Exhibit 1.1
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EXECUTION VERSION
INTERSTATE POWER AND LIGHT COMPANY
(an Iowa corporation)
5.875% SENIOR DEBENTURES DUE 2018
PURCHASE AGREEMENT
Dated: September 10, 2003
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TABLE OF CONTENTS
Page
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SECTION 1. Representations and Warranties ................................ 2
(a) Representations and Warranties by the Company ................. 2
(i) Compliance with Registration Requirements ............. 2
(ii) Incorporated Documents ................................ 3
(iii) Independent Accountants ............................... 4
(iv) Financial Statements .................................. 4
(v) No Material Adverse Change in Business ................ 4
(vi) Good Standing of the Company .......................... 5
(vii) No Significant Subsidiaries ........................... 5
(viii) Capitalization ........................................ 5
(ix) Authorization of Agreement ............................ 5
(x) Authorization of the Indenture ........................ 5
(xi) Authorization of the Securities ....................... 6
(xii) Description of the Securities and the Indenture ....... 6
(xiii) Absence of Defaults and Conflicts ..................... 6
(xiv) Absence of Labor Dispute .............................. 7
(xv) Absence of Proceedings ................................ 7
(xvi) Accuracy of Exhibits .................................. 7
(xvii) Absence of Further Requirements ....................... 7
(xviii) Possession of Licenses and Permits .................... 7
(xix) Title to Property ..................................... 8
(xx) Investment Company Act ................................ 8
(xxi) Environmental Laws .................................... 8
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(b) Officer's Certificates ............................................ 9
SECTION 2. Sale and Delivery to Underwriters; Closing ........................ 9
(a) The Securities .................................................... 9
(b) Payment ........................................................... 9
(c) Denominations; Registration ....................................... 10
SECTION 3. Covenants of the Company .......................................... 10
(a) Compliance with Securities Regulations and Commission Requests .... 10
(b) Filing of Amendments .............................................. 10
(c) Delivery of Registration Statements ............................... 11
(d) Delivery of Prospectuses .......................................... 11
(e) Continued Compliance with Securities Laws ......................... 11
(f) Blue Sky Qualifications ........................................... 11
(g) Rule 158 .......................................................... 12
(h) Use of Proceeds ................................................... 12
(i) Restriction on Sale of Securities ................................. 12
(j) Reporting Requirements ............................................ 12
(k) 1935 Act Filings .................................................. 12
(l) Rating of Securities .............................................. 12
(m) DTC ............................................................... 13
(n) Compliance with Regulatory Approvals .............................. 13
SECTION 4. Payment of Expenses ............................................... 13
(a) Expenses .......................................................... 13
(b) Termination of Agreement .......................................... 13
SECTION 5. Conditions of Underwriters' Obligations ........................... 13
(a) Effectiveness of Registration Statement ........................... 14
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(b) Opinion of Counsel for Company ................................... 14
(c) Opinion of Counsel for Underwriters .............................. 14
(d) Officers' Certificate ............................................ 14
(e) Accountant's Comfort Letter ...................................... 15
(f) Bring-down Comfort Letter ........................................ 15
(g) Maintenance of Rating ............................................ 15
(h) Additional Documents ............................................. 15
(i) Termination of Agreement ......................................... 16
SECTION 6. Indemnification .................................................. 16
(a) Indemnification of Underwriters .................................. 16
(b) Indemnification of Company, Directors and Officers ............... 17
(c) Actions against Parties; Notification ............................ 17
(d) Settlement without Consent if Failure to Reimburse ............... 18
SECTION 7. Contribution ..................................................... 18
SECTION 8. Representations, Warranties and Agreements to Survive Delivery ... 20
SECTION 9. Termination of Agreement ......................................... 20
(a) Termination; General ............................................. 20
(b) Liabilities ...................................................... 20
SECTION 10. Default by One or More of the Underwriters ....................... 21
SECTION 11. Tax Disclosure ................................................... 21
SECTION 12. Notices .......................................................... 21
SECTION 13. Parties .......................................................... 22
SECTION 14. Governing Law and Time ........................................... 22
SECTION 15. Effect of Headings ............................................... 22
SECTION 16. Counterparts ..................................................... 22
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SCHEDULES
Schedule A - List of Underwriters
Schedule B - Pricing Information
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel
Exhibit B - Form of Opinion of Company's In-House Counsel
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INTERSTATE POWER AND LIGHT COMPANY
(an Iowa corporation)
5.875% SENIOR DEBENTURES DUE 2018
PURCHASE AGREEMENT
September 10, 2003
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Barclays Capital Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
Interstate Power and Light Company, an Iowa corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch and Barclays Capital Inc. are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth on
Schedule A of $100,000,000 aggregate principal amount of the Company's 5.875%
Senior Debentures due 2018 (the "Securities"). The Securities will be issued
pursuant to an indenture dated as of August 20, 2003 (the "Indenture") between
the Company and Bank One Trust Company, National Association, as trustee (the
"Trustee"). The term "Indenture," as used herein, includes the Officer's
Certificate (as defined in the Indenture) to be executed in connection with the
offering of the Securities establishing the form and terms of the Securities
pursuant to Section 301 of the Indenture. The Securities are to be issued in
book-entry form and will be issued to Cede & Co. as nominee of The Depository
Trust Company ("DTC") pursuant to a letter agreement, to be dated as of the
Closing Time (as defined in Section 2(b)) (the "DTC Agreement"), among the
Company, the Trustee and DTC.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-108199), including
the related
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preliminary prospectus or prospectuses, covering the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits and any schedules thereto, at the time it
became effective, and including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act at such time and the Rule
430A Information, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act filed prior to the time of the execution of this
Agreement, is herein called the "Prospectus." For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which are "contained," "included" or "stated" (or other
references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which are incorporated by
reference, as of such applicable date, in the Registration Statement, Prospectus
or preliminary prospectus, as the case may be; and all references in this
Agreement to the Registration Agreement, amendments or supplements to the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
include the filing of any document under the Securities Exchange Act of 1934, as
amended (the "1934 Act") which is incorporated by reference, as of such
applicable date, in the Registration Statement, Prospectus or preliminary
prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof and as of the Closing
Time referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement
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and any Rule 462(b) Registration Statement has become effective under the
1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or
are pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied or will comply, as the case may be, in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the Trust
Indenture Act of 1939, as amended (the "1939 Act") and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not or will not, as the case may be, 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 and the Indenture complied and will comply in all material
respects with the requirements of the 1939 Act. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus or any
such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will
omit 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 representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto) or Prospectus (or any amendment thereto).
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents.
(1) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the
time they were or hereafter are filed with the Commission, complied or
will comply, as the case may be, in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), as applicable,
and, when read together with the other information in the Prospectus,
at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time, did not or will
not, as the case may be, contain an
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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.
(2) The description of regulatory matters to which the Company
is subject, as disclosed in the Company's filings with the Commission
under the 1934 Act and the 1934 Act Regulations and as incorporated by
reference into the Registration Statement, is true and correct in all
material respects, except to the extent such description in any
specific filing has been superseded, updated or supplemented by such
description in a subsequent filing under the 1934 Act or the 1934 Act
Regulations made prior to the date hereof or by such description in
the Prospectus.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants with respect to the Company
and its subsidiaries within the meaning of Regulation S-X under the 1933
Act.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of income, changes in common equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in all material
respects in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial information
included in the Prospectus present fairly in all material respects the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, in the
earnings or business affairs of the Company and its subsidiaries considered
as one enterprise, whether or not arising in the ordinary course of
business nor has there been any developments involving a prospective
material adverse change of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company
and its subsidiaries, and (C) except for regular dividends on the common
stock, par value $2.50 per share, of the Company and the 8.375% Series B
Cumulative Preferred Stock, $0.01 par value per share, of the Company in
amounts per share that are consistent with past practice or the terms of
the 8.375% Series B Cumulative Preferred Stock, as the case may be, there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
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(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation under the laws of the
State of Iowa and 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 and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other 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 so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(vii) No Significant Subsidiaries. The Company has no "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company as of the date hereof is set forth in the Prospectus
in the column entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant to
existing reservations, agreements or employee benefit plans, or pursuant to
the exercise of convertible securities or options outstanding on the date
hereof or pursuant to any dividend reinvestment plan). All of the issued
and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and
none of the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company. As of the date hereof, except for 6,000,000
shares of the Company's 8.375% Series B Cumulative Preferred Stock, all of
the issued and outstanding shares of the capital stock of the Company are
owned by Alliant Energy Corporation, a Wisconsin corporation (the
"Parent"), free and clear of all liens, encumbrances, equities or claims.
Immediately prior to the Closing Time, except for 6,000,000 shares of the
capital stock of the Company's 8.375% Series B Cumulative Preferred Stock
and 1,600,000 shares of the Company's 7.10% Series C Cumulative Preferred
Stock, all of the issued and outstanding shares of capital stock of the
Company will be owned directly by Parent, free and clear of all liens,
encumbrances, equities or claims. The Parent is a "holding company" and the
Company is a "subsidiary" of a "holding company" as such terms are defined
under the Public Utility Holding Company Act of 1935, as amended.
(ix) Authorization of Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement has been duly authorized,
executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and duly qualified under
the 1939 Act and constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except (A)
the enforcement thereof may be limited by bankruptcy, insolvency (including
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (B) as enforcement thereof is subject to
general principals of equity (regardless if whether enforcement is
considered in a proceeding in equity or at law).
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(xi) Authorization of the Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the
Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor provided for in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(xii) Description of the Securities and the Indenture. The statements
relating to the Securities and the Indenture contained in the Prospectus
conform, respectively, in all material respects to the terms of the
Securities and the Indenture.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively, "Agreements
and Instruments") except for such violations or defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture and the Securities, the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder and under the Indenture and the
Securities 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 or a Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, the
Agreements and Instruments except for such conflicts, breaches or defaults
or liens, charges or encumbrances that, singly or in the aggregate, would
not result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of (x) the charter or by-laws of the Company or
any of its subsidiaries (except for such conflicts, breaches, defaults,
events or liens, charges or encumbrances that would not result in a
Material Adverse Effect) or (y) any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations, except for any such violations with respect to this clause (y)
as would not, individually or in the aggregate, result in a Material
Adverse Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption
6
or repayment of all or a portion of such indebtedness by the Company or any
of its subsidiaries.
(xiv) Absence of Labor Disputes. No labor dispute with the employees
of the Company or any of its subsidiaries exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any of its
subsidiaries' respective principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to result in
a Material Adverse Effect.
(xv) Absence of Proceedings. Except as disclosed in the Prospectus,
there is no action, suit, proceeding, inquiry or investigation before or
brought by any court or governmental agency or body, domestic or foreign,
now pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect (A) the properties or assets
of the Company and its subsidiaries or (B) the consummation of the
transactions contemplated by this Agreement or the performance by the
Company of its obligations hereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its subsidiaries is
a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(xvi) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required except that this Agreement will be filed as an exhibit to a
Current Report on Form 8-K which shall be filed with the Commission in
accordance with the 1934 Act and the 1934 Act Regulations prior to the
filing of the Prospectus.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder, the consummation of the transactions contemplated
by this Agreement or for the due execution, delivery and performance of the
Indenture by the Company, except (A) such as have been already obtained,
(B) such as may be required under the 1933 Act or the 1933 Act Regulations
or state securities laws, and (C) such as may be required by the Public
Utility Holding Company Act of 1935, as amended (the "1935 Act"), solely
with respect to filings required to be made with the Commission subsequent
to the Closing Time (such 1935 Act filings to be made by the Company).
(xviii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, 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
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except where the failure to possess any such Governmental Licenses would
not have a Material Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to possess or comply would not, singly or in
the aggregate, have a Material Adverse Effect; 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 have a
Material Adverse Effect; and neither the Company nor any of its
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. Without limiting the
foregoing, the Company has received final orders of the Illinois Commerce
Commission, dated September 4, 2003, and the Minnesota Public Utilities
Commission, dated March 28, 2003 (as amended August 7, 2003), and the
approval, dated October 24, 2001, of the Commission under the 1935 Act
authorizing the issuance of the Securities and such issuance is in
compliance with the terms and conditions of such orders and approval. Such
orders and approval are in full force and effect and have not been amended
supplemented or otherwise modified. No proceeding to review, suspend,
limit, modify, restrict or revoke any such order or approval has been
instituted.
(xix) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the Prospectus or (B) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any of its subsidiaries has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
any of its subsidiaries to the continued possession of the leased or
subleased premises under any such lease or sublease, except where such
would not have a Material Adverse Effect.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative
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order, consent, decree or judgment, relating to pollution or protection
of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or, to the knowledge of
the Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and
(D) there are no events or circumstances that might reasonably be
expected to form the basis of an order for clean-up or remediation, or
an action, suit or proceeding by any private party or governmental body
or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or
to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) The Securities. On the basis of the representations, warranties and
agreements herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price set forth in
Schedule B, the aggregate principal amount of Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of the
Company at 4902 North Biltmore Lane, Madison, Wisconsin, 53718, or at
such other place as shall be agreed upon by the Representatives and the
Company, at 10:00 A.M. (Eastern time) on the fifth business day after
the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein called
the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to
9
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. Merrill Lynch, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. Certificates for the Securities shall be
in such denominations (in integral multiples of $1,000) as the
Representatives may request in writing at least two full business days
before the Closing Time and registered in the name of Cede & Co., as
nominee of DTC. The certificates for the Securities will be made
available for examination and packaging by the Representatives in New
York, New York not later than noon (Eastern time) on the last business
day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will notify the Representatives
immediately and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission with respect to the Registration Statement, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to Rule
424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives notice
of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any amendment,
supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall
reasonably object.
10
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters,
without charge, copies (one of which shall be manually signed) of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and copies (one of which shall be
manually signed) of all consents and certificates of experts, and will
also deliver to the Representatives, without charge, a conformed copy
of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered or will deliver to
each Underwriter, without charge, as many copies of each preliminary
prospectus and final prospectus as such Underwriter reasonably
requested, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments
or supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the reasonable opinion of
such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states
and other jurisdictions as the Representatives may designate
11
and to maintain such qualifications in effect so long as required for
the sale of the Securities; provided, however, that the Company shall
not be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for such period.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Restriction on Sale of Securities. During a period of 15 days from the
date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any debt
securities of the Company or any securities convertible into or
exercisable or exchangeable for debt securities of the Company or file
any registration statement under the 1933 Act with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of debt securities of
the Company, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of debt securities of
the Company or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to the Securities to be sold
hereunder.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
(k) 1935 Act Filings. The Company shall timely file all notifications,
forms and reports that may be required under the 1935 Act so as to
permit the completion of the distribution and sale of the Securities as
contemplated in this Agreement and in the Prospectus
(l) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc. ("S&P"), and Moody's Investors Service Inc.
("Moody's") to provide their respective credit ratings of the
Securities.
12
(m) DTC. The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(n) Compliance with Regulatory Approvals. The Company will comply with the
terms and conditions of the final orders of the Illinois Commerce
Commission and the Minnesota Public Utilities Commission and the
approval of the Commission under the 1935 Act issued on September 4,
2003, March 28, 2003 (as amended August 7, 2003) and October 24, 2001,
respectively, as such orders are amended from time to time until
superseded, and shall timely file all notifications, forms and reports
that may be required in connection therewith so as to permit the
completion of the distribution and sale of the Securities as
contemplated in this Agreement and in the Prospectus.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii)
the reproduction and delivery to the Underwriters of this Agreement,
the Indenture, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, including any transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to
the Underwriters and any charges of DTC in connection therewith, (iv)
the fees and disbursements of the Company's counsel, accountants and
other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any
supplement thereto (provided that counsel fees in connection therewith
do not exceed $5,000), (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the
Prospectus and any amendments or supplements thereto, (vii) the fees
and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the
Securities and (viii) any fees payable in connection with the rating of
the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or
Section 9(a)(i) hereof, the Company shall reimburse the Underwriters
for all of their out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters (provided that such
out-of-pocket expenses, fees and disbursements do not exceed $200,000).
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy in all material
respects of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to
13
the performance in all material respects by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective
and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to
the Underwriters. A prospectus containing the information to be
included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of
the Closing Time, of Foley & Lardner, counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters, to the effect set forth in Exhibit A hereto. At
the Closing Time, the Representatives shall have received the favorable
opinion regarding certain state and local regulatory matters, dated as
of the Closing Time, of Barbara J. Swan, Executive Vice President and
General Counsel of the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to
the effect set forth in Exhibit B hereto. In rendering such opinions,
such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and its subsidiaries and of public
officials.
(c) Opinion of Counsel for Underwriters. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of
the Closing Time, of Gibson, Dunn & Crutcher LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United
States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. In
rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and its
subsidiaries and of public officials.
(d) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, in the earnings or business
affairs of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
nor has there been any developments involving a prospective material
adverse change of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
and the Representatives shall have received a certificate of the
President or a Vice President of the Company and of the chief financial
or chief accounting officer of
14
the Company, dated as of the Closing Time, together with signed or
reproduced copies of such letter for each of the other Underwriters, to
the effect that (i) there has been no such material adverse change or
any developments involving a prospective material adverse change, (ii)
the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and
as of the Closing Time, (iii) the Company has complied in all material
respects with all agreements and satisfied all conditions on its part
to be performed or satisfied at or prior to the Closing Time, (iv) the
Company is not in default in the performance of any of the covenants to
be performed by it under the Indenture, and (v) 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 or, to the knowledge of the Company, are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte &
Touche LLP a letter dated such date, in form and substance satisfactory
to the Representatives, together with signed or reproduced copies of
such letter for each of the other Underwriters, containing statements
and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At the Closing Time, the Representatives
shall have received from Deloitte & Touche LLP a letter, dated as of
the Closing Time, together with signed or reproduced copies of such
letter for each of the other Underwriters, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred
to shall be a date not more than three business days prior to the
Closing Time.
(g) Maintenance of Rating. At the Closing Time, the Securities shall be
rated at least "Baa1" by Moody's and "BBB" by S&P, and the Company
shall have delivered to the Representatives a letter dated the Closing
Time, from each such rating agency, or other evidence satisfactory to
the Representatives, confirming that the Securities have such ratings;
and since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the
Company's other securities by any "nationally recognized statistical
rating agency," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the 1933 Act, and no such securities rating
agency shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the
Securities or any of the Company's other securities.
(h) Additional Documents. At the Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions (including
but not limited to those referenced above) as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be
15
reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(i) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Representatives by notice to
the Company at any time at or prior to the Closing Time, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and provided, further that
this indemnity agreement shall not inure to the benefit of any Underwriter or
any person who controls such
16
Underwriter on account of any such loss, liability, claim, damage or expense
arising out of any such defect or alleged defect in any preliminary prospectus
if a copy of the Prospectus (exclusive of the documents incorporated by
reference therein) shall not have been given or sent by such Underwriter with or
prior to the written confirmation of the sale involved to the extent that (i)
the Prospectus would have cured such defect or alleged defect and (ii)
sufficient quantities of the Prospectus were timely made available to such
Underwriter.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
through Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder
to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Merrill Lynch, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of
any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also
be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. In addition, the
indemnifying party shall be entitled to, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense of any claim or action brought against an indemnified party
with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Section 6 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the
Representatives shall have the right to employ one counsel (in addition
to local counsel) to represent them and those other Underwriters and
their respective officers, employees and controlling persons who may be
subject to liability
17
arising out of any claim in respect of which indemnity may be sought by
the Underwriters against the Company under this Section 6 if, in the
reasonable judgment of the Representatives, either (i) there is an
actual or potential conflict between the position of the Company on the
one hand and the Underwriters on the other hand or (ii) there may be
defenses available to it or them that are different from or additional
to those available to the Company (in any of which events the Company
shall not have the right to direct the defense of such action on behalf
of the Representatives with respect to such different defenses), in any
of which events such reasonable fees and expenses shall be borne by the
Company. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of
such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein; then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the
18
cover of the Prospectus, bear to the aggregate initial public offering price of
the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were 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 Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
19
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of and payment for the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the
Prospectus (exclusive of any supplement thereto), any material adverse
change in the condition, financial or otherwise, in the earnings or
business affairs of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
or any developments involving a prospective material adverse change of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has
occurred after the date hereof and prior to the Closing Time any
material adverse change in the financial markets in the United States
or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of
which is such as to make it, in the reasonable judgment of the
Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company or the Parent has been suspended or
materially limited by the Commission or the New York Stock Exchange, or
if trading generally on the American Stock Exchange or the New York
Stock Exchange or the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a banking moratorium has been declared by either
Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in
full force and effect.
20
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Securities to be
purchased on such date, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of Securities to be purchased on such
date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11 Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. For purposes of the foregoing, the term "tax
treatment" is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term "tax structure" includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
SECTION 12 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, attention of Karl Fritz Schlopy; and notices
to the Company shall be directed to it at 4902 North Biltmore Lane, Madison,
Wisconsin, 53718, attention of Thomas L. Hanson.
21
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND ALL DISPUTES,
CONTROVERSIES OR CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR A BREACH
HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall constitute a single instrument.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
INTERSTATE POWER AND LIGHT COMPANY
By: /s/ Thomas L. Hanson
--------------------------------
Thomas L. Hanson
Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Karl F. Schlopy, Director
-------------------------------
Authorized Signatory
BARCLAYS CAPITAL INC.
By: /s/ Pamela Kendall
-------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
23
SCHEDULE A
Name of Underwriter Principal
------------------- amount of
Securities
----------
Merrill Lynch, Pierce, Fenner & Smith Incorporated ............. $ 45,000,000
Barclays Capital Inc. .......................................... $ 30,000,000
Banc One Capital Markets, Inc. ................................. $ 11,000,000
Wachovia Capital Markets, LLC .................................. $ 11,000,000
Utendahl Capital Partners, L.P ................................. $ 3,000,000
------------
Total .......................................................... $100,000,000
============
SCHEDULE B
INTERSTATE POWER AND LIGHT COMPANY
(an Iowa corporation)
5.875% SENIOR DEBENTURES DUE 2018
1. The initial public offering price of the Securities shall be 99.440%
of the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be 98.690% of the principal amount thereof.
3. The interest rate on the Securities shall be 5.875% per annum.
4. The Company may redeem the Securities at any time at its option, in
whole or in part, at a redemption price equal to the sum of the principal amount
of the Securities to be redeemed, accrued interest on that principal amount to
the redemption date and the make-whole amount, if any, with respect to the
Securities to be redeemed. This sum is referred to as the redemption price.
"Make-whole amount" means, in connection with the optional redemption,
the excess, if any, of:
. the aggregate present value as of the date of any optional
redemption of each dollar of principal being redeemed and the
amount of interest, exclusive of interest accrued to the date of
redemption, that would have been payable in respect of such dollar
of principal if such redemption had not been made, determined by
discounting, on a semi-annual basis, such principal and interest at
the reinvestment rate, as determined on the third business day
preceding the date that notice of the redemption is given, from the
respective dates on which such principal and interest would have
been payable if such redemption had not been made, over
. the aggregate principal amount of the Securities being redeemed.
"Reinvestment rate" means 0.30% plus the arithmetic mean of the yields
under the headings "Week Ending" published in the most recent statistical
release under the caption "Treasury Constant Maturities" for the maturity,
rounded to the nearest month, corresponding to the remaining life to maturity,
as of the payment date of the principal being redeemed. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity will be calculated pursuant to the
immediately preceding sentence and the reinvestment rate will be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of the
relevant periods to the nearest month. For purposes of calculating the
reinvestment rate, the most recent statistical release published prior to the
date of determination of the make-whole amount will be used.
"Statistical release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination, then such
other reasonably comparable index which shall be designated by the Company.