Exhibit 4.24
Execution Copy
WESTERN RESOURCES, INC.
$365,000,000
First Mortgage Bonds, 7 7/8% Series Due 2007
Purchase Agreement
New York, New York
May 7, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxx Securities Inc.
BNY Capital Markets, Inc.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Western Resources, Inc., a corporation organized under the
laws of the State of Kansas (the "Company"), proposes to issue and sell to the
several parties named in Schedule I hereto (the "Initial Purchasers"),
$365,000,000 principal amount of its First Mortgage Bonds, 7 7/8% Series Due
2007 (the "Securities"). The Securities are to be issued under and secured by
the Mortgage and Deed of Trust, dated July 1, 1939, between the Company and BNY
Midwest Trust Company, as successor to Xxxxxx Trust and Savings Bank, as trustee
(the "Trustee"), as amended and supplemented by thirty-four indentures
supplemental thereto (such Mortgage and Deed of Trust, as amended and
supplemented by such thirty-four supplemental indentures, being hereinafter
called the "Mortgage"), and as amended and supplemented by a thirty-fifth
supplemental indenture, to be dated as of May 10, 2002 (the "Thirty-Fifth
Supplemental Indenture") (the Mortgage, as amended and supplemented by the
Thirty-Fifth Supplemental Indenture, being hereinafter called the "Amended
Mortgage"). The Securities have the benefit of a Registration Rights Agreement
(the "Registration Rights Agreement"), dated as of May 10, 2002, between the
Company and the Initial Purchasers, pursuant to which the Company has agreed to
register the Securities under the Act subject to the terms and conditions
therein specified. The use of the neuter in this Agreement shall include the
feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 17 hereof.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated April 24, 2002 (including any
and all exhibits thereto and any information incorporated by reference therein,
the "Preliminary
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Memorandum"), and a final offering memorandum, dated May 7, 2002 (including any
and all exhibits thereto and any information incorporated by reference therein,
the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum in connection with the offer and
sale of the Securities by the Initial Purchasers. Unless stated to the contrary,
any references herein to the terms "amend," "amendment" or "supplement" with
respect to the Final Memorandum shall be deemed to refer to and include any
information filed under the Exchange Act, subsequent to the Execution Time and
prior to the completion of the distribution of the Securities by the Initial
Purchasers, which is incorporated by reference into the Final Memorandum.
The Preliminary Memorandum and the Final Memorandum also
relate to the sale by the Company of $400,000,000 principal amount of Senior
Notes, 9 3/4% Series Due 2007 (the "Notes Due 2007"). While the Securities and
the Notes Due 2007 are expected to be sold on the same date, the consummation of
the sale of the Securities and Notes Due 2007 are not conditioned upon each
other.
1. Representations and Warranties. The Company represents
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and warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. At the Execution Time and on
the Closing Date (as defined in Section 3 hereof), the Final Memorandum did
not, and will not (and any amendment or supplement thereto, at the date
thereof and on the Closing Date, will not), contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. However, the Company makes no representation or
warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers through Xxxxxxx Xxxxx
Barney Inc. specifically for inclusion in the Preliminary Memorandum or the
Final Memorandum.
(b) The Company will not resell any Securities that have been acquired
by it.
(c) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under
the Act.
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(d) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(e) The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Act.
(f) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf has engaged in any directed selling efforts with respect
to the Securities, and each of them has complied with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them in Regulation S.
(g) The Company has been advised by the NASD's PORTAL Market that the
Securities have been designated PORTAL-eligible securities in accordance with
the rules and regulations of the NASD.
(h) The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Final Memorandum will not be, an "investment company" within the meaning of the
Investment Company Act, without taking account of any exemption arising out of
the number of holders of the Company's securities.
(i) The Company is subject to and in full compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act.
(j) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any Securities (except as
contemplated by this Agreement).
(k) The Company has not taken, directly or indirectly, any action designed
to cause or which has constituted or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities.
(l) The information provided by the Company pursuant to Section 5(g) hereof
will not, at the date thereof, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(m) Each of the Company and the Principal Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized with full
corporate power and authority to carry on the electric utility business in which
it is engaged,
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and is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such qualification
except where the failure to so qualify would not reasonably be expected to have
a material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Memorandum (a
"Material Adverse Effect").
(n) All the outstanding shares of capital stock of the Principal Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the Principal Subsidiary owned by the
Company, as described in the Final Memorandum, are owned by it free and clear of
any perfected security interest or any other security interests, claims, liens
or encumbrances.
(o) The Company's authorized equity capitalization is as set forth in the
Final Memorandum, and the capital stock of the Company conforms in all material
respects to the description thereof contained in the Final Memorandum.
(p) The statements in the Final Memorandum under the headings "Certain U.S.
Federal Income Tax Considerations," "Description of Bonds," "Description of
Notes" and "Exchange Offers; Registration Rights" fairly summarize the matters
therein described.
(q) This Agreement has been duly authorized, executed and delivered by the
Company; the Amended Mortgage has been duly authorized, executed and delivered
by the Company, and has been qualified under the Trust Indenture Act, and,
assuming due authorization, execution and delivery thereof by the Trustee,
constitutes a legal, valid, binding instrument enforceable against the Company
in accordance with its terms except that (x) the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights or remedies generally; (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought (regardless of whether enforcement is sought
in a proceeding at law or in equity); and (iii) any indemnification or
contribution provision that may be contrary to or inconsistent with public
policy and (y) the enforceability of provisions imposing liquidated damages,
penalties or an increase in interest rate upon the occurrence of certain events
may be limited in certain circumstances (collectively, the "Enforceability
Limitations"); the Securities have been duly authorized, and, when executed and
authenticated in accordance with the provisions of the Amended Mortgage and
delivered to and paid for by the Initial
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Purchasers, will have been duly executed and delivered by the Company and will
constitute the legal, valid and binding obligations of the Company entitled to
thelien of and benefits provided by the Amended Mortgage subject to the
Enforceability Limitations; the Registration Rights Agreement has been duly
authorized and, when executed and delivered by the Company, will constitute the
legal, valid, binding and enforceable instrument of the Company subject to the
Enforceability Limitations; and the New Securities (as such term is defined in
the Registration Rights Agreement) have been duly authorized by the Company for
issuance and sale pursuant to the Amended Mortgage and the Registration Rights
Agreement, and such New Securities, when executed, authenticated, issued and
delivered in the manner provided for in the Registration Rights Agreement and
the Amended Mortgage against payment of consideration therefor in the form of
the Securities, will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Amended Mortgage, enforceable against
the Company in accordance with their terms subject to the Enforceability
Limitations.
(r) No consent, approval, authorization, filing with or order of the State
Corporation Commission of the State of Kansas (the "KCC") or any court or
governmental agency or body is required in connection with the transactions
contemplated herein or in the Amended Mortgage or the Registration Rights
Agreement, except (i) the June 15, 2000 authorization from the Federal Energy
Regulatory Commission (the "FERC") in Federal Power Act docket numbers
ES00-39-000 and ES00-39-001 and the filing with the FERC of the reports required
by 18 CFR Section 34.10; (ii) such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of the
Securities by the Initial Purchasers in the manner contemplated herein and in
the Final Memorandum and the Registration Rights Agreement; and (iii) the filing
with the KCC of a copy of the registration statement contemplated by the
Registration Rights Agreement.
(s) Neither the execution and delivery of this Agreement, the Amended
Mortgage or the Registration Rights Agreement, the issue and sale of the
Securities, nor the consummation of any other of the transactions herein or
therein contemplated, nor the fulfillment of the terms hereof or thereof will
conflict with, result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or the Principal
Subsidiary pursuant to: (i) the charter or by-laws of the Company or the
Principal Subsidiary; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or the
Principal Subsidiary is a party or bound or to which its or their property is
subject; or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or the Principal Subsidiary of any court, regulatory
body, administrative agency, governmental body, arbitrator or
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other authority having jurisdiction over the Company or the Principal Subsidiary
or any of its or their properties.
(t) The consolidated historical financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final Memorandum
present fairly in all material respects the financial condition, results of
operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of the
Act and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein); the selected financial data set forth under the
caption "Summary Consolidated Financial Data" in the Final Memorandum fairly
present, on the basis stated in the Final Memorandum, the information included
therein; the information set forth under the captions "Summary Approximate
Restricted Group Pro Forma Financial Data" and "Summary Approximate Restricted
Group EBITDA Reconciliation" fairly present, on the basis stated in the Final
Memorandum, the information included therein; and the capitalization set forth
under the columns "Actual" and "As Adjusted" fairly present the information
included therein.
(u) No action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to have a Material
Adverse Effect on the performance of this Agreement, the Amended Mortgage or the
Registration Rights Agreement, or the consummation of any of the transactions
contemplated hereby or thereby; or (ii) could reasonably be expected to have a
Material Adverse Effect , except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(v) The Amended Mortgage and all required financing statements under the
Uniform Commercial Code have been duly recorded or filed in each place in which
any of the properties or assets of the Company subject to the lien of the
Amended Mortgage are situated and in which such recording or filing is required
to protect and preserve the lien of the Amended Mortgage, and all taxes and
recording or filing fees required to be paid in connection with the execution,
recording or filing of the Amended Mortgage have been duly paid.
(w) Each of the Company and each of its subsidiaries owns or leases all
such properties as are necessary to the conduct of its operations as presently
conducted, except where the failure to own or lease such properties would not
reasonably be expected to have a Material Adverse Effect.
(x) The Company has good and sufficient title to, or a satisfactory
easement in, all the real property, and has good and sufficient title to all the
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personal property described in the Amended Mortgage as owned by it and subject
to the lien of the Amended Mortgage, except any which may have been released
from the lien thereof pursuant to the provisions thereof, subject only to
permitted liens as defined in the Amended Mortgage; subject only as above set
forth in this paragraph, the Amended Mortgage constitutes a valid, direct first
mortgage lien upon said properties and upon all franchises owned by the Company,
which properties and franchises include all the physical properties and
franchises of the Company (other than classes of property expressly excepted in
the Amended Mortgage); all physical properties and franchises (other than
classes of property expressly excepted in the Amended Mortgage as aforesaid)
hereafter acquired by the Company will, upon such acquisition, become subject to
the lien thereof, subject however to liens permitted thereby and to any liens
existing or placed upon such properties at the time of the acquisition thereof
by the Company and except as described in the Final Memorandum; and the
descriptions of all such properties and assets contained in the granting clauses
of the Amended Mortgage are correct and adequate for the purposes of the Amended
Mortgage.
(y) Neither the Company nor the Principal Subsidiary is in violation or
default of (i) any provision of its charter or by-laws; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or the Principal Subsidiary is a party or bound or to which
its property is subject; or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or the Principal Subsidiary of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or the Principal Subsidiary
or any of its properties, as applicable, except for violations or defaults which
would not reasonably be expected to have a Material Adverse Effect.
(z) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx"), who have certified certain
financial statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated financial
statements and schedules included in the Final Memorandum, are independent
public accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations thereunder.
(aa) The Company has received from Xxxxxx Xxxxxxxx (i) a letter dated March
27, 2002 concerning Xxxxxx Xxxxxxxx'x quality controls in connection with Xxxxxx
Xxxxxxxx'x audit of the audited financial statements of the Company and its
consolidated subsidiaries included in the Final Memorandum (the "AA
Representation Letter"), including representations regarding the continuity of
Xxxxxx Xxxxxxxx'x personnel working on the audit, the availability of national
office consultation and the availability of personnel at foreign affiliates of
Xxxxxx Xxxxxxxx to conduct relevant portions of the audit. The AA Representation
Letter has not been rescinded and the Company has no reason to believe that the
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representations contained in the AA Representation Letter are not true and
correct in all respects.
(bb) There are no stamp or other issuance or transfer taxes or duties or
other similar fees or charges required to be paid in connection with the
execution and delivery of this Agreement or the issuance or sale by the Company
of the Securities to the Initial Purchasers.
(cc) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not reasonably be
expected to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto)) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as would not reasonably be
expected to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).
(dd) No labor problem or dispute with the employees of the Company or the
Principal Subsidiary exists or is threatened or imminent, and the Company is not
aware of any existing or imminent labor disturbance by the employees of any of
its or the Principal Subsidiary's principal suppliers, contractors or customers,
that would reasonably be expected to have a Material Adverse Effect, except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(ee) The Company and the Principal Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or the Principal Subsidiary or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
the Principal Subsidiary are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
the Principal Subsidiary under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Company nor the Principal Subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor the
Principal Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not reasonably be expected to have a Material
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Adverse Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(ff) The Principal Subsidiary is not currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on its capital stock, from repaying to the Company any loans or
advances to the Principal Subsidiary from the Company or from transferring any
of the Principal Subsidiary's property or assets to the Company, except as
described in or contemplated by the Final Memorandum.
(gg) Each of the Company and the Principal Subsidiary possesses valid and
subsisting franchises, certificates of convenience and authority, licenses and
permits authorizing it to carry on the electric utility business in which it is
engaged, subject to the expiration of the Principal Subsidiary's franchise
agreement with the City of Wichita, and neither the Company nor the Principal
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such franchise, certificate of convenience and authority,
license or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to have a
Material Adverse Effect, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(hh) The Company and the Principal Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ii) The Company and the Principal Subsidiary are (i) in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"); (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (iii) have not
received notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals, or liability would not, individually or in the aggregate, reasonably
be
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expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto); except as set forth in the Final Memorandum, neither
the Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(jj) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws, or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties); on the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(kk) The offerings are in the ordinary course of business of the Company
and the Company does not believe that an exemption from the July 20, 2001 Order
of the KCC is required.
Any certificate signed by any officer of the Company and delivered to the
Initial Purchasers or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
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upon the representations and warranties herein set forth, the Company agrees to
sell to each Initial Purchaser, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 99% of the
principal amount thereof, the principal amount of Securities set forth opposite
such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall
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be made at 10:00 A.M., New York City time, on May 10, 2002, or at such time on
such later date (not later than May 17, 2002) as the Initial Purchasers and the
Company shall agree, which date and time may be postponed by agreement between
the Initial Purchasers and the Company or as provided in Section 9 hereof (such
date and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Initial
Purchasers for their respective accounts against payment by the several Initial
Purchasers of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to the account
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specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company.
4. Offering by Initial Purchasers. Each Initial Purchaser, severally and
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not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any Securities
except (i) to those it reasonably believes to be "Qualified Institutional
Buyers" (as defined in Rule 144A under the Act) and that, in connection with
each such sale, it has taken or will take reasonable steps to ensure that the
purchaser of such Securities is aware that such sale is being made in reliance
on Rule 144A or (ii) in accordance with the restrictions set forth in Exhibit A
hereto.
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Securities in the United States by means of any form of
general solicitation or general advertising (within the meaning of Regulation D)
in the United States.
5. Agreements. The Company agrees with each Initial Purchaser that:
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(a) The Company will furnish to each Initial Purchaser and to counsel for
the Initial Purchasers, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as it may reasonably request.
(b) The Company will not (except as is necessary to comply with applicable
law) amend or supplement the Final Memorandum, other than by filing documents
under the Exchange Act that are incorporated by reference therein, without the
prior written consent of the Initial Purchasers; provided, however, that, prior
to the completion of the distribution of the Securities by the Initial
Purchasers (as determined by the Initial Purchasers), the Company will not file
any document under the Exchange Act that is incorporated by reference in the
Final Memorandum unless, prior to such proposed filing, the Company has
furnished the Initial Purchasers with a copy of such document for their review
and the Initial Purchasers have not reasonably objected to the filing of such
document.
(c) If at any time prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by the Initial Purchasers),
any event occurs as a result of which the Final Memorandum, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it should
be necessary to amend or supplement the Final Memorandum to comply with
applicable law, the Company promptly (i) will notify the Initial Purchasers of
any such event; (ii) subject to the requirements of paragraph (b) of this
Section 5, will
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prepare an amendment or supplement that will correct such statement or omission
or effect such compliance; and (iii) will supply any supplemented or amended
Final Memorandum to the several Initial Purchasers and counsel for the Initial
Purchasers without charge in such quantities as the Initial Purchasers may
reasonably request.
(d) The Company will not, and will not permit any of its Affiliates to,
resell any Securities (other than to other Affiliates) that have been acquired
by any of them.
(e) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Act.
(f) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with any
offer or sale of the Securities in the United States.
(g) So long as any of the Securities are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, the Company will, during any period in
which it is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act or it is not exempt from such reporting requirements pursuant to
and in compliance with Rule 12g3-2(b) under the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the request of
such holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders, from
time to time of such restricted securities.
(h) Neither the Company, nor any of its Affiliates, nor any person acting
on its or their behalf will engage in any directed selling efforts with respect
to the Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(i) The Company will cooperate with the Initial Purchasers and use its best
efforts to permit the Securities to be eligible for clearance and settlement
through The Depository Trust Company.
(j) The Company will use its best efforts to cause the Amended Mortgage to
be duly filed for record, appropriate notices of such filing to be recorded, and
an appropriate financing statement to be filed, wherever necessary
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or appropriate to perfect the lien of the Amended Mortgage for the benefit of
the Securities prior to the Closing Date.
(k) The Company will not for a period of 90 days following the Execution
Time, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer,
sell or contract to sell, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition
(k) (whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any Affiliate of the Company or
any person in privity with the Company or any Affiliate of the Company),
directly or indirectly, or announce the offering of, any debt securities issued
or guaranteed by the Company (other than (i) the Securities; (ii) the Notes Due
2007; and (iii) indebtedness under the Company's Credit Agreement dated as of
June 28, 2000, the Five-Year Competitive Advance and Revolving Credit Facility
Agreement dated as of March 17, 1998 and the WR Receivables Corporation Purchase
and Sale Agreement dated as of July 28, 2000); provided, however that the
Company may incur indebtedness under credit facilities that replace the credit
facilities described in clause (iii) above.
(l) The Company will not take, directly or indirectly, any action designed
to or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(m) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of the Registration Rights Agreement, the
issuance of the Securities and the fees of the Trustee; (ii) the preparation,
printing or reproduction of the Preliminary Memorandum and Final Memorandum and
each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Preliminary Memorandum and
Final Memorandum, and all amendments or supplements to either of them, as may,
in each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (v) the printing (or reproduction) and delivery of this Agreement
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (vi) admitting the Securities
for trading in the PORTAL Market; (vii) the reasonable transportation and other
expenses incurred by or on behalf of Company representatives (which shall
exclude expenses of the Initial Purchasers) in connection with presentations to
prospective purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (ix) all other
148
costs and expenses incident to the performance by the Company of its obligations
hereunder.
(n) The Company will cause Westar Industries, Inc., contemporaneously with
the consummation of the issuance of the Securities, to transfer to the Company
in exchange for equity, Company debt in an amount equal to the sum of any
offering expenses, Initial Purchasers' discounts, and the amount, if any, by
which the debt incurred under and in connection with the issuance of the
Securities and the Notes Due 2007 exceeds the amount of the debt of the Company
retired by application of the proceeds of the sale of the Securities and the
Notes Due 2007.
6. Conditions to the Obligations of the Initial Purchasers. The obligations
-------------------------------------------------------
of the Initial Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein at the Execution Time and the Closing Date, to the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Initial Purchasers shall have received from Xxxxx X. Xxxxx, Esq.,
Vice President and Corporate Secretary of the Company, and from other counsel
(which may be Company counsel) acceptable to the Initial Purchasers, one or more
legal opinions, dated the Closing Date and addressed to the Initial Purchasers
to the cumulative effect that:
(i) each of the Company and the Principal Subsidiary has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Kansas, with full
corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as
described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification
and where the failure to be so qualified would be materially
adverse to the Company and its subsidiaries considered as a
whole;
(ii) each of the Company and the Principal Subsidiary possesses valid
and subsisting franchises, certificates of convenience and
authority, licenses and permits authorizing it to carry on the
electric utility business in which it is engaged, subject to the
expiration of the Principal Subsidiary's franchise agreement with
the City of Wichita, in each case as described in the Final
Memorandum;
(iii) the Amended Mortgage has been duly and validly authorized by all
necessary corporate action and has been duly executed and
delivered, and has been qualified under the Trust Indenture Act
of
158
1939, as amended, and constitutes a valid and binding instrument enforceable in
accordance with its terms subject to the Enforceability Limitations;
(iv) the Amended Mortgage and all required financing statements under the
Uniform Commercial Code have been duly recorded or filed in each place in which
any of the properties or assets of the Company subject to the lien of the
Amended Mortgage are situated and in which such recording or filing is required
to protect and preserve the lien of the Amended Mortgage, and all taxes and
recording or filing fees required to be paid in connection with the execution,
recording or filing of the Amended Mortgage have been duly paid;
(v) the Securities have been duly authorized, executed, issued and
delivered by the Company and constitute valid and legally binding obligations of
the Company entitled to the lien of and benefits provided by the Amended
Mortgage subject to the Enforceability Limitations;
(vi) the Registration Rights Agreement has been duly authorized, executed
and delivered and constitutes the legal, valid, binding and enforceable
instrument of the Company subject to the Enforceability Limitations;
(vii) neither the execution and delivery of the Amended Mortgage, the
Registration Rights Agreement, the Securities or this Agreement, nor the
consummation of the transactions therein contemplated, nor compliance with the
terms and provisions thereof, will conflict with, violate or result in a breach
of any law, any administrative regulation or any court decree known to such
counsel to be applicable to the Company or the Principal Subsidiary, conflict
with or result in a breach of any of the terms, conditions or provisions of the
charter or by-laws of the Company or the Principal Subsidiary or of any
agreement or instrument known to such counsel to which the Company or the
Principal Subsidiary is a party or by which the Company or the Principal
Subsidiary is bound or constitute a default thereunder, or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any properties or assets of the Company or the Principal
Subsidiary other than the lien of the Amended Mortgage;
(viii) this Agreement has been duly authorized, executed and delivered by
the Company;
(ix) the Securities and the Amended Mortgage conform as to legal matters in
all material respects with the statements concerning them set forth in the Final
Memorandum under the captions "Description of
168
Bonds" and "Exchange Offers; Registration Rights," insofar as such statements
purport to summarize certain provisions;
(x) an appropriate order has been entered by the FERC in Federal Power Act
dockets ES00-39-000 and ES00-39-001 authorizing the issuance and sale of the
Securities and the transactions related thereto as contemplated by this
Agreement and the Registration Rights Agreement, and no additional consent,
approval, authorization, filing with or order of the FERC, the KCC or any court
or governmental agency or body is required in connection with the transactions
contemplated herein or in the Amended Mortgage and the Registration Rights
Agreement, except (i) such as may be required under the blue sky or securities
laws of any jurisdiction in connection with the purchase and sale of the
Securities by the Initial Purchasers in the manner contemplated in this
Agreement and the Final Memorandum and the Registration Rights Agreement; (ii)
the filing with the FERC of the reports required by 18 CFR Section 34.10; and
(iii) the filing with the KCC of a copy of the registration statement
contemplated by the Registration Rights Agreement and such other approvals
(specified in such opinion) as have been obtained;
(xi) the Company has good and sufficient title to, or a satisfactory
easement in, all the real property, and has good and sufficient title to all the
personal property described in the Amended Mortgage as owned by it and subject
to the lien of the Amended Mortgage, except any which may have been released
from the lien thereof pursuant to the provisions thereof, subject only to (a)
minor leases and liens of judgements not prior to the lien of the Amended
Mortgage, which, in such counsel's opinion, do not interfere with the Company's
business, (b) minor defects, irregularities and deficiencies in titles of
properties and rights-of-way which, in such counsel's opinion, do not materially
impair the use of such property and rights-of-way for the purposes for which
they are held by the Company, and (c) other permitted liens as defined in the
Amended Mortgage; subject only as above set forth in this paragraph, the Amended
Mortgage constitutes a valid, direct first mortgage lien upon said properties
and upon all franchises owned by the Company, which properties and franchises
include all the physical properties and franchises of the Company (other than
classes of property expressly excepted in the Amended Mortgage); all physical
properties and franchises (other than classes of property expressly excepted in
the Amended Mortgage as aforesaid) hereafter acquired by the Company will, upon
such acquisition, become subject to the lien thereof, subject however to liens
permitted thereby and to any liens existing or placed upon such properties at
the time of the acquisition thereof by the Company and except as described in
the Final Memorandum; and the descriptions of all such properties and assets
178
contained in the granting clauses of the Amended Mortgage are correct and
adequate for the purposes of the Amended Mortgage;
(xii) to the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or the Principal
Subsidiary or its or their property that is not adequately disclosed in the
Final Memorandum, except in each case for such proceedings that, if the subject
of an unfavorable decision, ruling or finding would not singly or in the
aggregate, result in a material adverse change in the condition (final or
otherwise), prospects, earnings, business or properties of the Company and its
Restricted Subsidiaries, taken as a whole;
(xiii) the statements in the Final Memorandum under the heading "Certain
U.S. Federal Income Tax Considerations" and the statements in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001 (the "Annual
Report") under the heading "Legal Proceedings" fairly summarize the matters
therein described;
(xiv) no facts have come to such counsel's attention that lead him to
believe that the Final Memorandum at the Execution Time and on the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (in
each case, other than the statistical information, financial statements and
other financial information contained therein, as to which such counsel need
express no opinion);
(xv) assuming the accuracy of the representations and warranties and
compliance with the agreements contained herein, no registration of the
Securities under the Act, and no qualification of an indenture under the Trust
Indenture Act, are required for the offer and sale by the Initial Purchasers of
the Securities in the manner contemplated by this Agreement; and
(xvi) the documents of the Company incorporated by reference in the Final
Memorandum, as of the respective dates on which they were filed with the
Commission pursuant to the Exchange Act, complied as to form in all material
respects with the Exchange Act and the applicable published rules and
regulations of the Commission under the Exchange Act.
In rendering such opinion, counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and
188
public officials. References to the Final Memorandum in this Section 6(a)
include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have requested and caused Morris, Laing, Xxxxx, Xxxxx
& Xxxxxxx, Chartered, special counsel for the Company, to furnish to the Initial
Purchasers its opinion, dated the Closing Date, addressed to the Initial
Purchasers and in form reasonably satisfactory to the Initial Purchasers, to the
effect that:
(i) unless the issue and sale of the Securities pursuant to this
Agreement violates an existing valid order of the KCC, no
consent, approval, authorization, order, registration, waiver,
exemption or qualification of or with the KCC is required for the
issue and sale of the Securities by the Company pursuant to this
Agreement;
(ii) the issue and sale of the Securities should not be interpreted by
the KCC to violate the July 20, 2001 Order of the KCC; and
(iii) if the KCC were to determine that the issue and sale of the
Securities violates the July 20, 2001 Order, (i) any such
violation should not affect the validity of the Securities; (ii)
any such violation should not impair the legal enforceability of
such Securities; and (iii) the Company should not be prevented
from making timely payments of interest, premium, if any, and
principal pursuant to the terms of the Securities, or otherwise
complying with the terms of the Securities.
(c) The Initial Purchasers shall have received from Xxxxxx Xxxxxx &
Xxxxxxx, special counsel to the Company, a legal opinion dated the Closing Date
and addressed to the Initial Purchasers and in form reasonably satisfactory to
the Initial Purchasers, covering the matters referred to in clauses (iii), (v),
(vi), (viii), (ix), the statement with respect to "Certain U.S. Federal Income
Tax Considerations" in (xiii) and (xv) of Section 6(a) above. In rendering such
opinions, such counsel may rely as to matters of fact, to the extent they deem
proper on certificates of responsible officers of the Company and public
officials, and as to matters relating to the FERC authorization and Kansas law
(including matters relating to the KCC), upon the opinions rendered pursuant to
Sections 6(a) and 6(b) above. In addition, such counsel shall state that they
have participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent certified
public accountants for the Company and the Initial Purchasers at which
conferences the contents of the Final Memorandum were discussed and that
although they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except as to matters referred to in their opinion described in
clauses (ix) and (xiii) referred to above, on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions
198
of officers, counsel and other representatives of the Company), no facts came to
their attention which lead them to believe that the Final Memorandum, as of its
date, or (as amended or supplemented) as of the Closing Date, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (except in each
case as to the financial statements and other financial and statistical data
contained therein or incorporated by reference therein, with respect to which
they need make no comment).
(d) The Initial Purchasers shall have received from Sidley Xxxxxx Xxxxx &
Xxxx LLP, counsel for the Initial Purchasers, such opinion or opinions, dated
the Closing Date and addressed to the Initial Purchasers, with respect to the
issuance and sale of the Securities, the Amended Mortgage, the Registration
Rights Agreement, the Final Memorandum (as amended or supplemented at the
Closing Date) and other related matters as the Initial Purchasers may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters. Sidley
Xxxxxx Xxxxx & Xxxx LLP may rely on the opinion of one or more of the foregoing
counsel for the Company.
(e) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by two of its executive officers (one of whom
shall be a principal financial or accounting officer of the Company), dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement
are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and
(ii) since the date of the most recent financial statements included in the
Final Memorandum (exclusive of any amendment or supplement thereto),
there has been no material adverse change in the condition (financial
or otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(f) Subject to such modifications as the Initial Purchasers may, in their
discretion, deem acceptable to accommodate the current uncertainty
relating to the
208
ongoing operations of Xxxxxx Xxxxxxxx, at the Execution Time and at the Closing
Date, the Company shall have requested and caused Xxxxxx Xxxxxxxx to furnish to
the Initial Purchasers letters, dated respectively as of the Execution Time and
as of the Closing Date, in form and substance satisfactory to the Initial
Purchasers, confirming that they are independent accountants within the meaning
of the Act and the Exchange Act and the applicable rules and regulations
thereunder, and that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the Final
Memorandum and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations thereunder;
(ii) on the basis of carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders, directors and
committees thereof committees of the Company and its subsidiaries; and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent to December 31,
2001, nothing came to their attention which caused them to believe
that:
(1) with respect to the period subsequent to December
31, 2001 there were any changes, at a specified date not
more than five days prior to the date of the letter, in the
total long-term liabilities of the Company and its
subsidiaries or cumulative preferred stock or common stock
of the Company or decreases in the shareholders' equity of
the Company as compared with the amounts shown on the
December 31, 2001 consolidated balance sheet included in the
Annual Report, or for the period from January 1, 2002 to
such specified date there were any decreases, as compared
with the corresponding period in the preceding year in total
sales or earnings (loss) before income taxes or in total or
per share amounts of net income of the Company and its
subsidiaries, except in all instances for changes or
decreases set forth in such letter (including decreases as a
result of the impairment charge in the first quarter of 2002
of approximately $657 million), in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not
deemed necessary by the Initial Purchasers; or
218
(2) the information included under the headings "Selected
Financial Data" in the Annual Report is not in conformity with
the disclosure requirements of Regulation S-K; or
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Final Memorandum, the information included in Items 1, 2,
6, 7 and 11 of the Annual Report agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Memorandum in this Section 6(f) include any
amendment or supplement thereto at the date of the applicable letter.
(g) On the Closing Date, the AA Representation Letter shall not have
been rescinded and the Company shall have no reason to believe that the
representations in the AA Representation Letter are not true and correct in
all respects.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (f)
of this Section 6; or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
Restricted Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Initial Purchasers, so
material and adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(i) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(j) Subsequent to the Execution Time, there shall not have been any
(i) downgrading in the rating accorded the Company's debt securities by a
"nationally recognized securities rating organization," as that term is
defined by the Commission for purposes of its Rule 436(g)(2); and (ii) no
such rating
228
organization shall have announced publicly that it has placed, or informed the
Company or the Initial Purchasers that it intends to place, any of the Company's
debt securities on what is commonly referred to as a "watchlist" for possible
downgrading, in a manner or to an extent indicating a materially greater
likelihood of a downgrading in rating as described in clause (i) above occurring
than was the case as of the date hereof.
(k) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Initial
Purchasers. Notice of such cancellation shall be given to the Company in writing
or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of
the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason
of a default by any of the Initial Purchasers, the Company will reimburse
the Initial Purchasers severally through Xxxxxxx Xxxxx Xxxxxx Inc. on
demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors and
officers of each Initial Purchaser and each person who controls any Initial
Purchaser within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum (or in any supplement or
amendment thereto) or any information provided
238
by the Company to any holder or prospective purchaser of Securities pursuant to
Section 5(g), or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Company will not be liable in any such case to the extent that
-------
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Initial
Purchasers through the Initial Purchasers specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Initial Purchaser severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers, and
each person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to the Company by or on behalf of such
Initial Purchaser through the Initial Purchasers specifically for inclusion in
the Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in (i) the last paragraph of the
cover page regarding the delivery of the Securities, the fourth full paragraph
on page (ii) and the related disclosure on page 73 (in the third full paragraph
from the bottom of page 73) concerning stabilization, syndicate covering
transactions and penalty bids and, under the heading "Plan of Distribution";
(ii) the sentences related to concessions and reallowances; (iii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids in
the Preliminary Memorandum and the Final Memorandum and (iv) paragraphs three,
five and seven under the heading "Plan of Distribution," constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and
248
defenses; and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
-------- -------
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action; or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, 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 (whether or not the indemnified parties
are actual or potential parties to such claim or action) 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.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchasers agree to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of the
Initial Purchasers may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Initial Purchasers on the other from the offering of the Securities; provided,
--------
however, that in no case shall any Initial Purchaser (except as may be provided
-------
in any agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
258
of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions in each case set forth on the
cover of the Final Memorandum. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the Initial
Purchasers on the other, the intent of the parties and their relative knowledge,
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director and officer of an
Initial Purchaser shall have the same rights to contribution as such Initial
Purchaser, and each person who controls the Company within the meaning of either
the Act or the Exchange Act and each officer and director of the Company shall
have the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d). The Initial Purchasers'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule 1 hereto, and not joint.
9. Default by an Initial Purchaser. If any one or more Initial Purchasers
-------------------------------
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
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aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days,
268
as the Initial Purchasers shall determine in order that the required changes in
the Final Memorandum or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser of its liability, if any, to the Company or any nondefaulting Initial
Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange; (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities; or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
------------------------------------------
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchasers set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchasers or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to the Initial Purchasers, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
Western Resources, Inc. Legal Department (fax no.: (000) 000-0000) and confirmed
to Xx. Xxxxx X. Xxxxx, Vice President and Corporate Secretary, at 000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000.
13. Successors. This Agreement will inure to the benefit of and be binding
----------
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) hereof, no other person will have any
right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
--------------
278
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only and
--------
shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement, shall
-----------
have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York, New York and Topeka,
Kansas.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean, the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Principal Subsidiary" shall mean Kansas Gas and Electric Company.
"Restricted Subsidiaries" shall have the same meaning as in the Amended
Mortgage.
288
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
Western Resources, Inc.
By /s/ Xxxx X. Xxxxx
-------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxx Securities Inc.
BNY Capital Markets, Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By /s/ Xxxxxx Xxxxxxxxx, Xx
----------------------------------
Name: Xxxxxx Xxxxxxxxx, Xx.
Title: Managing Director
For itself and the other several
Initial Purchasers named in
Schedule I to the foregoing
Agreement.
308
SCHEDULE I
Principal
Amount of Securities
Initial Purchasers to be Purchased
------------------ --------------------
Xxxxxxx Xxxxx Xxxxxx Inc..........................................................$ 212,386,000
X.X. Xxxxxx Securities Inc..........................................................141,591,000
BNY Capital Markets, Inc............................................................ 11,023,000
-----------
Total......................................................................$ 365,000,000
===========
EXHIBIT A
Selling Restrictions for Offers and
-----------------------------------
Sales outside the United States
-------------------------------
(1)(a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(a)(i) of the Agreement to which this is an
exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its Affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Act") and may not be
offered or sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the closing
date of the offering, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that (i) it has not offered or sold and, prior
to the date six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995; (ii) it has complied and will comply with
all applicable provisions of the Financial Services and Markets Xxx 0000 (the
"FSMA")
A-1
28
with respect to anything done by it in relation to the Securities in,
from or otherwise involving the United Kingdom; and (iii) it has only
communicated, or caused to be communicated, and will only communicate, or cause
to be communicated, any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) received by it in
connection with the issue or sale of the Securities in circumstances in which
Section 21(1) of the FSMA does not apply to the Company.
A-2
