16,500,000 SHARES
AQUILA, INC.
CLASS A COMMON STOCK
UNDERWRITING AGREEMENT
April ___, 2001
▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED,
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
CREDIT LYONNAIS SECURITIES (USA) INC. AND
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
As Representatives of the several
U.S. Underwriters named in Schedule 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE),
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL,
SALOMON BROTHERS INTERNATIONAL LIMITED,
CREDIT LYONNAIS SECURITIES AND
▇.▇. ▇▇▇▇▇▇ SECURITIES LTD.
As Representatives of the several
International Underwriters named in Schedule 3,
c/▇ ▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
World Financial ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
Aquila, Inc., a Delaware corporation (the "COMPANY"), and UtiliCorp United
Inc. (the "SELLING SHAREHOLDER") propose to sell an aggregate of 16,500,000
shares (the "FIRM STOCK") of the Company's Class A Common Stock, par value $0.01
per share (the "COMMON STOCK") upon the terms and conditions stated in this
letter.
The Company proposes, subject to the terms and conditions stated herein, to
issue and then sell to the Underwriters (as defined herein) 12,250,000 shares of
Firm Stock, and the Selling Shareholder proposes, subject to
the terms and conditions stated herein, to sell to the Underwriters 4,250,000
shares of Firm Stock. It is understood that an aggregate of 13,200,000 shares of
the Firm Stock (the "U.S. FIRM STOCK") will be sold to the several U.S.
Underwriters named in SCHEDULE 1 hereto (the "U.S. UNDERWRITERS") in connection
with the offering and sale of such U.S. Firm Stock in the United States and
Canada to United States Persons and Canadian Persons (as such terms are defined
in the Intersyndicate Agreement of even date herewith), and an aggregate of
3,300,000 shares of the Firm Stock (the "INTERNATIONAL FIRM STOCK") will be sold
to the several International Underwriters named in SCHEDULE 2 hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Firm Stock outside the United States and Canada to persons other
than United States Persons and Canadian Persons. ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., Credit
Lyonnais Securities (USA) Inc. and ▇.▇. ▇▇▇▇▇▇ Securities Inc. shall act as
representatives (the "U.S. REPRESENTATIVES") of the several U.S. Underwriters,
and ▇▇▇▇▇▇ Brothers International (Europe), ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Salomon
Brothers International Limited, Credit Lyonnais Securities and ▇.▇. ▇▇▇▇▇▇
Securities Ltd. shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the "UNDERWRITERS." The U.S. Representatives and the
International Representatives are hereinafter collectively referred to as the
"REPRESENTATIVES."
In addition, the Company and the Selling Shareholder propose to grant to
the Underwriters an option to purchase up to an additional 1,975,000 and 500,000
shares of the Common Stock, respectively, on the terms and for the purposes set
forth in Sections 2 and 5 (the "OPTION STOCK"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "STOCK."
Anything herein to the contrary notwithstanding, the consummation of the
issuance and sale of Stock (as defined herein) by the Company pursuant to this
Agreement on the one hand, and the consummation of the sale of Stock by the
Selling Shareholder on the other hand, are both expressly conditional on one
another.
It is further understood that 825,000 shares of the Firm Stock (the
"DIRECTED SHARES") will initially be reserved by the Underwriters for offer and
sale to directors and employees of the Company and its affiliates (collectively,
the "PARTICIPANTS") upon the terms and conditions set forth in the Prospectus
and in accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "DIRECTED SHARE PROGRAM"). Under no circumstances
will any Representative or Underwriter be liable to the Company, the Selling
Shareholder or to any Participant for any action taken or omitted to be taken in
good faith in connection with such Directed Share Program. To the extent that
any Directed Shares are not affirmatively reconfirmed for purchase by any
Participant by the end of the business day after the date of this Agreement,
such Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
Section 1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and the rules and regulations (the "RULES AND
REGULATIONS") of the Securities and Exchange Commission (the
"COMMISSION") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. The registration statement contains two
prospectuses to be used in connection with the offering and sale
of the Stock: the U.S. prospectus, to be used in connection with
the offering and sale of Stock in the United States and Canada to
United States Persons and Canadian Persons, and the international
prospectus, to be used in connection with the offering and sale
of Stock outside the United States and Canada to persons other
than United States Persons and Canadian Persons. The
international prospectus is identical to the U.S. prospectus
except for the outside front and back cover pages. Copies of such
registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement,
"EFFECTIVE TIME" means the date and the time as of which such
registration statement, or
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the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "EFFECTIVE DATE" means the
date of the Effective Time; "PRELIMINARY PROSPECTUS" means each
prospectus included in such registration statement, or amendments
thereof, before it became effective under the Securities Act and
any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "REGISTRATION STATEMENT" means such
registration statement, as amended at the Effective Time,
including all information contained in the final prospectus filed
with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement
as of the Effective Time pursuant to Rule 430A of the Rules and
Regulations; and "PROSPECTUS" means the U.S. prospectus and the
international prospectus in the respective forms first used to
confirm sales of Stock. If the Company has filed an abbreviated
registration statement to register additional shares of Common
Stock pursuant to Rule 462(b) under the Securities Act (the "RULE
462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such
Rule 462 Registration Statement.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration
Statement or the Prospectus will, when they become effective or
are filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act and
the Rules and Regulations and do not and will not, as of the
applicable Effective Date (as to the Registration Statement and
any amendment thereto) and as of the applicable filing date (as
to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the
Prospectus, in light of the circumstances under which they were
made); provided that no representation or warranty is made as to
information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically
for inclusion therein. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(c) Each of the Company and its significant subsidiaries (as
defined in Section 17) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full power and authority
(corporate and other) to own or lease its properties and conduct
its business as described in the Prospectus, and is duly
qualified to do business and is in good standing in each
jurisdiction in which the character of the business conducted by
it or the location of the properties owned or leased by it makes
such qualification necessary (except where the failure to be so
qualified and in good standing could not be reasonably expected
to have a material adverse effect on the Company and its
subsidiaries taken as a whole).
(d) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the outstanding shares of capital
stock of the Company and all of the outstanding shares of capital
stock of each significant subsidiary, have been duly authorized
and validly issued, and are fully paid and nonassessable. All of
the outstanding shares of capital stock of each significant
subsidiary that are owned directly or indirectly by the Company
are owned free and clear of any claim, lien, encumbrance or
security interest except as otherwise disclosed in writing to the
Representatives.
(e) The shares of the Stock to be issued and sold by the Company
and the Selling Shareholder to the Underwriters hereunder, upon
issuance and delivery and payment therefor in the manner
described herein, will be duly authorized, validly issued, fully
paid and nonassessable. Such shares of Stock conform to the
descriptions thereof in the
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Preliminary Prospectus, dated April 6, 2001, and the
Prospectus. There are no preemptive or other rights to
subscribe for or to purchase, or any restriction upon the
transfer of, any shares of the Company's capital stock,
including the Stock when issued, pursuant to the Company's
certificate of incorporation, bylaws or other governing
documents or any agreement or other instrument to which the
Company or any of its subsidiaries is a party or by which it
may be bound.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and conforms in all material respects to
the description thereof in the Prospectus.
(g) Neither the Company nor any of its subsidiaries is, nor with
the giving of notice or lapse of time or both would be, in
violation of or in default under, nor will the execution or
delivery of this Agreement or consummation of the transactions
contemplated by this Agreement result in a violation of, or
constitute a default under, the certificate of incorporation,
bylaws or other governing documents of the Company or any of its
subsidiaries, or any agreement, indenture or other instrument to
which the Company or any of its subsidiaries is a party or by
which any of them is bound, or to which any of their properties
is subject, nor will the performance by the Company of its
obligations under this Agreement violate any law, rule,
administrative regulation or decree of any court or any
governmental agency or body having jurisdiction over the Company,
its subsidiaries or any of their properties, result in the
creation or imposition of any lien, charge, claim or encumbrance
upon any property or asset of the Company or any of its
subsidiaries which would be material to the Company and its
subsidiaries taken as a whole, except with reference to the
result of a violation of, or a default under, the certificate of
incorporation, bylaws or other governing documents of the Company
or any of its subsidiaries. Except for permits and similar
authorizations required under the Securities Act, the Federal
Power Act and the securities or Blue Sky laws of certain
jurisdictions, and except for such permits and authorizations as
have been obtained, no consent, approval, authorization or order
of any court, governmental agency or body or financial
institution is required in connection with the consummation of
the transactions contemplated by this Agreement.
(h) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company
to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by
such person or to require the Company to include such securities
in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the
Securities Act.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of its capital stock during the
six-month period preceding the date of the Prospectus, including
but not limited to any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act.
(j) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction, not in the ordinary
course of business, that is material to the Company and its
subsidiaries taken as a whole, or sustained any loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus,
that is material to the Company and its subsidiaries taken as a
whole; and, since the date as of which information is given in
the Prospectus, there has not been any material change in the
capital stock, or material increase in the short-term debt or
long-term debt, of the Company or any of its subsidiaries or any
material adverse change, or any development involving, or which
may
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reasonably be expected to involve, a prospective material adverse
change in or affecting the condition (financial or other),
business, prospects, properties, net worth or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries
on the basis stated in the Registration Statement and the
Prospectus at the respective dates or for the respective periods
to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial
and statistical information and data included in the Registration
Statement and the Prospectus (and any amendment or supplement
thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and
records of the Company and its subsidiaries.
(l) The accountants who have certified or shall certify the
financial statements included in the Registration Statement and
the Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Securities Act.
(m) The Company and its significant subsidiaries have good and
marketable title to all material real and personal property owned
by them, in each case free and clear of all mortgages, liens,
encumbrances and defects, except such as are described or
referred to in the Prospectus or such as do not materially affect
the values of such property and do not interfere with the use
made or proposed to be made of such property by the Company or
such 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 such significant
subsidiaries.
(n) Except as described in the Prospectus, the Company and each
of its significant subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as are adequate
for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies
engaged in similar businesses in similar industries.
(o) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights and licenses necessary for
the conduct of their respective businesses and have no knowledge
of any infringement by them of, and have not received any notice
of any claim of infringement of, any such rights of others, which
might result in any material adverse change in the condition
(financial or other), results of operations, business, prospects,
net worth or assets of the Company and its subsidiaries taken as
a whole.
(p) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject or which is pending or, to
the knowledge of the Company, contemplated against the Company or
any of its subsidiaries which might result in any material
adverse change in the condition (financial or other), results of
operations, business, prospects, net worth or assets of the
Company and its subsidiaries taken as a whole.
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(q) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or
filed as exhibits to the Registration Statement.
(r) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholder, customers or suppliers of the Company on the other
hand, which is required to be described in the Prospectus which
is not so described.
(s) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent, which might be
expected to have a material adverse effect on the general
affairs, management, consolidated financial position,
stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries taken as a whole.
(t) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA");
no "REPORTABLE EVENT" (as defined in ERISA) has occurred with
respect to any "PENSION PLAN" (as defined in ERISA) for which the
Company would have any material liability; the Company has not
incurred and does not expect to incur any material liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "PENSION PLAN" or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the
"CODE"); and each "PENSION PLAN" for which the Company would have
any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(u) The Company has filed or has had filed on its behalf, all
material federal, state and local income and franchise tax
returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had
(nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, might have) a material adverse effect on the
consolidated financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries taken as a whole.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise
be disclosed in the Prospectus, the Company has not (i) issued or
granted any securities, (ii) incurred any liability or
obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its
capital stock.
(w) The Company (i) makes and keeps accurate books and records in
all material respects and (ii) maintains a system of internal
accounting controls sufficient to provide reasonable assurances
that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
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(x) Neither the Company nor any of its significant subsidiaries
is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership
of its property or to the conduct of its business, which would
have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business
or prospects of the Company and its significant subsidiaries
taken as a whole.
(y) To the best knowledge of the Company, neither the Company nor
any of its subsidiaries, nor any director, officer, agent,
employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any funds of the
Company for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from funds of the Company;
violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances
by the Company or any of its subsidiaries (or, to the knowledge
of the Company, any of their predecessors in interest) at, upon
or from any of the property now or previously owned or leased by
the Company or its subsidiaries in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or
permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action
which would not have, singularly or in the aggregate with all
such violations and remedial actions, a material adverse effect
on the general affairs, management, consolidated financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole; there has been no
material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes,
medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its
subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release
which would not have, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general
affairs, management, consolidated financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and the terms "HAZARDOUS
WASTES", "TOXIC WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL
WASTES" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with
respect to environmental protection.
(aa) Neither the Company nor any significant subsidiary is, or,
as of the Delivery Date (as hereinafter defined) after giving
effect to the sale of the Stock pursuant to this Agreement and
the application of the net proceeds therefrom as described in the
Prospectus, will be, an "INVESTMENT COMPANY" as defined in the
Investment Company Act of 1940, as amended.
(bb) None of the Directed Shares distributed in connection with
the Directed Share Program will be offered or sold outside of the
United States.
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Section 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
SELLING SHAREHOLDER.
The Selling Shareholder represents, warrants and agrees that:
(a) (i) The President and Chief Operating Officer of the Selling
Shareholder has reviewed and is familiar with the Registration
Statement, the Preliminary Prospectus and the Prospectus and, to
the best of his knowledge, none of the Preliminary Prospectus,
the Registration Statement, the Prospectus or any amendments or
supplements thereto includes any untrue statement of a material
fact 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 and (ii) the information in
the Preliminary Prospectus, the Registration Statement and the
Prospectus and any further amendments or supplements thereto does
not and will not, as of the applicable Effective Date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date, the date hereof, each Delivery Date (as
to the Preliminary Prospectus and the Prospectus and in any
amendments or supplements thereto) contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided that such information in this subsection
2(a)(ii) shall be limited to the following: the first paragraph
of "Prospectus Summary - Our Relationship with UtiliCorp," the
first paragraph (excluding the last sentence of such paragraph)
of "Management's discussion and Analysis of Financial Condition
and Results of Operations - Separation from UtiliCorp," the first
sentence of "Our Separation From UtiliCorp - Overview," the
information under the caption "Our Separation From
UtiliCorp - Distribution by UtiliCorp of Our Common Stock," the
first two sentences of the second paragraph under "Federal Tax
Matters Related to Our Separation from UtiliCorp," the
information under the caption "Principal and Selling
Stockholder," the first sentence of the second paragraph under
"Shares Available for Future Sale", and the first sentence of
Note 2 of the attached Financial Statements.
(b) The Selling Shareholder has the full right, power and
authority to enter into this Agreement and to sell, transfer and
deliver the Stock to be sold by the Selling Shareholder under
this Agreement. The execution and delivery of this Agreement, the
sale and delivery of the Stock to be sold by the Selling
Shareholder, the consummation by the Selling Shareholder of the
transactions contemplated under this Agreement and compliance by
the Selling Shareholder with its obligations under this Agreement
have been duly authorized by such Selling Shareholder 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
tax, lien, charge or encumbrance upon the Stock to be sold by
such Selling Shareholder which is material as it relates to the
transactions contemplated in this Agreement, whether pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, license, lease or other agreement or instrument
to which the Selling Shareholder is a party or by which such
Selling Shareholder may be bound nor will such action result in
any violation of the provisions of its charter or by-laws or
other organizational instrument of such Selling Shareholder, or
any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of its
properties.
(c) The Selling Shareholder (i) has at the date hereof valid and
marketable title to the Stock to be sold by the Selling
Shareholder under this Agreement, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind (collectively, a "LIEN"), other than
pursuant to this Agreement and (ii) will at the first date upon
which the Stock is sold under this Agreement (the "CLOSING DATE")
and, if any Option Stock is purchased, on the Delivery Date (as
defined below), have valid and marketable title to such stock to
be sold by the Selling Shareholder under this Agreement,
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free and clear of any Lien, other than pursuant to this
Agreement; and upon delivery of such Stock and payment of the
purchase price therefor as contemplated in this Agreement
(assuming each such Underwriter has no notice of any adverse
claim, as defined in Uniform Commercial Code as adopted in the
State of New York (the "UCC")), each of the Underwriters will
receive valid and marketable title to the Stock purchased by it
from the Selling Shareholder, free and clear of any lien.
(d) The Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the common stock of the Company in
violation of Regulation M under the 1934 Act.
(e) 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 Selling Shareholder of its obligations under
this Agreement, or in connection with the offer, sale and
delivery by the Selling Shareholder of the Stock under this
Agreement or the consummation by the Selling Shareholder of the
transactions contemplated by this Agreement, except such as have
been already obtained or as may be required under the Securities
Act or the Rules and Regulations and state securities laws.
Section 3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees to
issue and sell to the several Underwriters 12,250,000 shares of Firm Stock; and
each of the Underwriters, severally agrees to purchase from the Company the
number of shares of Firm Stock set forth opposite that Underwriter's name in
Schedule 1 and 2 hereto.
The Company also grants to the Underwriters an option to purchase up to
1,975,000 shares of Option Stock. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 5 hereof. Shares of Option Stock when granted shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedules 1 and 2 hereto.
In addition, on the basis of the representations and warranties contained
in, and subject to the terms and conditions of, this Agreement, the Selling
Shareholder agrees to sell 4,250,000 shares of Firm Stock; and each of the
Underwriters, severally agrees to purchase from the Selling Shareholder the
number of shares of Firm Stock set forth opposite that Underwriter's name in
Schedule 1 and 2. The shares of Firm Stock will be in the form of the delivery
of shares of Class A Common Stock, par value $.01 per share, of the Company,
which will upon sale to the Underwriters automatically convert into Common
Stock.
In addition, the Selling Shareholder grants to the Underwriters an option
to purchase up to 500,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock when granted shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set forth opposite the name of such Underwriters
in Schedules 1 and 2 hereto. The shares of Option Stock will be in the form of
the delivery of shares of Class A Common Stock, par value $.01 per share, of the
Company which will upon sale to the Underwriters automatically convert into
Common Stock.
Shares of Option Stock shall be sold severally from the Company and the
Selling Shareholders in proportion to the number of shares of Option Stock
offered by the Company and the Selling Shareholder.
In every case, the respective purchase obligations of each Underwriter with
respect to the Firm Stock or Option Stock, as applicable, shall be adjusted by
the Representatives so that no Underwriter shall be obligated to purchase Option
Stock other than in 100 share amounts.
-9-
The price of both the Firm Stock and any Option Stock shall be $[ ] per
share.
Neither the Company nor the Selling Shareholder shall be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), except upon payment for all the Stock to be purchased on such Delivery
Date as provided herein.
Section 4. OFFERING OF STOCK BY THE UNDERWRITERS.
Upon authorization by the Representatives of the release of the Firm Stock,
the several Underwriters will offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
Section 5. DELIVERY OF AND PAYMENT FOR THE STOCK.
Delivery of and payment for the Firm Stock shall be made at the offices of
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, at 10:00 A.M., New York City time, on the fourth full business day
following the date of this Agreement or at such other date or place as shall be
determined by agreement among the Representatives, the Company and the Selling
Shareholder. This date and time are sometimes referred to as the "FIRST DELIVERY
DATE." On the First Delivery Date, the Company and the Selling Shareholder shall
each deliver or cause to be delivered certificates representing the Firm Stock
each has committed to sell under this Agreement to the Representatives for the
account of each Underwriter against the respective payment to or upon the order
of the Company and the Selling Shareholder of the purchase price by wire
transfer in immediately available funds in U.S. dollars. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each of the parties hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
each of the Company and the Selling Shareholder shall make the certificates
representing the Firm Stock to be sold pursuant to this Agreement available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to both the Company and the Selling Shareholder by the
Representatives. Such notice shall set forth the aggregate number of shares of
Option Stock as to which the option is being exercised, the names in which the
shares of Option Stock are to be registered, the denominations in which the
shares of Option Stock are to be sold and the date and time, as determined by
the Representatives, when the shares of Option Stock are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Stock are delivered are sometimes referred to as a "SECOND
DELIVERY DATE" and the First Delivery Date and any Second Delivery Date are
sometimes each referred to as a "DELIVERY DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement among the Representatives,
the Company and the Selling Shareholder) at 10:00 A.M., New York City time, on
such Second Delivery Date. On such Second Delivery Date, each of the Company and
the Selling Shareholder shall deliver or cause to be delivered the certificates
representing the Option Stock to the Representatives for the account of each
U.S. Underwriter against the respective payment to or upon the order of the
Company and the Selling Shareholder of the purchase price by wire transfer in
immediately available funds in U.S. Dollars. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each of the parties hereunder. Upon delivery,
the Option Stock shall be registered in such names and in such denominations as
the Representatives shall request in the aforesaid written notice. For the
purpose of expediting the checking and packaging of the certificates for the
Option Stock, each of the Company and the Selling Securityholder shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
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Section 6. FURTHER AGREEMENTS OF THE COMPANY AND THE SELLING
SHAREHOLDER.
The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than Commission's close
of business on the second business day following the execution
and delivery of this Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Securities
Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted
herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening by the Commission
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to use
promptly commercially reasonable efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto
(in each case excluding exhibits) and (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at
any time after the Effective Time in connection with the offering
or sale of the Stock or any other securities relating thereto and
if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement
the Prospectus in order to comply with the Securities Act, to
notify the Representatives and, upon their request, to prepare
and furnish without charge to each Underwriter and to any dealer
in securities as many copies as the Representatives may from time
to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or
effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or
the Representatives, be required by the Securities Act or
requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and
-11-
Regulations, to furnish a copy thereof to the Representatives and
counsel for the Underwriters and obtain the consent of the
Representatives to the filing;
(f) As soon as practicable but in any event no later than the
date on which the first filing by the Company under the
Securities Exchange Act of 1934 is required to be filed following
the first anniversary of the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished
by the Company to its shareholders and all public reports and all
reports and financial statements furnished by the Company to the
principal national securities exchange upon which the capital
stock of the Company may be listed pursuant to requirements of or
agreements with such exchange or to the Commission pursuant to
the Exchange Act or any rule or regulation of the Commission
thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions
as the Representatives may reasonably request and to comply with
such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in
connection therewith the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
(i) To apply for the listing of the Stock on the New York Stock
Exchange, and to use commercially reasonable efforts to complete
that listing, subject only to official notice of issuance, prior
to the First Delivery Date;
(j) To apply the net proceeds from the sale of the Stock pursuant
to this Agreement as set forth in the Prospectus;
(k) For a period of one year after the Effective Date, to take
such steps as shall be necessary to ensure that the Company shall
not become an "INVESTMENT COMPANY" as defined in the Investment
Company Act of 1940, as amended; and
(l) In connection with the Directed Share Program, to ensure that
the Directed Shares will be restricted to the extent required by
the National Association of Securities Dealers, Inc. or the rules
of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement, and ▇▇▇▇▇▇
Brothers Inc. will notify the Company as to which Participants
will need to be so restricted. At the request of ▇▇▇▇▇▇ Brothers
Inc., the Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of
time.
The Company and the Selling Shareholder agree for a period of 180 days
from the date of the Prospectus, not to, directly or indirectly, (1) offer
for sale, sell, pledge or otherwise dispose of (or enter into any transaction
or device which is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of the
common stock of the Company or securities convertible into or exchangeable
for the common stock of the Company (other than the Stock and shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights), or sell or grant options,
rights or warrants with respect to any shares of the common stock of the
Company or securities convertible into or exchangeable for the common stock
of the Company (other
-12-
than the grant of options, rights or warrants pursuant to employee
compensation plans existing on the date hereof), or (2) enter into any swap
or other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares of
the common stock of the Company, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of the common stock of
the Company or other securities, in cash or otherwise, in each case without
the prior written consent of each of ▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated on behalf of the Underwriters; and to
cause any other shareholder of the Company and each officer and director set
forth in Schedule 3 to furnish to the Representatives, prior to the First
Delivery Date, a letter or letters, substantially in the form of Exhibit A
hereto, pursuant to which each such person shall agree not to, directly or
indirectly, with certain limited exceptions, (1) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of the common stock of the Company
or securities convertible into or exchangeable for the common stock of the
Company or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of the common stock of the Company, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of the common stock of the Company or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc. on
behalf of the Underwriters.
Section 7. EXPENSES.
The Company agrees to pay (a) the costs incident to the authorization,
issuance, sale and delivery of the Stock and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement and any amendments and exhibits
thereto incurred within nine months of the Effective Date; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement, the Agreement Between U.S.
Underwriters and International Managers, any Supplemental Agreement Among U.S.
Underwriters and any other related documents in connection with the offering,
purchase, sale and delivery of the stock; (e) the filing fees incident to
securing the review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (f) any applicable stock exchange listing or
other stock exchange fees; (g) the fees and expenses (not in excess, in the
aggregate, of $10,000) of qualifying the Stock under the securities laws of the
several jurisdictions as provided in Section 5(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (h) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, incident
to the Directed Share Program, including counsel fees and any stamp duties or
other taxes incurred by the Underwriters in connection with the Directed Share
Program; (i) the costs and expenses of the Company relating to investor
presentations on any "ROAD SHOW" undertaken in connection with the marketing of
the offering of the Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show; and (j) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
6 and in Section 11 the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters.
The Selling Shareholder shall pay all expenses incident to the performance
of its obligations under, and the consummation of the transactions contemplated
by this Agreement, including (i) any stamp duties, capital duties and stock
transfer taxes, if any, payable upon the sale of the Stock by it to the
Underwriters and (ii) the fees and disbursements of its counsel and accountants.
Section 8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The respective obligations of the Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of each of the Company and the Selling Shareholder
-13-
contained herein, to the performance by each of the Company and the Selling
Shareholder of its obligations hereunder, and to each of the following
additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or, to the best knowledge of
the Company, threatened by the Commission; and any request of the
Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have
been complied with.
(b) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP shall have furnished to
the Representatives their written opinion, as counsel to the
Company and the Selling Shareholder, addressed to the
Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect
that:
(i) Each of the Selling Shareholder and the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the State of Delaware, is
duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such
qualification (except where the failure to be so qualified
and in good standing could not be reasonably expected to
have a material adverse effect on the Company and its
subsidiaries taken as a whole);
(ii) Each significant subsidiary of the Company (other than
the Company's foreign subsidiaries) has been duly
incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation;
(iii) The shares of the Company's capital stock outstanding
prior to the issuance of the Stock have been duly authorized
and are validly issued, fully paid and nonassessable and to
the best of our knowledge, the Selling Shareholder has valid
and marketable title to the Stock to be sold by the Selling
Shareholder pursuant hereto, free and clear of any pledge,
lien, security interest, charge, claim, equity or
encumbrance of any kind, and has full right, power and
authority to sell, transfer and deliver such Stock pursuant
hereto. By delivery of a certificate or certificates
therefor the Selling Shareholder will transfer to the
Underwriters who have purchased such Stock pursuant to the
Underwriting Agreement (assuming each such Underwriter has
no notice of any adverse claim, as defined in Uniform
Commercial Code as adopted in the State of New York (the
"NYUCC")), valid and marketable title to such Stock, free
and clear of any adverse claim (as defined in the NYUCC),
pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.;
(iv) The Stock has been duly authorized, and, when delivered
in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable;
(v) There are no preemptive or other rights to subscribe for
or to purchase, or any restriction upon the transfer of, any
shares of the Company's common stock, including the Stock
when issued, pursuant to the Company's certificate of
incorporation, bylaws, or any agreement or other instrument
known to such counsel to which the Selling Shareholder, the
Company or any of their significant subsidiaries are a party
or by which any of them may be bound, and neither the filing
of the Registration Statement nor the offering or sale of
the Stock as contemplated by this Agreement gives rise to
any rights, other than those which
-14-
have been waived or satisfied, for or relating to the
registration of any shares of the Company's common stock
under the Company's certificate of incorporation, bylaws or
any agreement or other instrument binding upon the Selling
Shareholder or the Company known to such counsel;
(vi) After due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to
which the Company or their significant subsidiaries are a
party or to which any of the properties of the Company or
its significant subsidiaries is subject that is required to
be described in the Registration Statement or the Prospectus
as amended or supplemented and is not so described or of any
contract or other document that is required to be described
in the Registration Statement or the Prospectus as amended
or supplemented or to be filed as an exhibit to the
Registration Statement that is not described or filed as
required;
(vii) The Registration Statement has become effective under
the Securities Act and no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to such counsel's knowledge, no proceedings for that
purpose have been instituted or are pending before or
contemplated by the Commission and all filings required by
Rule 424 under the Securities Act have been made; the
Registration Statement and the Prospectus and any amendments
and supplements thereto (other than the financial statements
and related schedules and the other financial information
and data therein, as to which such counsel need express no
opinion), comply as to form in all material respects with
the requirements of the Securities Act and the Rules and
Regulations thereunder; such counsel has no reason to
believe that, as of its Effective Date, the Registration
Statement or amendment thereto (other than the financial
statements and related schedules and the other financial
information and data therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the
Preliminary Prospectus dated April 6, 2001 and the
Prospectus or any amendment or supplement thereto (other
than the financial statements and related schedules and the
other financial information and data therein, as to which
such counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading or
that, as of the Delivery Date for the Stock, either the
Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto
made by the Company prior to the Delivery Date for the Stock
(other than the financial statements and related schedules
and the other financial information and data therein, as to
which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed;
(viii) The statements made in the Registration Statement,
the Preliminary Prospectus dated April 6, 2001 and the
Prospectus under the captions "Description of Our Capital
Stock", "U.S. Federal Tax Considerations for Non-U.S.
Holders" and "Relationship with UtiliCorp and Related Party
Transactions", insofar as such statements constitute a
summary of the legal matters, documents, proceedings,
federal statutes, rules and regulations, fairly summarize
such legal matters, documents, proceedings, federal statutes
and rules and regulations;
-15-
(ix) The Selling Shareholder and the Company each have full
corporate power and corporate authority to enter into and
perform its obligations under this Agreement with respect to
the Stock and the Company has full corporate power and
corporate authority to issue the Stock; this Agreement has
been duly authorized, executed and delivered by the Company
and the Selling Shareholder;
(x) The orders of the Federal Energy Regulatory Commission
authorizing the issuance and sale of the Stock are in effect
on the Delivery Date and no other approval, authorization,
consent or order of any federal, state or local commission
or governmental authority (other than under state securities
or Blue Sky laws, as to which such counsel need express no
opinion) is required for the issuance and sale of the Stock
or the performance by the Selling Shareholder and the
Company of their other obligations under this Agreement,
except such as are specified, obtained and in effect, and
the issuance and sale of the Stock hereunder are in
conformity with each such approval, authorization, consent
and order;
(xi) The execution, delivery and performance by the Selling
Shareholder and the Company of this Agreement will not
violate the certificate of incorporation or the bylaws of
the Selling Shareholder or the Company or their significant
subsidiaries or violate any provision of applicable law that
would be material to the Selling Shareholder or the Company
and their subsidiaries taken as a whole, or breach, or
result in a default under, any existing obligation of the
Selling Shareholder or the Company or their significant
subsidiaries under any agreement filed as an exhibit;
(xii) The Company is not an "INVESTMENT COMPANY" as defined
in the Investment Company Act of 1940, as amended.
In giving the foregoing opinions, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP may
rely on the opinions of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇'▇▇▇▇▇, P.C., Dickinson,
Mackaman, Tyler & ▇▇▇▇▇, P.C., Anderson, Byrd, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, a
Professional Association, Brydon, ▇▇▇▇▇▇▇▇▇▇ & England, P.C., May, ▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., with respect to the
opinions set forth in paragraphs (i) and (x) above. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇'▇▇▇▇▇, P.C., Dickinson, Mackaman, Tyler & ▇▇▇▇▇, P.C., Anderson, Byrd,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇, a Professional Association, Brydon, ▇▇▇▇▇▇▇▇▇▇ & England, P.C.,
May, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., shall state
that ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ LLP is justified in relying on such
opinions.
(c) The Representatives shall have received from Milbank, Tweed,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion
or opinions, dated such Delivery Date, with respect to the
issuance and sale of the Stock by the Company and the sale of the
Stock by the Selling Shareholder, the Registration Statement, the
Prospectus and other related matters as the Representatives may
reasonably require, and each of the Company and the Selling
Shareholder shall have furnished to such counsel such documents
as they reasonably request for the purpose of enabling them to
pass upon such matters.
(d) At the time of execution of this Agreement, the
Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter or letters, in form and substance reasonably satisfactory
to the Representatives, addressed to the Underwriters and dated
the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission and (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the
respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days
prior to the date hereof), the
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conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "COMFORT LETTERS" to underwriters in connection with
registered public offerings.
(e) With respect to the letter or letters of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement
(the "INITIAL LETTERS"), the Company shall have furnished to the
Representatives a letter (the "BRING-DOWN LETTER") of such
accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date
not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect
to the financial information and other matters covered by the
initial letters and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letters.
(f) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the
Board, its President or a Vice President and its Chief Financial
Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 7(a) and 7(h) have been fulfilled; and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus.
(g) The Representatives shall have received a certificate of the
Selling Shareholder, dated as of the Closing Date, to the effect that
(i) the representations and warranties of the Selling Shareholder
contained in this Agreement are true and correct in all respects with
the same force and effect as though expressly made at and as of the
Closing Date and (ii) the Selling Shareholder has complied in all
material respects with all agreements and all conditions on its part
to be performed under this Agreement at or prior to the Closing Date.
(h) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus (A) any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (B) since such date there shall not
have been any change in the capital stock or any material increase in
the long-term debt of the Company or any of its subsidiaries (other
than in the ordinary course of business) or any change, or any
development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause
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(A) or (B), is, in the reasonable judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(i) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's
debt securities by any "NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATION", as that term is defined by the Commission for purposes
of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) (A) trading in
securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (B) a banking moratorium in New York or
Missouri shall have been declared by Federal, New York or Missouri
authorities, (C) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States, or (D) there shall
have occurred a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such), and (ii)
the effect of the event in (i)(C) or (D) would, in the reasonable
judgment of the Representatives, make it impracticable or inadvisable
to proceed with the public offering, delivery or sale of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) The New York Stock Exchange, Inc. shall have approved the Stock
for listing, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock),
to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (B) in any materials or information provided
electronically to investors by, or with the approval of, the Company
in connection with the marketing of the offering of the Stock
("MARKETING MATERIALS"), including any road show or investor
presentations made to investors by the Company (where such
presentations are made electronically and not in person), or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or in any Marketing Materials, any material fact
required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with,
or relating in any manner to, the Stock or the offering
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contemplated hereby, and which is included as part of or referred to
in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that
the Company shall not be liable under this clause (iii) to the extent
that it is determined in a final judgment by a court of competent
jurisdiction or a final judgment of an arbitral panel of competent
jurisdiction (such panel having being given such jurisdiction and the
authority to render a binding decision by agreement of the parties or
otherwise) that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted
to be taken by such Underwriter through its negligence or willful
misconduct), and shall reimburse each Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section
9(f), and provided, further, that with respect to any such untrue
statement in or omission from the Preliminary Prospectus, the
indemnity agreement contained in this Section 9(a) shall not inure to
the benefit of an Underwriter to the extent that the sale to the
person asserting any such loss, claim, damage, liability or action was
an initial resale by the Underwriter and any such loss, claim, damage,
liability or action of or with respect to the Underwriter results from
the fact that both (A) to the extent required by applicable law, a
copy of the Prospectus was not sent or given to such person at or
prior to the written confirmation of the sale of such Shares to such
person and (B) the untrue statement in or omission from the
Preliminary Prospectus was corrected in the Prospectus unless, in
either case, such failure to deliver the Prospectus was a result of
non-compliance by the Company. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and
hold harmless ▇▇▇▇▇▇ Brothers Inc. and the other Underwriters from and
against any loss, claim, damage, expense, liability or action which
(i) arises out of, or is based upon, any untrue statement or alleged
untrue statement of a material fact contained in any material prepared
by or with the approval of the Company for distribution to
Participants in connection with the Directed Share Program or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) arises out of the failure of any Directed Share
Program participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase or (iii) is otherwise related
to the Directed Share Program, other than losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted directly from the bad faith or gross
negligence of ▇▇▇▇▇▇ Brothers Inc. or the other Underwriters.
(b) The Selling Shareholder shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases
and sales of Stock), to which that
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Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto; provided,
however, that (i) the indemnification obligation of the Selling
Shareholder shall be limited to the public offering price, less
underwriting discounts of the Stock sold by the Selling Stockholder;
(ii) that such an untrue statement shall be limited to information
found in the first paragraph of "Prospectus Summary-Our Relationship
with UtiliCorp," the first paragraph (excluding the last sentence of
such paragraph) of "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Separation from UtiliCorp," the
first sentence of "Our Separation From UtiliCorp-Overview,"the
information under the caption "Our Separation From
UtiliCorp-Distribution by UtiliCorp of Our Common Stock," the first
two sentences of the second paragraph under "Federal Tax Matters
Related to Our Separation from UtiliCorp," the information under the
caption "Principal and Selling Stockholder," the first sentence of the
second paragraph under "Shares Available for Future Sale", and the
first sentence of Note 2 of the attached Financial Statements; and
(iii) that with respect to any such untrue statement in or omission
from the Preliminary Prospectus, the indemnity agreement contained in
this Section 9(b) shall not inure to the benefit of an Underwriter to
the extent that the sale to the person asserting any such loss, claim,
damage, liability or action was an initial resale by the Underwriter
and any such loss, claim, damage, liability or action of or with
respect to the Underwriter results from the fact that both (A) to the
extent required by applicable law, a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation
of the sale of such Shares to such person and (B) the untrue statement
in or omission from the Preliminary Prospectus was corrected in the
Prospectus unless, in either case, such failure to deliver the
Prospectus was a result of non-compliance by the Company with Section
6(c).
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each of the Company and the Selling Shareholder, their
respective officers and employees, each of their respective directors,
and each person, if any, who controls either the Company, the Selling
Shareholder or both within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company, the Selling
Shareholder or any such director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the Company,
the Selling Shareholder and any such director, officer, employee or
controlling person for any legal or other expenses reasonably incurred
by the Company, the Selling Shareholder or any such director, officer,
employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company, the Selling Shareholder
or any such director, officer, employee or controlling person.
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(d) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 9, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 9 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying parties, to assume the defense thereof 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 9 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 counsel to represent jointly the
Representatives and those other Underwriters and their respective
officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may
be sought by the Underwriters against the Company and/or the Selling
Shareholder, as applicable, under this Section 9 if, the named parties
to any such claim (including impleaded parties) include both such
Representative, any Underwriter or any officer, employee or
controlling person of a Representative or Underwriter and the Company
and/or the Selling Shareholder, and the Representatives are advised in
writing by counsel that representation of such indemnified party and
the Company and/or the Selling Shareholder by the same counsel will be
inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them.
It is understood, however, that in connection with any one such
action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, the indemnifying
party shall be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any
time for all such indemnified parties not having actual or potential
differing interests, which firm shall be designated in writing. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may
be sought hereunder unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party
or if there be a final judgment of the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(e) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 9(a), 9(b) or 9(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the
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Company and the Selling Shareholder on the one hand and the
Underwriters on the other from the offering of the Stock 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 and the Selling Shareholder on the
one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company and the Selling Shareholder on the one hand and the
Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company and the Selling Shareholder on the
one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock under this
Agreement, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to
whether the 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 and the Selling Shareholder or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholder and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section were to be 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 into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for
purposes of this Section 9(e), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 9(e), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public was offered to
the public exceeds the amount of any damages which such Underwriter
has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this
Section 9(e) are several in proportion to their respective
underwriting obligations and not joint.
(f) The Underwriters severally confirm and the Company and the Selling
Shareholder acknowledge that the statements with respect to the public
offering of the Stock by the Underwriters set forth (i) on the cover
page of the Prospectus and (ii) such information under the caption
"Underwriting" in the Prospectus relating to (A) any concession and
reallowance figures including the public offering price and any
underwriting discount or commission, (B) the allocation of shares to
the Underwriters, (C) agreements among the Underwriters and not the
Company, (D) factors considered in determining the initial public
offering price, (E) stabilizing transactions, (F) representations of
the international underwriters, (G) the role of Fidelity Capital
Markets in this offering and (H) the Underwriters' intention to not
confirm sales, are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or
on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
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Section 10. DEFAULTING UNDERWRITERS.
If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in SCHEDULE 1 and SCHEDULE 2 hereto bears to the
total number of shares of the Firm Stock set forth opposite the names of all the
remaining non-defaulting Underwriters in SCHEDULE 1 and SCHEDULE 3 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 10.0% of the total number of shares
of the Stock to be purchased on such Delivery Date. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives, the Selling Shareholder and
the Company who so agree, shall have the right (exercisable within 72 hours of
the initial default), but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives, the Selling Shareholder and the Company do
not elect to purchase the Stock which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Selling Shareholder and the Company to sell, the Option
Stock) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Selling Shareholder and the Company
will continue to be liable for the payment of expenses to the extent set forth
in Sections 7 and 12. As used in this Agreement, the term "UNDERWRITER"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 or 2 hereto who, pursuant to this
Section 10, purchases Stock which a defaulting Underwriter agreed but failed to
purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Selling Shareholder or the Company for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the
Representatives, on the one hand, or the Company and the Selling Shareholder, on
the other, may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company and
the Selling Shareholder or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
Section 11. TERMINATION.
The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by both the Company and the
Selling Shareholder prior to delivery of and payment for the Firm Stock if,
prior to that time, any of the events described in Sections 8(h), 8(i) or 8(j),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
Section 12. REIMBURSEMENT OF UNDERWRITERS' EXPENSE.
If the Selling Shareholder or the Company shall fail to tender the Stock
for delivery to the Underwriters by reason of any failure, refusal or inability
on the part of the Selling Shareholder or the Company to perform any agreement
on its part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Selling Shareholder or the
Company is not fulfilled, the Company will reimburse the Underwriters for all
reasonable out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any Underwriter (other than those
Underwriters approved by the Company) on account of those expenses.
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Section 13. NOTICES, ETC.
All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to (i) ▇▇▇▇▇▇ Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: Syndicate Department (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇
Brothers Inc., ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and
(ii) ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, World Financial
Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy to Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company and/or the Selling Shareholder, shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company
set forth in the Registration Statement, Attention: General Counsel (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
LLP, Suite 1000, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇);
provided, however, that any notice to an Underwriter pursuant to Section 9(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. Each of the Company
and the Selling Shareholder shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
▇▇▇▇▇▇ Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated on
behalf of the Representatives.
Section 14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Company, the Selling Shareholder and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company and the Selling Shareholder contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and, with respect to the indemnities and agreements contained
in Section 9(a), for the benefit of the persons named therein, and (B) the
indemnity agreement of the Underwriters contained in Section 9(c) of this
Agreement shall be deemed to be for the benefit the person or persons identified
in Section 9(c). Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 14, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
Section 15. SURVIVAL.
The respective indemnities, representations, warranties and agreements of
the Company, the Selling Shareholder and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
Section 16. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
laws of New York.
-24-
Section 17. DEFINITION OF THE TERMS "BUSINESS DAY," "SUBSIDIARY"
AND "SIGNIFICANT SUBSIDIARY."
For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday,
Tuesday, Wednesday, Thursday or Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close, (b) "SUBSIDIARY" has the meaning set forth in Rule 405
of the Rules and Regulations and (c) "SIGNIFICANT SUBSIDIARY" means each of the
subsidiaries of the Company meeting the requirements of Rule 1-02 of Regulation
S-X under the Securities Act.
Section 18. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to
be an original but all such counterparts shall together constitute one and the
same instrument.
Section 19. HEADINGS.
The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
-25-
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
AQUILA, INC.
By:
------------------------------------
Name:
Title:
UTILICORP UNITED INC.
By:
-----------------------------------
Name:
Title:
Accepted:
▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED,
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
CREDIT LYONNAIS SECURITIES (USA) INC. AND
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
For themselves and as U.S. Representatives
for each of the several U.S. Underwriters
named in Schedule 1 hereto
By ▇▇▇▇▇▇ BROTHERS INC. By ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
--------------------------
Authorized Representative By:
-----------------------------------
Authorized Representative
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE),
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL,
SALOMON BROTHERS INTERNATIONAL LIMITED,
CREDIT LYONNAIS SECURITIES AND
▇.▇. ▇▇▇▇▇▇ SECURITIES LTD.
For themselves and as International Representatives
for each of the several International Underwriters
named in Schedule 3 hereto
By ▇▇▇▇▇▇ BROTHERS INTERNATIONAL By ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
(EUROPE)
By: By:
-------------------------- -----------------------------------
Authorized Representative Authorized Representative
SCHEDULE 1
Number of Shares of Firm
U.S. Underwriters Stock to be Purchased
----------------- ---------------------
▇▇▇▇▇▇ Brothers Inc................................................... [ ]
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.................... [ ]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc............................................. [ ]
Credit Lyonnais Securities (USA) Inc.................................. [ ]
▇.▇. ▇▇▇▇▇▇ Securities Inc............................................ [ ]
[NAMES OF OTHER U.S. UNDERWRITERS].................................... [ ]
--------
Total........................................................ [ ]
========
S1-1
SCHEDULE 2
Number of Shares of Firm
International Underwriters Stock to be Purchased
-------------------------- ---------------------
▇▇▇▇▇▇ Brothers International (Europe) ............................... [ ]
▇▇▇▇▇▇▇ ▇▇▇▇▇ International........................................... [ ]
Salomon Brothers International Limited................................ [ ]
Credit Lyonnais Securities............................................ [ ]
▇.▇. ▇▇▇▇▇▇ Securities Ltd............................................ [ ]
[NAMES OF OTHER INTERNATIONAL UNDERWRITERS]........................... [ ]
--------
Total........................................................ [ ]
========
S2-1
SCHEDULE 3
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
Irvine ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Dr. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇
S3-1
EXHIBIT A
LOCK-UP LETTER AGREEMENT
▇▇▇▇▇▇ BROTHERS INC.,
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED,
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
CREDIT LYONNAIS SECURITIES (USA) INC. AND
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
As Representatives of the several
U.S. Underwriters named in SCHEDULE 1,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ BROTHERS INTERNATIONAL (EUROPE),
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL,
SALOMON BROTHERS INTERNATIONAL LIMITED,
CREDIT LYONNAIS SECURITIES AND
▇.▇. ▇▇▇▇▇▇ SECURITIES LTD.
As Representatives of the several
International Underwriters named in Schedule 2,
c/▇ ▇▇▇▇▇▇ Brothers International (Europe)
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
World Financial ▇▇▇▇▇▇--▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") providing
for the purchase by you and such other firms (the "UNDERWRITERS") of shares (the
"SHARES") of Class A Common Stock, par value $0.01 per share, of Aquila, Inc., a
Delaware corporation (the "COMPANY"), and that the Underwriters propose to
reoffer the Shares to the public (the "OFFERING").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of both ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated on behalf
of the Underwriters, the undersigned will not, directly or indirectly, (1) offer
for sale, sell, pledge, or otherwise dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of the common
stock of the Company (including, without limitation, the Shares and shares of
the common stock of the Company that may be deemed to be beneficially owned by
the undersigned in
A-1
accordance with the rules and regulations of the Securities and Exchange
Commission and shares of the common stock of the Company that may be issued upon
exercise of any option or warrant) or securities convertible into or
exchangeable for the common stock of the Company owned by the undersigned on the
date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of the common stock of the
Company, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of the common stock of the Company or other securities,
in cash or otherwise, for a period of 180 days after the date of the final
Prospectus relating to the Offering, except that the undersigned may make gifts
of such securities to members of the undersigned's "immediate family" (as such
term is defined under Item 404 of Regulation S-K under the Securities Act of
1933) or transfer such securities to one or more trusts established for the
benefit of members of the undersigned's immediate family and make involuntary
transfers; provided, that any such transferee agrees in writing to be bound by
the terms hereof.
In furtherance of the foregoing, the Company, the Selling Shareholder and
the Transfer Agent are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Letter Agreement.
It is understood that, if the Company and/or UtiliCorp United Inc., as
selling shareholder (the "Selling Shareholder") notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company, the Selling Shareholder and
the Underwriters will proceed with the Offering in reliance on this Lock-Up
Letter Agreement.
Whether or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation among the
Company, the Selling Shareholder and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
--------------------------------
Name:
Title:
Dated: April __, 2001
A-2
