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UNDERWRITING AGREEMENT
March 4, 1998
K N Energy, Inc.
000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Dear Sirs and Mesdames:
We (the "LEAD MANAGERS") are acting on behalf of the underwriters
(including ourselves) named below (such underwriters being herein called the
"UNDERWRITERS"), and we understand that K N Energy, Inc., a Kansas corporation
(the "COMPANY"), proposes to issue and sell $400 million aggregate initial
offering price of its 6.30% REPS due 2021 (the "DEBT SECURITIES"). (The Debt
Securities are also referred to herein as the "OFFERED SECURITIES"). The Debt
Securities will be issued pursuant to the provisions of an Indenture dated as of
November 20, 1993 (the "BASE INDENTURE") between the Company and First Trust
National Association, as Trustee (the "TRUSTEE"), as supplemented by a
supplemental indenture dated as of March 9, 1998 (the "SUPPLEMENTAL INDENTURE"
and, together with the Base Indenture, the "INDENTURE") between the Company and
the Trustee.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Company hereby agrees to sell to the several Underwriters,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Debt Securities set forth below
opposite their names at a purchase price of 99.579% of the principal amount of
Debt Securities:
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PRINCIPAL AMOUNT OF
NAME DEBT SECURITIES
---- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated $80,000,000
BancAmerica Xxxxxxxxx Xxxxxxxx $64,000,000
Chase Securities Inc. $64,000,000
Xxxxxx Brothers Inc. $64,000,000
X.X. Xxxxxx Securities Inc. $64,000,000
NationsBanc Xxxxxxxxxx Securities LLC $64,000,000
------------
Total....................................................... $400,000,000
The Underwriters will pay for the Offered Securities upon delivery
thereof at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000 at 10:00 a.m. (New York City time) on March 9, 1998, or at such other
time, not later than 5:00 p.m. (New York City time) on March 16, 1998, as shall
be designated by the Lead Managers. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
Terms of Debt Securities
The Offered Securities shall have the terms set forth in the Prospectus
dated January 30, 1998, and the Prospectus Supplement dated March 4, 1998,
including the following:
Maturity Date: March 1, 2021 (subject to "Call
Option; Mandatory Put" below)
Interest Rate: 6.30%
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Call Option; Mandatory Put: On March 1, 2003 holders of
the Debt Securities will be
entitled to receive 100% of the
principal amount thereof either
(i) through the exercise of a call
option, as provided for in the
Supplemental Indenture or (ii)
in the event the call option is
not exercised or the call price is
not paid, the automatic exercise
of a mandatory put to the
Company by the Trustee on
behalf of the holders of Debt
Securities, as provided for in
the Supplemental Indenture.
Interest Payment Dates: March 1 and September 1
commencing September 1,
1998
Form and Denomination: Book entry, $1,000 minimum
denomination and integral
multiples thereof
All provisions contained in the document entitled K N Energy, Inc. Underwriting
Agreement Standard Provisions (Debt Securities) dated March 4, 1998, a copy of
which is attached hereto, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, and (ii) all references in the Standard Provisions to the
"MANAGER" shall be deemed to be to the "LEAD MANAGERS", as defined herein.
If at any time when a Prospectus is required by the Securities Act to be
delivered in connection with any sale of the Offered Securities by a Callholder,
any Dealer or any of their affiliates following any exercise of the Call Option,
any event shall occur or condition shall exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Callholder or any such
Dealer or for the Company, to amend any Registration Statement or amend or
supplement any Prospectus or Prospectus Supplement in order that such Prospectus
or Prospectus Supplement will not include any untrue statement of material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend
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any Registration Statement or file a new registration statement or amend or
supplement any Prospectus or issue a new Prospectus or Prospectus Supplement in
order to comply with the requirements of the Securities Act or the SEC's
interpretations of the Securities Act, the Company shall prepare and file with
the SEC such amendment or supplement as may be necessary to correct such
statement or omission or to make any such Registration Statement or any such
Prospectus or Prospectus Supplement comply with such requirements, or prepare
and file any such new registration statement and prospectus as may be necessary
for such purpose, and furnish to such Callholder or any such Dealer such number
of copies of such amendment, supplement, Prospectus or other documents as they
may reasonably request. In addition, the Company shall, if at any time when a
Prospectus is required by the Securities Act to be delivered in connection with
any sale of the applicable principal amount of Offered Securities by a
Callholder or any Dealer or any of their affiliates following the exercise by
such Callholder of its Call Option, (i) execute and deliver or cause to be
executed and delivered legal documentation (including a purchase agreement or
underwriting agreement and registration rights agreement with customary
indemnities, covenants, representations and warranties, comfort letters and
legal opinions) in form and substance reasonably satisfactory to such Callholder
or Dealer, (ii) provide promptly upon request updated consolidated financial
statements to the date of its latest report filed with the SEC and (iii) to the
extent the Company and the Callholder or applicable Dealer deem reasonably
necessary for successful completion of the Coupon Reset Process, make available
senior management of the Company for road show and one-on-one presentations.
Terms used in this paragraph and not otherwise defined shall have the meaning
ascribed to them in the Calculation Agency Agreement dated as of March 9, 1998
between the Company and Xxxxxx Xxxxxxx & Co. Incorporated, as Calculation Agent.
Assignment of Call Option
(a) In consideration for the sum of $11,800,000, the Company hereby
irrevocably assigns to Xxxxxx Xxxxxxx & Co. International Limited (the
"CALLHOLDER") all of the Company's right, title and interest in, to and under
the Call Option (as defined in the Indenture). The Callholder may at any time
assign its rights and obligations under its Call Option to an affiliate;
provided that (i) such rights and obligations are assigned in whole and not in
part and (ii) it provides the Trustee and the Company with notice of such
assignment contemporaneously with such assignment. Upon receipt of notice of
assignment, the Trustee shall treat the assignee as Callholder for such Call
Option for all purposes. The Callholder may assign its rights under its Call
Option without notice to, or consent of, the holders of the Notes to which the
Call Option corresponds.
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(b) The Company agrees that it will not take any action that is
inconsistent with such assignment and that it will, from time to time upon the
request of the Trustee, execute all instruments of further assurance and all
such supplemental instruments with respect to such assignment as the Trustee may
specify.
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Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
XXXXXX XXXXXXX & CO. INCORPORATED
BANCAMERICA XXXXXXXXX XXXXXXXX
XXXXXX BROTHERS INC.
CHASE SECURITIES INC.
X.X. XXXXXX SECURITIES INC.
NATIONSBANC XXXXXXXXXX
SECURITIES LLC
Acting severally on behalf of themselves and the
several Underwriters named herein
By: XXXXXX XXXXXXX & CO.
INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxxx III
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Xxxxxx X. Xxxxxxxxxx III
Vice President
Accepted:
K N ENERGY, INC.
By: /s/ E. Xxxxx Xxxxxxxxx
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E. Xxxxx Xxxxxxxxx
Vice President and Treasurer
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Accepted by Assignee of Call Option assigned hereunder:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
By: /s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
Principal
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