Exhibit 1.1
EXECUTION COPY
ATMOS ENERGY CORPORATION
5,500,000 Shares of Common Stock
UNDERWRITING AGREEMENT
December 7, 2006
Lehman Brothers Inc
.
Goldman, Sachs & Co
.
As Representatives of the several
Underwriters named in Schedule I attached hereto
c/o Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
- and -
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Atmos Energy Corporation, a Texas and Virginia corporation (the “
Company
”), proposes to sell
5,500,000 shares (the “
Firm Stock
”) of the Company’s common stock, no par value (the “
Common
Stock
”). In addition, the Company proposes to grant to the underwriters (the “
Underwriters
”) named
in
Schedule I
attached to this agreement (this “
Agreement
”) an option to purchase up to
825,000 additional shares of the Common Stock on the terms set forth in Section 2 (the “
Option
Stock
”). The Firm Stock and the Option Stock, if purchased, are hereinafter collectively called
the “
Stock
.” This is to confirm the agreement concerning the purchase of the Stock from the
Company by the Underwriters.
1.
Representations, Warranties and Agreements of the Company
. The Company represents,
warrants and agrees that:
(a) A registration statement on Form S-3, including a base prospectus relating to the
Stock (i) has been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the “
Securities Act
”), and the rules and regulations
(the “
Rules and Regulations
”) of the Securities and Exchange Commission (the “
Commission
”)
thereunder; (ii) has been filed with the Commission under the Securities Act; and (iii) is
effective under the Securities Act. Copies of the Registration
Statement (as defined below) have been delivered by the Company to you as the
representatives (the “
Representatives
”) of the Underwriters. As used in this Agreement:
(i) “
Applicable Time
” means 5:45 p.m. (New York City time) on the date of this
Agreement;
(ii) “
Effective Date
” means any date as of which any part of the Registration
Statement became effective under the Securities Act in accordance with the Rules and
Regulations;
(iii) “
Issuer Free Writing Prospectus
” means any “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with the offering of the
Stock;
(iv) “
Preliminary Prospectus
” means the base prospectus included in the
Registration Statement, together with any preliminary prospectus supplement relating
to the Stock filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations;
(v) “
Pricing Disclosure Package
” means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with any Issuer Free Writing Prospectus
filed or used by the Company on or before the Applicable Time as permitted by this
Agreement, other than a road show that is an Issuer Free Writing Prospectus under
Rule 433 of the Rules and Regulations;
(vi) “
Prospectus
” means the base prospectus included in the Registration
Statement, together with the final prospectus supplement relating to the Stock filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations; and
(vii) “
Registration Statement
” means, the registration statement described
above, as amended as of the Effective Date for such part, including the Prospectus
and all exhibits to such registration statement and any document incorporated by
reference therein.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to Form S-3 under the
Securities Act as of the date of such Preliminary Prospectus or the Prospectus, as the case
may be. Any reference to the “
most recent Preliminary Prospectus
” shall be deemed to refer
to the base prospectus included in the Registration Statement, together with the latest
preliminary prospectus supplement relating to the Stock filed with the Commission pursuant
to Rule 424(b) prior to or on the date hereof (including, for purposes hereof, any documents
incorporated by reference therein prior to or on the date hereof). Any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the Securities Exchange Act of 1934, as
amended (the “
Exchange Act
”), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by
2
reference in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to include any
annual report of the Company on Form 10-K filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the Effective Date that is incorporated by
reference in the Registration Statement. The Commission has not issued any stop order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus or
suspending the effectiveness of the Registration Statement, and no proceeding or examination
for such purpose has been instituted or, to the knowledge of the Company, threatened by the
Commission. The Commission has not notified the Company of any objection to the use of the
form of the Registration Statement.
(b) At the time of filing the Registration Statement and, if applicable, at the time of the
most recent amendment thereto for purposes of complying with Section 10(a)(3) of the Securities
Act, the Company was a “well-known seasoned issuer” (as defined in Rule 405 of the Rules and
Regulations) eligible to use Form S-3 for the offering of the Stock, including not having been an
“ineligible issuer” (as defined in Rule 405 of the Rules and Regulations) at any such time. The
Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405 of
the Rules and Regulations) and was filed not earlier than the date that is three years prior to the
applicable Delivery Date (as defined in Section 4).
(c) The Registration Statement conformed and will conform in all material respects on the
Effective Date and on the applicable Delivery Date, and any amendment to the Registration Statement
filed after the date hereof will conform in all material respects when filed, to the requirements
of the Securities Act and the Rules and Regulations. The Preliminary Prospectus conformed, and the
Prospectus will conform, in all material respects when filed with the Commission pursuant to Rule
424(b) and on the applicable Delivery Date to the requirements of the Securities Act and the Rules
and Regulations. The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus conformed, and any further documents so incorporated will conform, when filed with the
Commission, in all material respects to the requirements of the Exchange Act or the Securities Act,
as applicable, and the rules and regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date, contain an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
provided
that no representation or warranty is made as
to information contained in or omitted from the Registration Statement in reliance upon and in
conformity with written information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which information is specified in
Section 8(e).
(e) The Prospectus will not, as of its date and on the applicable Delivery Date, contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
provided
that no representation or warranty is made as to information
contained in or omitted from the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified in Section 8(e).
3
(f) The documents incorporated by reference in any Preliminary Prospectus or the Prospectus
did not, and any further documents filed and incorporated by reference therein will not, when filed
with the Commission, contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. 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.
(g) The Pricing Disclosure Package did not, as of the Applicable Time, contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the price of the Stock and the number of shares of Stock issued
will be included on the cover page of the Prospectus;
provided
that no representation or warranty
is made as to information contained in or omitted from the Pricing Disclosure Package in reliance
upon and in conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 8(e).
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show that is
a free writing prospectus under Rule 433), when considered together with the Pricing Disclosure
Package as of the Applicable Time, did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, except that the price
of the Stock and number of shares of Stock to be issued will be included on the cover page of the
Prospectus.
(i) Each Issuer Free Writing Prospectus conformed or will conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations on the date of first use, and
the Company has complied with any filing requirements applicable to such Issuer Free Writing
Prospectus pursuant to the Securities Act and the Rules and Regulations. Each Issuer Free Writing
Prospectus does not and will not conflict with the information contained in the Registration
Statement, the most recent Preliminary Prospectus or the Prospectus. The Company has not made any
offer relating to the Stock that would constitute an Issuer Free Writing Prospectus without the
prior written consent of the Representatives. The Company has retained in accordance with the
Rules and Regulations all Issuer Free Writing Prospectuses that were not required to be filed
pursuant to the Rules and Regulations.
(j) 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 most recent Preliminary 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 change, or a development known to the Company involving a prospective material
4
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
”).
(k) Each “significant subsidiary” (as such term is defined in Rule 405 of the Securities Act)
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 corporate or limited liability company power and authority, as
applicable, to own, lease and operate its properties and to conduct its business as described in
the most recent Preliminary 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 II and the Company
does not own or control, directly or indirectly, any corporation, association or other entity other
than the subsidiaries listed on Schedule III.
(l) The authorized, issued and outstanding capital stock of the Company is as set forth in
each of the most recent Preliminary Prospectus and the Prospectus under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to reservations, agreements,
acquisitions or employee benefit plans each referred to in each of the most recent Preliminary
Prospectus and the Prospectus or pursuant to the exercise of options or share unit awards, each
referred to in each of the most recent Preliminary Prospectus and 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; 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.
(m) All of the issued and outstanding capital stock or limited liability company membership
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 except for
such liens, encumbrances, equities or claims as would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect; 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.
(n) The Stock has 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 Stock conforms to all statements relating thereto
contained in each of the most recent Preliminary Prospectus and the Prospectus and such description
conforms to all the rights set forth in the instruments defining the same; no holder of the Stock
will be subject to personal liability by reason of being such a holder; and the issuance of the
Stock is not subject to the preemptive or other similar rights of any securityholder of the
Company.
5
(o) The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(p) 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 in connection with the consummation
of the transactions contemplated in each of the most recent Preliminary Prospectus 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 each of the most recent Preliminary Prospectus and the
Prospectus under the caption “Use of Proceeds”) and compliance by 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 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 (i) the provisions of the charter, bylaws
or other organizational documents of the Company or any subsidiary or (ii) 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 except, with respect to (ii), as would
not result in a Material Adverse Effect. 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.
(q) 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.
(r) 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 most recent Preliminary Prospectus (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
6
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.
(s) The Company and each of 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 the absence of which would have a Material Adverse Effect, 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 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, conflict, invalidity or inadequacy would result in a Material Adverse Effect.
(t) There have been issued and, at the Applicable Time and 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 Stock 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 Stock 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 Securities Act or the Rules and
Regulations or state securities or blue sky laws.
(u) 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 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.
(v) 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 the Registration Statement and in
connection with this offering of Stock.
(w) 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
7
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 most recent
Preliminary Prospectus or (b) would not singly or in the aggregate have a Material Adverse Effect.
All of the leases and subleases of the Company and its subsidiaries under which the Company or any
of its subsidiaries holds properties described in the most recent Preliminary Prospectus are in
full force and effect, except as would not result in a Material Adverse Effect.
(x) The Company has not sold or issued any securities that would be integrated with the
offering of the Stock contemplated by this Agreement pursuant to the Securities Act, the Rules and
Regulations or the interpretations thereof by the Commission.
(y) The financial statements of the Company included or incorporated by reference in the
Registration Statement, the most recent Preliminary Prospectus 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. The supporting schedules, if any, included in the Registration Statement and
incorporated by reference in the most recent Preliminary Prospectus and the Prospectus with respect
to the Company, when considered in relation to the financial statements taken as a whole, present
fairly, in all material respects in accordance with GAAP, the financial information set forth
therein. The selected financial data and the summary financial information included or
incorporated by reference in the most recent Preliminary Prospectus and 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.
(z) Ernst & Young LLP, who have certified financial statements and supporting schedules of the
Company and its consolidated subsidiaries, whose report is incorporated by reference in the most
recent Preliminary Prospectus and in the Registration Statement, who have audited the Company’s
internal control over financial reporting and management’s assessment thereof and who have
delivered the initial letter referred to in Section 7(i) hereof, are registered independent public
accountants as required by the Securities Act and the Rules and Regulations.
(aa) The Company and each of its subsidiaries are not, and as of the applicable Delivery Date
and upon the issuance and sale of the Stock and the application of the proceeds therefrom as
described under “Use of Proceeds” in the most recent Preliminary Prospectus and the Prospectus,
none of them will be, (i) 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 and the rules
and regulations of the Commission thereunder or (ii) a
“business development company” (as defined in
Section 2(a)(48) of the Investment Company Act).
(bb) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Security Act of 1974, as amended (“ERISA”)) for which the Company or any member of its
“Controlled Group” (defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414(b) or (c) of the Internal Revenue Code of 1986, as
amended (the “Code”)) would have any liability (each a “Plan”) has
8
been maintained in compliance in all respects with its terms and with the requirements of all
applicable statutes, rules and regulations including ERISA and the Code except where failure to do
so would not have a Material Adverse Effect; (ii) with respect to each Plan subject to Title IV of
ERISA (a) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is
reasonably expected to occur that would result in a Material Adverse Effect, (b) no “accumulated
funding deficiency” (within the meaning of Section 302 of ERISA or Section 412 of the Code),
whether or not waived, has occurred or is reasonably expected to occur that would result in a
Material Adverse Effect, (c) the fair market value of the assets under each Plan exceeds the
actuarial present value of the benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan) except where failure to do so would not have a Material Adverse
Effect, and (d) neither the Company nor any member of its Controlled Group has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the Pension Benefit Guaranty Corporation in the ordinary course and without
default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section
4001(c)(3) of ERISA) that would result in a Material Adverse Effect; and (iii) each Plan that is
intended to be qualified under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service as to its qualified status and nothing has occurred,
whether by action or by failure to act, which would cause the loss of such qualification that would
result in a Material Adverse Effect.
(cc) The Company is in compliance, in all material respects, with the provisions of the
Sarbanes-Oxley Act of 2002 to the extent currently applicable.
(dd) 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, and the Company does
not have any knowledge of any tax deficiency which would have, a Material Adverse Effect.
(ee) 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 reasonably be expected to
have a Material Adverse Effect.
(ff) Except as would not 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, permit, 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
9
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,
to the knowledge of the Company, 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, except as disclosed in the Preliminary
Prospectus.
(gg) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. The Company’s internal control over financial reporting is
effective and the Company is not aware of any material weaknesses in its internal control over
financial reporting. Since the date of the latest audited financial statements included or
incorporated by reference in the most recent Preliminary Prospectus, there has been no change in
the Company’s internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
of the Exchange Act) that comply with the requirements of the Exchange Act and such disclosure
controls and procedures have been designed to provide reasonable assurance that material
information relating to the Company and its subsidiaries that is required to be disclosed in the
reports the Company files, furnishes, submits or otherwise provides to the Commission under the
Exchange Act is made known to the Company’s principal executive officer and principal financial
officer by others within those entities in such a manner as to allow timely decisions regarding the
required disclosure; such disclosure controls and procedures are effective.
(hh) The Company has not distributed and, prior to the later to occur of any Delivery Date and
completion of the distribution of the Stock, will not distribute any offering material in
connection with the offering and sale of the Stock other than any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus to which the Representatives have consented in
accordance with Section 1(i) or 5(a)(vii).
(ii) The Stock has been approved for listing, subject to official notice of issuance, on the
New York Stock Exchange.
Any certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Stock shall be deemed a
representation and warranty by the Company, as to matters covered thereby on the date of such
certificate, to each Underwriter.
10
2.
Purchase of the Stock by the Underwriters.
On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this Agreement, the Company
agrees to sell 5,500,000 shares of the Firm Stock to the several Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm Stock
set forth opposite that Underwriter’s name in Schedule I hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, on the basis of the representations and warranties contained in, and subject to
the terms and conditions of, this Agreement, the Company grants to the Underwriters an option to
purchase part or all of the Option Stock. Such option is exercisable in the event that the
Underwriters sell more shares of Common Stock than the number of shares of Firm Stock in the
offering and as set forth in Section 4 hereof. Each Underwriter agrees, severally and not jointly,
to purchase the number of shares of Option Stock (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same proportion to the total
number of shares of Option Stock to be sold on such Delivery Date as the number of shares of Firm
Stock set forth in
Schedule I
hereto opposite the name of such Underwriter bears to the
total number of shares of Firm Stock.
The price of both the Firm Stock and any Option Stock purchased by the Underwriters shall be
$30.3975 per share.
The Company shall not be obligated to deliver any of the Firm Stock or Option Stock to be
delivered on the applicable Delivery Date, except upon payment for all such Stock to be purchased
on such Delivery Date as provided herein.
3.
Offering of Stock by the Underwriters
. Upon authorization by the Representatives
of the release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions to be set forth in the Prospectus.
4.
Delivery of and Payment for the Stock
.
Delivery of the Firm Stock by the Company
and payment for the Firm Stock by the several Underwriters shall be made at 10:00 A.M., New York
City time, on the fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives and the Company.
This date and time are sometimes referred to as the “
Initial Delivery Date
.” Delivery of the Firm
Stock shall be made to the Representatives for the account of each Underwriter against payment by
the several Underwriters through the Representatives of the respective aggregate purchase prices of
the Firm Stock being sold by the Company to or upon the order of the Company by wire transfer in
immediately available funds to the accounts specified by the Company. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. The Company shall deliver the Firm
Stock through the facilities of DTC unless the Representatives shall otherwise instruct.
The option granted in Section 2 will expire 30 days after the date of this Agreement and may
be exercised in whole or from time to time in part by written notice being
11
given to the Company by the Representatives;
provided
that if such expiration date falls on a
day that is not a business day, the option granted in Section 2 will expire on the next succeeding
business day. Such notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be issued and the date and
time, as determined by the Representatives, when the shares of Option Stock are to be delivered;
provided, however
, that this date and time shall not be earlier than the Initial Delivery Date nor
earlier than the second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall have been exercised.
Each date and time the shares of Option Stock are delivered is sometimes referred to as an “
Option
Stock Delivery Date
,” and the Initial Delivery Date and any Option Stock Delivery Date are
sometimes each referred to as a “
Delivery Date
.”
Delivery of the Option Stock by the Company and payment for the Option Stock by the several
Underwriters through the Representatives shall be made at 10:00 A.M., New York City time, on the
date specified in the corresponding notice described in the preceding paragraph or at such other
date or place as shall be determined by agreement between the Representatives and the Company. On
the Option Stock Delivery Date, the Company shall deliver or cause to be delivered the Option Stock
to the Representatives for the account of each Underwriter against payment by the several
Underwriters through the Representatives of the respective aggregate purchase prices of the Option
Stock being sold by the Company to or upon the order of the Company by wire transfer in immediately
available funds to the accounts specified by the Company. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Company shall deliver the Option Stock through the
facilities of DTC unless the Representatives shall otherwise instruct.
5.
Further Agreements of the Company and the Underwriters
. (a) The Company agrees:
(i) To prepare the Prospectus in a form reasonably approved by the Representatives and
to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the
Commission’s close of business on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any supplement to the
Registration Statement or the Prospectus prior to the last Delivery Date except as provided
herein; to advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment or supplement to the Registration Statement or the Prospectus has
been filed and to furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Stock; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding or examination for any such purpose, of any
12
notice from the Commission objecting to the use of the form of the Registration
Statement or any post-effective amendment thereto or of any request by the Commission for
the amending or supplementing of the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of the Prospectus or any
Issuer Free Writing Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(ii) To pay the applicable Commission filing fees relating to the Stock within the time
required by Rule 456(b)(1);
(iii) To furnish promptly to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith;
(iv) To deliver promptly to the Representatives such number of the following documents
as the Representatives shall reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of per share earnings), (B)
each Preliminary Prospectus, the Prospectus and any amendment or supplement thereto, (C) any
Issuer Free Writing Prospectus and (D) any document incorporated by reference in any
Preliminary Prospectus or the Prospectus; and, if the delivery of a prospectus is required
at any time after the date hereof in connection with the offering or sale of the Stock or
any other securities relating thereto and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representatives and, upon their request, to file such
document and to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus that will correct such statement or omission or effect
such compliance;
(v) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the Commission;
(vi) Prior to filing with the Commission any amendment or supplement to the
Registration Statement or the Prospectus, any document incorporated by reference in the
Prospectus or any amendment to any document incorporated by reference in the Prospectus, to
furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain
the consent (not to be unreasonably withheld) of the Representatives to the filing;
13
(vii) Not to make any offer relating to the Stock that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Representatives.
(viii) To retain in accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses not required to be filed pursuant to the Rules and Regulations and to comply
with any filing requirements applicable to all Issuer Free Writing Prospectuses pursuant to
the Securities Act and the Rules and Regulations; and if at any time after the date hereof
any events shall have occurred as a result of which any Issuer Free Writing Prospectus, as
then amended or supplemented, would conflict with the information in the Registration
Statement, the most recent Preliminary Prospectus or the Prospectus or would include an
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading, or, if for any other reason it shall be necessary to amend or supplement any
Issuer Free Writing Prospectus, to notify the Representatives and, upon their request, to
file such document and to prepare and furnish without charge to each Underwriter as many
copies as the Representatives may from time to time reasonably request of an amended or
supplemented Issuer Free Writing Prospectus that will correct such conflict, statement or
omission or effect such compliance;
(ix) As soon as practicable, to make generally available to the Company’s security
holders an earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations;
(x) Promptly from time to time to take such action to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the Representatives may
reasonably request and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Stock;
provided
that in connection therewith the Company shall not be
required to (i) qualify as a foreign corporation in any jurisdiction in which it would not
otherwise be required to so qualify, (ii) take any action that would subject it to service
of process in any such jurisdiction or (iii) subject itself to taxation in any jurisdiction
in which it would not otherwise be subject;
(xi) Except with the written consent of Lehman Brothers, Inc. and Goldman, Sachs & Co.,
for a period of 90 days commencing on the date hereof (such 90-day period, the “Lock-Up
Period”) not to, (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 shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common Stock or file
any registration statement under the Securities 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 Stock to be sold hereunder, (B) any shares of
Common Stock issued by the Company upon the
14
exercise of an option or warrant or the conversion of a security outstanding on the
date hereof and referred to in the most recent Preliminary Prospectus and 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 most recent Preliminary
Prospectus and 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 most
recent Preliminary Prospectus and 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 most recent Preliminary Prospectus and the Prospectus), provided
that no securities of the Company are sold pursuant to such registration statement during
the Lock-Up Period. Notwithstanding the foregoing, if: (1) during the last 17 days of the
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 Lock-Up Period, the
Company announces that it will release earnings results during the 16-day period beginning
on the last day of the 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 unless Lehman
Brothers Inc. and Goldman, Sachs & Co., on behalf of the Underwriters, waive such extension
in writing;
(xii) To apply the net proceeds from the sale of the Stock being sold by the Company as
set forth in the Prospectus;
(b) Each Underwriter severally agrees that such Underwriter shall not include any
“issuer information” (as defined in Rule 433) in any “free writing prospectus” (as defined
in Rule 405) used or referred to by such Underwriter without the prior consent of the
Company (any such issuer information with respect to whose use the Company has given its
consent, “
Permitted Issuer Information
”);
provided
that “issuer information,” as used in
this Section 5(b), shall not be deemed to include information prepared by or on behalf of
such Underwriter on the basis of or derived from issuer information.
6.
Expenses.
The Company agrees, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and
taxes incident to and in connection with (a) the authorization, issuance, sale and delivery of the
Stock and any stamp duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Stock; (b) the preparation, printing and filing under the
Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any
15
amendment or supplement thereto, or any document incorporated by reference therein, all as
provided in this Agreement; (d) the production and distribution of this Agreement, any supplemental
agreement among Underwriters, and any other related documents in connection with the offering,
purchase, sale and delivery of the Stock; (e) the listing of the Stock on the New York Stock
Exchange; (f) the qualification of the Stock under the securities laws of the several jurisdictions
as provided in Section 5(a)(x) and the preparation, printing and distribution of a Blue Sky
Memorandum (including related reasonable fees and expenses of counsel to the Underwriters); (g) the
investor presentations on any “road show” undertaken in connection with the marketing of the Stock,
including, without limitation, expenses associated with any electronic roadshow, travel and lodging
expenses of the representatives and officers of the Company and the cost of any aircraft chartered;
and (h) all other costs and expenses incident to the performance of the obligations of the Company;
provided
that, except as provided in this Section 6 and Section 11, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of the Stock made by
the Underwriters.
7.
Conditions of Underwriters’ Obligations
. The respective obligations of the Underwriters
hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations
and warranties of the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in accordance with Section
5(i); the Company shall have complied with all filing requirements applicable to any Issuer Free
Writing Prospectus used or referred to after the date hereof; no stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus
or any Issuer Free Writing Prospectus shall have been issued and no proceeding or examination for
such purpose shall have been initiated or, to the knowledge of the Company, threatened by the
Commission; any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied with; and the
Commission shall not have notified the Company of any objection to the use of the form of the
Registration Statement.
(b) The Lock-Up Agreements between the Underwriters and the individuals listed on Schedule IV
have been delivered to the Representatives, on or before the date of this Agreement, shall be in
full force and effect and substantially in the form attached hereto as Exhibit A on such Delivery
Date.
(c) Gibson, Dunn & Crutcher LLP, as counsel to the Company, shall have furnished to the
Representatives its written opinion and letter, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially
to the effect set forth in
Exhibit B-1
.
(d) Hunton & Williams LLP, as Virginia counsel to the Company, shall have furnished to the
Representatives its written opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, substantially to the effect set
forth in
Exhibit B-2
.
16
(e) Louis P. Gregory, as General Counsel to the Company, shall have furnished to the
Representatives his written opinion and letter, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the Representatives, substantially
to the effect set forth in
Exhibit B-3
.
(f) The Representatives shall have received from Shearman & Sterling LLP, counsel for the
Underwriters, such opinion or opinions, dated such Delivery Date, as the Underwriters may
reasonably require.
(g) At the time of execution of this Agreement, the Representatives shall have received from
Ernst & Young LLP a letter, in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, and (ii) stating, as of the date hereof (or, with respect to matters involving changes
or developments since the respective dates as of which specified financial information is given in
the most recent Preliminary Prospectus, as of a date not more than three days prior to the date
hereof), the conclusions and findings of such firm with respect to the financial information and
other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection
with registered public offerings.
(h) With respect to the letter of Ernst & Young LLP referred to in the preceding paragraph and
delivered to the Representatives concurrently with the execution of this Agreement (the “
initial
letter
”), the Company shall have furnished to the Representatives a letter (the “
bring-down
letter
”) of such accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the qualification of accountants
under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as of a date not more than
three days prior to the date of the bring-down letter), the conclusions and findings of such firm
with respect to the financial information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a certificate, dated such Delivery
Date, of its Chief Executive Officer or its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company in Section 1
are true and correct on and as of such Delivery Date, and the Company has complied
with all its agreements contained herein and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to such Delivery Date;
(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued; no proceedings or examination for that purpose have been instituted
or, to the knowledge of such officers, threatened; and the
17
Commission has not notified the Company of any objection to the use of the form
of the Registration Statement or any post-effective amendment thereto; and
(iii) 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.
(j) There has not been any change, or any development known to the Company involving a
prospective 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, the effect of which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Stock being delivered on such Delivery Date on the terms
and in the manner contemplated in the Prospectus; subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the Company’s debt
securities by any “nationally recognized statistical rating organization” (as that term is defined
by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations) and (ii) no such
organization shall have publicly announced that it has placed the Company under surveillance or
review, with possible negative implications, for its rating of any of the Company’s debt
securities.
(k) Subsequent to the execution and delivery of this Agreement there shall not have occurred
any of the following: (i) trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been suspended or materially
limited or the settlement of such trading generally shall have been materially disrupted or minimum
prices shall have been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by federal or New York, Texas or Virginia authorities,
(iii) the United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions, including, without
limitation, as a result of terrorist activities after the date hereof (or the effect of
international conditions on the financial markets in the United States shall be such), in each
case, as to make it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the public offering or delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(l) The New York Stock Exchange shall have approved the Stock for listing, subject only to
official notice of issuance.
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 Stock as herein contemplated, or in order to evidence the accuracy of
18
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
Stock as herein contemplated shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
8.
Indemnification and Contribution
. (a) The Company shall indemnify and hold harmless each
Underwriter, its directors, officers and employees and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, director, officer, employee
or controlling person may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in (A) any Preliminary Prospectus, the
Registration Statement, the Prospectus or in any amendment or supplement thereto, (B) any Issuer
Free Writing Prospectus or in any amendment or supplement thereto or (C) any Permitted Issuer
Information used or referred to in any “free writing prospectus” (as defined in Rule 405) permitted
by Section 5(b) hereof used or referred to by any Underwriter or (D) any “road show” (as defined in
Rule 433) not constituting an Issuer Free Writing Prospectus (a “
Non-Prospectus Road Show
”) or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement
thereto or in any Permitted Issuer Information, any Non-Prospectus Road Show, any material fact
required to be stated therein or necessary to make the statements therein not misleading, and shall
reimburse each Underwriter and each such director, officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that Underwriter, director,
officer, employee or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action as such expenses are incurred;
provided
,
however
, that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any such amendment
or supplement thereto or in any Permitted Issuer Information, any Non-Prospectus Road Show, in
reliance upon and in conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information consists solely of the information specified in Section 8(e).
The foregoing indemnity agreement is in addition to any liability which the Company may otherwise
have to any Underwriter or to any director, officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, its directors, officers and employees, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
19
Act, from and against any loss, claim, damage, liability or expense (including reasonable
attorney’s fees and expenses relating to investigating or defending or preparing to defend), joint
or several, or any action in respect thereof, to which the Company, or any such director, officer,
employee or controlling person may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any amendment
or supplement thereto or in any Non-Prospectus Road Show, or (ii) the omission or alleged omission
to state in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free
Writing Prospectus or in any amendment or supplement thereto or in any Non-Prospectus Road Show,
any material fact required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the Representatives by or
on behalf of that Underwriter specifically for inclusion therein, which information is limited to
the information set forth in Section 8(e). The foregoing indemnity agreement is in addition to any
liability that any Underwriter may otherwise have to the Company, or any such director, officer,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim
or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action;
provided
,
however
, that the failure to
notify the indemnifying party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such failure and,
provided
,
further
, that the failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation;
provided, however
, that the indemnified party
shall have the right to employ such other counsel as the indemnified party may deem necessary, and
the indemnifiying party shall bear the reasonable legal or other expenses of such other counsel if
(i) the indemnifying party shall have agreed; (ii) the indemnifying party has failed within a
reasonable time to assume the defense of and retain counsel reasonably satisfactory to the
indemnified party; or (iii) the named parties in any such proceeding (including any impleaded
parties) include both the indemnified party and the indemnifying party, and representation of both
sets of parties by the same counsel would be inappropriate due to actual or potential differing
interests between them;
provided further
, however, that the indemnifying party shall not, in
connection with any one such claim or action or separate but substantially similar or related
claims or actions in the same jurisdiction, arising out of the same general allegations or
circumstances, be liable for the legal or other expenses of more than one separate firm of
attorneys (in addition to local counsel) for all of the
20
indemnified parties, which firm shall be designated in writing by the Company or the
Representatives, as applicable, and that all such legal or other expenses shall be reimbursed as
they are incurred. No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each indemnified party from
all liability arising out of such claim, action, suit or proceeding, provided that such
unconditional release may be subject to parallel release by a claimant or plaintiff of such
indemnified party, and does not include any findings of fact or admissions of fault or culpability
as to the indemnified party, or (ii) be liable for any settlement of any such action effected
without its written consent, but if settled with the consent of the indemnifying party or if there
be a final judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any reason be unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a), 8(b), 8(c) in respect
of any loss, claim, damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company, on the one hand, and the Underwriters, on the other,
from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company, on the one
hand, and the Underwriters, on the other, with respect to the statements or omissions that resulted
in such loss, claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company, as set forth in the table on the cover page of
the Prospectus, on the one hand, and the total underwriting discounts and commissions received by
the Underwriters with respect to the shares of the Stock purchased under this Agreement, as set
forth in the table on the cover page of the Prospectus, on the other hand. The relative fault
shall be determined by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions pursuant to this
Section 8(d) were to be determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect thereof, referred
to above in this Section 8(d) shall be deemed to include, for purposes of this Section 8(d), any
legal or other expenses reasonably
21
incurred by such indemnified party in connection with investigating or defending any such
action. Notwithstanding the provisions of this Section 8(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the net proceeds from the sale of the Stock
underwritten by it exceeds the amount of any damages that such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges and agrees that the
statements regarding the concession and reallowance figures and the paragraph relating to
stabilization by the Underwriters appearing under the caption “Underwriting” in, the most recent
Preliminary Prospectus and the Prospectus constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically
for inclusion in any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer
Free Writing Prospectus or in any amendment or supplement thereto or in any Non-Prospectus Road
Show.
9.
Defaulting Underwriters
. If, on any Delivery Date, any Underwriter shall fail or refuse to
purchase the shares of Stock agreed to be purchased by such Underwriting hereunder, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock that the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule I hereto bears to the total number of shares of the Firm Stock set forth
opposite the names of all the remaining non-defaulting Underwriters in Schedule I hereto;
provided,
however
, that the remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Stock on such Delivery Date if the total number of shares of the Stock that the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total
number of shares of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock that it agreed to purchase on such Delivery Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall have the right,
but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all
the Stock to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the shares that the
defaulting Underwriter or Underwriters agreed but failed to purchase on such Delivery Date, this
Agreement (or, with respect to any Option Stock Delivery Date, the obligation of the Underwriters
to purchase, and of the Company to sell, the Option Stock) shall terminate without liability on the
part of any non-defaulting Underwriter or the Company, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in, and subject to the terms of,
Sections 6 and 11. As used in this Agreement, the term “Underwriter” includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
22
Schedule I hereto that, pursuant to this Section 9, purchases Stock that a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have
to the Company for damages caused by its default. If other Underwriters are obligated or agree to
purchase the Stock of a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document or arrangement.
10.
Termination.
The obligations of the Underwriters hereunder may be terminated by the
Representatives by notice given to and received by the Company prior to delivery of and payment for
the Firm Stock if, prior to that time, any of the events described in Sections 7(l) and 7(m) shall
have occurred.
11.
Reimbursement of Underwriters’ Expenses.
If the Company shall fail to tender the Stock
for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any other condition to the
Underwriters’ obligations hereunder required to be fulfilled by the Company is not fulfilled for
any reason the Company will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the Company shall pay
the full amount thereof to the Representatives.
12.
Research Analyst Independence.
The Company acknowledges that the Underwriters’ research
analysts and research departments are required to be independent from their respective investment
banking divisions and are subject to certain regulations and internal policies, and that such
Underwriters’ research analysts may hold views and make statements or investment recommendations
and/or publish research reports with respect to the Company and/or the offering that differ from
the views of their respective investment banking divisions. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that the Company may have against the
Underwriters with respect to any conflict of interest that may arise from the fact that the views
expressed by their independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Company by such Underwriters’ investment
banking divisions. The Company acknowledges that each of the Underwriters is a full service
securities firm and as such from time to time, subject to applicable securities laws, may effect
transactions for its own account or the account of its customers and hold long or short positions
in debt or equity securities of the companies that may be the subject of the transactions
contemplated by this Agreement.
13.
No Fiduciary Duty
. The Company acknowledges and agrees that in connection with this
offering, sale of the Stock or any other services the Underwriters may be deemed to be providing
hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between the parties
or any oral representations or assurances previously or subsequently made by the Underwriters: (i)
no fiduciary or agency relationship between the
23
Company and any other person, on the one hand, and the Underwriters, on the other, exists;
(ii) the Underwriters are not acting as advisors, expert or otherwise, to the Company, including,
without limitation, with respect to the determination of the public offering price of the Stock,
and such relationship between the Company on the one hand, and the Underwriters, on the other, is
entirely and solely commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Underwriters may have to the Company shall be limited to those duties and obligations
specifically stated herein; and (iv) the Underwriters and their respective affiliates may have
interests that differ from those of the Company. The Company hereby waives any claims that the
Company may have against the Underwriters with respect to any breach of fiduciary duty in
connection with this offering.
14.
Notices, Etc
. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or facsimile transmission to
(i) Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate
Registration (Fax: 646-834-8133), with a copy, in the case of any notice pursuant to Section 8(c),
to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 399 Park
Avenue, 10
th
Floor, New York, New York 10022 (Fax: 212-520-0421) and (ii) Goldman,
Sachs & Co., One New York Plaza, 42
nd
Floor, New York, New York 10004, Attention:
Registration Department;
(b) if to the Company, shall be delivered or sent by mail or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention: Louis P. Gregory (Fax:
972-855-3080)
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by the Representatives.
15.
Persons Entitled to Benefit of Agreement
. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, any controlling person referred to herein, the
other indemnities referred to herein and their respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire or have any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision contained herein.
The term “successors and assigns” shall not include a purchaser of Stock from any Underwriter
merely because of such purchase.
16.
Survival.
The respective indemnities, representations, warranties and agreements of the
Company and the Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock
and shall remain in full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
17.
Definition of the Term “Business Day
.
”
For purposes of this Agreement “
business day
”
means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day
24
on which banking
institutions in New York are generally authorized or obligated by law or executive order to close.
18.
Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
19.
Counterparts.
This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original but
all such counterparts shall together constitute one and the same instrument.
20
. Headings.
The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
25
If the foregoing correctly sets forth the agreement among the Company and the Underwriters,
please indicate your acceptance in the space provided for that purpose below.
| |
|
|
|
|
| |
Very truly yours,
ATMOS ENERGY CORPORATION
|
|
| |
By: |
/s/ JOHN P. REDDY
|
</ |