EXHIBIT 1.1
PUGET SOUND ENERGY, INC.
SENIOR MEDIUM TERM NOTES
DISTRIBUTION AGREEMENT
November __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
[OTHER AGENTS]
[ADDRESS]
Ladies and Gentlemen:
Puget Sound Energy, Inc. a Washington corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated and [OTHER AGENTS] (each, an "Agent", and collectively, the
"Agents") with respect to the issue and sale by the Company of its Senior Medium
Term Notes, Series A, Due Nine Months or More From Date of Issue (the "Notes").
The Notes are to be issued pursuant to an Indenture, dated as of November __,
1997, as amended or modified from time to time (the "Indenture"), between the
Company and [TRUSTEE], as trustee (the "Trustee"). Prior to the Substitution
Date (as defined in the Indenture), the Notes will be secured by the delivery to
the Trustee of (i) first mortgage bonds issued under the Company's electric
mortgage indenture or (ii) first mortgage bonds issued under the Company's gas
mortgage indenture, as specified in the Prospectus referred to below
(collectively, the "Pledged Bonds"). As of the date hereof, the Company has
authorized the issuance and sale of up to U.S. $500,000,000 aggregate initial
offering price of Notes to or through the Agents pursuant to the terms of this
Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes were
authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-________) for the
registration of the Notes, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to any acceptance by the Company of an offer
for the purchase of Notes. Such registration statement (as so amended, if
applicable) has been declared effective by the Commission and the Indenture has
been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). Such registration statement (as so amended, if applicable) is referred
to herein as the "Registration Statement"; and the final prospectus and all
applicable amendments or supplements thereto (including the final prospectus
supplement and pricing supplement relating to the offering of Notes), in the
form first furnished to the applicable Agent(s), are collectively referred to
herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to any acceptance by
the Company of an offer for the purchase of Notes; provided, further, that if
the Company files a registration statement with the Commission pursuant to Rule
462(b) of the 1933 Act Regulations (the "Rule 462(b)
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Registration Statement"), then, after such filing, all references to the
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus used before the registration statement became effective and any
prospectus furnished by the Company after the registration statement became
effective and before any acceptance by the Company of an offer for the purchase
of Notes which omitted information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations. For purposes of this Agreement, all references to the Registration
Statement, Prospectus or preliminary prospectus or to any amendment or
supplement thereto shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "disclosed", "contained," "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.
1. Appointment as Agent.
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(a) Appointment. Subject to the terms and conditions stated herein
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and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby agrees that Notes will be sold
exclusively to or through the Agents. The Company agrees that it will not
appoint any other agents to act on its behalf, or to assist it, in the placement
of the Notes.
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(b) Sale of Notes. The Company shall not sell or approve the
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solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
(c) Purchases as Principal. The Agents shall not have any obligation
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to purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
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Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally, each offer for the purchase of Notes
solicited by it on an agency basis other than those offers rejected by such
Agent. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for the purchase of Notes, in whole or in
part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation
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to deliver Notes to a purchaser whose offer has been solicited by such Agent on
an agency basis and accepted by the Company, the Company shall (i) hold such
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) pay to such Agent any commission to which
it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes
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purchased from the Company by one or more Agents as principal shall be
purchased, and any Notes the placement of which an Agent arranges as an agent of
the Company shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
2. Representations and Warranties.
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(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a "Settlement Date"), and as of
any time that the Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to herein as a
"Representation Date"), as follows:
(i) Due Incorporation, Good Standing and Due Qualification of the
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Company. The Company has been duly organized and is validly existing as a
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corporation in good standing under the laws of the State of Washington with
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
this Agreement and consummate the transactions contemplated in the
Prospectus; 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
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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 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 (a "Material Adverse Effect").
(ii) Significant Subsidiaries. The Company has no significant
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subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X
promulgated under the 1933 Act).
(iii) Registration Statement and Prospectus. The Company meets the
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requirements for use of Form S-3 under the 1933 Act; the Registration
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statement (including 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; the
Indenture has been duly qualified under the 1939 Act; at the respective
times that the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto (including the filing of
the Company's most recent Annual Report on Form 10-K with the Commission
(the "Annual Report on Form 10-K")) became effective and at each
Representation Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments 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; each preliminary prospectus and
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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; each preliminary prospectus and the Prospectus delivered
to the applicable Agent(s) for use in connection with the offering of Notes
are identical to any electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T; and at the date hereof, at the date of the Prospectus and
at each Representation Date, neither the Prospectus nor any amendment or
supplement thereto 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; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Agents expressly for use in the
Registration Statement or the Prospectus.
(iv) Incorporated Documents. The documents incorporated or deemed to
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be incorporated by reference in 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 under the 1934 Act (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date hereof, at the date of the Prospectus and at each
Representation Date, did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(v) Independent Accountants. The accountants who certified the
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financial statements and any
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supporting schedules thereto included in the Registration Statement and the
Prospectus are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(vi) Financial Statements. The consolidated financial statements of
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the Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, as well as those financial
statements, schedules and notes of any other entity included in the
Registration Statement and the Prospectus, present fairly the consolidated
financial position of the Company and its subsidiaries, or such other
entity, as the case may be, at the dates indicated and the consolidated
statement of operations, stockholders' equity and cash flows of the Company
and its subsidiaries, or such other entity, as the case may be, for the
periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved; the supporting
schedules, if any, included in the Registration Statement and the
Prospectus 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 Registration Statement and 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 and the Prospectus; and any pro forma
consolidated financial statements of the Company and its subsidiaries and
the related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
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(vii) No Material Changes. Since the respective dates as of which
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information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (1) there has been no event or
occurrence that would result in a Material Adverse Effect and (2) 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.
(viii) Authorization, etc. of this Agreement, the Indenture, the
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Notes and the Pledged Bonds. This Agreement has been duly authorized,
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executed and delivered by the Company; the Indenture has been duly
authorized, executed and delivered by the Company and will be a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or (2)
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law); the Notes and the Pledged
Bonds have been duly authorized by the Company for offer, sale, issuance
and delivery pursuant to this Agreement and, when issued, authenticated and
delivered in the manner provided for in the Indenture and delivered against
payment of the consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally or (2)
general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law); the Notes will be
substantially in a form previously certified to the Agents and contemplated
by the Indenture; and each holder of Notes will be entitled to the benefits
of the Indenture.
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(ix) Descriptions of the Indenture, the Notes and the Pledged Bonds.
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The Indenture, the Notes and the Pledged Bonds conform and will conform in
all material respects to the statements relating thereto contained in the
Prospectus and are substantially in the form filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement.
(x) Accuracy of Exhibits. There are no contracts or documents which
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are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
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of its subsidiaries is in violation of the provisions of its charter or by-
laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries 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 Indenture, the Notes and the Pledged
Bonds 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 by the Prospectus, the consummation of the transactions
contemplated in the Prospectus (including the issuance and sale of the
Notes and the use of proceeds therefrom as described in the Prospectus) and
the compliance by the Company with its obligations hereunder and under the
Indenture, the Notes and the Pledged Bonds and such other agreements or
instruments have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of
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notice or the passage of time or both, conflict with or constitute a breach
of, or default or event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of
its subsidiaries (a "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
Agreements and Instruments, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any of its
subsidiaries 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 subsidiaries or any of their assets, properties or operations.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
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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 any of its
subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which may
reasonably be expected to result in a Material Adverse Effect, or which may
reasonably be expected to materially and adversely affect the assets,
properties or operations thereof, the performance by the Company of its
obligations under this Agreement, the Indenture, the Notes and the Pledged
Bonds or the consummation of the transactions contemplated in the
Prospectus; and the aggregate of all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a party or
of which any of their respective assets, properties or operations is the
subject which are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the
business, may not reasonably be expected to result
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in a Material Adverse Effect.
(xiii) Possession of Licenses and Permits. The Company and its
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subsidiaries possess such franchises, permits, licenses, approvals,
consents, certificates of public convenience and necessity and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including, without limitation, the Washington Utilities and Transportation
Commission (the"Utilities Commission") and cities and towns within the
service territory of the Company, necessary for the Company and its
subsidiaries to conduct the business now operated by them and for the
Company to own and operate the its electric plant and its gas plant; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not result in a Material Adverse Effect; and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xiv) Environmental Laws. Except as otherwise stated in the
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Registration Statement and the Prospectus and 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,
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land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively,
"Hazardous Materials") or to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that may
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xv) No Filings, Regulatory Approvals etc. The Utilities Commission
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has issued an [Order Establishing Compliance with RCW 80.08.040] with
respect to the Notes and the Pledged Bonds (the "Order") and the Order has
not been rescinded, annulled or modified. 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 this Agreement, the Indenture, the Notes and the
Pledged Bonds or in connection with the transactions contemplated in the
Prospectus, except such as have been previously obtained or rendered, as
the case may be.
(xvi) Investment Company Act. The Company is
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not, and upon the issuance and sale of the Notes as herein contemplated and
the application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the ("1940 Act").
(xvii) Ratings. The Medium-Term Note Program under which the Notes
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are issued (the "Program"), as well as the Notes, are rated [ ] by
▇▇▇▇▇'▇ Investors Service, Inc. and [ ] by Standard & Poor's Ratings
Service, or such other rating as to which the Company shall have most
recently notified the Agents pursuant to Section 4(a) hereof.
(b) Additional Certifications. Any certificate signed by any officer
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of the Company or any of its subsidiaries and delivered to one or more Agents or
to counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
3. Purchases as Principal; Solicitations as Agent.
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(a) Purchases as Principal. Notes purchased from the Company by the
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Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
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Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto.
The Agents may engage the services of any broker or dealer in connection with
the resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes
from the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant to
which such Agents agree to purchase Notes from the Company as principal and one
or more of such Agents shall fail at the Settlement Date to purchase the Notes
which it or they are obligated to purchase (the "Defaulted Notes"), then the
nondefaulting Agents shall have the right, within 24 hours thereafter, to make
arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Notes does not
exceed 10% of the aggregate principal amount of Notes to be so purchased by
all of such Agents on the Settlement Date, the nondefaulting Agents shall
be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective initial underwriting
obligations bear to the underwriting obligations of all nondefaulting
Agents; or
(b) if the aggregate principal amount of Defaulted Notes exceeds 10%
of the aggregate principal amount of Notes to be so purchased by
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all of such Agents on the Settlement Date, such agreement shall terminate
without liability on the part of any nondefaulting Agent.
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default
which does not result in a termination of such agreement, either the
nondefaulting Agents or the Company shall have the right to postpone the
Settlement Date for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
(b) Solicitations as Agent. On the basis of the representations and
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warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently.
As soon as practicable after receipt of instructions from the Company, such
Agent will suspend solicitation of offers for the purchase of Notes from the
Company until such time as the Company has advised such Agent that such
solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
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formula, maturity date and other
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terms of the Notes specified in Exhibit A hereto (as applicable) shall be agreed
upon between the Company and the applicable Agent(s) and specified in a pricing
supplement to the Prospectus (each, a "Pricing Supplement") to be prepared by
the Company in connection with each sale of Notes. Except as otherwise specified
in the applicable Pricing Supplement, the Notes will be issued in denominations
of U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000.
Administrative procedures with respect to the issuance and sale of the Notes
(the "Procedures") shall be agreed upon from time to time among the Company, the
Agents and the Trustee. The Agents and the Company agree to perform, and the
Company agrees to cause the Trustee to agree to perform, their respective duties
and obligations specifically provided to be performed by them in the Procedures.
4. Covenants of the Company.
------------------------
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
------------------------
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
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 initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative
17
implications, its rating of the Program or any such debt securities, or the
withdrawal by any nationally recognized statistical rating organization of its
rating of the Program or any such debt securities. The Company will make every
reasonable effort 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 or Use of Amendments. The Company will give the Agents
---------------------------
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or any amendment or supplement to the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus
(other than an amendment or supplement thereto providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes or an amendment or supplement
pursuant to the requirements of the 1934 Act and the 1934 Act Regulations), will
furnish to the Agents copies of any such document a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such document to which the Agents or counsel for the Agents shall object.
(c) Delivery of the Registration Statement. The Company has furnished
--------------------------------------
to each Agent and to counsel for the Agents, without charge, signed and
conformed 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 and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to each
---------------------------
Agent, without charge, as many
18
copies of each preliminary prospectus as such Agent may reasonably request, and
the Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each Agent, without charge, such
number of copies of the Prospectus (as amended or supplemented) as such Agent
may reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Agents will be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare,
----------------------------------
with respect to any Notes to be sold to or through one or more Agents pursuant
to this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b)(3)
under the 1933 Act not later than the close of business of the Commission on the
fifth business day after the date on which such Pricing Supplement is first
used.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
-------------------------------------------
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement 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 or to amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
19
the 1933 Act or the 1933 Act Regulations, the Company shall give immediate
notice, confirmed in writing, to the Agents to cease the solicitation of offers
for the purchase of Notes in their capacity as agents and to cease sales of any
Notes they may then own as principal, and the Agents shall as soon as
practicable cease any such solicitation or sales, and the Company will promptly
prepare and file with the Commission, subject to Section 4(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement and Prospectus comply with such
requirements, and the Company will furnish to the Agents, without charge, such
number of copies of such amendment or supplement as the Agents may reasonably
request. In addition, the Company will comply with the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of each offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
------------------------------------------------------
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall, as required by the 1933 Act and the
1933 Act Regulations, cause the Prospectus to be amended or supplemented to
include financial information with respect thereto and corresponding information
for the comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
-----------------------------------------------------
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall, as required by the
1933 Act and the 1933 Act
20
Regulations, cause the Prospectus to be amended or supplemented to include such
audited consolidated financial statements and the report or reports, and consent
or consents to such inclusion, of the independent accountants with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such consolidated financial statements or as
shall be required by the 1933 Act or the 1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such reports
-------------------
pursuant to the 1934 Act as are necessary in order to make generally available
to its security holders 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.
(j) Reporting Requirements. The Company, during the period when the
----------------------
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
---------------------------------------------
agreed upon between one or more Agents acting as principal and the Company,
between the date of an agreement made in accordance with Section 3(a) hereof by
such Agent(s) to purchase the related Notes from the Company and the Settlement
Date with respect thereto, the Company will not, without the prior written
consent of such Agent(s), issue, sell, offer or contract to sell, grant any
option for the sale of, or otherwise dispose of, any debt securities of the
Company (other than the Notes that are to be sold pursuant to such agreement or
commercial paper in the ordinary course of business).
(l) Use of Proceeds. The Company will use the net proceeds received
---------------
by it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
(m) Suspension of Certain Obligations. The Company shall not be
---------------------------------
required to comply with the provisions of subsections (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall
21
have suspended solicitation of offers for the purchase of Notes in their
capacity as agents pursuant to a request from the Company and (ii) no Agent
shall then hold any Notes purchased from the Company as principal, as the case
may be, until the time the Company shall determine that solicitation of offers
for the purchase of Notes should be resumed or an Agent shall subsequently
purchase Notes from the Company as principal.
5. Conditions of Agents' Obligations.
---------------------------------
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes as an agent
of the Company, and the obligations of any purchasers of Notes sold through an
Agent as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance and
observance by the Company of its covenants and other obligations hereunder, and
to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration
---------------------------------------
Statement (including any Rule 462(b) Registration Statement) has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or shall be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have
--------------
received the following legal opinions, dated as of the date hereof and in form
and substance reasonably satisfactory to the Agents (it being understood that
such legal opinions will be subject to reasonable and customary assumptions,
qualifications and exclusions):
(1) Opinion of Counsel for the
---------------------------
22
Company. The favorable opinion of ▇▇▇▇▇▇▇ Coie, counsel for
-------
the Company, to the effect set forth in Exhibit B hereto and to such
further effect as the Agents may reasonably request.
(2) Opinion of Counsel for the Agents. The favorable opinion of
---------------------------------
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Agents, with
respect to the matters set forth in paragraph __ and the penultimate
paragraph of Exhibit B hereto.
(c) Officer's Certificate. On the date hereof, there shall not have
---------------------
been, 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 Agents shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer, chief accounting officer or treasurer of the Company, dated
as of the date hereof, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties of the Company herein
contained are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such certificate, 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, to the best of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Coopers & ▇▇▇▇▇▇▇, L.L.P. On the date hereof,
------------------------------------------
the Agents shall have received a letter from Coopers & ▇▇▇▇▇▇▇, L.L.P.,, dated
as of the date hereof and in form and substance satisfactory to the Agents, to
the effect set forth in Exhibit C hereto.
(e) Additional Documents. On the date
--------------------
23
hereof, counsel to the Agents shall have been furnished with such documents and
opinions as such counsel may reasonably require for the purpose of enabling such
counsel to pass upon the issuance and sale of Notes as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Notes as herein contemplated shall be reasonably
satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party
except as provided in Section 10 hereof and except that Sections 8, 9, 11, 14
and 15 hereof shall survive any such termination and remain in full force and
effect.
6. Delivery of and Payment for Notes Sold through an Agent as Agent.
----------------------------------------------------------------
Delivery of Notes sold through an Agent as an agent of the Company
shall be made by the Company to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
7. Additional Covenants of the Company.
-----------------------------------
The Company further covenants and agrees with
24
each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance
-----------------------------------------------
by the Company of an offer for the purchase of Notes (whether to one or more
Agents as principal or through an Agent as agent), and each delivery of Notes
(whether to one or more Agents as principal or through an Agent as agent), shall
be deemed to be an affirmation that the representations and warranties of the
Company herein contained are true and correct at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to such Agent(s) or
to the purchaser or its agent, as the case may be, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of each such
time (it being understood that such representations and warranties shall relate
to the Registration Statement and Prospectus as amended and supplemented to each
such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
-----------------------------------
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished to the Agent(s), forthwith a certificate dated
the date of filing with the Commission or the date of effectiveness of such
amendment or supplement, as applicable, or the date of such sale, as the case
may be, in form reasonably satisfactory to the Agent(s) to the effect that the
statements contained in the certificate referred to in Section 5(c) hereof which
were last furnished to the Agents are true and correct at the time of the filing
or effectiveness of such amendment or supplement, as applicable, or the time of
such sale, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration Statement and
the Prospectus as amended
25
and supplemented to such time) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in Section 5(c) hereof, modified
as necessary to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such certificate (it being
understood that, in the case of clause (ii) above, any such certificate shall
also include a certification that 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 since the date of the agreement by such Agent(s) to purchase Notes
from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
-------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents the written opinion of ▇▇▇▇▇▇▇ Coie, counsel to the Company, or other
counsel reasonably satisfactory to the Agent(s), dated the date of filing with
the Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form and substance
reasonably satisfactory to the Agent(s), of the same tenor as the opinion
referred to in Section 5(b)(1) hereof, but modified, as necessary, to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agent(s) with a letter
substantially to the effect that the Agent(s) may rely on such last opinion to
the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as
26
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
--------------------------------------
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase of Notes
from the Company by one or more Agents as principal) the Company sells Notes to
one or more Agents as principal, the Company shall cause Coopers & ▇▇▇▇▇▇▇,
L.L.P. forthwith to furnish to the Agent(s) a letter, dated the date of filing
with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s), of the same tenor as the letter referred to in
Section 5(d) hereof but modified to relate to the Registration Statement and
Prospectus as amended and supplemented to the date of such letter.
8. Indemnification.
---------------
(a) Indemnification of the Agents. The Company agrees to indemnify
-----------------------------
and hold harmless each Agent and each person, if any, who controls such Agent
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 and damage whatsoever,
as incurred, arising out of an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of an untrue statement or
alleged untrue statement of a material fact included 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
27
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 any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, provided that (subject to Section
8(d) hereof) 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 such Agent), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity does not apply to any loss, liability,
-------- -------
claim, damage or expense to the extent arising out of an 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 the Agents
expressly for use in the Registration Statement (or any amendment thereto) or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided further, that such indemnity with respect to the
Prospectus shall not inure to the benefit of any Agent (or any person
controlling any Agent) from whom the person asserting any such loss, liability,
claim, damage or expense purchased the Notes which 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 Notes 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
28
contained in the Prospectus was corrected in the Prospectus as supplemented.
(b) Indemnification of Company, Directors and Officers. Each Agent
--------------------------------------------------
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 8(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
-------------------------------------
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
8(a) hereof, counsel to the indemnified parties shall be selected by the
applicable Agent(s) and, in the case of parties indemnified pursuant to Section
8(b) hereof, counsel to the indemnified shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
-------- -------
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
29
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 8 or 9 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 in accordance with Section
8(a)(iii) for any settlement of the nature contemplated by Section 8(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.
9. Contribution. If the indemnification provided for in Section 8
------------
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
30
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
applicable Agent(s), on the other hand, from the offering of the Notes that were
the subject of the claim for indemnification or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and
the applicable Agent(s), on the other hand, in connection with the offering of
the Notes that were the subject of the claim for indemnification shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the Company and
the total discount or commission received by each applicable Agent, as the case
may be, bears to the aggregate initial offering price of such Notes.
The relative fault of the Company, on the one hand, and the applicable
Agent(s), on the other hand, shall be determined by reference to, among other
things, whether any 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 applicable Agent(s) and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9.
31
Notwithstanding the provisions of this Section 9, (i) no Agent shall
be required to contribute any amount in excess of the amount by which the total
discount or commission received by such Agent in connection with the offering of
the Notes that were the subject of the claim for indemnification exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of any applicable untrue or alleged untrue statement or omission or
alleged omission and (ii) 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. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
For purposes of this Section 9, each person, if any, who controls an
Agent 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 Agent, and each director
of the Company, each officer of the Company 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.
10. Payment of Expenses.
-------------------
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and
the Indenture;
32
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in book-
entry form and the cost of obtaining CUSIP or other identification numbers for
the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent) and of the
Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
33
11. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
12. Termination.
-----------
(a) Termination of this Agreement. This Agreement (excluding any
-----------------------------
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 30 days' prior written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
-------------------------------------------------------
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development or event involving a prospective
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the reasonable
judgment of such Agent(s), impracticable to market such Notes or enforce
contracts for the sale of such
34
Notes, or (iii) trading in any securities of the Company has been suspended or
limited by the Commission or a national securities exchange, or if trading
generally on the New York Stock Exchange or the American Stock Exchange or in
the NASDAQ National Market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Prospectus, at the time
it was required to be delivered to a purchaser of such Notes, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
-------
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
35
13. Notices.
-------
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
36
If to the Company:
Puget Sound Energy, Inc.
411-108th Avenue N.E.
Attention: ________________
Telecopy No.: ______________
If to the Agents:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: MTN Product Management
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
[OTHER AGENTS]
[ADDRESS]
Attention: ________________
Telecopy No.: (___) ________
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
14. Parties.
-------
This Agreement shall inure to the benefit of and be binding upon the
Agents 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 parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof 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 parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be
37
deemed to be a successor by reason merely of such purchase.
15. GOVERNING LAW; FORUM.
--------------------
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR
ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL
COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
16. Effect of Headings.
------------------
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
17. Counterparts.
------------
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
38
If the foregoing is in accordance with the Agents' understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this Distribution Agreement, along with all counterparts, will become
a binding agreement among the Agents and the Company in accordance with its
terms.
Very truly yours,
PUGET SOUND ENERGY, INC.
By: ____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:__________________________________________
Authorized Signatory
[OTHER AGENTS]
By:_________________________________________
39