Exhibit 1.1
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PUGET SOUND ENERGY CAPITAL TRUST II
(a Delaware Business Trust)
$200,000,000
8.40% TRUST ORIGINATED PREFERRED
SECURITIES
UNDERWRITING AGREEMENT
Dated: May 18, 2001
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Table of Contents
UNDERWRITING AGREEMENT
Page
1. Representations and Warranties..................................................... 3
(a) Compliance with Registration Requirements..................................... 3
(b) Incorporated Documents........................................................ 4
(c) No Material Adverse Change in Business........................................ 4
(d) Good Standing of the Company.................................................. 4
(e) Good Standing of Subsidiaries................................................. 5
(f) Authorization of Agreement.................................................... 5
(g) Authorization of the Trust Agreement.......................................... 5
(h) Authorization of the Subordinated Debentures.................................. 5
(i) Authorization of the Trust Securities......................................... 5
(j) Authorization of the Trust Preferred Guarantee and Common Securities
Guarantee..................................................................... 6
(k) Authorization of the Indenture................................................ 6
(l) Independent Accountants....................................................... 6
(m) Financial Statements.......................................................... 6
(n) Absence of Defaults and Conflicts............................................. 7
(o) Absence of Further Requirements............................................... 8
(p) Environmental Laws............................................................ 8
(q) Absence of Proceedings........................................................ 8
(r) [Reserved].................................................................... 9
(s) Officer's Certificates........................................................ 9
2. Sale and Delivery to Underwriters; Closing......................................... 9
(a) Securities.................................................................... 9
(b) Payment....................................................................... 9
(c) Denominations; Registration................................................... 10
3. Agreements of the Company.......................................................... 10
(a) Compliance with Securities Regulations and Commission Requests................ 10
(b) Filing of Amendments.......................................................... 10
(c) Delivery of Registration Statements........................................... 10
(d) Delivery of Prospectuses...................................................... 11
(e) Continued Compliance with Securities Laws..................................... 11
(f) Blue Sky Qualifications....................................................... 11
(g) Restriction on Sale of Securities............................................. 12
(h) Rule 158...................................................................... 12
(i) Use of Proceeds............................................................... 12
4. Payment of Expenses................................................................ 12
(a) Expenses...................................................................... 12
(b) Termination of Agreement...................................................... 13
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5. Conditions of Underwriters' Obligations............................................ 13
(a) Effectiveness of Registration Statement....................................... 13
(b) Opinion of Counsel for Company................................................ 13
(c) Opinion of Counsel for Trust.................................................. 13
(d) Opinion of Counsel for Trustee................................................ 14
(e) Tax Opinion................................................................... 14
(f) Opinion of Counsel for Underwriters........................................... 14
(g) Company Officers' Certificate................................................. 14
(h) Trust Certificate............................................................. 15
(i) Accountant's Comfort Letter................................................... 15
(j) Bring-down Comfort Letter..................................................... 15
(k) Maintenance of Rating......................................................... 15
(l) Additional Documents.......................................................... 15
(m) Termination of Agreement...................................................... 16
6. Indemnification.................................................................... 16
(a) Indemnification of Underwriters............................................... 16
(b) Indemnification of Company, Directors and Officers............................ 17
(c) Actions against Parties; Notification......................................... 17
(d) Settlement without Consent if Failure to Reimburse............................ 18
7. Contribution....................................................................... 18
8. Representations, Warranties and Agreements to Survive Delivery..................... 19
9. Termination of Agreement........................................................... 20
(a) Liabilities................................................................... 20
10. Default by One or More of the Underwriters......................................... 20
11. Notices............................................................................ 21
12. Parties............................................................................ 21
13. GOVERNING LAW AND TIME............................................................. 21
14. Effect of Headings................................................................. 21
15. Counterparts....................................................................... 22
SCHEDULES
Schedule A - List of Underwriters Sch A-1........................................ Sch A-1
Schedule B - Pricing Information Sch B-1......................................... Sch B-1
EXHIBITS
Exhibit A - Form of Opinion of Trust's Washington Counsel A-1...................... Exh A-1
Exhibit B - Form of Opinion of Counsel to the Trust................................ Exh B-1
Exhibit C - Form of Opinion of Counsel to the Trustee.............................. Exh C-1
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PUGET SOUND ENERGY CAPITAL TRUST II
(a Delaware Business Trust)
$200,000,000
8.40% TRUST-ORIGINATED PREFERRED
SECURITIES
UNDERWRITING AGREEMENT
----------------------
May 18, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Puget Sound Energy Capital Trust II, a Delaware business trust (the
"Trust"), and Puget Sound Energy, Inc., a Washington corporation (the "Company"
or the "Guarantor") each confirm their agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), and each
of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in said
Schedule A of $200,000,000 in aggregate principal amount of the Company's 8.40%
Trust-Originated Preferred Securities due June 30, 2041 (the "Trust Preferred
Securities").
The Trust Preferred Securities are to be issued pursuant to an Amended and
Restated Declaration of Trust dated as of May 18, 2001 (the "Trust Agreement")
among the Company, in its capacity as the Sponsor, and the Trustees (each, as
defined therein). The Trust Agreement authorizes the Trustees, on behalf of the
Trust, to issue the Trust Preferred Securities, which
represent preferred undivided beneficial interests in the assets of the Trust,
and the Common Securities, which represent undivided beneficial interests in the
assets of the Trust, which will be owned/purchased by the Company (the "Common
Securities" and together with the Trust Preferred Securities, the "Trust
Securities"). The Common Securities are subordinate to the Trust Preferred
Securities.
The Trust will use the proceeds from the sale of the Trust Preferred
Securities to buy an equal principal amount of the 8.40% Subordinated Deferrable
Interest Debentures, due 2041, issued by the Company (the "Subordinated
Debentures" and together with the Trust Securities, the "Securities"). The
Subordinated Debentures are unsecured debt obligations of the Company that are
to be issued under an Indenture dated as of May 18, 2001 as supplemented from
time to time (as so supplemented, the "Indenture") between the Company and Bank
One Trust Company, N.A., as trustee (the "Debenture Trustee"). In certain
circumstances, the Company can elect to liquidate the Trust and distribute the
Subordinated Debentures.
Certain payments on the Trust Preferred Securities will be guaranteed (the
"Trust Preferred Guarantee") by the Guarantor pursuant to the Preferred
Securities Guarantee Agreement dated as of May 18, 2001 (the "Preferred
Securities Guarantee") to be entered into between the Guarantor and Bank One
Trust Company, N.A., as trustee, and certain distributions on the Common
Securities will be guaranteed by the Guarantor pursuant to the Common Securities
Guarantee Agreement dated as of May 18, 2001 (the "Common Securities Guarantee")
between the Guarantor and Bank One Trust Company, N.A. as trustee.
The Company and the Trust understand that the Underwriters propose to make
a public offering of the Trust Preferred Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered and the Trust Agreement, the Indenture and the Preferred Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act").
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 333-
47302) covering the registration of the Securities under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses. Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. The information included in such
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information". Any prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective and including
the Rule 430A Information, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall
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include the Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus." For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
The Indenture, the Trust Agreement, the Preferred Securities Guarantee and
the Common Securities Guarantee are referred to herein collectively as the
"Operative Documents".
All references in this Agreement to financial statements and schedules and
other information that is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that is incorporated by
reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") that is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
1. Representations and Warranties
-- ------------------------------
The Company and the Trust jointly and severally represent and warrant to
each Underwriter as of the date hereof, as of the Closing Time referred to in
Section 2(b) hereof, and agree with each Underwriter, as follows:
(a) Compliance with Registration Requirements
--- -----------------------------------------
The Company and the Trust meet the requirements for use of Form S-3 under
the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any
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amendments or supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued and at the Closing Time, included or will
include an untrue statement of a material fact or omitted or will omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to the
Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture
Act or statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of any Underwriter expressly for use in the
Registration Statement, the preliminary prospectus or the Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(b) Incorporated Documents
--- ----------------------
The documents incorporated or deemed to be incorporated by reference in the
Registration Statement and the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together with
the other information in the Prospectus, at the time the Registration Statement
became effective, at the time the Prospectus was issued and at the Closing Time,
did not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) No Material Adverse Change in Business
--- --------------------------------------
Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein
(A) there has been no material adverse change 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"), and
(B) there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise.
(d) Good Standing of the Company
--- ----------------------------
The Company has been duly organized and is validly existing as a
corporation, under the laws of the State of Washington and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and
4
perform its obligations under this Agreement and each of the Operative
Documents, as applicable; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect.
The Trust has been duly created and is validly existing as statutory
business trust in good standing under the Business Trust Act of the State of
Delaware, 12 Del.C. (S)(S) 3801 et seq (the "Delaware Business Trust Act") with
the trust power and authority to own property and conduct its business as
described in the Registration Statement, and has conducted and will conduct no
business other than the transactions described in the Registration Statement.
(e) Good Standing of Subsidiaries
--- -----------------------------
The Company has no "significant subsidiaries" (as such term is defined in
Rule 1-02 of Regulation S-X).
(f) Authorization of Agreement
--- --------------------------
This Agreement has been duly authorized, executed and delivered by the
Company and the Trust.
(g) Authorization of the Trust Agreement
--- ------------------------------------
The Trust Agreement has been duly authorized by the Company and duly
qualified under the 1939 Act and, when duly executed and delivered by the
Company, as Sponsor and the Trustees, will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(h) Authorization of the Subordinated Debentures
--- --------------------------------------------
The Subordinated Debentures have been duly authorized and, when duly
executed, authenticated, issued and delivered in the manner provided for in this
Agreement and in the Indenture and delivered against payment of the purchase
price therefore as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
(i) Authorization of the Trust Securities
--- -------------------------------------
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The Trust Securities have been duly authorized for issuance and sale
pursuant to this Agreement and, when duly authenticated, issued and delivered in
the manner provided for in this Agreement and the Trust Agreement and delivered
against payment of the purchase price therefore as provided in this Agreement,
will constitute valid and binding obligations of the Trust, enforceable against
the Trust and entitled to the benefits of the Trust Agreement in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Trust Agreement.
(j) Authorization of the Trust Preferred Guarantee and Common Securities
--- --------------------------------------------------------------------
Guarantee
---------
The Trust Preferred Guarantee and Common Securities Guarantee have each
been duly authorized by the Guarantor and, when duly executed and delivered as
provided for in the Trust Agreement, will each constitute the valid and binding
agreement of the Guarantor, enforceable against the Guarantor in accordance with
the terms of the Trust Preferred Guarantee or the Common Securities Guarantee,
as applicable, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and will be in the form contemplated by, and
entitled to the benefits of, the Trust Preferred Guarantee or the Common
Securities Guarantee, as applicable.
(k) Authorization of the Indenture
--- ------------------------------
The Indenture has been duly authorized by the Company and duly qualified
under the 1939 Act and, when duly executed and delivered as provided for in the
Indenture, will constitute the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will conform in all material respects to all statements relating
thereto contained in the Registration Statement and the Prospectus.
(l) Independent Accountants
--- -----------------------
The accountants who certified the financial statements and supporting
schedules including the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(m) Financial Statements
--- --------------------
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The financial statements included in the Registration Statement and the
Prospectus, together with the related schedules and notes, present fairly 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 present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.
(n) Absence of Defaults and Conflicts
--- ---------------------------------
The Company is not in violation of its articles of incorporation or by-laws
or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan or
credit agreement, note, lease or other agreement or instrument to which the
Company is a party or by which it may be bound, or to which any of the property
or assets of the Company 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, the other Operative
Documents to which it is a party and the Securities and the consummation of the
transactions contemplated herein and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder and
under the other Operative Documents and the Securities does 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 pursuant to,
the Agreements and Instruments (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of the
articles of incorporation or by-laws of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company.
The Trust is not a party to or bound by any agreement or instrument other
than this Agreement and the Operative Documents to which it is a party, and the
agreements and instruments contemplated by the Trust Agreement and described in
the Registration Statement; the Trust has no liabilities or obligations other
than those arising out of the transactions contemplated by this Agreement and
the agreements and instruments contemplated by the Trust Agreement and described
in the Registration Statement; and the Trust is not a party to or subject to any
action, suit or proceeding of any nature. The execution, delivery and
performance of this Agreement and the Operative Documents to which it is a
party, and the consummation of the
7
transactions contemplated herein and therein will not violate or conflict with
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Trust or any of its properties or assets,
nor will such actions result in any violation of the Trust Agreement or the
certificate of trust of the Trust; and except for the registration of the
Securities under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement and the other
Operative Documents to which the Trust is a party or the consummation of the
transactions contemplated herein and therein.
(o) Absence of Further Requirements
--- -------------------------------
No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated by
this Agreement or for the due execution, delivery or performance of the Trust
Agreement by the Company, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities laws
and except for the qualification of the Indenture and the Trust Agreement under
the 1939 Act.
(p) Environmental Laws
--- ------------------
Except as described in the Registration Statement or except as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws") and (B) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements.
(q) Absence of Proceedings
--- ----------------------
There is no action, suit, proceeding, inquiry or investigation before or
brought by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or affecting
the Company or the Trust or any subsidiary that is required to be disclosed in
the Registration Statement (other than as disclosed therein), or that might
reasonably be expected to result in a Material Adverse Effect, or that might
reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation
8
of the transactions contemplated in this Agreement or the performance by the
Company or the Trust of their obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any subsidiary
or the Trust is a party or of which any of their respective property or assets
is the subject that are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(r) [Reserved]
--- ----------
(s) Officer's Certificates
--- ----------------------
Any certificate signed by any officer of the Company or any of its
subsidiaries or any Regular Trustee (as defined in the Trust Agreement) and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company or the Trust (as the case
may be) to each Underwriter as to the matters covered thereby.
2. Sale and Delivery to Underwriters; Closing
-- ------------------------------------------
(a) Securities
--- ----------
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, each of the Company and
the Trust agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the Trust,
at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional principal amount of Securities that such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Payment
--- -------
Payment of the purchase price for, and delivery of certificates for, the
Securities shall be made at the offices of the Company, or at such other place
as shall be agreed upon by the Representatives and the Company, at 10:00 A.M.
(Eastern time) on the fourth business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
Payment shall be made to the Company at the Closing Time by wire transfer
of immediately available funds to a bank account designated by the Company,
against delivery to the Representatives for the respective accounts of the
Underwriters of Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities that it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
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(c) Denominations; Registration
--- ---------------------------
Certificates for the Securities shall be in such denominations as ▇▇▇▇▇▇▇
▇▇▇▇▇ shall request ($25 or integral multiples thereof) and registered in the
name of The Depository Trust Company's nominee. The Securities will be made
available for examination by ▇▇▇▇▇▇▇ ▇▇▇▇▇ not later than 10:00 A.M. (Eastern
time) on the business day prior to the Closing Time.
3. Agreements of the Company
-- -------------------------
The Company and the Trust agree with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests
--- --------------------------------------------------------------
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and will notify the Representatives immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus or any
amended Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will use reasonable efforts to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments
--- --------------------
The Company will give the Representatives notice of its intention to file
or prepare any amendment to the Registration Statement (including any filing
under Rule 462(b)) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representatives with copies of any such documents
a reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the Representatives
or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements
--- -----------------------------------
The Company has furnished or will deliver to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
10
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses
--- ------------------------
The Company has delivered to each Underwriter, without charge, as many
copies of each preliminary prospectus as such Underwriter reasonably requested,
and the Company hereby consents to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus and
any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws
--- -----------------------------------------
The Company will comply with the 1933 Act and the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading, in the light of the circumstances under
which they were made, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company will
furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications
--- -----------------------
The Company will cooperate with the Underwriters to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions as the Representative(s) may designate and to maintain such
qualifications in effect as long as may be required for distribution of the
securities by the Underwriters, but not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign corporation
or as a dealer in securities in
11
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be required
by the laws of such jurisdiction to continue such qualification in effect for a
period of not more than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement. The Company will also
supply the Underwriters with such information as is necessary for the
determination of the legality of the Securities for investment under the laws of
such jurisdictions as the Underwriters may request.
(g) Restriction on Sale of Securities
--- ---------------------------------
From the date hereof through the Closing Date, the Company will not,
without prior written consent of the Representatives, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of any long-term debt securities or guarantees of
such securities.
(h) Rule 158
--- --------
The Guarantor will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as
practicable an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(i) Use of Proceeds
--- ---------------
The Company and the Trust will use the net proceeds received from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
4. Payment of Expenses
-- ---------------------
(a) Expenses
--- --------
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters, the other Operative Documents and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's and the Trust's respective counsel,
accountants and other advisors, (v) the expenses related to the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus and of the Prospectus and any amendments or supplements
thereto, (vii) the fees and expenses of the Regular Trustees, the Property
Trustee, the Delaware Trustee and the costs and charges of any registrar,
transfer agent, paying agent under the Operative
12
Documents, including the fees and disbursements of counsel for the Trustee in
connection with the Operative Documents and the Securities and (viii) any fees
payable in connection with the rating of the Securities.
(b) Termination of Agreement
--- ------------------------
If this Agreement is terminated by the Representatives in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
5. Conditions of Underwriters' Obligations
-- ---------------------------------------
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company and the Trust
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company delivered pursuant to the provisions hereof, to
the performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement
--- ---------------------------------------
The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company
--- ------------------------------
At Closing Time, the Representatives shall have received the favorable
opinion as to Washington law, dated as of Closing Time, of ▇▇▇▇▇▇▇ Coie, LLP,
counsel for the Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A hereto and to
such further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Trust
--- ----------------------------
At Closing Time, the Representatives shall have received the favorable
opinion as to Delaware law, dated as of Closing Time, of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special Delaware counsel for the Trust, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit B hereto and to such further effect as counsel to
the Underwriters may reasonably request. In giving such opinion such counsel
may rely, as to
13
matters governed by the laws of jurisdictions other than the law of the State of
Delaware and federal law of the United States, upon the opinions of Counsel to
the Representatives.
(d) Opinion of Counsel for Trustee
--- ------------------------------
At Closing Time, the Representatives shall have received the favorable
opinion as to Delaware law, dated as of Closing Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
counsel for the Property Trustee and Delaware Trustee (each as defined in the
Trust Agreement), in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit C hereto and to
such further effect as counsel to the Underwriters may reasonably request. In
giving such opinion such counsel may rely, as to matters governed by the laws of
jurisdictions other than the law of the State of Delaware and federal law of the
United States, upon the opinions of Counsel to the Representatives.
(e) Tax Opinion
--- -----------
At Closing Time, the Representatives shall have received a favorable
opinion as to certain tax matters, dated as of Closing Time, of ▇▇▇▇▇▇▇ Coie,
LLP, tax counsel for the Company and the Trust, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit D and to such further effect as counsel to the Underwriters may
reasonably request (it being understood that such legal opinion will be subject
to customary assumptions, qualifications and exclusions).
(f) Opinion of Counsel for Underwriters
--- -----------------------------------
At Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Guarantor
and its subsidiaries and certificates of public officials.
(g) Company Officers' Certificate
--- -----------------------------
At Closing Time, there shall not have been, since the date hereof or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer or treasurer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied
14
at or prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(h) Trust Certificate
--- -----------------
At Closing Time, there shall not have been, since the date hereof or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Trust and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the Sponsor and a Regular Trustee, dated as of Closing Time, to
the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Trust has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(i) Accountant's Comfort Letter
--- ---------------------------
At the time of the execution of this Agreement, the Representatives shall
have received from PricewaterhouseCoopers LLP a letter dated such date, in form
and substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(j) Bring-down Comfort Letter
--- -------------------------
At Closing Time, the Representatives shall have received from
PricewaterhouseCoopers LLP, a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (j) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to Closing Time.
(k) Maintenance of Rating
--- ---------------------
At Closing Time, the Securities shall be rated at least "baa2" by Moody's
Investor's Service Inc. and "BBB-" by Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the Securities or any
of the Company's other debt securities by any "nationally recognized statistical
rating agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of the Securities
or any of the Company's other debt securities.
(l) Additional Documents
--- --------------------
15
At Closing Time, counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company and the Trust in writing in connection
with the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(m) Termination of Agreement
--- ------------------------
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company in writing at any time at or prior to
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
6. Indemnification
-- ---------------
(a) Indemnification of Underwriters
--- -------------------------------
The Company and the Trust, jointly and severally agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or
16
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
or on behalf of any Underwriter expressly for use in the Registration Statement
(or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or in any statement in or omission from the Statement of Eligibility
and Qualification (Form T-1) of the Trustees under the Trust Agreement and the
Indenture; and provided further, that such indemnity with respect to the
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling any Underwriter) from whom the person asserting any such loss,
liability, claim, damage or expense purchased the Securities that are the
subject thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented), excluding documents incorporated therein by
reference, at or prior to the confirmation of the sale of such Securities to
such person in any case where such delivery is required by the 1933 Act and the
untrue statement or omission of a material fact contained in the Prospectus was
corrected in the Prospectus as supplemented.
(b) Indemnification of Company, Directors and Officers
--- --------------------------------------------------
Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Trust, their directors, each of their officers or trustees, as
the case may be, who signed the Registration Statement, and each person, if any,
who controls the Company or the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company or the Trust by such Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification
--- -------------------------------------
Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced or threatened
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the indemnified
parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company or the Trust. An indemnifying party may
17
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse
--- --------------------------------------------------
If at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
7. Contribution
-- ------------
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Trust on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Trust on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Trust on the one hand
and the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters, in
18
each case as set forth on the cover of the Prospectus bear to the aggregate
initial public offering price of the Trust Preferred Securities as set forth on
such cover.
The relative fault of the Company and the Trust on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Trust and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Trust Preferred Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
8. Representations, Warranties and Agreements to Survive Delivery
-- --------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company or any of their subsidiaries
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person or by or on behalf of the Company, and shall survive delivery
of the Securities to the Underwriters.
19
9. Termination of Agreement
-- ------------------------
This Agreement shall be subject to termination in the absolute discretion
of the Representatives, by notice given to the Company and the Trust prior to
delivery of and payment for the Securities, if prior to such time (i) the
Company or the Trust shall have failed, refused or been unable, at or prior to
the Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the obligations of the Underwriters
hereunder is not fulfilled (other than by reason of a default by any of the
Underwriters), (iii) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or the Trust, whether
or not arising in the ordinary course of business, (iv) trading in the Company's
Common Stock has been suspended by the Commission, or trading in securities
generally on the New York Stock Exchange or the over-the-counter market shall
have been suspended (otherwise than as a result of a "circuit breaker" or other
similar suspension of securities trading pursuant to existing regulations) or
minimum or maximum prices shall have been fixed, or minimum or maximum ranges
for prices for securities have been required, by either of such exchanges or
such market by the Commission or by such exchange or other regulatory body or
governmental authority having jurisdiction, (v) a general banking moratorium
shall have been declared by Federal or New York or Washington state authorities,
or (vi) there shall have occurred any material adverse change in general
economic, political or financial conditions in the United States, or any
outbreak of hostilities or escalation of hostilities or other national or
international calamity or crisis, the effect of which on the financial markets
in the United States is such as to make it, in the reasonable judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities.
(a) Liabilities
--- -------------
If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
such termination and remain in full force and effect.
10. Default by One or More of the Underwriters
--- ------------------------------------------
If one or more of the Underwriters shall fail at Closing Time to purchase
the Securities that it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
each of the non-defaulting Underwriters shall be obligated, severally and
not jointly, to purchase the
20
full amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-
defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any non-
defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
11. Notices
--- -------
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives at 4 World Financial Center, New York, New York 10080, attention
of ▇▇▇▇▇ ▇▇▇▇▇; and notices to the Company as the Guarantor shall be directed to
it at Puget Sound Energy, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇, attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ with a copy to ▇▇▇▇▇▇▇ Coie LLP,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, attention of ▇▇▇▇▇▇
▇▇▇.
12. Parties
--- -------
This Agreement shall each inure to the benefit of and be binding upon the
Underwriters and the Company and their respective successors. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Company and
their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
13. GOVERNING LAW AND TIME
--- ----------------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
14. Effect of Headings
--- ------------------
21
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
15. Counterparts
--- ------------
This Agreement may be simultaneously executed in counterparts, each of
which when so executed shall be deemed to be an original. Such counterparts
shall together constitute one and the same instrument.
22
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
PUGET SOUND ENERGY CAPITAL TRUST II
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Regular Trustee
PUGET SOUND ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
For itself and as Representative of the other
Underwriters named in Schedule A hereto.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
23
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------ -------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ 2,170,000
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 2,160,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. 2,160,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. 245,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. 245,000
▇▇▇▇▇ Fargo Investments LLC 245,000
BNY Capital Markets, Inc. 50,000
Banc One Capital Markets, Inc. 50,000
▇. ▇. ▇▇▇▇▇▇▇▇ & Co. 50,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated 50,000
First Union Securities, Inc. 50,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated 50,000
McDonald Investments Inc. 50,000
Prudential Securities Incorporated 50,000
Quick & ▇▇▇▇▇▇, Inc. 50,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. 50,000
ABN AMRO Incorporated 25,000
BB&T Capital Markets, a division of ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇▇▇, Inc. 25,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated 25,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc. 25,000
CIBC World Markets Corp. 25,000
Deutsche Banc Alex. ▇▇▇▇▇ Inc. 25,000
▇▇▇▇▇▇▇▇▇▇ & Co. Inc. 25,000
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc. 25,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. 25,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC 25,000
Southwest Securities, Inc. 25,000
---------
Total..................................................................... 8,000,000
=========
Sch A-1
SCHEDULE B
PUGET SOUND ENERGY CAPITAL TRUST II
$200,000,000 8.40%
Trust Originated Preferred Securities
$25 Par Denomination
1. The initial public offering price of the Trust Originated Preferred
Securities shall be 100% of the principal amount thereof, plus accrued interest,
if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the Trust
Originated Preferred Securities shall be 96.85% of the principal amount thereof
or an underwriting discount of 3.15% per Trust Originated Preferred Security.
3. The interest rate on the Trust Originated Preferred Securities shall be
8.40% per annum.
4. The maturity date for the Trust Originated Preferred Securities shall be
June 30, 2041.
All terms not defined herein shall have the meaning ascribed to such terms
in the Underwriting Agreement, dated as of May 18, 2001, among Puget Sound
Energy Capital Trust II, Puget Sound Energy, Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, for itself and on behalf of each of the other
Underwriters named in the Underwriting Agreement (the "Underwriting Agreement").
Sch B-1
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
PUGET SOUND ENERGY CAPITAL TRUST II
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Regular Trustee
PUGET SOUND ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
For itself and as Representative of
the other Underwriters named in
Schedule A to the Underwriting Agreement
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
Sch B-2
Exhibit A
Form of Opinion of Washington Counsel to the Company
[LETTERHEAD OF ▇▇▇▇▇▇▇ COIE LLP]
May __, 2001
To the parties listed on Exhibit A
Re: Puget Sound Energy Capital Trust II
Ladies and Gentlemen:
We have acted as counsel to Puget Sound Energy, Inc. (the "Company") in
connection with (i) the formation of the Puget Sound Energy Capital Trust II
(the "Trust"), (ii) the authorization and issuance by the Trust of $200,000,000
principal amount of 8.40% Trust Originated Preferred Securities (the "Preferred
Securities"), (iii) the sale by the Trust to the Company of its common
securities (the "Common Securities"), (iv) the sale by the Company to the Trust
of the Company's 8.40% Subordinated Deferrable Interest Debentures due June 30,
2041 (the "Subordinated Debentures"), and (v) the guarantee by the Company of
the Common Securities pursuant to the Common Securities Guarantee Agreement (the
"Common Securities Guarantee") and the Preferred Securities pursuant to the
Preferred Securities Guarantee Agreement (the "Preferred Securities Guarantee"),
each dated May 18, 2001. The Subordinated Debentures, Preferred Securities and
Preferred Securities Guarantee are collectively referred to herein as the
"Securities."
The Common Securities and the Preferred Securities will be issued pursuant
to the Amended and Restated Declaration of Trust, dated May 18, 2001 (the
"Declaration"), among the Company, as sponsor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, as regular trustees, Bank One Trust Company, N.A., as property trustee,
and Bank One Delaware, Inc., as Delaware trustee. The Subordinated Debentures
will be issued pursuant to an indenture, dated as of May 18, 2001 (the
"Indenture"), as supplemented by the First Supplemental Indenture, dated as of
May 18, 2001 (the "First Supplemental Indenture"), between the Company and Bank
One Trust Company, N.A., as indenture trustee. The Company's registration
statement on Form S-3 (File No. 333-47302) (the "Registration Statement") was
filed in accordance with Rule 415 under the Securities Act of 1933, as amended
(the "1933 Act"), permitting a delayed or continuous offering of securities
pursuant thereto and, if appropriate, a post-effective amendment or prospectus
supplement which provides information relating to the terms of such securities
and the manner of their distribution. The Preferred Securities are initially to
be offered by the Prospectus dated October 30, 2000 (the "Basic Prospectus"), as
supplemented by the Prospectus Supplement dated May 18, 2001 (the "Prospectus
Supplement"), which supplements certain information contained in the Basic
Prospectus (the Basic Prospectus as supplemented by the Prospectus Supplement is
hereinafter referred to as
Exh A-1
May __, 2001
Page 2
the "Prospectus"). Any reference herein to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 that were filed under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), on or before the effective date of the Registration
Statement or the issue date of the Basic Prospectus, the Prospectus Supplement
or the Prospectus, as the case may be.
This opinion is delivered to you pursuant to Section 5(b) of the
Underwriting Agreement, dated May 18, 2001 (the "Underwriting Agreement"),
between the Company and each of you (the "Initial Purchasers"). Capitalized
terms used herein, and not otherwise defined herein, shall have the respective
meanings ascribed to them in the Underwriting Agreement.
In the course of our representation as described above, we have examined,
among other things, the Underwriting Agreement, the Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee, the Indenture, the First
Supplemental Indenture, the Registration Statement, the Prospectus, and the
documents delivered at the closing of the sale of the Securities. We have also
examined originals, photocopies or certified copies of all such corporate
records of the Company and the Trust, and of all such indentures, agreements and
such other instruments, certificates and orders of public officials,
certificates of officers and representatives of the Company, and other
documents, as we have deemed relevant and necessary as a basis for the opinions
hereinafter set forth. As to various questions of fact material to such
opinions, we have relied upon certificates and assurances of officers and
representatives of the Company and statements contained in the Underwriting
Agreement and related certificates, the Registration Statement and the
Prospectus.
In addition, we have further relied on the following assumptions, the
accuracy of which we have not independently verified:
(i) the genuineness of all signatures, the authenticity of documents
submitted to us as originals, and the conformity to originals of all documents
submitted to us as copies;
(ii) that each of the Operative Documents constitutes the legal, valid
and binding obligation of each party thereto, other than the Company,
enforceable against such party in accordance with its terms; and
(iii) that no action has been taken or will be taken by any party other
than the Company that would cause the Operative Documents to be void, give the
Company a right to void any of such documents or give rise to a defense by the
Company that one or more of the provisions of any of such documents are
unenforceable.
Exh A-2
May __, 2001
Page 3
Although we assume no responsibility for the factual accuracy, completeness
or fairness of any statements made in the Registration Statement or any post-
effective amendment thereto or the Prospectus or any amendment or supplement
thereto, except as stated in paragraphs 12, 13 and 14 hereof, we have reviewed
the Registration Statement and the Prospectus and any amendment or supplement
thereto, participated in conferences with representatives of the Company, its
accountants and your representatives and legal counsel, at which the contents of
the Registration Statement and the Prospectus, including any amendment or
supplement thereto, and related matters were discussed, and we do not know of
any reason to believe that, at the effective date of the Registration Statement,
or at the date hereof, the Registration Statement contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any amendment or supplement thereto, at
the time such Prospectus was issued, at the time any such amended or
supplemented Prospectus was issued, or at the date hereof, included or includes
any untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that we express
no view as to the accuracy of the financial statements or supporting schedules
or the other financial and statistical information contained in the Registration
Statement or in the Prospectus or any amendment or supplement thereto).
Based on the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation under the laws of the state of Washington.
2. The Company has full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Operative
Documents to which it is a party, including, without limitation, the issuance of
the Subordinated Debentures and the Preferred Securities Guarantee.
3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
4. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
5. The Declaration has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company and is
enforceable
Exh A-3
May __, 2001
Page 4
against the Company in accordance with its terms, except to the extent that
rights to indemnity and contribution contained therein may be limited by state
and federal securities laws or the public policy underlying such laws.
6. Each of the Preferred Securities Guarantee and the Common Securities
Guarantee has been duly authorized, executed and delivered by the Company, and
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
7. Each of the Indenture and the First Supplemental Indenture has been
duly authorized, executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
8. The Subordinated Debentures have been duly authorized for issuance and
sale by the Company, and the Subordinated Debentures, when executed,
authenticated and delivered in the manner provided for in the Indenture and the
First Supplemental Indenture and paid for in accordance with the Debenture
Subscription Agreement will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and the First Supplemental
Indenture and enforceable against the Company in accordance with their terms.
9. The execution, delivery and performance of the Operative Documents and
any other agreement or instrument entered into or issued or to be entered into
or issued by the Company in connection with the transactions contemplated in the
Prospectus, the consummation of the transactions contemplated in the Prospectus
and the compliance by the Company with its obligations thereunder have been duly
authorized by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event under, or result in the
creation or imposition of any lien, charge or encumbrance upon any assets,
properties or operations of the Company or any of its subsidiaries pursuant to,
any agreement and instrument known to us, which, in the event of any such
conflict, breach, default, Repayment Event or imposition of lien, charge or
encumbrance, would be reasonably expected to have a Material Adverse Effect, nor
will such action result in any violation of the provisions of the charter or
bylaws of the Company or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their assets, properties or
operations.
10. To the best of our knowledge, there is no action, suit, proceeding,
inquiry or investigation to which the Company or any of its subsidiaries is a
party, before or brought by any court or governmental agency or body, domestic
or foreign, which might reasonably be
Exh A-4
May __, 2001
Page 5
expected to result in a Material Adverse Effect or which might reasonably be
expected to materially and adversely affect the assets, properties or operations
of the Company or any of its subsidiaries, the performance by the Company of its
obligations under the Operative Documents or the consummation of the
transactions contemplated in the Prospectus.
11. The Operative Documents and the Securities conform in all material
respects to the description thereof contained in the Prospectus.
12. The statements in the Prospectus under the captions "Certain terms of
the trust preferred securities," "Certain terms of the debentures,"
"Subordinated Debentures," "Trust Preferred Securities," "The Guarantee" and
"ERISA Considerations" or any caption purporting to cover such matters, the
information in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 under "Regulation and Rates" and "Legal Proceedings" and the
information in the Registration Statement under Item 15, to the extent that such
statements constitute matters of law or legal conclusions, have been reviewed by
us and are accurate in all material respects.
13. The Registration Statement and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates (other than
the financial statements and supporting schedules and other financial and
statistical data included therein or omitted therefrom and the Trustee's
Statement of Eligibility on Form T-1 (the "Form T-1"), as to which we express no
opinion), complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
14. The documents incorporated by reference in the Prospectus (other than
the financial statements and supporting schedules and other financial and
statistical data included therein or omitted therefrom, as to which we express
no opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the 1934 Act and the 1934 Act
Regulations.
15. All descriptions in the Prospectus of contracts and other documents to
which the Company or any of its subsidiaries are a party are accurate in all
material respects; and, to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits to the Registration Statement other than
those described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are correct
in all material respects.
Exh A-5
May __, 2001
Page 6
16. To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
17. The Registration Statement has been declared effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); and to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for
that purpose have been initiated or are pending or threatened by the Commission.
18. The Company is not, and following issuance of the Securities and the
consummation of the transactions contemplated by the Underwriting Agreement
(including the use of proceeds of the sale of the Subordinated Debentures, as
described in the Prospectus under the caption "Use of Proceeds") will be, an
"investment company" or an entity "controlled" by an "'investment company" which
is required to be registered under the Investment Company Act of 1940.
19. The Washington Utilities and Transportation Commission has issued an
Order, dated October 25, 2000, with respect to the Securities and such Order has
not been rescinded, annulled or modified. Except for such filings subsequent to
the date hereof as may be specifically required by the Washington Utilities and
Transportation Commission in order to effectuate the Order, no other filing
with, or approval, authorization, consent, license, registration, qualification,
order or decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by the Company of its
obligations under the Operative Documents or the consummation of the
transactions contemplated in the Prospectus other than under the 1933 Act, the
1933 Act Regulations, the 1939 Act and the 1939 Act Regulations, which have been
made, obtained or rendered, as applicable, and other than compliance with the
provisions of applicable state securities or "blue sky" laws.
20. Each of the Indenture and the Declaration has been duly qualified
under the 1939 Act.
The opinions expressed above are subject to the following exclusions and
qualifications:
1. We express no opinion as to the validity, binding effect or
enforceability of any right or obligation to the extent that such right or
obligation may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws relating to or
affecting creditors' nights generally or (b) general principles of equity
Exh A-6
May __, 2001
Page 7
(regardless of whether considered in a proceeding in equity or at law),
including those relating to the availability of the remedy of specific
performance or injunctive relief.
2. We express no opinion as to any laws other than the federal laws of the
United States and the internal laws of the State of Washington and we express no
opinion with respect to the laws, regulations or ordinances of any county,
municipality or governmental subdivision or agency thereof.
3. Notwithstanding any provisions in the Operative Documents to the effect
that such agreements reflect the entire understanding of the parties with
respect to the matters described therein, the courts of the State of Washington
may consider extrinsic evidence of the circumstances surrounding the entering
into of such agreements to ascertain the intent of the parties in using the
language employed in such agreements, regardless of whether or not the meaning
of the language used in such agreements is plain and unambiguous on its face,
and may determine that additional or supplementary terms can be incorporated
into such agreements.
4. Whenever a statement herein is qualified "to our best knowledge,"
"known to us" or a similar phase, it is intended to indicate that, during the
course of our representation of the Company in this transaction, no information
that would give us current actual knowledge of the inaccuracy of such statement
has come to the attention of those attorneys in this firm who have rendered
legal services to the Company during the twelve months preceding the date
hereof. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of such
statement, and any limited inquiry undertaken by us during the preparation of
this opinion letter should not be regarded as such an investigation.
5. Our opinions are as of the date hereof and we have no responsibility to
update this opinion for events and circumstances occurring after the date hereof
or as to facts relating to prior events that are subsequently brought to our
attention. We disavow any undertaking or obligation to advise you of any
changes in law. This opinion is provided to you and is solely for your benefit
in connection with the Underwriting Agreement and the transactions contemplated
thereby. It may not be relied on by any other person, or duplicated or
disclosed, without our prior written consent.
Very truly yours,
Exh A-7
Exhibit B
Form of Opinion of Counsel to the Trust
May __, 2001
To Each of the Persons Listed
on Schedule A Hereto
Re: 8.40% Trust Originated Preferred Securities of Puget Sound
Energy Capital Trust II
----------------------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Puget Sound Energy Capital
Trust II (the "Trust"), a business trust formed under the Business Trust Act of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
(S)(S) 3801 et. seq.) (the "Delaware Act"), in connection with the issuance by
the Trust of 8.40% Trust Originated Preferred Securities, liquidation amount $25
per trust preferred security (the "Preferred Securities"), as described in the
Base Prospectus dated October 30, 2000, as supplemented by a Prospectus
Supplement dated May 18, 2001 relating to the Preferred Securities
(collectively, the "Prospectus"), being offered pursuant to a Registration
Statement on Form S-3 (File No. 333-47302) filed with the Securities and
Exchange Commission on October 4, 2000 under the Securities Act of 1933, as
amended. Capitalized terms used in this letter and not defined herein have the
meanings given to such terms in the Prospectus.
The Preferred Securities are to be issued pursuant to the Amended and
Restated Declaration of Trust of the Trust, dated as of May 18, 2001 (the
"Declaration of Trust"), among Puget Sound Energy, Inc., a Washington
corporation (the "Company"), as sponsor, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
as regular trustees, Bank One Delaware, as Delaware trustee, and Bank One Trust
Company, N.A., as property trustee (the "Property Trustee" and collectively
with such other trustees, the "Trustees"), for the benefit of holders, from time
to time, of undivided beneficial interests in the assets of the Trust.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
(a) The Certificate of Trust of the Trust, dated as of October 3, 2000
(the "Certificate of Trust"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on October 3, 2000;
(b) the Declaration of Trust, including the designation of the terms of
the Preferred Securities contained in Annex I thereto;
Exh B-1
Each of the Persons Listed on Schedule A Hereto
May __, 2001
Page 2
(c) The Underwriting Agreement, dated as of May 18, 2001 (the
"Underwriting Agreement"), among the Trust, the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as representative of the
several underwriters named in Schedule A thereto;
(d) The Prospectus;
(e) a specimen certificate of the Preferred Securities; and
(f) a Certificate of the Secretary of State of the State of Delaware with
respect to the good Standing of the Trust.
We have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents, we have assumed that the parties thereto (other than the Trust) had
or as of the date hereof will have the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery
Exh B-2
Each of the Persons Listed on Schedule A Hereto
May __, 2001
Page 3
by such parties of such documents and, except to the extent set forth in
paragraph 3 below, the validity and binding effect thereof on such parties. As
to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and
representations of the Trustees and other representatives of the Trust and
others.
Members of our firm are admitted to practice in the State of Delaware, and
we do not express any opinion as to the laws of any other jurisdiction.
In rendering the opinion set forth herein, we have assumed that the
execution and delivery of the Declaration of Trust by the parties thereto and
the execution, issuance and delivery of the Preferred Securities by the Trust do
not violate, conflict with or constitute a default under (i) any agreement or
instrument to which the Trust or its properties is subject; (ii) any law, rule
or regulation to which the Trust is subject, except that we do not make such
assumption with respect to those laws, rules and regulations of the State of
Delaware which, in our experience, are normally applicable to transactions of
the type contemplated by the Underwriting Agreement, but without our having made
any special investigation concerning the applicability of any specific laws,
rules or regulations ("Applicable Laws"); and (iii) any judicial or regulatory
order or decree of any governmental authority.
Exh B-3
Each of the Persons Listed on Schedule A Hereto
May __, 2001
Page 4
Based upon the foregoing, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made.
2. Under the Delaware Act and the Declaration of Trust, the Trust has the
trust power and authority to own property and conduct its business, all as
described in the Prospectus.
Exh B-4
Each of the Persons Listed on Schedule A Hereto
May __, 2001
Page 5
3. The Declaration of Trust constitutes a valid and binding obligation of
the Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
4. Under the Delaware Act and the Declaration of Trust, the Trust has the
trust power and authority to (i) execute and deliver, and to perform its
obligations under, the Underwriting Agreement and (ii) issue, and perform its
obligations under, the Preferred Securities.
5. Under the Delaware Act and the Declaration of Trust, the execution and
delivery by the Trust of the Underwriting Agreement, and the performance by the
Trust of its obligations thereunder, have been duly authorized by all necessary
trust action on the part of the Trust.
6. The Preferred Securities have been duly authorized by the Declaration
of Trust and are duly and validly issued and, subject to the qualifications set
forth herein, represent fully paid and nonassessable undivided beneficial
interests in the assets of the Trust. The Holders of the Preferred Securities,
as beneficial owners of the Trust, are entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware. We bring
your attention, however, that the Holders of the Preferred Securities may be
obligated pursuant to the Declaration of Trust to (i) provide indemnity in
connection with, and pay taxes or governmental charges arising from, transfers
of Preferred Securities and (ii) provide security and indemnity in connection
with the requests of or directions to the Property Trustee to exercise its
rights and powers under the Declaration.
7. The Common Securities have been duly authorized by the Declaration of
Trust and represent duly and validly issued undivided beneficial interests in
the assets of the Trust.
8. Under the Delaware Act and the Declaration of Trust, the issuance of
the Securities is not subject to preemptive rights.
9. The issuance and sale by the Trust of the Preferred Securities, the
execution, delivery and performance by the Trust of the Underwriting Agreement,
the consummation by the Trust of the transactions contemplated thereby and
compliance by the Trust with its obligations thereunder do not violate (i) any
of the provisions of the
Exh B-5
Each of the Persons Listed on Schedule A Hereto
May __, 2001
Page 6
Certificate of Trust or the Declaration of Trust or (ii) any Applicable Law.
The opinion set forth in paragraph 1 above as to the existence and good
standing of the Trust is based solely upon our review of a certificate of the
Secretary of State of the State of Delaware. The opinion expressed in paragraph
3 above regarding the enforceability of the Declaration of Trust is subject to
(i) bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent transfer and conveyance and other similar laws relating
to or affecting the rights and remedies of creditors generally, (ii) principles
of equity (regardless of whether considered and applied in a proceeding in
equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
This opinion is furnished to you solely for your benefit in connection with
the closing under the Underwriting Agreement occurring today and is not to be
used, circulated, quoted or otherwise referred to for any other purpose or
relied upon by any other person without our express written permission. The
opinions expressed herein are as of the date hereof unless otherwise expressly
stated, and we disclaim any undertaking to advise you of any subsequent changes
in the facts stated or assumed herein or of any subsequent changes in applicable
law.
Very truly yours,
Exh B-6
Schedule A
----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
as representative of the Underwriters
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Puget Sound Energy Capital Trust II
c/o Puget Sound Energy, Inc.
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Puget Sound Energy, Inc.
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Exhibit C
Form of Opinion of Counsel to the Trustee
May ___, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as special Delaware counsel to Bank One Trust Company,
National Association, a national banking association ("BOTC"), and to Bank One
Delaware, Inc., a Delaware corporation ("BOD," and together with BOTC referred
to herein as the "Trustees"), in connection with (i) the appointment of BOTC and
BOD as Property Trustee and Delaware Trustee, respectively, of Puget Sound
Energy Capital Trust II, a Delaware statutory business trust, pursuant to a
trust agreement, dated as of October 3, 2000 , as amended and restated in its
entirety effective as of May ___, 2001 (as so amended and restated, the "Trust
Agreement"), (ii) the appointment of BOTC as a trustee (the "Guarantee Trustee")
under the Preferred Securities Guarantee (the "Guarantee"), and (iii) the
appointment of BOTC as a Debenture Trustee under the Indenture. This opinion is
delivered to you pursuant to the Underwriting Agreement. Except as otherwise
defined herein, the capitalized terms used herein shall have the meanings set
forth in the Trust Agreement.
For purposes of this opinion, we have examined the Trust Agreement, the
Guarantee, and the Indenture. Additionally, we have made such examination of
laws, of certificates of public officials, and of certificates of officers of
BOTC and BOD as we have deemed necessary to enable us to render the opinions set
forth herein.
With your permission, and without any further inquiry, we have assumed that
the Trust Agreement, the Guarantee, and the Indenture have been duly authorized,
executed and delivered by each of the parties thereto (other than the Trustees)
and constitute legal, valid and binding obligations enforceable against the
respective parties thereto (other than the Trustees) in accordance with their
terms.
Exh ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representatives of the several Underwriters
Page 2
May __, 2001
As to material matters of fact relevant to the opinions hereinafter
expressed, with your permission, we have assumed the accuracy and completeness
of, and have relied solely upon, the representations and warranties contained in
the Trust Agreement, the Guarantee, and the Indenture.
We have further assumed (i) the genuineness of all signatures and the
authenticity and completeness of all records, certificates, instruments and
documents (including the Trust Agreement, the Guarantee, and the Indenture)
submitted to us as originals; and (ii) the conformity to authentic originals of
all records, certificates, instruments and documents submitted to us as
certified, conformed, photostatic or facsimile copies thereof.
In expressing opinions based on our knowledge, the phrase "our knowledge"
or words of similar meaning means that, in the course of our representation of
the Company, no information has come to the attention of partners or associates
of this firm who have performed legal services in connection with the Trust
Agreement, the Guarantee and the Indenture that would give them actual knowledge
that any such opinions or other matters are not accurate or that any of the
documents, certificates, reports and information upon which we have relied are
not accurate and complete. Except as otherwise stated herein, we have
undertaken no independent investigation or verification of such matters.
Based upon the foregoing and subject to the exceptions, qualifications and
limitations herein set forth, we are of the opinion that:
1. BOTC is a national banking association with trust powers, duly
organized, validly existing and in good standing under the laws of the United
States with corporate power and authority to execute and deliver, and to carry
out and fully perform its obligations under the terms of, the Trust Agreement,
the Guarantee, and the Indenture.
2. BOD is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, the Trust Agreement.
3. The execution, delivery and performance by each of BOTC and BOD of the
Trust Agreement have been duly authorized by all necessary corporate action on
the part of BOTC and BOD, respectively. The Trust Agreement has been duly
executed and
Exh ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representatives of the several Underwriters
Page 3
May __, 2001
delivered by BOTC and BOD, respectively, and constitutes the valid and binding
agreement of each of BOTC and BOD, enforceable against each of BOTC and BOD, in
accordance with its terms.
4. The execution, delivery and performance by BOTC of the Guarantee, in
its capacity as the Guarantee Trustee, and of the Indenture, in its capacity as
Debenture Trustee, have been duly authorized by all necessary corporate action
on the part of BOTC. Each of the Guarantee and the Indenture has been duly
executed and delivered by BOTC, in its capacity as the Guarantee Trustee and
Debenture Trustee, respectively, and constitutes the valid and binding agreement
of BOTC, enforceable against BOTC in accordance with their terms.
5. The execution, delivery and performance by each of BOTC and BOD of the
Trust Agreement, and the execution, delivery and performance by BOTC of the
Guarantee and the Indenture, in its capacity as the Guarantee Trustee and
Debenture Trustee, respectively, do not conflict with, or constitute a breach
of, BOTC's or BOD's respective charter or bylaws, or violate any law,
governmental rule or regulation of the State of Delaware or of the United States
of America governing the banking or trust power of BOTC or the corporate powers
of BOD or, to our knowledge, conflict with any judgment or order applicable to
BOTC or BOD.
6. No consent, approval, the withholding of objection on the part of, or
authorization of, or registration, declaration or filing with, or notice to, or
qualification with, or the taking of any other action in respect of, any
Delaware or federal, court, banking authority or other governmental body, is
required for the execution, delivery or performance by each of BOTC and BOD of
the Trust Agreement, or by BOTC of the Guarantee and the Indenture.
7. To our knowledge, there are no proceedings pending or threatened
against BOTC or BOD in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
have a material adverse effect on the right, power and authority of BOTC or BOD
to enter into, or perform its obligations under, the Trust Agreement, the
Guarantee or the Indenture.
The opinions set forth in paragraphs 3 and 4 above are further limited by
(i) public policy considerations; (ii) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws affecting the
enforcement of creditors' rights generally, as well as awards by courts of
relief in lieu of the remedy of specific
Exh ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representatives of the several Underwriters
Page 4
May __, 2001
performance of contractual provisions; and (iii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) as a court having jurisdiction may impose.
We express no opinion herein as to the laws of any jurisdiction except the
laws of the State of Delaware and federal law (including, without limitation,
federal laws of the United States of America governing the banking and trust
powers of BOTC, but excluding any tax laws, fraudulent conveyance laws,
fraudulent transfer laws and securities laws, and rules, regulations and orders
thereunder, and further excluding judicial decisions to the extent that they
deal with any of the foregoing). This opinion is given as of the date hereof
and is based upon present laws and reported court decisions as they exist and
are construed as of the date hereof.
We assume no obligation to update or supplement this opinion to reflect any
facts or circumstances which may hereafter come to our attention, or any changes
in laws which may hereafter occur. This opinion is rendered only to the
addressees set forth above and is solely for the benefit of such addressees.
This opinion may not be quoted to or relied upon by any other person or entity
without the express prior written consent of a partner of this firm.
Very truly yours,