Exhibit 4.1
Kansas Gas and Electric
Company
$300,000,000
6.70% First Mortgage Bonds due 2019
Purchase Agreement
June 8, 2009
BNY Mellon Capital Markets,
LLC
One Wall Street
New York, New York 10286
Citigroup Global Markets
Inc.
388 Greenwich Street
New York, New York 10013
Credit Suisse Securities (USA)
LLC
11 Madison Avenue
New York, New York 10010
As Representatives of the Initial
Purchasers
Ladies and Gentlemen:
Kansas Gas and Electric Company, a
corporation organized under the laws of Kansas (the “
Company ”), proposes to issue and sell to the several
parties named in Schedule I hereto (the “ Initial
Purchasers ”), for whom you (the “
Representatives ”) are acting as representatives,
$300,000,000 principal amount of its 6.70% First Mortgage Bonds due
2019 (the “ Securities ”). The Securities are to
be issued under a Mortgage and Deed of Trust, dated as of
April 1, 1940 (as amended and supplemented, the “
Original Mortgage ”), between the Company and The Bank
of New York Mellon Trust Company, N.A., as successor to Guaranty
Trust Company of New York, and Judith L. Bartolini, as successor to
Henry A. Theis, as trustees (the “ Trustee ”).
In connection with the issuance of the Securities, the Original
Mortgage will be further supplemented by a Fifth-Fourth
Supplemental Indenture, to be dated as of June 11, 2009 (the
“ Supplemental Indenture ”, and the Original
Mortgage as so supplemented, the “ Mortgage ”).
To the extent there are no additional parties listed on Schedule I
other than you, the term Representatives as used herein shall mean
you as the Initial Purchasers, and the terms Representatives and
Initial Purchasers shall mean either the singular or plural as the
context requires. Certain terms used herein are defined in
Section 21 hereof.
The sale of the Securities to the
Initial Purchasers will be made without registration of the
Securities under the Act in reliance upon exemptions from the
registration requirements of the Act.
In connection with the sale of the
Securities, the Company has prepared a preliminary offering
memorandum, dated June 8, 2009 (as amended or supplemented at
the date thereof, including any and all exhibits thereto, the
“ Preliminary Memorandum ”), and a final
offering memorandum, dated June 8, 2009 (as amended or supplemented
at the Execution Time, including any and all exhibits thereto, the
“ Final Memorandum ”). Each of the Preliminary
Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Disclosure Package,
the Preliminary Memorandum and the Final Memorandum, and any
amendment or supplement thereto, in connection with the offer and
sale of the Securities by the Initial Purchasers.
1. Representations and
Warranties . The Company represents and warrants to, and agrees
with, each Initial Purchaser as set forth below in this
Section 1.
(a) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of Kansas with full corporate power and
authority to carry on the electric utility business in which it is
engaged, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification except where the
failure to so qualify would not reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
earnings, business or properties of the Company, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Official Statement (a
“ Material Adverse Effect ”).
(b) The Company has corporate power
and authority to execute and deliver, to take all actions required
or permitted to be taken by the Company by or under, and to perform
and observe the covenants and agreements on its part contained in,
this Agreement, the Mortgage and the Securities.
(c) This Agreement has been duly
authorized, executed and delivered by the Company; the Mortgage and
the Securities have been duly authorized by the Company and the
Mortgage (excluding the Supplemental Indenture) has been duly
executed and delivered by the Company; and the Mortgage (excluding
the Supplemental Indenture) constitutes a legal, valid, binding
instrument enforceable against the Company in accordance with its
terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors’ rights generally from time to time in
effect and to general principles of equity); at the Closing Date
(as defined below), the Mortgage (including the Supplemental
Indenture) will constitute the valid and legally binding obligation
of the Company, enforceable in accordance with its terms, subject
to the limitations described above; and the Securities, when
executed and authenticated in accordance with the provisions of the
Mortgage and delivered to and paid for by the Initial Purchasers,
will have been duly executed and delivered by the Company and will
constitute the legal, valid and binding obligations of the Company
entitled to the benefits of the Mortgage (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’
rights generally from time to time in effect and to general
principles of equity).
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(d) None of the execution and
delivery of this Agreement or the Supplemental Indenture, the
issuance and sale of the Securities, or the consummation of any
other of the transactions herein or therein contemplated, or the
fulfillment of the terms hereof or thereof will conflict with,
result in a breach or violation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company pursuant
to, (i) the articles of incorporation or by-laws of the
Company; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
the Company is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or any of its properties except in the cases of clauses
(ii) and (iii) above, for any default or violation that
would not have a Material Adverse Effect.
(e) The State Corporation Commission
of the State of Kansas (“ KCC ”) has authorized
the issuance of the Securities pursuant to an order dated
May 18, 2009. No additional consent, approval,
authorization, filing with or order of (i) the Federal Energy
Regulatory Commission (the “ FERC ’) under the
Federal Power Act, (ii) the KCC or (iii) to the knowledge
of the Company, any court or governmental agency or body is
required in connection with the transactions contemplated herein,
except such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of
the Securities by the Initial Purchasers in the manner contemplated
herein and in the Disclosure Package and the Final
Memorandum.
(f) No action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company or its property is pending or,
to the best knowledge of the Company, threatened that
(i) could reasonably be expected to have a Material Adverse
Effect on the performance of this Agreement, the Indenture or the
consummation of any of the transactions contemplated hereby or
thereby or (ii) could reasonably be expected to have a
Material Adverse Effect on the Company, except as set forth in or
contemplated in the Disclosure Package and the Final Memorandum
(exclusive of any amendment or supplement thereto).
(g) The Company is not in violation
or default of (i) any provision of its articles of
incorporation or by-laws; (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company is a party or bound or to which its
property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company of
any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or any of its properties, as applicable, except, in the
cases of clauses (ii) and (iii), for violations or defaults
which would not reasonably be expected to have a Material Adverse
Effect.
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(h) The consolidated historical
financial statements and schedules of the Company included in the
Disclosure Package and the Final Memorandum present fairly in the
material respects the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated and have been prepared in conformity with generally
accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved (except as
otherwise noted therein); the selected financial data set forth
under the caption “Selected Financial Information” in
the Preliminary Memorandum and the Final Memorandum fairly present,
on the basis stated in the Preliminary Memorandum and the Final
Memorandum, the information included therein.
(i) The statements in the
Preliminary Memorandum and the Final Memorandum under the heading
“Description of the Bonds” fairly summarize the matters
therein described.
(j) the statements included in the
Final Memorandum under the caption “Certain U.S. Federal
Income Tax Consequences for Non-U.S. Holders,” insofar as
they purport to describe provisions of U.S. federal income tax laws
or legal conclusions with respect thereto, fairly and accurately
summarize the matters referred to therein in all material
respects.
(k) Since the date of the Disclosure
Package, there has been no material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company, whether or not arising from transactions
in the ordinary course of business (a “ Material Adverse
Change ”).
(l) The Preliminary Memorandum, as
of its date, did not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. At the Execution Time and on the
Closing Date, the Final Memorandum did not and will not (and any
amendment or supplement thereto, at the date thereof and at the
Closing Date will not) contain any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided , however ,
that the Company makes no representation or warranty as to the
information contained in or omitted from the Preliminary Memorandum
or the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein, it
being understood and agreed that the only such information
furnished by or on behalf of any Initial Purchaser consists of the
information described as such in Section 8(b)
hereof.
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(m) The Disclosure Package, as of
the Execution Time, does not contain any 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. The preceding sentence
does not apply to statements in or omissions from the Disclosure
Package based upon and in conformity with written information
furnished to the Company by any Initial Purchaser through the
Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by or on behalf
of any Initial Purchaser consists of the information described as
such in Section 8(b) hereof.
(n) None of the Company, its
Affiliates, or any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or
solicited offers to buy, any security under circumstances that
would require the registration of the Securities under the
Act.
(o) None of the Company, its
Affiliates, or any person acting on its or their behalf has engaged
in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale
of the Securities.
(p) The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the
Act.
(q) No registration under the Act of
the Securities, or qualification of the Mortgage under the Trust
Indenture Act, is required for the offer and sale of the Securities
to or by the Initial Purchasers in the manner contemplated herein,
in the Disclosure Package and the Final Memorandum.
(r) The Company has an authorized
and outstanding capitalization as set forth in the Disclosure
Package and the Final Memorandum.
(s) The Company has all necessary
consents, authorizations, approvals, orders, certificates, licenses
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets
and to conduct its business in the manner described in the
Disclosure Package and the Final Memorandum, except to the extent
that the failure to obtain or file would not have a Material
Adverse Effect.
(t) The Company maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance
with management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
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(u) Except as set forth in or
contemplated in the Disclosure Package, the Company has not
received written notice of any actual or potential liability for
the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, except where such liability would not, individually
or in the aggregate, have a Material Adverse Effect.
(v) The Company has no
subsidiaries.
(w) Neither the Company nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company is currently subject to any sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“ OFAC ”); and the Company
will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to
any joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(x) No part of the proceeds from the
sale of the Securities hereunder and under the Supplemental
Indenture will be used, directly or indirectly, for any payment to
any governmental official or employee, political party, official of
a political party, candidate for political office or anyone else
acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of
the United States Foreign Corrupt Practices Act of 1977, as
amended.
(y) To the knowledge of the Company,
the operations of the Company are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements in all material respects and the money
laundering statutes and the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “ Money Laundering Laws ”) and no action,
suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with
respect to the Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
(z) Any certificate signed by any
officer of the Company and delivered to the Representatives or
counsel for the Initial Purchasers in connection with the offering
of the Securities shall be deemed a representation and warranty by
the Company, as to matters covered thereby, to each Initial
Purchaser.
2. Purchase and Sale .
Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees
to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 99.169% of the principal amount thereof, plus
accrued interest, if any, from June 11, 2009 to the Closing Date,
the principal amount of Securities set forth opposite such Initial
Purchaser’s name in Schedule I hereto.
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3. Delivery and Payment .
Delivery of and payment for the Securities shall be made at 10:00
A.M., New York City time, on June 11, 2009, or at such time on such
later date not more than three Business Days after the foregoing
date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the
“ Closing Date ”). Delivery of the Securities
shall be made to the Representatives for the respective accounts of
the several Initial Purchasers against payment by the several
Initial Purchasers through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company.
Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall
otherwise instruct.
4. Offering by Initial
Purchasers . (a) Each Initial Purchaser acknowledges that
the Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States, except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Act.
(b) Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees
with the Company that:
(i) it has not offered or sold, and
will not offer or sell, any Securities within the United States as
part of their distribution at any time except to those it
reasonably believes to be “qualified institutional
buyers” (as defined in Rule 144A under the Act);
(ii) neither it nor any person
acting on its behalf has made or will make offers or sales of the
Securities in the United States by means of any form of general
solicitation or general advertising (within the meaning of
Regulation D) in the United States;
(iii) in connection with each sale
pursuant to Section 4(b)(i), it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale may be made in reliance on Rule
144A;
(iv) it is an “accredited
investor” (as defined in Rule 501(a) of Regulation
D);
5. Agreements . The Company
agrees with each Initial Purchaser that:
(a) The Company will furnish to each
Initial Purchaser and to counsel for the Initial Purchasers,
without charge, as many copies of the materials contained in the
Disclosure Package and the Final Memorandum and any amendments and
supplements thereto as they may reasonably request.
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(b) The Company will prepare a final
term sheet, containing solely a description of final terms of the
Securities and the offering thereof, in the form approved by you
and attached as Schedule II hereto.
(c) The Company will not amend or
supplement the Disclosure Package or the Final Memorandum without
the prior written consent of the Representatives.
(d) If at any time prior to the
completion of the sale of the Securities by the Initial Purchasers
(as determined by the Representatives), any event occurs as a
result of which the Disclosure Package or the Final Memorandum, as
then amended or supplemented, would include any untrue statement of
a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made or the circumstances then prevailing,
not misleading, or if it should be necessary to amend or supplement
the Disclosure Package or the Final Memorandum to comply with
applicable law, the Company will promptly (i) notify the
Representatives of any such event; (ii) prepare an amendment
or supplement that will correct such statement or omission or
effect such compliance; and (iii) supply any supplemented or
amended Disclosure Package or Final Memorandum to the several
Initial Purchasers and counsel for the Initial Purchasers without
charge in such quantities as they may reasonably
request.
(e) Without the prior written
consent of the Representatives, the Company has not given and will
not give to any prospective purchaser of the Securities any written
information concerning the offering of the Securities other than
materials contained in the Disclosure Package, the Final Memorandum
or any other offering materials prepared by or with the prior
written consent of the Representatives.
(f) The Company will arrange, if
necessary, for the qualification of the Securities for sale by the
Initial Purchasers under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications
in effect so long as required for the sale of the Securities;
provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so
subject. The Company will promptly advise the Representatives of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(g) The Company will not, and will
not permit any of its Affiliates to, resell any Securities that
have been acquired by any of them.
(h) None of the Company, its
Affiliates, or any person acting on its or their behalf will,
directly or indirectly, make offers or sales of any security, or
solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the
Act.
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(i) None of the Company, its
Affiliates, or any person acting on its or their behalf will engage
in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or sale
of the Securities in the United States.
(j) For so long as any of the
Securities are outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the
Act, the Company, during any period in which it is not subject to
and in compliance with Section 13 or 15(d) of the Exchange
Act, will provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of
such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Act. This covenant is intended to be for
the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(k) The Company will cooperate with
the Representatives and use its best efforts to permit the
Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(l) Each of the Securities will
bear, to the extent applicable, the legend contained in
“Transfer Restrictions” in the Preliminary Memorandum
and the Final Offering Memorandum for the time period and upon the
other terms stated therein.
(m) The Company will not, from the
date hereof until the Closing Date, without the prior written
consent of the Representatives offer, sell, contract to sell,
pledge, otherwise dispose of, or enter into any transaction which
is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or
any Affiliate of the Company or any person in privity with the
Company or any Affiliate of the Company), directly or indirectly,
or announce the offering, of any debt securities issued or
guaranteed by the Company (other than the Securities).
(n) The Company will not take,
directly or indirectly, any action designed to, or that has
constituted or that might reasonably be expected to, cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(o) The Company will, for a period
of twelve months following the Execution Time, furnish to the
Representatives such information concerning the business and
financial condition of the Company as the Representatives may from
time to time reasonably request.
(p) The Company will comply with all
applicable securities and other laws, rules and regulations, and
use its best efforts to cause the Company’s directors and
officers, in their capacities as such, to comply with such laws,
rules and regulations.
(q) The Company will pay and bear
all costs and expenses incident to the performance of its
obligations under this Agreement, including (a) the
preparation, printing and filing of the Disclosure Package and the
Final Memorandum and any
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amendments or supplements thereto, and the cost
of furnishing copies thereto to the Initial Purchasers,
(b) the preparation, printing and distribution of this
Agreement, the Mortgage, the Supplemental Indenture, and any Blue
Sky Memorandum, (c) the delivery of the Securities to the
Initial Purchasers, (d) the reasonable fees and disbursements
of the Company’s counsel and accountants, (e) the
qualification of the Securities under the applicable state
securities or Blue Sky laws in accordance with Section 5(f),
including filing fees and reasonable fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in
connection with any Blue Sky survey and any legal investment
survey, (f) all fees payable to the Financial Industry
Regulatory Authority, Inc. in connection with the review, if any,
of the offering of the Securities, (g) any fees charged by
rating agencies for rating the Securities and (h) the fees and
expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee, in connection with the Mortgage, the
Supplemental Indenture and the Securities. Except as specifically
provided elsewhere herein, the Initial Purchasers will pay all of
their own costs and expenses, including without limitation the fees
and expenses of their counsel and the expenses of selling
presentations.
6. Conditions to the Obligations
of the Initial Purchasers . The obligations of the Initial
Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties of the Company
contained herein at the Execution Time and the Closing Date, to the
accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following
additional conditions:
(a) Subsequent to the Execution Time
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended
or potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change, in the
rating accorded the Company or any of the securities of any Company
by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule
436(g)(2) under the Act.
(b) There shall not have been any
Material Adverse Change from that set forth in the Disclosure
Package, that, in the judgment of the Representatives, is material
and adverse and that makes it, in the judgment of the
Representatives, impracticable or inadvisable to market or deliver
the Securities on the terms and in the manner contemplated in the
Disclosure Package; and the Representatives shall have received, on
the Closing Date, a certificate, dated the Closing Date and signed
by either the chief executive officer or chief financial officer of
the Company, to the foregoing effect. Such certificate will also
provide that the representations and warranties of the Company
contained herein are true and correct as of the Closing Date and
that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date. The officer making such certificate may
rely upon the best of his knowledge as to proceedings
threatened.
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(c) The Company shall have requested
and caused Larry D. Irick, Secretary for the Company, to furnish to
the Representatives his opinion, dated the Closing Date and
addressed to the Representatives, to the effect that:
(i) the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the State of Kansas and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification (except where the failure to
so qualify would not have a Material Adverse Effect);
(ii) all of the issued s
