EXHIBIT 1.1
EXECUTION COPY
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ATMOS ENERGY CORPORATION
(a Texas and Virginia corporation)
14,000,000 Shares of Common Stock
PURCHASE AGREEMENT
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Dated: October 21, 2004
TABLE OF CONTENTS
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SECTION 1. Representations and Warranties..................................................................3
(a) Representations and Warranties by the Company...................................................3
(i) Compliance with Registration Requirements..............................................3
(ii) Incorporated Documents.................................................................4
(iii) Independent Accountants of the Company.................................................4
(iv) Financial Statements...................................................................4
(v) No Material Adverse Change in Business.................................................5
(vi) Good Standing of the Company...........................................................5
(vii) Good Standing of the Subsidiaries......................................................5
(viii) Capitalization of the Company..........................................................5
(ix) Capitalization of the Subsidiaries.....................................................6
(x) Authorization of Agreement.............................................................6
(xi) Authorization and Description of Securities............................................6
(xii) Absence of Defaults and Conflicts......................................................6
(xiii) Absence of Labor Dispute...............................................................7
(xiv) Absence of Proceedings.................................................................7
(xv) Accuracy of Exhibits...................................................................7
(xvi) Possession of Intellectual Property....................................................7
(xvii) Absence of Further Requirements........................................................8
(xviii) Possession of Licenses and Permits.....................................................8
(xix) Title to Property......................................................................8
(xx) Investment Company Act.................................................................9
(xxi) Environmental Laws.....................................................................9
(xxii) Registration Rights....................................................................9
(xxiii) Independent Accountants of TXU Gas.....................................................9
(xxiv) Merger.................................................................................9
(xxv) Internal Controls.....................................................................10
(xxvi) ERISA.................................................................................10
(xxvii) Insurance.............................................................................10
(xxviii) Taxes.................................................................................10
(xxix) ▇▇▇▇▇▇▇▇-▇▇▇▇▇........................................................................10
(b) Officer's Certificates.........................................................................11
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................11
(a) Initial Securities.............................................................................11
(b) Option Securities..............................................................................11
(c) Payment........................................................................................11
(d) Denominations; Registration....................................................................12
SECTION 3. Covenants of the Company.......................................................................12
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(a) Prospectus Supplement; Delivery of Prospectus..................................................12
(b) Filing of Amendments...........................................................................12
(c) Delivery of Registration Statements............................................................12
(d) Delivery of Prospectuses.......................................................................13
(e) Continued Compliance with Securities Laws......................................................13
(f) Blue Sky Qualifications........................................................................13
(g) Rule 158.......................................................................................14
(h) Use of Proceeds................................................................................14
(i) Listing........................................................................................14
(j) Notice upon Effectiveness; Commission Requests.................................................14
(k) Restriction on Sale of Securities..............................................................14
(l) Reporting Requirements.........................................................................15
SECTION 4. Payment of Expenses............................................................................15
(a) Expenses.......................................................................................15
(b) Termination of Agreement.......................................................................16
SECTION 5. Conditions of Underwriters' Obligations........................................................16
(a) Effectiveness of Registration Statement........................................................16
(b) Opinions of Counsels for Company...............................................................16
(c) Opinion of Counsel for Underwriters............................................................16
(d) Officers' Certificate..........................................................................17
(e) Accountants' Comfort Letter....................................................................17
(f) Bring-down Comfort Letter......................................................................17
(g) Approval of Listing............................................................................17
(h) No Objection...................................................................................17
(i) Lock-up Arrangements...........................................................................17
(j) Conditions to Purchase of Option Securities....................................................17
(k) Additional Documents...........................................................................18
(l) Termination of Agreement.......................................................................18
SECTION 6. Indemnification................................................................................19
(a) Indemnification of Underwriters................................................................19
(b) Indemnification of Company, Directors and Officers.............................................20
(c) Actions Against Parties; Notification..........................................................20
(d) Settlement Without Consent If Failure to Reimburse.............................................21
SECTION 7. Contribution...................................................................................21
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.................................22
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SECTION 9. Termination of Agreement.......................................................................22
(a) Termination; General...........................................................................22
(b) Liabilities....................................................................................23
SECTION 10. Default by One or More of the Underwriters.....................................................23
SECTION 11. Notices ......................................................................................23
SECTION 12. Parties ......................................................................................24
SECTION 13. Representation of Underwriters.................................................................24
SECTION 14. GOVERNING LAW AND TIME.........................................................................24
SECTION 15. Effect of Headings.............................................................................24
SECTION 16. Counterparts...................................................................................24
SCHEDULES
Schedule A - List of Underwriters
Schedule B - Pricing Information
Schedule C - List of Subsidiaries
Schedule D - List of Persons and Entities Subject to Lock-up
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel
Exhibit B - Form of Opinion of Virginia Counsel to the Company
Exhibit C - Form of Opinion of General Counsel of the Company
Exhibit D - Form of Lock-Up Agreement
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ATMOS ENERGY CORPORATION
(a Texas and Virginia corporation)
14,000,000 Shares of Common Stock
(No Par Value)
PURCHASE AGREEMENT
October 21, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Banc of America Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
SunTrust Capital Markets, Inc.
Wachovia Capital Markets, LLC
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Atmos Energy Corporation, a Texas and Virginia corporation
(the "Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Banc of America Securities
LLC, ▇.▇. ▇▇▇▇▇▇ Securities Inc., SunTrust Capital Markets, Inc. and Wachovia
Capital Markets, LLC (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, is acting as representative (in such capacity,
the "Representative "), with respect to the issue and sale by the Company and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, no par value, of the Company
("Common Stock") set forth in Schedule A hereto, and with respect to the grant
by the Company to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 2,100,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 14,000,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 2,100,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(Registration No. 333-118706). Such registration statement, as amended at the
date hereof, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated or deemed to be incorporated by reference therein, is
hereinafter referred to as the "Registration Statement". The Registration
Statement includes a prospectus prepared in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "1933 Act"), relating to certain debt
securities and common stock of the Company, as the case may be, and the offering
thereof from time to time in accordance with Rule 415 under the 1933 Act
pursuant to the Registration Statement. The Registration Statement has been
declared effective by the Commission. As provided in Section 3(a), a prospectus
supplement reflecting the terms of the Securities, the terms of the offering
thereof and other matters set forth therein has been prepared and will be filed
pursuant to Rule 424 under the 1933 Act. Such prospectus supplement, in the form
first filed after the date hereof pursuant to Rule 424, is herein referred to as
the "Prospectus Supplement." The base prospectus included in the Registration
Statement relating to all offerings of securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus," except that, if such base prospectus is amended or supplemented on
or prior to the date on which the Prospectus Supplement is first filed pursuant
to Rule 424, the term "Prospectus" shall refer to the base prospectus as so
amended or supplemented and as supplemented by the Prospectus Supplement, in
either case including the documents filed with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), that are
incorporated by reference therein. Any preliminary prospectus supplement
attached to the base prospectus that was filed omitting certain information
regarding the public offering price and description of Securities pursuant to
Rule 424 of the rules and regulations of the Commission under the 1933 Act and
used prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and
schedules and other information which is "contained", "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
On October 1, 2004, LSG Acquisition Corporation, a wholly
owned subsidiary of the Company ("LSG"), pursuant to an agreement and plan of
merger, dated as of June 17, 2004, as amended on September 30, 2004 (the "Merger
Agreement"), with TXU Gas Company LP ("TXU Gas") completed the acquisition (the
"Merger") of substantially all the natural gas
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distribution and pipeline operations of TXU Gas. In addition, on such date LSG
was merged with and into the Company, which was the surviving corporation.
The Company understands that the Underwriters propose to make
a public offering of the Securities as soon as the Representative deems
advisable after this Agreement has been executed and delivered.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the time of
the filing by the Company of any annual report on Form 10-K or any
quarterly report on Form 10-Q and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), the
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements
of the 1933 Act and the published rules and regulations under the 1933
Act (the "1933 Act Regulations") and did not 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 not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through the Representative expressly for use in the Registration
Statement or Prospectus.
Each preliminary prospectus and the Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
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(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act, 1933 Act Regulations, 1934 Act and
the published rules and regulations of the Commission thereunder (the
"1934 Act Regulations"), and, when read together with the other
information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), did not and will not contain an untrue statement of a
material fact and did not omit to or will not omit to state 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.
(iii) Independent Accountants of the Company. Ernst & Young
LLP ("Ernst & Young"), the accountants who certified the financial
statements and supporting schedules of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants as required by the 1933
Act and the 1933 Act Regulations and registered public accountants as
required by the Public Company Accounting Oversight Board ("PCAOB").
(iv) Financial Statements. The financial statements of the
Company included or incorporated by reference in the Registration
Statement and the Prospectus, together with the related schedules and
notes, present fairly in all material respects the financial position
of the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. To the knowledge of
the Company, the financial statements of TXU Gas included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present
fairly in all material respects the financial position of TXU Gas and
its consolidated subsidiaries at and for the dates indicated and the
statement of operations, stockholders' equity and cash flows of TXU Gas
and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with GAAP applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and the
Prospectus with respect to the Company present fairly in all material
respects in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectus present fairly, in all material
respects, the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements of the
Company and, to the knowledge of the Company, TXU Gas, as the case may
be, included or incorporated by reference in the Registration Statement
and the Prospectus. The pro forma financial statements and the related
notes thereto included or incorporated by reference in the Registration
Statement and the Prospectus present fairly, in all material respects,
the information shown therein, have been prepared in accordance with
the 1934 Act and the 1934 Act Regulations, including the Commission's
rules and guidelines with respect to pro forma financial statements and
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have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give pro forma effect to
the transactions and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change, or a development known to
the Company involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Texas and the Commonwealth of Virginia
and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of the Subsidiaries. Each "significant
subsidiary" (as such term is defined in Rule 1-02 of Regulation S-X) of
the Company (each a "Subsidiary" and, collectively, the "Subsidiaries")
(a) has been duly organized and is validly existing as an entity in
good standing under the laws of the jurisdiction of its formation, (b)
has 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 entity 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 so to qualify or to be in
good standing would not result in a Material Adverse Effect. The only
Subsidiaries of the Company are the subsidiaries listed on Schedule C
hereto.
(viii) Capitalization of the Company. The authorized, issued
and outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "As Adjusted" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to
reservations, agreements, acquisitions or employee benefit plans each
referred to in the Prospectus or pursuant to the exercise of
convertible securities or options each referred to in the Prospectus).
The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
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non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(ix) Capitalization of the Subsidiaries. All of the issued and
outstanding capital stock, limited liability company membership
interests, or other beneficial interests, as the case may be, of each
Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock or limited liability company membership
interests, as the case may be, of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization and Description of Securities. The
Securities have been duly authorized by the Company for issuance and
sale to the Underwriters pursuant to the terms of this Agreement and,
when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be validly
issued, fully paid and non-assessable; the Common Stock conforms to all
statements relating thereto contained in the Prospectus and such
description conforms to all the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter, bylaws or
other organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or any
of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a
Material Adverse Effect; and the execution, delivery and performance of
this Agreement and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company and any
subsidiary of the Company in connection with the consummation of the
transactions contemplated herein and in the Registration Statement and
the Prospectus (including the issuance and sale of the Securities and
the use of the proceeds from the sale of the Securities as described in
the Prospectus under the caption "Use of Proceeds") and compliance by
the Company and any subsidiary of the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate or other action on the part of the Company and any of the
subsidiaries and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and
6
Instruments (except for such conflicts, breaches or defaults or liens,
charges, encumbrances or a Repayment Event that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter, bylaws or other organizational
document of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any subsidiary's principal suppliers, manufacturers, customers
or contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending against,
or, to the knowledge of the Company, threatened against or affecting
the Company or any of its subsidiaries, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to affect the
properties, assets or operations of the Company and its subsidiaries,
except what does not result in a Material Adverse Effect, or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company and its subsidiaries of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of
which any of their respective property, assets or operations is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvi) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess or have the right to use, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with
7
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. There have been issued
and, at the Closing Time, there shall be in full force and effect
orders or authorizations of the regulatory authorities of the States of
Colorado, Georgia, Illinois, Kentucky and Virginia, respectively,
authorizing the issuance and sale of the Securities on terms herein set
forth or contemplated and no other filing with, or authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary
or required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions
contemplated by this Agreement by the Company, except such as have been
already obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities or blue sky laws.
(xviii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to do so would not have a Material Adverse
Effect; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, would result in a Material Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have
good title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Registration Statement and the Prospectus
or (b) do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any of its subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
of its subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of
8
the leased or subleased premises under any such lease or sublease,
which, singly or in the aggregate, would result in a Material Adverse
Effect.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as would not, singly or in
the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxii) Registration Rights. There are no persons or entities
with registration rights or other similar rights to have any securities
registered under the Registration Statement who have not properly
waived such rights in connection with the Securities registered
pursuant to this Registration Statement and in connection with this
offering.
(xxiii) Independent Accountants of TXU Gas. To the knowledge
of the Company, Deloitte & Touche LLP ("Deloitte & Touche"), the
accountants who certified the financial statements and supporting
schedules of TXU Gas included and incorporated by reference in the
Registration Statement and Prospectus, are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations
and registered public accountants as required by the PCAOB.
(xxiv) Merger. The Merger was completed pursuant to the terms
of the Merger Agreement and the assets and operations of TXU Gas
acquired pursuant to the Merger Agreement and as described in the
Prospectus are now owned by the Company.
9
(xxv) Internal Controls. Each of the Company and its
subsidiaries (A) makes and keeps accurate books and records and (B)
maintains internal accounting controls which provide reasonable
assurance that (i) transactions are executed in accordance with the
Company's management's authorization, (ii) transactions are recorded as
necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (iii) access to the Company's
assets is permitted only in accordance with management's authorization
and (iv) the reported accountability for the Company's assets is
compared with existing assets at reasonable intervals. To the knowledge
of the Company, prior to the merger TXU Gas was in compliance, in all
material respects, with the requirements of Section 13(b)(2) of the
1934 Act.
(xxvi) ERISA. The Company is in compliance in all material
respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), except
where such non-compliance would not have a Material Adverse Effect; no
"reportable event" (as defined in Section 4043(c) of ERISA), other than
events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived, has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have
any liability that would have a Material Adverse Effect; the Company
has not incurred and does not expect to incur any liability that would
have a Material Adverse Effect (A) under Title IV of ERISA with respect
to the termination of, or withdrawal from, any "pension plan" or (B)
due to an "accumulated funding deficiency" under Section 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" maintained by the Company that is intended to be
qualified under Section 401(a) of the Code is, to the knowledge of the
Company, so qualified in all material respects and, to the knowledge of
the Company, nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification, except where
such failure to qualify or such loss would not have a Material Adverse
Effect.
(xxvii) Insurance. The Company and its subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties, except where the failure to do so would
not have a Material Adverse Effect.
(xxviii) Taxes. The Company and each of its subsidiaries have
filed all federal, state and local income and franchise tax returns
required to be filed through the date hereof and have paid all taxes
due thereon, except such as are being contested in good faith by
appropriate proceedings or where the failure to do so would not have a
Material Adverse Effect, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had, nor
does the Company have any knowledge of any tax deficiency which would
have a Material Adverse Effect.
(xxix) ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The Company is in compliance, in all
material respects, with the provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002 to the extent currently applicable.
10
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the
Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations
and warranties herein contained, and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule B, the number of Initial Securities set forth
opposite the name of such Underwriter in Schedule A, plus any additional Initial
Securities that such Underwriter may become obligated to purchase pursuant to
Section 10 of this Agreement.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
2,100,000 shares of Common Stock at the price per share set forth in Schedule B,
less an amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the
Company setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a "Date
of Delivery") shall be determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall not be later than
seven full business days after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined. If the option is exercised as
to all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as
▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to eliminate any sales or purchases
of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery
of, the Initial Securities shall be made at the offices of Shearman & Sterling
LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Company and the Underwriters, at 9:00 A.M. (Eastern
Time) on Wednesday, October 27th, 2004 (unless postponed pursuant to Section
10), or at such other time not later than ten business days after such date as
shall be agreed upon by the Underwriters and the Company (such date and time of
payment and delivery being herein called the "Closing Time"). Payment shall be
made to the Company by wire transfer of immediately available funds to an
account designated by the Company, against delivery to the Underwriters for the
respective accounts of the several Underwriters of the Securities to be
purchased by them.
11
In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the Purchase Price for,
and delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by
▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Company, on each Delivery Date as specified in the notice
from ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and any Option
Securities will be made available in
New York City for examination and packaging
by the Underwriters not later than 10:00 A.M. (Eastern Time) on the last
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) Prospectus Supplement; Delivery of Prospectus. The Company
has prepared a Prospectus Supplement that complies with the 1933 Act
and the 1933 Act Regulations and that sets forth the amount of the
Securities and their terms, the name of each Underwriter participating
in the offering and the number of the Securities that each severally
and not jointly has agreed to purchase, the name of each Underwriter,
if any, acting as representative of the Underwriters in connection with
the offering, the price at which the Securities are to be purchased by
the Underwriters from the Company, any initial public offering price,
any selling concession and reallowance and any delayed delivery
arrangements, and such other information as the Underwriters and the
Company deem appropriate in connection with the offering of the
Securities. The Company will promptly transmit copies of the Prospectus
Supplement to the Commission for filing pursuant to Rule 424 under the
1933 Act and will furnish to the Underwriters as many copies of the
Prospectus as the Underwriters shall reasonably request.
(b) Filing of Amendments. The Company will give the
Representative notice of its intention to file or prepare any amendment
to the Registration Statement, or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act, or otherwise, will furnish the Representative
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representative shall reasonably
object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representative and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of
each
12
amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations, the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and in
the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it
is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel,
at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Representative may designate and to maintain such qualifications in
effect for a period of not less than one year from the effective date
of the Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue
13
such qualification in effect for a period of not less than one year
from the date of the Prospectus.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the issuance and sale of the Securities in the
manner specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
the listing of the Securities on the
New York Stock Exchange.
(j) Notice upon Effectiveness; Commission Requests. During the
period when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, the Company will notify the
Underwriters immediately, and confirm the notice in writing, (i) of the
effectiveness of any amendment to the Registration Statement, (ii) of
the mailing or the delivery to the Commission for filing of any
supplement to the Prospectus or any document that would as a result
thereof be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the Commission with respect to the
Registration Statement, the Prospectus or the Prospectus Supplement,
(iv) of any request by the Commission for any amendment to the
Registration Statement or any supplement to the Prospectus or for
additional information relating thereto or to any document incorporated
by reference in the Prospectus and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
institution or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the issuance of
any such stop order or of any order suspending such qualification and,
if any such order is issued, to obtain the lifting thereof at the
earliest possible moment.
(k) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in
14
the Prospectus, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit
plans of the Company referred to in the Prospectus, (D) any shares of
Common Stock issued pursuant to any non-employee director stock plan or
dividend reinvestment plan, or (E) any shares of Common Stock issued by
the Company as a result of acquisitions where such shares of Common
Stock are subject to the restrictions set forth herein, (F) any shares
of Common Stock sold pursuant to a registration demanded under any
registration rights described in the Prospectus or (G) the filing with
the Commission and any other regulatory authority of a registration
statement substantially similar to the Registration Statement (other
than as to the aggregate amount of securities covered thereby and
inclusion of shares of Common Stock of any individual holders under any
registration rights described in the Prospectus), provided that no
securities of the Company are sold pursuant to such registration
statement during the 90-day lock-up period. Notwithstanding the
foregoing, if: (1) during the last 17 days of the 90-day lock-up period
the Company issues an earnings release or material news or a material
event relating to the Company occurs; or (2) prior to the expiration of
the 90-day lock-up period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the 90-day lock-up period, the restrictions imposed by this section
shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of
the material news or material event.
(l) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Securities, will file all
documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to
the performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits, including any documents incorporated therein
by reference) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the delivery of the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including the filing fees incident to any
necessary filings under state securities laws and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities, if
15
any, and (ix) the fees and expenses incurred in connection with the listing of
the Securities on the
New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated
by the Representative in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
as of the Closing Time and each Date of Delivery or in certificates of any
officer of the Company or any subsidiary of the Company delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated,
pending or threatened by the Commission, and any request on the part of
the Commission for additional information shall have been complied with
to the reasonable satisfaction of counsel to the Underwriters. A
Prospectus Supplement shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinions of Counsels for Company. At the Closing Time, the
Representative shall have received the favorable opinion, dated as of
Closing Time, of (i) ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Company, in form and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in
Exhibit A hereto, (ii) Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ counsel for the
Company, in form and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in
Exhibit B hereto and (iii) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the
Company, in form and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in
Exhibit C hereto.
(c) Opinion of Counsel for Underwriters. At the Closing Time,
the Representative shall have received the favorable opinion, dated as
of Closing Time, of Shearman & Sterling LLP, counsel for the
Underwriters, as the Representative may reasonably require. In giving
such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of
New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
16
(d) Officers' Certificate. At the Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change or a development known to the Company involving a prospective
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, and the Representative shall have
received a certificate of the President or a Senior Vice President of
the Company and of the Treasurer of the Company, dated as of Closing
Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution
of this Agreement, the Representative shall have received from each of
Ernst & Young and Deloitte & Touche a letter dated such date, in form
and substance satisfactory to the Representative, together with signed
or reproduced copies of such letter for each of the other Underwriters
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information relating to the
Company, with respect to Ernst & Young, and TXU Gas, with respect to
Deloitte & Touche, contained in or incorporated by reference in the
Registration Statement and the Prospectus.
(f) Bring-Down Comfort Letter. At the Closing Time, the
Representative shall have received from each of Ernst & Young and
Deloitte & Touche, a letter, dated as of Closing Time, to the effect
that each of Ernst & Young and Deloitte & Touche reaffirm the
statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(g) Approval of Listing. At the Closing Time, the Securities
shall have been approved for listing on the
New York Stock Exchange,
subject only to official notice of issuance.
(h) No Objection. If required, the NASD has confirmed that it
has not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(i) Lock-up Arrangements. At the date of this Agreement, the
Representative shall have received an agreement substantially in the
form of Exhibit D hereto signed by the persons listed on Schedule D
hereto.
(j) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any
17
portion of the Option Securities, the representations and warranties of
the Company contained herein and the statements in any certificates
furnished by the Company or any subsidiary of the Company hereunder
shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representative shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Senior Vice President
of the Company and of the chief financial officer of the
Company confirming that the certificate delivered at Closing
Time pursuant to Section 5(d) hereof remains true and correct
as of such Date of Delivery;
(ii) Opinions of Counsels for Company and the General
Counsel. The favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
counsel for the Company, together with the favorable opinion
of Hunton & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ counsel for the Company and the
favorable opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of the
Company, each in form and substance reasonably satisfactory to
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof;
(iii) Opinion of Counsel for Underwriters. The
favorable opinion of Shearman & Sterling LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(c) hereof; and
(iv) Bring-down Comfort Letter. A letter from each of
Ernst & Young, and Deloitte & Touche in form and substance
satisfactory to the Representative and dated such Date of
Delivery, substantially in the same form and substance as the
letter furnished to the Representative pursuant to Section
5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery;
(k) Additional Documents. At the Closing Time and at each Date
of Delivery, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as
herein contemplated shall be reasonably satisfactory in form and
substance to the Representative and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase
the
18
relevant Option Securities, may be terminated by the Representative by
notice to the Company at any time at or prior to Closing Time or such
Date of Delivery, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except
that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto) or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus, Prospectus
Supplement or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus, Prospectus
Supplement or the Prospectus (or any amendment or supplement thereto). The
foregoing indemnity with respect to any untrue statement contained in or any
omission from the Prospectus shall not inure to the benefit of any Underwriter
(or any person controlling such
19
Underwriter) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities that are the subject thereof
if the Company shall sustain the burden of proving that (i) the untrue statement
or omission contained in the Prospectus was corrected; (ii) such person was not
sent or given a copy of the Prospectus (excluding documents incorporated by
reference) which corrected the untrue statement or omission at or prior to the
written confirmation of the sale of such Securities to such person if required
by applicable law; and (iii) the Company satisfied its obligation pursuant to
Section 3(d) of this Agreement to provide a sufficient number of copies of the
Prospectus to the Underwriters.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), or any preliminary prospectus, Prospectus
Supplement or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representative expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) above, counsel to the indemnified parties shall be selected by
the Representative, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
20
(d) Settlement Without Consent If Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel and such
indemnified party shall be entitled to such reimbursement, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency
21
or body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section are
several in proportion to the number of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate
this Agreement, by notice to the Company, at any time at or prior to Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the
New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the
New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum
22
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal,
New York, Texas or Virginia authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time or the Date of
Delivery, as the case may be, to purchase the Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Representative shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if the aggregate number of Defaulted Securities does not
exceed 10% of the aggregate number of the Securities to be purchased on
such date, the non-defaulting Underwriters shall be obligated, each
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the aggregate number of Defaulted Securities exceeds
10% of the aggregate number of Securities to be purchased on such date,
this Agreement or, with respect to any Date of Delivery which occurs
after the Closing Time, the obligation of the Underwriters to purchase
and that of the Company to sell the Option Securities to be purchased
and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative or the Company shall
have the right to postpone the Closing Time or the Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, 4 World Financial Center,
New York,
23
New York 10080 and notices to the Company shall be directed to it at 1800 Three
Lincoln Centre, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit
of and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons within the meaning of Section 15 of the 1933 Act and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors and assigns, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Representation of Underwriters. The Representative
will act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under or in respect of this
Agreement taken by the Representative will be binding upon all Underwriters.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 16. Counterparts. This Agreement may be executed in
one or more counterparts, and when a counterpart has been executed by each
party, all such counterparts taken together shall constitute one and the same
agreement.
24
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ATMOS ENERGY CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
Banc of America Securities LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
SunTrust Capital Markets, Inc.
Wachovia Capital Markets, LLC
As Representative of the several Underwriters
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Authorized Signatory
For themselves and as Representative of the other Underwriters named in Schedule
A hereto.
SCHEDULE A
Number
of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ........................... 8,400,000
Banc of America Securities LLC ..................... 1,680,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. ........................ 1,680,000
SunTrust Capital Markets, Inc. ..................... 1,680,000
Wachovia Capital Markets, LLC ...................... 560,000
Total .............................................. 14,000,000
==========
SCHEDULE B
ATMOS ENERGY CORPORATION
14,000,000 Shares of Common Stock
(No Par Value)
1. The initial public offering price per share for the Securities, determined as
provided in said Section 2, shall be $24.75.
2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $332,640,000, being an amount equal to the initial public
offering price set forth above less $0.99 per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
SCHEDULE C
List of Subsidiaries
1. Atmos Energy Holdings, Inc.
2. Atmos Energy Marketing, LLC
3. Atmos Pipeline and Storage, LLC
4. Atmos Power Systems, Inc.
5. Atmos Energy Services, LLC
6. PDH I Holding Company, Inc.
SCHEDULE D
List of Persons and Entities Subject to Lock-Up
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. Best
▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇
R. ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
For the purposes of this opinion the term "Prospectus" shall
have the meaning set forth in the
Purchase Agreement and shall include the
Prospectus Supplement, the Company's Annual Report on Form 10-K for the year
ended September 30, 2003 (the "Form 10-K") and any other document incorporated
by reference therein.
(i) The Company is validly existing as a corporation in good
standing under the laws of the State of Texas.
(ii) The Company has corporate power and authority to conduct
its business as described in the Prospectus and to execute, deliver and perform
its obligations under the
Purchase Agreement.
(iii) The Shares to be purchased by the Underwriters have been
duly authorized for issuance and sale to the Underwriters pursuant to the
Purchase Agreement and, when issued and delivered by the Company pursuant to the
Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable,
and no holder of the Shares is or will be subject to personal liability by
reason of being such a holder.
(iv) The issuance of the Shares is not subject to the
preemptive or other similar rights of any securityholder of the Company provided
in the articles of incorporation or bylaws of the Company or by statute.
(v) The
Purchase Agreement has been duly authorized, executed
and delivered by the Company.
(vi) The Registration Statement has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required by Rule
424(b); no stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and, to our knowledge, no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
(vii) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the articles of incorporation
and bylaws of the Company and the requirements of the New York Stock Exchange.
A-1
(viii) Insofar as the statements in the Prospectus under the
caption "Description of Common Stock" constitute a summary of the documents
referred to therein, such statement fairly present in all material respects the
information required to be disclosed under the 1933 Act and the 1933 Act
Regulations relating to registration statements on Form S-3 and prospectuses.
(ix) The information in the Registration Statement under Item
15, to the extent that it constitutes matters of law, summaries of legal matters
or legal conclusions, has been reviewed by us and is correct in all material
respects.
(x) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency under any law or regulation of the State of
Texas or the United States of America that is generally applicable to the
transactions of the nature contemplated under the
Purchase Agreement (other than
under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as
may be required under state securities or blue sky laws or with respect to
regulatory matters, as to which we express no opinion), is necessary or required
in connection with the due authorization, execution and delivery of the
Purchase
Agreement or for the offering, issuance, sale or delivery of the Shares by the
Company.
(xi) The execution, delivery and performance of the Purchase
Agreement, by the Company, and the issuance and sale of the Shares by the
Company do not and will not, whether with or without the giving of notice or
lapse of time or both, violate or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to, any document
filed or incorporated by reference as an exhibit to the Registration Statement
or incorporated by reference therein (except for such violations, breaches, or
defaults, or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the articles of incorporation or bylaws of the Company or, to our knowledge,
any order, judgment or decree of any court or governmental agency or body of the
State of Texas or the United States of America binding on the Company (other
than as to orders, judgments or decrees with respect to regulatory matters, as
to which we express no opinion).
(xii) The execution, delivery and performance of the Purchase
Agreement by the Company, and the issuance and sale of the Shares by the
Company, do not and will not violate, any law, statute, rule, or regulation of
any government or government instrumentality of the State of Texas or the United
States of America that is generally applicable to transactions of the nature of
those contemplated by the Purchase Agreement (other than as to regulatory
matters, as to which we express no opinion). We express no opinion in this
paragraph regarding federal or state securities laws.
(xiii) The Company is not an "investment company" as such term
is defined in the 1940 Act that is required to be registered under the 1940 Act.
(xiv) The Rights under the Company's Shareholder Rights
Agreement, dated November 12, 1997, as amended, to which holders of the Shares
will be entitled, have been duly
A-2
authorized and, when issued and delivered by the Company pursuant to the terms
therein, will be validly issued.
(xv) The Company is not a "holding company" or, to our
knowledge, a "subsidiary of a holding company," within the meaning of such terms
as defined in the Public Utility Holding Company Act of 1935; and to our
knowledge, no person or corporation which is a "holding company" or a
"subsidiary of a holding company," as so defined, directly or indirectly owns,
controls or holds with power to vote 10% or more of the outstanding voting
securities of the Company.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent auditors of
the Company, and your representatives and counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed.
Because the purpose of our professional engagement was not to establish or
confirm factual matters and because the scope of our examination of the affairs
of the Company did not permit us to verify the accuracy, completeness or
fairness of the statements set forth in the Registration Statement or the
Prospectus, we are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements set forth in the
Registration Statement or the Prospectus except insofar as such statements
specifically relate to us and except to the extent set forth in the final
sentence of the following paragraph.
On the basis of the foregoing, and except for the financial statements
and schedules, pro forma financial information and other information of an
accounting or financial nature included or incorporated by reference therein, as
to which we express no opinion or belief, no facts have come to our attention
that led us to believe: (a) that the Registration Statement, at the time it
became effective (which, for the purposes of this paragraph, shall have the
meaning set forth in Rule 158(c) under the 1933 Act), or the Prospectus, as of
its date or as of the date hereof, were not appropriately responsive in all
material respects to the requirements of the 1933 Act and the applicable rules
and regulations of the Commission thereunder; or (b)(i) that the Registration
Statement, at the time it became effective, 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 (ii) that the
Prospectus, as of its date or as of the date hereof, contained or contains 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.
The opinions expressed above, and the statements made above, are solely
for your benefit in connection with the transactions contemplated by the
Purchase Agreement and are not to be used for any other purpose, or circulated,
quoted or otherwise referred to for any purpose, without, in each case, our
written permission. We are aware that Shearman & Sterling LLP, your counsel, is
relying, solely with respect to matters involving the laws of the State of
Texas, on opinion paragraphs (i)-(v) and (xiv) herein in rendering their opinion
to you required under Section 5(c) of the Purchase Agreement.
A-3
* * *
In rendering such opinion, such counsel may state that its
opinion is limited to the Federal laws of the United States and the laws of the
State of Texas.
A-4
Exhibit B
FORM OF OPINION OF VIRGINIA COUNSEL TO THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(b)(ii)
For the purposes of this opinion the term "Prospectus" shall
have the meaning set forth in the Purchase Agreement and shall include the
Prospectus Supplement, the Form 10-K and any other document incorporated by
reference therein.
(i) The Company is validly existing as a corporation in good
standing under the laws of the Commonwealth of Virginia.
(ii) 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 and perform its obligations under the Purchase
Agreement.
(iii) The Securities to be purchased by the Underwriters have
been duly authorized for issuance and sale to the Underwriters pursuant to the
Purchase Agreement and, when issued and delivered by the Company pursuant to the
Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability by
reason of being such a holder.
(iv) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company provided
in the charter or bylaws of the Company or by statute.
(v) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and bylaws of the Company.
(vi) The Rights under the Company's Shareholder Rights
Agreement, dated November 12, 1997, as amended, to which holders of the
Securities will be entitled, have been duly authorized and, when issued and
delivered by the Company pursuant to the terms therein, will be validly issued.
Except with our prior written consent, no person other than
the addressees of this opinion and Shearman & Sterling LLP, counsel for the
Underwriters, shall be entitled to rely upon it. We are aware that this opinion
will be relied upon by Shearman & Sterling LLP.
* * *
In rendering such opinion, such counsel may state that its
opinion is limited to the Federal laws of the United States and the laws of the
Commonwealth of Virginia.
B-1
Exhibit C
FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY
TO BE DELIVERED PURSUANT TO SECTION 5(b)(iii)
For the purposes of this opinion the term "Prospectus" shall
have the meaning set forth in the Purchase Agreement and shall include the
Prospectus Supplement, the Form 10-K and any other document incorporated by
reference therein.
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of Texas
and the Commonwealth of Virginia.
(ii) 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 and perform its obligations under the Purchase
Agreement.
(iii) 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 so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column entitled "As
Adjusted" under the caption "Capitalization" (except for subsequent issuances,
if any, pursuant to the Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or pursuant
to the exercise of convertible securities or options referred to in the
Prospectus); the shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(v) Each Subsidiary has been duly organized, and is validly
existing as an entity in good standing under the laws of the jurisdiction of its
formation, has the 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 entity 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 so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration Statement, all
of the issued and outstanding capital stock, limited liability company
membership interests, or other beneficial interests, as the case may be, of each
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and, to the best of my
C-1
knowledge, are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock or limited liability
company membership interests, as the case may be, of any Subsidiary was issued
in violation of the preemptive or similar rights of any securityholder of such
Subsidiary.
(vi) The Purchase Agreement has been duly authorized, executed
and delivered by the Company.
(vii) The documents incorporated by reference in the
Registration Statement and the Prospectus (other than financial statements and
schedules, pro forma financial information and other information of an
accounting or financial nature included or incorporated by reference therein, as
to which I express no opinion or belief), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the 1934 Act and the 1934 Act Regulations.
(viii) To the best of my knowledge, there is no pending or
threatened action, suit, proceeding, inquiry or investigation, to which the
Company or any subsidiary is a party, or to which the property of the Company or
any subsidiary 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, or which might reasonably be expected to affect the
properties or assets thereof, except what does not result in a Material Adverse
Effect, or the consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company of its obligations thereunder or
which is required to be described in the Prospectus that is not described as
required.
(ix) The information in (a) the Prospectus under "Prospectus
Supplement Summary--
Atmos Energy Corporation", "The TXU Gas
Acquisition--Description of the TXU Gas Acquisition", "The TXU Gas
Acquisition--Financing for the Aquisition" and "Description of Common Stock",
(b) the Form 10-K under "Item 1. - Business--Regulation", as modified or
supplemented in the Prospectus by "Business--Regulation"; under "Item 1. -
Business--Ratemaking Activity" in the Form 10-K, as modified or supplemented in
the Prospectus by "Business--Rates"; under "Item 1. - Corporate Governance" in
the Form 10-K; under "Item 2. - Properties" in the Form 10-K, as modified or
supplemented in the Prospectus by "Business--Properties"; under "Item 3. - Legal
Proceedings" in the Form 10-K, (c) "Note 13. - Commitments and Contingencies" to
the Company's 2003 Consolidated Financial Statements (contained in the Form
10-K) and (d) "Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations - Factors that May Affect our Future
Performance - Our Operations Are Subject to Regulation Which Can Directly Impact
Our Operations" in the Form 10-K, to the extent that it constitutes matters of
law, summaries of legal matters, the Company's Restated Articles of
Incorporation, as amended, and Amended and Restated Bylaws or legal proceedings,
or legal conclusions, has been reviewed by me and is correct in all material
respects.
(x) 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.
C-2
(xi) All descriptions in the Registration Statement and the
Prospectus of contracts and other documents to which the Company or its
subsidiaries are a party are accurate in all material respects; 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 the Prospectus or to be filed as
exhibits thereto 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.
(xii) To the best of my knowledge, neither the Company nor any
subsidiary is in violation of its charter, bylaws or other organizational
document and no default by the Company or any subsidiary exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or 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, except for such defaults that would
not result in a Material Adverse Effect.
(xiii) The material franchises, permits and rights of the
Company and its subsidiaries in each jurisdiction in which such franchise,
permit or right is required are valid and adequate for the business in which
they are engaged, and there do not exist, to the best of my knowledge, any
restrictions in connection therewith that, solely or in the aggregate, would
result in a Material Adverse Effect.
(xiv) There have been issued and, as of the date hereof, are
in full force and effect orders or authorizations of the regulatory authorities
of Colorado, Georgia, Illinois, Kentucky and Virginia, respectively, authorizing
the issuance and sale of the Shares by the Company on the terms set forth or
contemplated in the Purchase Agreement; and no other filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign
(other than under the 1933 Act and the 1933 Act Regulations, which have been
obtained, or as may be required under the securities or blue sky laws of the
various states, as to which I express no opinion), is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement, or for the offering, issuance, sale or delivery of the Shares by the
Company.
(xv) The execution, delivery and performance of the Purchase
Agreement by the Company and the consummation of the transactions contemplated
in the Purchase Agreement and in the Registration Statement and the Prospectus
(including the issuance and sale of the Shares by the Company and the use of the
proceeds from the sale of the Shares as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its obligations
under the Purchase Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, violate or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xii) of the Purchase
Agreement) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or any other agreement or instrument, known to me, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which
C-3
any of the property or assets of the Company or any subsidiary is subject
(except for such violations, breaches or defaults or liens, charges or
encumbrances or a Repayment Event that would not have a Material Adverse
Effect), nor will such action result in any violation of the provisions of the
articles of incorporation or bylaws of the Company or the charter, bylaws or
other organizational documents of any subsidiary, 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, binding on
the Company or any subsidiary or any of their respective properties, assets or
operations. I express no opinion in this paragraph regarding federal or state
securities laws.
(xvi) The Company is not a "holding company" or, to the best
of my knowledge after due inquiry, a "subsidiary of a holding company" , within
the meaning of such terms as defined in the Public Utility Holding Company Act
of 1935; and to the best of my knowledge after due inquiry, no person or
corporation which is a "holding company" or a "subsidiary of a holding company,"
as so defined, directly or indirectly owns, controls or holds with power to vote
10% or more of the outstanding voting securities of the Company.
Except for the financial statements and schedules, pro forma financial
information and other information of an accounting or financial nature included
or incorporated by reference therein, as to which I express no opinion or
belief, no facts have come to my attention that led me to believe: (a) that the
Registration Statement, at the time it became effective (which, for the purposes
of this paragraph, shall have the meaning set forth in Rule 158(c) under the
1933 Act), 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 (b) that the Prospectus, as of its date or
as of the date hereof, contained or contains 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.
This opinion is furnished by me as General Counsel for the Company to
you pursuant to the terms of the Purchase Agreement. Except with my prior
written consent, no person other than the addressees of this opinion and
Shearman & Sterling LLP, counsel for the Underwriters, shall be entitled to rely
on it. I am aware that this opinion will be relied upon by Shearman & Sterling
LLP. This opinion may not be quoted, in whole or in part, or copies hereof
furnished, to any other person without my prior written consent, except that you
may furnish copies hereof to Shearman & Sterling LLP, your counsel.
* * *
In rendering such opinion, such counsel may state that his
opinion is limited to the Federal laws of the United States, the laws of the
State of Texas and the Virginia Stock Corporation Act.
C-4
Exhibit D
FORM OF LOCK-UP LETTER FROM DIRECTORS AND
OFFICERS PURSUANT TO SECTION 5(i)
October 13, 2004
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representative of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by
Atmos Energy Corporation
Dear Sirs:
The undersigned, a stockholder and/or officer and/or director
of
Atmos Energy Corporation, a Texas and Virginia corporation (the "Company"),
understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and the underwriters named in the
within-mentioned purchase agreement propose to enter into a Purchase Agreement
(the "Purchase Agreement") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, no par value (the
"Common Stock"). In recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder and/or as an officer and/or as a director
of the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 90
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or request or demand that the Company file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any
D-1
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise. Notwithstanding the
foregoing, if: (1) during the last 17 days of the 90-day lock-up period the
Company issues an earnings release or material news or a material event relating
to the Company occurs; or (2) prior to the expiration of the 90-day lock-up
period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 90-day lock-up period, the
restrictions imposed by this letter shall continue to apply until the expiration
of the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
Very truly yours,
Signature:
-----------------------------
Print Name:
---------------------------
D-2