company Act authorizing the issuance and sale of the Notes shall be in full
force and effect, and such order shall not have been amended since the date
of this Agreement to include any provision unacceptable to the
Representatives in their respective reasonable judgments; and
(l) on or prior to the Closing Date, the Company shall have furnished
to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, 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 any untrue statement or alleged untrue statement of any material fact
contained in (i) the Registration Statement, or any amendment 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 statement
therein not misleading, or (ii) the Prospectus, 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, in the light of the circumstances under which they
were made, 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 loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company will not 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 in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(b) below.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company, its directors and officers and each person, if any who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which 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
14
upon any untrue statement or alleged untrue statement of any material fact
contained in (i) the Registration Statement, or any amendment 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 statement
therein not misleading, or (ii) the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, 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 reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of the Underwriters: the information contained in the third and fourth
sentences of the fourth paragraph on the front cover regarding offers of the
notes by the underwriters; the information contained in the first, second,
fourth and fifth sentences of the fourth paragraph under the caption
"Underwriting" regarding offers of the notes by the underwriters; and the
information contained in the sixth, seventh and eighth paragraphs under the
caption "Underwriting" regarding stabilizing transactions, over-allotment
transactions, syndicate covering transactions and penalty bids.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under subsection (a) or (b) above except to
the extent that it has been materially prejudiced (including through the
forfeiture of substantive rights or defenses) by such failure; and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may 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 will not be liable to such indemnified
party under this Section 7 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
15
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the aggregate principal
amount of the Notes bears to the difference between the aggregate principal
amount of the Notes and the Surrender Value of the Old Notes. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of 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 action or
claim which is the subject of this subsection (d). 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 Notes 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.
16
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which 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 each
Underwriter under this Section 7 shall be in addition to any liability which
such Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Termination. Notwithstanding anything herein contained, this Agreement
may be terminated in the absolute discretion of the Representatives, by notice
given to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange or the Chicago Board Options Exchange, (ii) trading of any securities
of or guaranteed by the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse makes it impracticable or inadvisable
to proceed with the exchange, sale or delivery or offering of the Notes on the
Closing Date on the terms and in the manner contemplated by this Agreement and
the Prospectus.
9. Default by One or More of the Underwriters. If, on the Closing Date, any
one or more of the Underwriters shall fail or refuse to purchase Notes which it
or they have agreed to purchase under this Agreement, and the aggregate
principal amount of Notes which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Notes, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Notes set
forth opposite their respective names in Schedule II hereto bears to the
aggregate principal amount of Notes set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Notes which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Notes that any Underwriter has
agreed to purchase pursuant to Section 2 be increased pursuant to this Section 9
by an amount in excess of one-tenth of such principal amount of Notes without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Notes and the
aggregate principal amount of Notes with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of Notes to be purchased,
and arrangements satisfactory to you and the Company for the purchase of such
Notes are not made within 24 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
17
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Notes. If for any reason the purchase of the Notes by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Notes have been purchased hereunder the
representations and warranties in Section 1 and all obligations under Section 5
shall also remain in effect. If the purchase of the Notes by the Underwriters is
not consummated for any reason other than solely because of the occurrence of
any event specified in Section 8, the Company will reimburse the Underwriters
for all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Notes.
11. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Underwriters c/o Citigroup Global Markets Inc., 388 Greenwich Street, New
York, New York 10013, Attention: General Counsel (fax no.: (212) 816-7912) and
Wachovia Capital Markets, LLC, 301 South College Street, TW-7, Charlotte, North
Carolina 28288, Attention: High Grade Debt Syndicate (fax no.: (704) 383-0661),
or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at One Metro Tech Center, Brooklyn, New York 11201, facsimile:
(718) 403-2809, Attention: John J. Bishar, Jr., or to such other address as any
of the above shall specify to the other in writing; provided, however, that any
notice to any Underwriter pursuant to Section 7 will also be mailed, delivered
or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
18
If the foregoing is in accordance with the Underwriters' understanding of
our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
19
Very truly yours,
KEYSPAN CORPORATION
By: /s/
---------------------
Name:
Title:
Accepted: March 29, 2005
CITIGROUP GLOBAL MARKETS INC.
WACHOVIA CAPITAL MARKETS, LLC
Acting severally on behalf of themselves and the several Underwriters listed in
Schedule II hereto.
CITIGROUP GLOBAL MARKETS INC.
By: /s/
--------------------
Name:
Title:
WACHOVIA CAPITAL MARKETS, LLC
By: /s/
---------------------
Name:
Title:
20
SCHEDULE I
Representatives Citigroup Global Markets Inc.
Wachovia Capital Markets, LLC
Underwriting and Exchange
Agreement dated: March 29, 2005
Registration Statement No.: 333-119491
Title of Notes: 5.803% Senior Notes due 2035
Aggregate principal amount: $307,200,000
Price to Public: At market prices determined at the time of sale.
Indenture: Indenture dated as of November 1, 2000 (the "Base
Indenture", and as supplemented by the First
Supplemental Indenture and the Second
Supplemental Indenture, the "Indenture") by and
between KeySpan Corporation and JPMorgan Chase
Bank, N.A. (formerly known as JPMorgan Chase
Bank), as trustee.
First Supplemental Indenture dated
as of May 6, 2002 (the "First
Supplemental Indenture") by and
between KeySpan Corporation, a New
York corporation, and JPMorgan
Chase Bank, N.A., as trustee.
Second Supplemental Indenture dated
as of May 6, 2002 (the "Second
Supplemental Indenture") by and
between KeySpan Corporation and
JPMorgan Chase Bank, N.A., as
trustee.
Maturity: April 1, 2035
Interest Rate: 5.803%
Interest Payment Dates: April 1 and October 1 of each year, commencing October 1, 2005
Optional Redemption Provisions: Make Whole Call T+20 basis points as described in the Prospectus
Sinking Fund Provisions: None
Other Provisions: None
Closing Date and Time of Delivery: March 31, 2005; 10:00 A.M., New York City time.
Closing Location: Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York
10017
Address for Notices to Underwriters: c/o Citigroup Global Markets Inc., 388 Greenwich Street, New
York, New York 10013, Attention: General Counsel (fax no.:
(212) 816-7912) and Wachovia Capital Markets, LLC, 301 South
College Street, TW-7, Charlotte, North Carolina 28288,
Attention: High Grade Debt Syndicate (fax no.: (704) 383-0661)
21
SCHEDULE II
Principal Amount of Notes
Underwriter To Be Purchased
Citigroup Global Markets Inc. $116,736,000
Wachovia Capital Markets, LLC 116,736,000
ABN AMRO Incorporated 24,576,000
Banc of America Securities LLC 24,576,000
BNP Paribas Securities Corp. 24,576,000
------------
Total $307,200,000
============
22
EXHIBIT A
FORM OF OPINION OF GENERAL COUNSEL OR
DEPUTY GENERAL COUNSEL OF THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 6(g)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New York.
2. The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to
enter into the Agreement and consummate the transactions contemplated in the
Prospectus.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a material adverse effect on the Company
and its subsidiaries, taken as a whole.
4. Each Significant Subsidiary (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Act) has been duly incorporated
and is validly existing as a corporation or a limited liability company, as the
case may be, in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation or limited liability
company, as the case may be, to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure to so qualify or be in good standing would not result in a material
adverse effect on the Company and its subsidiaries, taken as a whole; except as
stated in the Prospectus, all of the membership interests or issued and
outstanding shares of capital stock of each Significant Subsidiary has been duly
authorized and with respect to such stock, are validly issued, fully paid and
non-assessable and, to the best of my knowledge, are owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; and none of the
outstanding shares of capital stock of any Significant Subsidiary were issued in
violation of preemptive or other similar rights of any securityholder of such
Significant Subsidiary.
5. The information (i) in the Annual Report on Form 10-K under "Legal
Proceedings" and "Business--Competition, Regulation and Rate
Matters--Regulation", "--State Utility Commission", "--Federal Energy Regulatory
Commission" and "--Securities and Exchange Commission", (ii) in the Prospectus
covering similar matters, if any, and (iii) in the Registration Statement under
Item 15, to the extent that such information constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by me and is correct in all
material respects.
A-1
6. To the best of my knowledge, neither of the Company nor any of its
Significant Subsidiaries is (i) in violation of its charter or by-laws or
operating agreement, as the case may be, or (ii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except where such violation would not
result in a material adverse effect on the Company and its subsidiaries, taken
as a whole, and no default by the Company or any of its Significant Subsidiaries
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any agreement and instrument that
is described or referred to in the Registration Statement or the Prospectus or
filed or incorporated by reference as an exhibit to the Registration Statement.
7. The execution, delivery and performance of the Agreement, the Indenture
and the Notes, the consummation of the transactions contemplated in the
Prospectus (including the issuance and sale of the Notes and the use of the
proceeds therefrom as described in the Prospectus) and the compliance by the
Company with its obligations thereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any assets, properties or operations of the
Company or any of its Significant Subsidiaries pursuant to, any agreement or
instrument known to me, nor will such action result in any violation of the
provisions of the charter or by-laws or operating agreement of the Company or
any of its Significant Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to me, of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its Significant Subsidiaries or any of their assets,
properties or operations.
8. To the best of my knowledge, except as otherwise disclosed in the
Registration Statement or the Prospectus, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
of its Significant Subsidiaries is a party or to which the assets, properties or
operations of the Company or any of its Significant Subsidiaries is subject,
before or brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a material adverse
effect on the Company and its Significant Subsidiaries, taken as a whole, or
which might reasonably be expected to materially and adversely affect the
assets, properties or operations of the Company or any of its Significant
Subsidiaries, the performance by the Company or of its obligations under the
Agreement, the Indenture, or the Notes or the consummation of the transactions
contemplated in the Prospectus.
9. All descriptions in the Prospectus of contracts and other documents to
which the Company or any of its subsidiaries are a party are accurate in all
material respects; and, to the best of my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits to the Registration Statement other than
those described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
A-2
10. To the best of my knowledge, there are no statutes or regulations that
are required to be described in the Prospectus that are not described as
required.
11. The Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules included therein or omitted
therefrom and the Trustee's Statement of Eligibility on Form T-1 (the "Form
T-1"), as to which no opinion is expressed), complied as to form in all material
respects with the requirements of the Securities Act.
12. The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules included therein or omitted
therefrom, as to which no opinion is expressed), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act.
Nothing has come to such counsel's attention that would lead such counsel
to believe that the Registration Statement or any post-effective amendment
thereto (except for (x) financial statements, supporting schedules and other
financial and statistical data included therein or omitted therefrom, (y) the
Form T-1 and (z) the information related to estimated proved reserves
attributable to certain oil and gas properties and estimates of future net cash
flows and present values referred to in the Prospectus under the caption
"Experts", as to which such counsel makes no statement), at the date of the
Underwriting and Exchange Agreement, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto (except for (x) financial statements,
supporting schedules and other financial and statistical data included therein
or omitted therefrom, (y) the Form T-1 and (z) the information related to
estimated proved reserves attributable to certain oil and gas properties and
estimates of future net cash flows and present values referred to in the
Prospectus under the caption "Experts", as to which such counsel makes no
statement), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the date hereof, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
A-3
EXHIBIT B-1
FORM OF OPINION OF SIMPSON THACHER & BARTLETT LLP TO BE DELIVERED PURSUANT TO
SECTION 6(h)
1. The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the State of New York and has
full corporate power and authority to conduct its business as described in the
Registration Statement and Prospectus.
2. The Underwriting and Exchange Agreement has been duly authorized,
executed and delivered by the Company.
3. The Indenture has been duly authorized, executed and delivered by the
Company and duly qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and, assuming that the Indenture is the valid and
legally binding obligation of the Trustee, the Indenture constitutes a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms.
4. The Notes have been duly authorized, executed and issued by the Company
and, assuming due authentication thereof by the Trustee, constitute valid and
legally binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture.
5. The statements made in the Prospectus Supplement under the caption
"Description of the Notes" and the statements made in the Base Prospectus under
the caption "Description of Debt Securities", insofar as they purport to
constitute summaries of certain terms of contracts and other documents referred
to therein, constitute accurate summaries of the terms of such statutes,
contracts and other documents in all material respects.
6. No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or body or,
to our knowledge, any federal or New York court is required for the issuance and
sale of the Notes by the Company and the compliance by the Company with the
provisions of the Underwriting and Exchange Agreement, the Indenture and the
Notes, except for (A) the issuance of an appropriate order by the Commission
under the Public Utility Holding Company Act, (B) the registration of the Notes
under the Securities Act and (C) such consents, approvals, authorizations,
orders, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the sale of the Notes by the
Underwriters.
7. The Registration Statement has become effective under the Securities Act
and the Prospectus was filed on March 30, 2005, pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Securities Act, and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued or proceedings for that purpose have been instituted
or threatened by the Commission.
8. Subject to the qualifications, exceptions, assumptions and limitations
therein, the statements set forth in the Prospectus Supplement under the caption
"Certain United States Federal Income and Estate Tax Consequences to Non-U.S.
Holders", insofar as they purport to constitute summaries of matters of United
States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters described therein in all
material respects.
9. The Company is not, and after giving effect to the offering and sale of
the Notes will not be, an "investment company" within the meaning of and subject
to regulation under the Investment Company Act of 1940, as amended.
The opinions set forth in paragraphs 4 and 5 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.
The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
B-1
EXHIBIT B-2
FORM OF LETTER OF SIMPSON THACHER & BARTLETT LLP TO BE DELIVERED PURSUANT TO
SECTION 6(h)
Such counsel shall (i) advise the Underwriters that the Registration
Statement, as of its effective date, and the Prospectus, as of its date,
appeared, on its face, to be appropriately responsive in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder, except that such counsel may express
no view with respect to the financial statements or other financial or
statistical data contained or incorporated by reference in such Registration
Statement, the Prospectus or the Exchange Act Documents and (ii) nothing has
come to such counsel's attention to cause such counsel to believe that the
Registration Statement (including the Exchange Act Documents on file with the
Commission on the date of filing of the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2004), as of the date of filing of such
Annual Report, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading or that the Prospectus (including the
Exchange Act Documents) as of its date or as of the date hereof contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that in each case such counsel need not express any belief with respect to the
financial statements or other financial or statistical data contained or
incorporated by reference in the Registration Statement, the Prospectus or the
Exchange Act Documents.
For purposes of this letter, "Exchange Act Documents" means the Company's
Annual Report on Form 10-K for the year ended December 31, 2004 and all other
reports filed by the Company pursuant to Section 13(a) or 15(d) of the 1934 Act
since the end of the fiscal year covered by such Annual Report.
B-1