EXECUTION COPY
KEYSPAN CORPORATION
Debt Securities
Underwriting Agreement
April 1, 2003
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto
Dear Sirs:
1. Introductory. KeySpan Corporation, a New York corporation
("Company"), proposes to issue and sell to the Underwriters named in Schedule
II hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of each series of its debt securities
identified in Schedule I hereto (the "Offered Securities"), to be issued under
the indenture specified in Schedule I hereto (the "Indenture") between the
Company and the Trustee identified in Schedule I hereto. The Company hereby
agrees with the Underwriters as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) A registration statement (No. 333-82230), including a
prospectus, relating to certain securities of the Company including
the Offered Securities, has been filed with the Securities and
Exchange Commission ("Commission") and has become effective. Such
registration statement, as amended at the time of this Agreement,
together with any related registration statement (the "Rule 462(b)
Registration Statement") filed with the Commission pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act") is
hereinafter referred to as the "Registration Statement", and the
prospectus included in such Registration Statement, as supplemented
to reflect the terms of the offering of the Offered Securities, as
first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") under the Act, including all material
incorporated by reference therein, is hereinafter referred to as the
"Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act; no
order suspending the effectiveness of the Registration Statement has
been issued by the Commission and no proceeding for that purpose has
been initiated or, to the knowledge of the Company, threatened by
the Commission;
(b) As of the applicable effective date of the Registration
Statement and any amendment thereto, the Registration Statement
complied and will comply in all material respects with the
requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and did not and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and as of the date of
the Prospectus and any amendment or supplement thereto, the
Prospectus, as amended or supplemented, complied in all material
respects with the requirements of the Act; and as of the date of the
Prospectus and any amendment or supplement thereto, the Prospectus
does not, and as of the Closing Date (as defined below), the
Prospectus, as amended or supplemented, will not, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no
representation and warranty with respect to (i) that part of the
Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of the Trustee, and (ii) any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in the Registration
Statement or the Prospectus and any amendment or supplement thereto;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects to
the requirements of the Act or the Securities Exchange Act of 1934
("Exchange Act"), as applicable, and none of such documents contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; and any further documents so filed and incorporated
by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will comply in all
material respects to the requirements of the Act or the Exchange
Act, as applicable, and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) The financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement
and the Prospectus complied in all material respects with the
applicable requirements of the Act and the Exchange Act, as
applicable, on the date filed with the Commission, and present
fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results
of their operations and the changes in their consolidated cash flows
for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis, and the supporting schedules included
or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein; and the pro
forma financial information, and the related notes thereto, if any,
included or incorporated by reference in the Registration Statement
and the Prospectus have been prepared in accordance with the
applicable requirements of the Act and the Exchange Act, as
applicable, and are based upon good faith estimates and assumptions
believed by the Company to be reasonable;
(e) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) there has
not been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries, or, except as described in the
Prospectus and for regular quarterly dividends paid on the Company's
capital stock, and except for stock issuances pursuant to the
Company's employee benefit plans, Investor Program and dividend
reinvestment plans, any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any
class of capital stock, (2) there has not been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and
(3) except as set forth or contemplated in the Prospectus, neither
the Company nor any of its subsidiaries has entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to the Company and its subsidiaries taken as a
whole;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require
such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(g) Each of the Company's Significant Subsidiaries (as such
term is defined in Rule 1-02 of Regulation S-X promulgated under the
Act) has been duly incorporated or formed and is validly existing as
a corporation or limited liability company under the laws of its
jurisdiction of incorporation or formation, with power and authority
(corporate (or company) and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly
qualified as a foreign corporation or limited liability company for
the transaction of business and is in good standing under the laws
of each jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, other
than where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company and its
Significant Subsidiaries taken as a whole; and, except as set forth
in the Prospectus, all the outstanding shares of capital stock of
each corporate subsidiary of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable, and (except
in the case of foreign subsidiaries, for directors' qualifying
shares) are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;
(h) This Agreement has been duly authorized, executed and
delivered by the Company;
(i) The Company has an authorized capitalization as set
forth in the Prospectus under the heading "Capitalization"; except as
described in or expressly contemplated by the Prospectus, there are
no outstanding rights (including, without limitation, pre-emptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other
equity interest in the Company or any of its subsidiaries, or any
contract, commitment, agreement, understanding or arrangement of any
kind relating to the issuance of any capital stock of the Company or
any such subsidiary, any such convertible or exchangeable securities
or any such rights, warrants or options; the capital stock of the
Company conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
(j) The Offered Securities have been duly authorized, and,
when issued and delivered pursuant to this Agreement, will have been
duly executed, authenticated, issued and delivered and will constitute
valid and binding obligations of the Company entitled to the
benefits provided by the Indenture; the Indenture has been duly
authorized, executed and delivered by the Company and constitutes a
valid and binding instrument of the Company; the Indenture has been
duly qualified under the Trust
Indenture Act; and the Offered Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(k) Neither the Company nor any of its Significant
Subsidiaries is, or with the giving of notice or lapse of time or
both would be, (i) in violation of or in default under, its
Certificate of Incorporation, as amended, or By-Laws, as amended, or
(ii) in violation of or in default under any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party
or by which it or any of them or any of their respective properties is
bound, or in violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental or
regulatory authority, except for violations and defaults which
individually and in the aggregate are not material to the Company
and its Significant Subsidiaries taken as a whole or to the holders
of the Offered Securities; the issue and sale of the Offered
Securities and the performance by the Company of all its obligations
under this Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Certificate
of Incorporation or the By-Laws of the Company or any applicable law
or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company,
its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, license, registration or
qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Offered Securities or
the consummation by the Company of the transactions contemplated by
this Agreement, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been
obtained under the Act and the Public Utility Holding Company Act of
1935, as amended (the "Public Utility Holding Company Act") and as
may be required under state securities laws in connection with the
purchase and distribution of the Offered Securities by the
Underwriters;
(l) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
Significant Subsidiaries or any of their respective properties or to
which the Company or any of its Significant Subsidiaries is or may be
a party or to which any property of the Company or any of its
Significant Subsidiaries is or may be the subject
which, if determined adversely to the Company or any of its
Significant Subsidiaries, could (i) individually or in the aggregate
have, or reasonably be expected to have, a material adverse effect
on the general affairs, business, management, financial position,
stockholders' equity or results of operations of the Company and its
Significant Subsidiaries taken as a whole or (ii) materially and
adversely affect the ability of the Company to perform its
obligations under this Agreement; and there are no statutes,
regulations, contracts or other documents that are required to be
filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus which are
not filed or described as required;
(m) Immediately after any sale of Offered Securities by the
Company hereunder, the aggregate amount of Offered Securities which
have been issued and sold by the Company hereunder and of any
securities of the Company (other than the Offered Securities) that
shall have been issued and sold pursuant to the Registration
Statement will not exceed the amount of securities registered under
the Registration Statement;
(n) The accountants who have certified certain financial
statements and any supporting schedules thereto included in the
Registration Statement or the Prospectus are independent public
accountants, or were independent public accountants on the date of
such certification as the case may be, as required by the Act;
(o) The Company and its Significant Subsidiaries have good
and marketable title in fee simple to all items of real property and
good and marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects
except such as are described or referred to in the Prospectus or
such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such
property by the Company and its Significant Subsidiaries; and any
real property and buildings held under lease by the Company and its
Significant Subsidiaries are held by them under valid, existing and
enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such
property and buildings by the Company or its Significant
Subsidiaries;
(p) No relationship, direct or indirect, exists between or
among the Company or any or its Significant Subsidiaries on the one
hand, and the directors, officers, stockholders, customers or
suppliers of the Company or any of its subsidiaries on the other
hand, which is required by the Act to be described in the
Registration Statement and the Prospectus which is not so described;
(q) The Company is not and, after giving effect to the
offering and sale of the Offered Securities, will not be an
"investment company",
as such term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act");
(r) The Company and its Significant Subsidiaries have filed
all federal, state, local and foreign tax returns which have been
required to be filed and have paid all taxes shown thereon and all
assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith with
such exceptions as would not singly or in the aggregate result in a
material adverse effect on the Company or its Significant
Subsidiaries taken as a whole; and, except as disclosed in the
Registration Statement and the Prospectus, there is no tax
deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any Significant
Subsidiary with such exceptions as would not singly or in the
aggregate result in a material adverse effect on the Company or its
Significant Subsidiaries taken as a whole;
(s) There are no existing or, to the best knowledge of the
Company, threatened labor disputes with the employees of the Company
or any of its Significant Subsidiaries which are likely to have a
material adverse effect on the Company and its Significant
Subsidiaries taken as a whole;
(t) The Company and each of its Significant Subsidiaries
possess such permits, licenses, franchises, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them; the Company and each of its Significant Subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to so possess or comply would
not, singly or in the aggregate, result in a material adverse effect
on the Company and its Significant Subsidiaries, taken as a whole;
all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and
effect would not result in a material adverse effect on the Company
and its Significant Subsidiaries, taken as a whole; and none of the
Company or any of its Significant Subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
result in a material adverse effect on the Company and its
Significant Subsidiaries, taken as a whole;
(u) Except as otherwise stated in the Registration Statement
and the Prospectus, and except as would not, singly or in the
aggregate, result in a material adverse effect on the Company and
its Significant
Subsidiaries, taken as a whole, (A) neither the Company nor any of
its Significant Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof including any judicial or administrative
order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its Significant Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations
or proceedings relating to any Environmental Law against the Company
or any of its Significant Subsidiaries and (D) there are no events
or circumstances that may reasonably be expected to form the basis
of an order for clean up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its Significant
Subsidiaries relating to Hazardous Materials or any Environmental
Laws;
(v) An appropriate order (the "Order") of the Commission
under the Public Utility Holding Company Act, necessary to permit the
issuance and delivery of the Offered Securities has been entered,
and the Order is in full force and effect and has not been modified
or repealed in any respect; no filing with, or approval,
authorization, consent, license, registration, qualification, order
or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this
Agreement and the Offered Securities, as applicable, or for the
performance by the Company of the transactions contemplated in this
Agreement or the Prospectus, except (i) such as have been obtained
under the Act, (ii) under the Public Utility Holding Company Act and
(iii) as may be required to be obtained under state securities laws;
(w) The Significant Subsidiaries of the Company are KeySpan
New England, LLC, The Brooklyn Union Gas Company d/b/a KeySpan Energy
Delivery New York, KeySpan Gas East Corporation d/b/a KeySpan Energy
Delivery Long Island, KeySpan-Ravenswood LLC, Boston Gas Company
d/b/a KeySpan Energy Delivery New England and KeySpan Energy
Corporation;
(x) Except as described in the Prospectus, no subsidiary of
the Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to
the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company;
(y) No person has the right to require the Company or any of
its subsidiaries to register any securities for sale under the Act
by reason of the filing of the Registration Statement with the
Commission or the issuance and sale of the Offered Securities; and
(z) The Company is subject to the reporting requirements of
either Section 13 or Section 15(d) of the Exchange Act and files
reports with the Commission on the Electronic Data Gathering,
Analysis, and Retrieval (▇▇▇▇▇) system.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each Underwriter agrees to purchase, severally and not
jointly, from the Company, the respective principal amount of each series of
Offered Securities set forth opposite such Underwriter's name in Schedule II
hereto at the respective purchase prices set forth in Schedule I hereto plus
accrued interest, if any, from the date specified in Schedule I hereto to the
date of payment and delivery.
Payment for the Offered Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representatives, no later than noon the Business Day (as defined below) prior
to the Closing Date (as defined below), on the date and at the time and place
set forth in Schedule I hereto (or at such other time and place on the same or
such other date, not later than the fifth Business Day (as defined below)
thereafter, as you and the Company may agree in writing). As used herein, the
term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York City. The time and date of such
payment and delivery with respect to the Securities are referred to herein as
the "Closing Date".
Payment for the Offered Securities shall be made against delivery to
the nominee of The Depository Trust Company or its custodian for the
respective accounts of the several Underwriters of one or more global
securities (the "Global Securities") representing each series of Offered
Securities, with any transfer taxes payable in connection with the transfer to
the Underwriters of the Offered Securities duly paid by the Company. The
Global Securities will be made available for inspection by the Representatives
at the office of the Trustee, not
later than 1:00 p.m., New York City time, on the Business Day prior to
the Closing Date.
4. Offering by Underwriter. It is understood that the Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
Underwriters that:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and
if consented to by the Representatives, subparagraph (5)) not later than
the second business day following the execution and delivery of this
Agreement; and, if applicable, the Company will file any Rule 462(b)
Registration Statement with the Commission not later than 10:00 P.M. on
the date of execution and delivery of this Agreement (or such later time
or date as may be consented to by the Representatives);
(b) The Company will advise the Representatives promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity
to comment on any such proposed amendment or supplement; and the Company
will also advise the Representatives promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued;
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or any dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company promptly will notify the Representatives of such event and will
promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance. Neither the
Representatives' consent to, nor any Underwriter's delivery of, any such
amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6 hereof;
(d) As soon as practicable, but not later than 16 months after
the date of this Agreement, the Company will make generally available to
its securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Offered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of this
Agreement and (iii) the date of the Company's most recent Annual Report
on Form 10-K filed with the Commission prior to the date of this
Agreement, which will satisfy the provisions of Section 11(a) of the Act;
(e) The Company will furnish to each Underwriter and counsel for
the Underwriters, at the expense of the Company, copies of the Registration
Statement in the form it became effective (of which will be signed and
will include all exhibits) and of all amendments thereto and, so long as
a prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any Underwriter or
any dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as such Underwriter requests.
The Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the Business Day following the later of the execution and
delivery of this Agreement. All other documents shall be so furnished as
soon as available;
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in effect
so long as required for the distribution; provided that the Company shall
not be required to qualify as a foreign corporation, file a general
consent to service of process or become subject to taxation in any
jurisdiction;
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale and
determination of their eligibility for investment under the laws of such
jurisdictions as the Representatives designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Offered Securities, for any travel
expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses
incurred in distributing the Prospectus (including any amendments and
supplements thereto) to the Underwriters;
(h) During the period beginning on the date hereof and continuing
to and including the Business Day following the Closing Date,
not to offer, sell, contract to sell or otherwise dispose of any debt
securities of or guaranteed by the Company which are substantially
similar to the Offered Securities;
(i) To file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Offered Securities, and during such same
period, to advise you promptly, and to confirm such advice in writing,
(i) when any amendment to the Registration Statement has been filed or
becomes effective; (ii) when any supplement to the Prospectus or any
amendment to the Prospectus has been filed; (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or the receipt of any comments
from the Commission relating to the Registration Statement or any other
request by the Commission for any additional information; (iv) of the
issuance by the Commission of any order suspending the effectiveness of
the Registration Statement or preventing or suspending the use of the
Prospectus or the initiation or threatening of any proceeding for that
purpose; (v) of the occurrence of any event (within such period of time
after the first date of the public offering of the Offered Securities as
in the opinion of counsel for the Underwriters a prospectus relating to
the Offered Securities is required by law to be delivered in connection
with sales of the Offered Securities by any Underwriter or any dealer) as
a result of such occurrence or event the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus
is delivered to a purchaser, not misleading; and (vi) of the receipt by
the Company of any notice with respect to any suspension of the
qualification of the Offered Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its reasonable best efforts to prevent the issuance
of any such order suspending the effectiveness of the Registration
Statement, preventing or suspending the use of the Prospectus or
suspending any such qualification of the Offered Securities and, if any
such order is issued, to use its reasonable best efforts to obtain as
soon as possible the withdrawal thereof;
(j) To use the net proceeds received by the Company from the
sale of the Offered Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds".
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities on
the Closing Date will be subject to the accuracy of the representations and
warranties
on the part of the Company herein, to the accuracy of the written statements of
Company officers delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) On or prior to the date of this Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of Deloitte & Touche LLP in form and substance reasonably
satisfactory to the Representatives, to the effect set forth in the
attached Exhibit A hereto.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, threatened by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of the
Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the sale
of and payment for the Offered Securities; (ii) any downgrading in the
rating of any debt securities or preferred stock of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review its rating of any
debt securities or preferred stock of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change
in U.S. or international financial, political or economic conditions or
currency exchange rates or exchange controls as would, in the judgment of
the Representatives, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Offered Securities, whether
in the primary market or in respect of dealings in the secondary market;
(iv) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of settlements
of securities or clearance services in the United States or (vii) any
attack on, outbreak or escalation of hostilities or act of terrorism
involving the United States, any
declaration of war by Congress or any other national or international
calamity or emergency if, in the judgment the Representatives, the effect
of any such attack, outbreak, escalation, act, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion
of the public offering or the sale of and payment for the Offered
Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., the General Counsel of the
Company, to the effect set forth in Exhibit B hereto;
(e) The Representatives shall have received an opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Company, dated such Closing date, to
the effect set forth in Exhibit C hereto;
(f) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters;
(g) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers,
shall state that, to the best of their knowledge after reasonable
investigation, the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date, that no stop order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission and that, subsequent to
the date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole except as set forth in
or contemplated by the Prospectus or as described in such certificate;
(h) The Representatives shall have received a certificate, dated
such Closing Date, of the Chief Financial Officer of the Company, to the
effect set forth in Exhibit D hereto;
(i) The Representatives shall have received a letter, dated such
Closing Date, of Deloitte and Touche LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
such Closing Date for the purposes of this subsection; and
(j) An order of the Commission under the Public Utility Holding
Company Act authorizing the issuance and sale of the Offered Securities
shall be in full force and effect, and such order shall not have been
amended since the date of this Agreement to include any provision
unacceptable to the Representatives in their reasonable judgment.
The Company will furnish the Underwriters with such conformed copies of such
opinions, certificates, letters and documents as the Underwriter may
reasonably request. The Representatives may in their sole discretion waive
compliance with any conditions to the obligations of the Underwriters
hereunder.
7. Indemnification and Contribution. (a) The Company will indemnify
and hold harmless each Underwriter, its partners, directors and officers and
each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in (i) the
Registration Statement, or any amendment thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, or (ii) the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein, a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Company, its directors and officers and each person,
if any who controls the Company within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
(i) the Registration Statement, or any amendment thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statement therein not misleading, or (ii) the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability
or action as such expenses are incurred, it being understood and agreed
that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of the
Underwriters: the concession and reallowance figures appearing in the
fifth paragraph under the caption "Underwriting" and the information
contained in the seventh, eighth, ninth and eleventh paragraphs under the
caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the failure to notify
the indemnifying party shall not relieve it from any liability that it
may have under subsection (a) or (b) above except to the extent that it
has been materially prejudiced (including through the forfeiture of
substantive rights or defenses) by such failure; and provided further
that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have to an indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of
such indemnified party from all liability on any claims that are the
subject matter of such action and (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act by or on
behalf of an indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and
the Underwriters on the other from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of each Underwriter under this Section shall be in addition
to any liability which such Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
8. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Offered Securities which it or they have agreed to
purchase under this Agreement, and the aggregate principal amount of Offered
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Offered Securities, the other Underwriters shall be obligated
severally in the proportions that the principal amount of Offered Securities
set forth opposite their respective names in Schedule I hereto bears to the
aggregate principal amount of Offered Securities set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the principal amount of
Offered Securities that any Underwriter has agreed to purchase hereunder be
increased pursuant to this Section 8 by an amount in excess of one-tenth of
such principal amount of Offered Securities without the written consent of
such Underwriter. If, on the Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Offered Securities and the aggregate
principal amount of Offered Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Offered
Securities to be purchased, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Offered Securities
are not made within 24 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case, either the Representatives or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If for any reason
the purchase of the Offered Securities by the Underwriters is not consummated,
the Company shall remain responsible for the expenses to be paid or reimbursed
by it pursuant to Section 5 and the respective obligations of the Company and
the Underwriters pursuant to Section 7 shall remain in effect, and if any
Offered Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain
in effect. If the purchase of the Offered Securities by the Underwriters is
not consummated for any reason other than solely because of the occurrence of
any event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(c),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Underwriters c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Fixed Income Capital Markets, facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.; provided,
however, that any notice to any Underwriter pursuant to Section 7 will also be
mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and
no other person will have any right or obligation hereunder.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
If the foregoing is in accordance with the Underwriters'
understanding of our agreement, kindly sign and return to the Company one of
the counterparts hereof, whereupon it will become a binding agreement between
the Company and the Underwriters in accordance with its terms.
Very truly yours,
KEYSPAN CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
ABN AMRO INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
Acting severally on behalf of themselves and
the several Underwriters listed in Schedule II hereto.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇. Kind
----------------------------------------
Name: ▇▇▇▇▇ ▇. Kind
Title: Managing Director
SCHEDULE I
Representatives: ABN AMRO Incorporated and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Underwriting Agreement dated: April 1, 2003
Offered Securities: 4.650% Notes due 2013 and
5.875% Notes due 2033
Closing Date and Time of Delivery: April 4, 2003; 10:00 a.m., New
York City time.
Closing Location: ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Address for Notices to Underwriters: c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Terms of the 4.65% Notes due 2013
---------------------------------
Title: 4.650% Notes due 2013
Aggregate Principal Amount: $150,000,000
Price to Public: 99.739% of the principal amount
plus accrued interest, if any,
from April 4, 2003 to the
Closing Date.
Purchase Price: 99.089% of the principal amount
plus accrued interest, if any,
from April 4, 2003 to the
Closing Date.
Indenture: Indenture dated as of November
1, 2000 between the Company and
JPMorgan Chase Bank, as Trustee,
as supplemented.
Maturity: April 1, 2013
Interest Rate: 4.65%
I-1
Interest Payment Dates: April 1 and October 1 of each
year, commencing October 1, 2003
Optional Redemption Provisions: Make-whole redemption at T+15
basis points as described in the
Prospectus
Sinking Fund Provisions: None
Other Provisions: None
Terms of the 5.875% Notes Due 2033
Title: 5.875% Notes due 2033
Aggregate Principal Amount: $150,000,000
Price to Public: 99.763% of the principal amount
plus accrued interest, if any,
from April 4, 2003 to the
Closing Date.
Purchase Price: 98.888% of the principal amount
plus accrued interest, if any,
from April 4, 2003 to the
Closing Date.
Indenture: Indenture dated as of November
1, 2000 between the Company and
JPMorgan Chase Bank, as Trustee,
as supplemental
Maturity: April 1, 2033
Interest Rate: 5.875%
Interest Payment Dates: April and October 1 of each
year, commencing October 1, 2003
Optional Redemption Provisions: Make-whole redemption at T+20
basis points as described in the
Prospectus.
Sinking Fund Provisions: None
Other Provisions: None
I-2
SCHEDULE II
Principal Amount Principal Amount
Underwriter of Notes due 2013 of Notes due 2033
----------- ----------------- -----------------
ABN AMRO Incorporated................ $ 45,000,000 $ 45,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc............. 45,000,000 45,000,000
The Royal Bank of Scotland plc....... 30,000,000 30,000,000
Fleet Securities, Inc................ 10,000,000 10,000,000
Scotia Capital (USA) Inc............. 10,000,000 10,000,000
Wachoria Securities, Inc............. 10,000,000 10,000,000
---------------- --------------
Total................................ $ 150,000,000 $ 150,000,000
================ ===============
EXHIBIT A
April 1, 2003
ABN AMRO Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
The Royal Bank of Scotland plc
Fleet Securities, Inc.
Scotia Capital (USA) Inc.
Wachovia Securities, Inc.
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As the Underwriters named in the
Underwriting Agreement dated
April 1, 2003
The Board of Directors of KeySpan Corporation
c/o KeySpan Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We have audited the consolidated financial statements and financial statement
schedules of KeySpan Corporation and its subsidiaries (the "Company") as of
December 31, 2002 and for year ended December 31, 2002 included in the
Company's annual report on Form 10-K for the year ended December 31, 2002 (the
"Form 10-K") and incorporated by reference in the Prospectus Supplement dated
April 1, 2003 (the "Prospectus Supplement") to the Prospectus dated February
14, 2002 (the "Basic Prospectus, and with the Prospectus Supplement, the
"Prospectus") relating to the offering of $150,000,000 aggregate principal
amount of the Company's 4.65% Notes due 2013 and $150,000,000 aggregate
principal amount of the Company's 5.875% Notes due 2033, included in the
registration statement on Form S-3 (No. 333-83320) (the "Registration
Statement"), filed by the Company under the Securities Act of 1933 (the
"Act").
In connection with the Prospectus:
1. We are independent certified public accountants with respect to the
Company within the meaning of the Act and the applicable rules and
regulations thereunder adopted by the SEC.
A-1
2. We have not audited any financial statements of the Company as of any
date or for any period subsequent to December 31, 2002; although we
have conducted an audit for the year ended December 31, 2002, the
purpose (and therefore the scope) of such audit was to enable us to
express an opinion on the consolidated financial statements as of
December 31, 2002 and for the year then ended, but not on the
financial statements for any interim period within such year.
Therefore, we are unable to express and do not express any opinion on
the consolidated financial position, results of operations or cash
flows of the Company as of any other date or for any other period.
3. For purposes of this letter, we have read the 2003 minutes of
meetings of the Board of Directors of the Company as set forth in the
minute books through April __, 2003, officials of the Company having
advised us that the minutes of all such meetings through that date
were set forth therein, except for the Board of Directors meeting
dated _________________, for which we have read draft minutes; we
have carried out other procedures to April __, 2003 as follows (our
work did not extend to the period from March __, 2003 to April __,
2003, inclusive):
With respect to the period from January 1, 2003 to April __,
2003, we have inquired of certain officials of the Company who
have responsibility for financial and accounting matters, and
they have advised us that no financial statements as of any
date or for any period subsequent to December 31, 2002 are
available.
The foregoing procedures do not constitute an audit conducted in
accordance with auditing standards generally accepted in the United
States of America. Also, they would not necessarily reveal matters of
significance with respect to the comments in the following paragraph.
Accordingly, we make no representations about the sufficiency of the
foregoing procedures for your purposes.
4. As mentioned in 3. above, Company officials have advised us that no
consolidated financial statements as of any date or for any period
subsequent to December 31, 2002 are available. We have inquired of
certain officials of the Company who have responsibility for
financial and accounting matters whether at April __, 2003, there
was any increase in long-term debt or any decrease in net current
assets or common shareholder's equity of the Company as compared
with amounts shown on the December 31, 2002 audited consolidated
balance sheet incorporated by reference in the Prospectus, or, for
the period from January 1, 2003 to April __, 2003, there were any
decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues. On the basis of these
inquiries and our reading of the minutes as described in 3, nothing
came to our attention that caused us to believe that there was
A-2
any such increase in long-term debt or decrease in common
shareholder's equity, except in all instances for increases or
decreases that the Prospectus discloses have occurred or may occur.
Officials of the Company have advised us that complete information
is not available as to net current assets or revenues as of April
__, 2003.
5. For purposes of this letter, we have also read the items identified
by you in the Form 10-K, the Prospectus and the Company's Current
Report on Form 8-K dated ____________________, and have performed the
following procedures, which were applied as indicated with respect to
the symbols explained below:
[To Come from Deloitte & Touche]
6. Our audit of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter comprised
audit tests and procedures deemed necessary for the purpose of
expressing an opinion on such financial statements as a whole. For
none of the periods referred to therein, or for any other period, did
we perform audit tests for the purpose of expressing an opinion on
individual balances of accounts or summaries of selected transactions
such as those enumerated in 5. above, and, accordingly, we express no
opinion thereon.
7. It should be understood that we make no representations regarding
questions of legal interpretation or regarding the sufficiency for
your purposes of the procedures enumerated in the preceding
paragraph; also, such procedures would not necessarily reveal any
material misstatement of the amounts or percentages to which the
procedures were applied. Further, we have addressed ourselves solely
to the foregoing data as set forth in the Prospectus, and make no
representations regarding the adequacy of disclosure or regarding
whether any material facts have been omitted.
8. This letter is solely for the information of the addressees and to
assist the underwriter in conducting and documenting its
investigation of the affairs of the Company in connection with the
offering of securities covered by the Prospectus, and it is not to be
used, circulated, quoted, or otherwise referred to for any other
purpose, including but not limited to the purchase or sale of
securities, nor is it to be filed with or referred to in whole or in
part in the Prospectus or any other document, except that reference
may be made to it in the underwriting agreement or in any list of
closing documents pertaining to the offering of securities covered by
the Prospectus.
A-3
EXHIBIT B
FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 6(d)
(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of New York.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into the Underwriting Agreement and consummate the
transactions contemplated in the Prospectus.
(3) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a material adverse effect on the
Company or its subsidiaries, taken as a whole.
(4) All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company were issued in violation of preemptive or other similar rights of any
securityholder of the Company.
(5) Each Significant Subsidiary (as such term is defined in Rule 1-02
of Regulation S-X promulgated under the Securities Act) has been duly
incorporated and is validly existing as a corporation or a limited liability
company, as the case may be, in good standing under the laws of the
jurisdiction of its incorporation or organization, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified as a foreign corporation
or limited liability company, as the case may be, to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not result in a material adverse effect on the Company or its subsidiaries,
taken as a whole; except as stated in the Prospectus, all of the membership
interests or issued and outstanding shares of capital stock of each
Significant Subsidiary has been duly authorized and with respect to such
stock, are validly issued, fully paid and non-assessable and, to the best of
my knowledge, are owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; and none of the outstanding shares of capital stock
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of any Significant Subsidiary were issued in violation of preemptive or other
similar rights of any securityholder of such Significant Subsidiary.
(6) The Company has an authorized capitalization as set forth in the
Prospectus under the heading "Capitalization"; except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of the
Company or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options; the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus.
(7) The information (i) in the Annual Report on Form 10-K under
"Legal Proceedings" and "Business-Regulation and Rate Matters", (ii) in the
Prospectus covering similar matters and (iii) in the Registration Statement
under Item 15, to the extent that such information constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by me and is correct in
all material respects.
(8) To the best of my knowledge, neither of the Company nor any of
its Significant Subsidiaries is (i) in violation of its charter or by-laws or
operating agreement, as the case may be, or (ii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except where such violation would not
result in a material adverse effect on the Company and its subsidiaries, taken
as a whole, and no default by the Company or any of its Significant
Subsidiaries exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any agreement and
instrument that is described or referred to in the Registration Statement or
the Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement.
(9) The execution, delivery and performance of the Underwriting
Agreement and the Indenture, the consummation of the transactions contemplated
in the Prospectus (including the issuance and sale of the Offered Securities
and the use of the proceeds therefrom as described in the Prospectus) and the
compliance by the Company with its obligations thereunder have been duly
authorized by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any assets, properties or
operations of the Company or any of its Significant Subsidiaries pursuant to
any material
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agreement or instrument known to me, nor will such action result
in any violation of the provisions of the charter or by-laws or operating
agreement of the Company or any of its Significant Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to me, of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its Significant
Subsidiaries or any of their assets, properties or operations.
(10) To the best of my knowledge, except as otherwise disclosed in
the Registration Statement or the Prospectus, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any of its Significant Subsidiaries is a party or to which the
assets, properties or operations of the Company or any of its Significant
Subsidiaries is subject, before or brought by any court or governmental agency
or body, domestic or foreign, which might reasonably be expected to result in
a material adverse effect on the Company and its Significant Subsidiaries,
taken as a whole, or which might reasonably be expected to materially and
adversely affect the assets, properties or operations of the Company or any of
its Significant Subsidiaries, the performance by the Company of its
obligations under the Underwriting Agreement or the consummation of the
transactions contemplated in the Prospectus.
(11) All descriptions in the Prospectus of contracts and other
documents to which the Company or any of its subsidiaries are a party are
accurate in all material respects; and, to the best of my knowledge, there are
no franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(12) To the best of my knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
(13) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement
to the Registration Statement and Prospectus, excluding the documents
incorporated by reference therein, as of their respective effective or issue
dates (other than the financial statements and supporting schedules included
therein or omitted therefrom and the Trustee's Statement of Eligibility on
Form T-1 (the "Form T-1"), as to which no opinion is expressed), complied as
to form in all material respects with the requirements of the Securities Act.
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(14) The documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which no opinion is expressed), when they were filed
with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act.
Nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement or any post-effective
amendment thereto (except for (x) financial statements and other financial
data included therein or omitted therefrom, (y) the Form T-1 and (z) the
information related to estimated proved reserves attributable to certain oil
and gas properties and estimates of future net cash flows and present values
referred to in the Prospectus under the caption "Experts", as to which such
counsel makes no statement), as of the date of the Underwriting Agreement,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for (x) financial statements and other financial
data included therein or omitted therefrom, (y) the Form T-1 and (z) the
information related to estimated proved reserves attributable to certain oil
and gas properties and estimates of future net cash flows and present values
referred to in the Prospectus under the caption "Experts", as to which such
counsel makes no statement), at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the date
hereof, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of New York, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Company or of the
Significant Subsidiaries and public officials. The opinion of such counsel for
the Company shall state that the opinion of any such other counsel upon which
they relied is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriters and they are justified in relying thereon. With
respect to the matters to be covered in the paragraph immediately above,
counsel may state their opinion and belief is based upon their participation
in the preparation of the Registration Statement and the Prospectus and any
amendment or supplement thereto but is without independent check or
verification except as specified.
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The opinion of counsel described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
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EXHIBIT C
FORM OF OPINION OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 6(e)
1. The Company has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of New York and
has full corporate power and authority to conduct its business as described in
the Registration Statement and Prospectus.
2. The Indenture has been duly authorized, executed and delivered by
the Company and (assuming due authorization, execution and delivery thereof by
the Trustee) constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3. The Offered Securities have been duly authorized and issued by the
Company and, assuming due authentication thereof by the Trustee, upon payment
and delivery in accordance with this Agreement, the Offered Securities will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors' rights generally or by general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
4. The Indenture and the Offered Securities conform in all material
respects to the statements relating thereto contained in the Prospectus.
5. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
6. No consent, approval, authorization, order, registration or
qualification of or with any federal or New York governmental agency or body
or, to our knowledge, any federal or New York court is required for the issue
and sale of the Offered Securities by the Company or the compliance by the
Company with the provisions of the Underwriting Agreement except for (A) the
issuance of an appropriate order by the Commission under the Public Utility
Holding
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Company Act, (B) the registration of the Offered Securities under the
Act and (C) such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Offered Securities by
you.
7. The Registration Statement has become effective under the Act and
the Prospectus was filed on April 3, 2003 pursuant to Rule 424(b)(2) of the
rules and regulations of the Commission under the Act, and, to our knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
threatened by the Commission.
8. The Commission has issued appropriate orders under the Public
Utility Holding Company Act with respect to the issuance and sale of the
Offered Securities; the issuance and sale of the Offered Securities to you is
in conformity with the terms of such orders.
9. The Company is not, and after giving effect to the offering and
sale of the Offered Securities will not be, an "investment company" within the
meaning of and subject to regulation under the Investment Company Act of 1940,
as amended.
Such counsel shall (i) be of the opinion that the Registration
Statement, as of its effective date, and the Prospectus, as of April 1, 2003,
complied as to form in all material respects with the requirements of the Act
and the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the periodic reports of the Company filed under
the Exchange Act since January 1, 2003 (the Exchange Act Documents) complied
as to form when filed in all material respects with the requirements of the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, except for financial statements and other financial or statistical
data contained or incorporated by reference therein or omitted therefrom, as
to which such counsel makes no statement and (ii) have no reason to believe
that the Registration Statement, as of April 1, 2003, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus (including the Exchange Act Documents)
contained as of April 1, 2003 or contains as of the Closing Date any untrue
statement of a material fact or omitted as of April 1, 2003 or omits as of the
Closing Date to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except for financial statements and other financial or
statistical data contained or incorporated by reference therein or omitted
therefrom, as to which such counsel makes no statement.
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In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of New York, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, on the documents delivered to the
Underwriters at the closing, and upon originals, or duplicates or certified or
conformed copies, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Company, as such counsel deems
relevant and necessary in connection with the opinions hereinafter set forth.
The opinion of such counsel for the Company shall state that the opinion of
any such other counsel upon which they relied is in form satisfactory to such
counsel. With respect to the matters to be covered in the paragraph
immediately above, such counsel may state that (i) such counsel has not
independently verified the accuracy, completeness or fairness of the
statements made or included in the Registration Statement, the Prospectus or
the Exchange Act Documents and takes no responsibility therefor, except as and
to the extent specifically set forth in paragraph 4 above; (ii) in the course
of the preparation by the Company of the Registration Statement and the
Prospectus (excluding the Exchange Act Documents), such counsel participated
in conferences with certain officers and employees of the Company, with
representatives of Deloitte & Touche LLP and with counsel to the Company;
(iii) such counsel did not participate in the preparation of the Exchange Act
Documents, except to the extent such counsel so specifies and (iv) such
counsel's opinion is based upon such counsel's examination of the Registration
Statement, the Prospectus and the Exchange Act Documents, such counsel's
investigations made in connection with the preparation of the Registration
Statement and the Prospectus (excluding the Exchange Act Documents) and such
counsel's participation in the conferences referred to above.
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EXHIBIT D
FORM OF OFFICER'S CERTIFICATE
OF THE CHIEF FINANCIAL OFFICER OF THE COMPANY
I, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, do hereby certify that I am the Chief Financial Officer of
KeySpan Corporation, a New York corporation (the "Company"), and, in my
capacity as Chief Financial Officer, do hereby further certify that:
1. I am providing this certificate in connection with the offering
of (i) $150,000,000 aggregate principal amount of the Company's
4.65% Notes due 2013 and (ii) $150,000,000 aggregate principal
amount of the Company's 5.875% Notes due 2033 (the "Offering").
In connection with the Offering, the Company has executed an
Underwriting Agreement, dated April 1, 2003 (the "Underwriting
Agreement"), with the several underwriters (the "Underwriters")
named therein. Certain terms not defined herein have the meaning
given to them in the Underwriting Agreement.
2. I am familiar with the accounting, operations and records
systems of the Company.
3. I have also reviewed the audited consolidated balance sheets and
consolidated statements of capitalization of the Company and its
subsidiaries as of December 31, 2001 and 2000 and the related
consolidated statements of income, retained earnings,
comprehensive income and cash flows for each of the three years
in the period ended December 31, 2001 and the independent
auditors' report on such audited financial statements dated
February 4, 2002, issued by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, all
incorporated by reference into the Prospectus.
To the best of my knowledge, such financial statements described
in this paragraph 3 fairly present, in all material respects,
the financial condition of the Company and its consolidated
subsidiaries, and their results of operations and cash flows for
the periods shown, and such financial statements have been
prepared in conformity with U.S. generally accepted accounting
principles applied on a consistent basis;
I acknowledge that the agreed-upon procedures report written at
the request of the Company dated April 11, 2002 from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP on the attached Exhibit B confirms that ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP performed certain agreed-upon procedures with
respect to the audited financial statements of the Company for
the year ended December 31,
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2001. To the best of my knowledge, the statements made in such
agreed-upon procedures report continue to be correct.
This certificate is being furnished to the Underwriters solely to assist them
in conducting their investigation of the Company and its subsidiaries in
connection with the Offering. This certificate shall not be used, quoted or
otherwise referred to without the prior written consent of the Company.
IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of April 2003.
----------------------------
Chief Financial Officer