EXHIBIT 10.3
NORTHWEST PIPELINE CORPORATION
$175,000,000 8.125% Notes due 2010
PURCHASE AGREEMENT
February 27, 2003
To the Initial Purchasers
listed on Schedule I hereto
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Northwest Pipeline Corporation, a Delaware corporation, (the
"COMPANY"), proposes to issue and sell to the several initial purchasers listed
on Schedule I hereto (the "INITIAL PURCHASERS", individually, each an "INITIAL
PURCHASER"), $175,000,000 aggregate principal amount of its 8.125% Senior Notes
due 2010 (the "SECURITIES"), to be issued pursuant to the provisions of an
Indenture to be dated as of March 4, 2003 (the "INDENTURE"), between the Company
and JPMorgan Chase Bank, as trustee (the "TRUSTEE"). The Securities will be
entitled to the benefits of a registration rights agreement to be dated as of
March 4, 2003 between the Company and the Initial Purchasers (the "REGISTRATION
RIGHTS AGREEMENT").
The Company hereby confirms its agreement with the Initial Purchasers
to issue and sell all of the Securities to the Initial Purchasers, on the terms
and conditions set forth herein.
The Securities will be offered and sold to the Initial Purchasers,
without registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), in reliance upon an exemption from the registration
requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared
and delivered to the Initial Purchasers a preliminary confidential offering
memorandum, dated February 20, 2003 (together with all documents incorporated by
reference therein, the "PRELIMINARY OFFERING MEMORANDUM") and has
prepared and will deliver to the Initial Purchasers on the date hereof or as
soon as practicable thereafter, copies of a final confidential offering
memorandum, dated February 27, 2003 (together with all amendments and
supplements thereto, and together with all documents incorporated by reference
therein, the "FINAL OFFERING MEMORANDUM"), relating to the Securities. The
Preliminary Offering Memorandum and the Final Offering Memorandum are sometimes
collectively referred to herein as the "Offering Memorandum." All references in
this Agreement to the Offering Memorandum include the documents incorporated by
reference therein. The Company hereby confirms that it has authorized the use of
the Offering Memorandum in connection with the offer and sale of the Securities.
The Company understands that the Initial Purchasers propose to make
offerings ("EXEMPT RESALES") of the Securities only on the terms and in the
manner set forth in the Offering Memorandum and Section 3 hereof, as soon as the
Initial Purchasers deem advisable after this Agreement has been executed and
delivered only (i) to persons in the United States whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" ("QIBs") as defined in
Rule 144A under the Securities Act, as such rule may be amended from time to
time ("RULE 144A"), or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchasers that each such
account is a QIB to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A or (ii) in offshore transactions to non-U.S.
persons in reliance on Regulation S under the Securities Act ("REGULATION S").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Initial Purchasers that as of
the date hereof and at the Closing Date (as defined herein):
(a) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Offering Memorandum and
is duly qualified to do business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the financial condition, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole (a "MATERIAL ADVERSE EFFECT");
(b) Each of the subsidiaries of the Company (the
"SUBSIDIARIES" or "SUBSIDIARY") has been duly organized or validly
formed, is validly existing and in good standing under the laws of the
jurisdiction of its
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formation or incorporation, has the power (corporate or other) and
authority to own its property and to conduct its business as described
in the Offering Memorandum and is duly qualified to do business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect;
(c) Each of the Company and its Subsidiaries has all
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, and all
courts or other tribunals (collectively, the "LICENSES") necessary to
own, hold, or lease, as the case may be, and to operate its properties
and to carry on its business as presently conducted, except where the
failure to possess such Licenses could not reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to
revocation or modification of any such Licenses, except to the extent
that any such revocation or modification would not have a Material
Adverse Effect;
(d) The Company has an authorized capitalization as set
forth in the Final Offering Memorandum and all of the issued shares of
capital stock of the Company have been duly authorized and validly
issued, and are fully paid and non-assessable; all of the issued shares
of capital stock of the Company are owned, directly or indirectly, by
The ▇▇▇▇▇▇▇▇ Companies, Inc. ("▇▇▇▇▇▇▇▇"); and all of the issued shares
of capital stock of each Subsidiary (in the case of each Subsidiary
which is a corporation) have been duly authorized and validly issued
and are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(e) Each of the Company and its Subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has received
all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business as presently
conducted and (iii) is in compliance with all terms and conditions of
any such permit, license or approval, except, with respect to (i), (ii)
and (iii), as may be disclosed in the Offering Memorandum and except
where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other
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approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not be reasonably likely to,
singly or in the aggregate, have a Material Adverse Effect;
(f) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its Subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
Subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except as may be disclosed in the
Offering Memorandum and except for any violation or remedial action
which would not be reasonably likely to have, singularly or in the
aggregate, a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any
of its Subsidiaries or with respect to which the Company or any of its
Subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
be reasonably likely to have, singularly or in the aggregate, a
Material Adverse Effect; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the
meanings specified in any applicable local, state, federal and foreign
laws or regulations with respect to environmental protection;
(g) The Company has filed all material tax returns which
are required to be filed by it and has paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Company,
except where the same may be contested in good faith by appropriate
proceedings, and where the Company has maintained in accordance with
generally accepted accounting principles appropriate reserves for the
accrual of any of the same. The charges, accruals and reserves on the
books of the Company in respect of taxes or other governmental charges
are, in the opinion of the Company, adequate;
(h) The Company is not, and immediately following the
consummation of the offering of the Securities and the application of
the proceeds therefrom will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended;
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(i) The Indenture has been duly authorized by the Company
and, assuming due authorization, execution and authentication by the
Trustee, the Indenture, when duly executed and delivered by the
Company, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
the enforceability 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 or by general principles of
equity (regardless of whether considered in a proceeding in equity or
at law). On the Closing Date, the Indenture will conform in all
material respects to the description thereof in the Offering
Memorandum;
(j) The Securities have been duly authorized by the
Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, will
be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with
their terms, except as the enforceability 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 or by
general principles of equity (regardless of whether considered in a
proceeding in equity or at law);
(k) The Securities constitute unsecured and
unsubordinated obligations of the Company and rank pari passu without
any preference among themselves; the Securities rank pari passu with
all other unsecured and unsubordinated debt obligations of the Company;
(l) This Agreement has been duly authorized, executed and
delivered by the Company;
(m) The Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered by the
Company, and assuming due authorization, execution and delivery by or
on behalf of the Initial Purchasers, will be a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally or by general
principles of equity (regardless of whether considered in a proceeding
in equity or at law) and except as rights
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to indemnification and contribution thereunder may be limited by
applicable law;
(n) The execution and delivery by the Company of this
Agreement, the Indenture and the Registration Rights Agreement, the
issuance and delivery of the Securities, the consummation by the
Company of the transactions contemplated herein and therein and the
compliance by the Company with the terms of this Agreement, the
Indenture, the Securities and the Registration Rights Agreement have
been duly authorized by all necessary corporate action on the part of
the Company and do not and will not (i) result in any violation of the
charter or by-laws of the Company or (ii) conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or ▇▇▇▇▇▇▇▇ or any of their respective
affiliates is a party or by which the Company or ▇▇▇▇▇▇▇▇ or any of
their respective affiliates is bound (except for such conflicts,
breaches or defaults that could not reasonably be expected to have a
Material Adverse Effect), nor does or will such action result in any
violation of any statute applicable to the Company or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issuance and sale of the Securities by the Company to the Initial
Purchasers as contemplated by this Agreement, except as may be required
by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities and by the federal and state
securities laws with respect to the Company's obligations under the
Registration Rights Agreement;
(o) Neither the Company nor ▇▇▇▇▇▇▇▇ is (i) in violation
of its charter or by-laws, (ii) in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, obligation,
agreement, covenant or condition contained in any material contract,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it is bound
or which any of its properties or assets may be subject or (iii) in
violation of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, except
with respect to (ii) or (iii), for any such violations or
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defaults that would not be reasonably likely, singly or in the
aggregate, to have a Material Adverse Effect;
(p) The Company has filed all documents with the
Securities and Exchange Commission (the "COMMISSION") that it is
required to file under the Securities Act and the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), as applicable, and the
rules and regulations of the Commission thereunder, and such documents
conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and each document so filed or
to be filed and incorporated by reference in the Offering Memorandum or
any further amendment or supplement thereto, complied or will comply
when so filed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and, when read together with
the other information in the Offering Memorandum, or any amendment or
supplement thereto furnished by the Company, do not or will not as of
the Closing Date, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(q) The Preliminary Offering Memorandum and the Final
Offering Memorandum as of their respective dates did not, and the Final
Offering Memorandum (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) will not as of
the Closing Date, contain 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; provided, however, that this representation and
warranty shall not be made to the Initial Purchasers with regard to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by, or on behalf of the
Initial Purchasers through ▇▇▇▇▇▇ Brothers Inc.;
(r) Neither the Company nor any of its Subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum, any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, which would
be reasonably likely to result in any Material Adverse Effect, or any
development involving a material adverse change in or affecting the
financial condition, results of operations, business or prospects of
the Company and its subsidiaries,
7
taken as a whole, otherwise than as set forth or contemplated in the
Offering Memorandum, and, since the respective dates as of which
information is given in the Offering Memorandum (or in the case of
▇▇▇▇▇▇▇▇, since February 21, 2002, the date of the most recent Current
Report on Form 8-K filed by ▇▇▇▇▇▇▇▇ under the Exchange Act) or since
the date of the Final Offering Memorandum, there has not been (i) any
change in the capital stock or long-term debt of the Company or any of
its Subsidiaries, (ii) any material adverse change in or affecting the
financial condition, results of operations, business or prospects of
the Company or ▇▇▇▇▇▇▇▇ or (iii) any transaction entered into by the
Company or any of its Subsidiaries, other than in the ordinary course
of business, that is material to the Company and its Subsidiaries,
taken as a whole, otherwise than as disclosed, in each case, in the
Offering Memorandum (or in the case of ▇▇▇▇▇▇▇▇, in the documents
▇▇▇▇▇▇▇▇ has publicly filed under the Exchange Act);
(s) Since the date of the Preliminary Offering Memorandum
through the date hereof, and except as may otherwise be disclosed in
the Offering Memorandum, the Company has not (i) issued or granted any
securities, (ii) incurred any material liability or obligation, direct
or contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered into any
material transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock;
(t) The Company has good and marketable title in fee
simple to, or valid rights of way, easements, leaseholds, licenses and
consents to use, all real property and good and marketable title to all
personal property owned by it, in each case free and clear of all
liens, encumbrances and defects, except such as are described in the
Offering Memorandum or would not reasonably be expected to, singly or
in the aggregate, have a Material Adverse Effect; and all real property
and buildings held under lease by the Company are held by them under
valid, subsisting and enforceable leases, with such exceptions as would
not reasonably be expected to, singly or in the aggregate, have a
Material Adverse Effect and do not interfere in any material respect
with the use made and proposed to be made of such property and
buildings by the Company;
(u) The Company carries, or is covered by, insurance in
such amounts and covering such risks as is reasonable in accordance
with customary practices for companies engaged in similar businesses in
similar industries for the conduct of its business and the value of its
properties;
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(v) The consolidated financial statements filed with or
as part of any document filed with the Commission present fairly in all
material respects the financial position, results of operations and
changes in financial position of the Company and its subsidiaries at
the dates and for the periods indicated, all in conformity with
generally accepted accounting principles (subject, in the case of
interim statements, to normal year-end audit adjustments); and the
Company has no material contingent obligation which is not disclosed in
such financial statements or in the Offering Memorandum;
(w) Ernst & Young LLP, who have reported upon the audited
financial statements and schedules included or incorporated by
reference in the Offering Memorandum, are independent auditors within
the meaning of the rules and regulations promulgated under the
Securities Act;
(x) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company with respect to any securities of the Company owned
or to be owned by such person (other than the Securities) to include
such securities with the securities to be registered pursuant to the
registration statements to be filed pursuant to the Registration Rights
Agreement;
(y) The Company (i) makes and keeps books and records
which accurately reflect transactions and dispositions of the Company's
assets and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's general or
specific authorization and (D) the recorded accountability for its
assets is compared with existing assets at reasonable intervals;
(z) (i) The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule
13a-14 under the Exchange Act); (ii) such disclosure controls and
procedures are designed to ensure that information required to be
disclosed by the Company in the reports it files or submits under the
Exchange Act is accumulated and communicated to the Company's
management, including its principal executive officer and its principal
financial officer, as appropriate, to allow timely decisions regarding
required disclosure; and (iii) such disclosure controls and procedures
are effective in all material respects to perform the functions for
which they were established;
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(aa) Since the date of the filing of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2002
, the Company's auditors and the audit committee of the board of
directors of the Company (or persons fulfilling the equivalent
function) have not been advised of (i) any significant deficiencies in
the design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize and report
financial data nor any material weaknesses in internal controls; and
(ii) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Company's internal
controls;
(bb) Since the date of the filing of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2002,
there have been no significant changes in internal controls or in other
factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and
material weaknesses;
(cc) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined by ERISA) for which the Company would have any material
liability; the Company has not incurred and does not expect to incur
material liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, and "pension plan" or (ii) Sections
412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "CODE");
and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification;
(dd) Other than as set forth or incorporated by reference
in the Offering Memorandum, there is no action, suit or proceeding
before or by any government, governmental instrumentality or court,
domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or to which any of its
properties are subject that could reasonably be expected to result in
any Material Adverse Effect, or that could reasonably be expected to
adversely affect the consummation of the transactions contemplated in
this Agreement;
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(ee) Assuming the accuracy of the representations,
warranties and agreements of the Initial Purchasers in Section 2
hereof, compliance by the Initial Purchasers with the offering and
transfer procedures and restrictions described in the Offering
Memorandum and the accuracy of the representations and warranties
deemed to be made in the Offering Memorandum by purchasers to whom the
Initial Purchasers initially resell the Securities, it is not necessary
in connection with the offer, sale and delivery of the Securities to
the Initial Purchasers or in connection with the initial resale of the
Securities by the Initial Purchasers, in each case, in the manner
contemplated by this Agreement and the Offering Memorandum, to register
the Securities under the Securities Act or to qualify the Indenture
under the Trust Indenture Act of 1939, as amended;
(ff) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared by the Company for use in connection with
the Exempt Resales. No decree or order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or any
order asserting that the transactions contemplated by the Agreement are
subject to the registration requirements of the Securities Act has been
issued and no proceeding for that purpose has commenced or is pending
or, to the knowledge of the Company, is contemplated;
(gg) The Company, its affiliates and any person acting on
its or their behalf (other than the Initial Purchasers in connection
with the transactions contemplated hereby, about which the Company
makes no representation) have not, directly or indirectly:
(i) engaged in any directed selling efforts
(within the meaning of Regulation S under the Securities Act)
with respect to the Securities;
(ii) offered or sold the Securities in the United
States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; or
(iii) sold, solicited any offers to buy or offered
to sell or otherwise negotiated in respect of any security in
a manner that would require registration of the Securities
under the Securities Act in accordance with the theory of
"integration" referred to in Regulation D under the Securities
Act.
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(hh) Assuming the accuracy of the Initial Purchasers'
representations and warranties and the compliance by the Initial
Purchasers with their agreements made herein, the Securities offered
and sold in reliance on Regulation S have been and will be offered and
sold only in offshore transactions, and the sale of the Securities
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(ii) The Securities satisfy the requirements of Rule
144A(d)(3) under the Securities Act.
The Company (i) acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant
hereto, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and (ii) hereby
consents to such reliance.
2. REPRESENTATIONS AND WARRANTIES OF THE INITIAL PURCHASERS. Each
Initial Purchaser, severally and not jointly, hereby represents and warrants to,
and agrees with the Company that: such Initial Purchaser (i) is an institutional
"accredited investor" (as defined in Regulation D) with such knowledge and
experience in financial and business matters as are necessary to evaluate the
merits and risks of an investment in the Securities; (ii) is not acquiring the
Securities with a view to any distribution thereof that would violate the
Securities Act or the securities or blue sky laws of any state or country, (iii)
has received all information it considers necessary to evaluate the merits and
risks of an investment in the Securities, (iv) has not and will not solicit
offers for, or offer to sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act, or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act; and (v) has and will solicit offers for
the Securities only from, and will offer, sell or deliver the Securities, as
part of their initial offering, only (A) to persons in the United States such
Initial Purchaser reasonably believes to be QIBs to whom notice has been given
that such sale or delivery is being in reliance on Rule 144A or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to the
Initial Purchasers that each such account is a QIB to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A or (B) in
offshore transactions to non-U.S. persons in reliance on Regulation S.
Each Initial Purchaser, severally and not jointly, hereby represents
and warrants to, and agrees with the Company that:
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(i) such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not
engage in any directed selling efforts within the meaning of Regulation
S with respect to the Securities;
(ii) such Initial Purchaser has not offered or sold and
will not offer or sell the Securities in the United States or to, or
for the benefit or account of, a U.S. Person (other than a
distributor), in each case, as defined in Rule 902 under the Securities
Act (a) as part of its distribution at any time and (b) otherwise until
40 days after the later of the commencement of the offering of the
Securities pursuant hereto and the Closing Date, other than in
accordance with Regulation S of the Securities Act or another exemption
from the registration requirements of the Securities Act;
(iii) at or prior to confirmation of a sale of Securities
by such Initial Purchaser pursuant hereto in reliance on Regulation S
to any distributor, dealer or person receiving a selling concession,
fee or other remuneration during the 40-day restricted period referred
to in Rule 903(b)(2) under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or
other remuneration a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered and sold within the United
States or to, or for the account or benefit of, U.S. persons
(i) as part of your distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in
accordance with Regulation S under the Securities Act or Rule
144A in transactions that are exempt from the registration
requirements of the Securities Act, and in connection with any
subsequent sale by you of the Securities covered hereby in
reliance on Regulation S during the period referred to above
to any distributor, dealer or person receiving a selling
concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above
have the meanings assigned to them in Regulation S."
(iv) it has (A) not offered or sold and, prior to the date
six months after the Closing Date, will not offer or sell any
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments
13
(as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result
in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995, (B) only communicated
any invitation or inducement to engage in investment activity (within
the meaning of Section 21 of the Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of any Securities in circumstances in which Section 21(1) of the FSMA
does not apply to the Company, and (C) complied and will comply with
all applicable provisions of the FSMA with respect to anything done by
it in relation to the Securities in, from or otherwise involving the
United Kingdom;
The Initial Purchasers (i) acknowledge that the Company and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant
hereto, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and (ii) hereby
consent to such reliance.
3. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell and each Initial Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from the Company the respective
principal amounts of Securities set forth in Schedule I hereto opposite its name
at 97.50% of their principal amount (the "PURCHASE PRICE") plus accrued
interest, if any, from March 4, 2003 to the date of payment and delivery.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be made
by wire or other immediately available funds to the order of the Company to a
bank account designated by the Company at 10:00 A.M., New York time, on March 4,
2003, or at such other time on the same or such other date, as shall be agreed
by the parties and designated in writing by the Initial Purchasers. The time and
date of such payment are herein referred to as the "CLOSING DATE."
Payment for the Securities shall be made against delivery to the
Initial Purchasers of the one or more global notes representing the Securities
(collectively, the "GLOBAL NOTES") registered in the name of Cede & Co. (the
"GLOBAL HOLDER") with any transfer taxes payable in connection with the transfer
of the Securities to the Initial Purchasers duly paid. Such Global Notes shall
be made available to the Initial Purchasers for checking at least twenty four
hours prior to the Closing Date, at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, New
York, New York.
5. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers are subject to the following conditions:
14
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any
downgrading, nor shall any notice have been received of (A)
any intended or potential downgrading or (B) any review or
possible change that does not indicate the direction of a
possible change, in the rating accorded any of the securities
of the Company or ▇▇▇▇▇▇▇▇ by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Act; and
(ii) there shall not have occurred any material
adverse change, or any development which could reasonably be
expected to result in a prospective material adverse change,
in the financial condition, or in the earnings, business or
operations of the Company or ▇▇▇▇▇▇▇▇, from that set forth in
the Final Offering Memorandum.
(b) The Initial Purchasers shall have received on the
Closing Date a certificate, dated the Closing Date and signed by an
executive officer of the Company, to the effect set forth in clauses
(a)(i) and (ii) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate
may rely upon the best of his or her knowledge after due inquiry as to
proceedings threatened.
(c) The Initial Purchasers shall have received on the
Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., Senior Vice President
and General Counsel of ▇▇▇▇▇▇▇▇ dated the Closing Date, with such
exceptions and qualifications as shall be agreed by the Initial
Purchasers, to the effect set forth in Exhibit A.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq. described in Exhibit A shall
be rendered to the Initial Purchasers at the request of the Company and
shall so state therein.
15
(d) The Initial Purchasers shall have received on the
Closing Date an opinion from ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, special
counsel for the Company, dated the Closing Date, with such exceptions
and qualifications as shall be agreed by the Initial Purchasers, to the
effect set forth in Exhibit B.
(e) The Initial Purchasers shall have received on the
Closing Date an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Initial Purchasers, dated the Closing Date, covering the matters
referred to in paragraph 9 of Exhibit A, and such other matters as
shall be agreed by the Initial Purchasers.
With respect to paragraph 9 of Exhibit A, ▇▇▇▇▇ ▇▇▇▇
& ▇▇▇▇▇▇▇▇ may state that their opinion and belief are based upon their
participation in the preparation of the Offering Memorandum (excluding
any documents incorporated by reference therein) and any amendments or
supplements thereto and review and discussion of the contents thereof,
but are without independent check or verification, except as specified.
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may also state that they have relied solely on
the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., as to matters relating to the
regulation of the Company by the Federal Energy Regulatory Commission.
(f) The Initial Purchasers shall have received on the
date hereof and on the Closing Date letters, in form and substance
satisfactory to the Initial Purchasers, from Ernst & Young LLP,
independent public accountants, 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 or incorporated by reference in the
Offering Memorandum.
(g) The Initial Purchasers and the Company shall have
validly entered into the Registration Rights Agreement, substantially
in the form of Exhibit C hereto.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Initial Purchasers herein contained, the Company, its
affiliates and any person acting on its or their behalf, covenant with the
Initial Purchasers as follows:
(a) The Company, its affiliates and any person acting on
its or their behalf will not, directly or indirectly:
16
(i) engage in any directed selling efforts
(within the meaning of Regulation S under the Securities Act)
with respect to the Securities;
(ii) offer or sell the Securities in the United
States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; or
(iii) sell, solicit any offers to buy or offer to
sell or otherwise negotiate in respect of any security in a
manner that would require registration of the Securities under
the Securities Act in accordance with the theory of
"integration" referred to in Regulation D under the Securities
Act.
(b) While any Security remains outstanding, during any
period in which the Company is not subject to Section 13 or Section
15(d) of the Exchange Act and its securities are not exempt from
Section 12(g) thereof pursuant to Rule 12g3-2(b) thereunder, the
Company will upon request make available to the Initial Purchasers, to
any holder of Securities, and to any prospective purchaser designated
by any holder of Securities, the information regarding the Company
specified in, and satisfying the requirements of, Rule 144A(d)(4) under
the Securities Act.
(c) The Company will prepare the Final Offering
Memorandum in a form approved by the Initial Purchasers, and before
amending or supplementing the Final Offering Memorandum, will furnish
to ▇▇▇▇▇▇ Brothers Inc. on behalf of the Initial Purchasers a copy of
each such proposed amendment or supplement and will not deliver any
such proposed amendment or supplement to which the Initial Purchasers
reasonably object.
(d) As soon as practicable but in no event later than the
New York Business Day (as defined below) next succeeding the date of
this Agreement and from time to time during the period that in the
opinion of counsel for the Initial Purchasers a Final Offering
Memorandum is required by law to be delivered in connection with Exempt
Resales by the Initial Purchasers, the Company will furnish the Initial
Purchasers, in New York City, with copies of the Final Offering
Memorandum and each amendment or supplement thereto, together with any
independent accountants' report contained in the Final Offering
Memorandum, and any amendment or supplement containing amendments to
the financial
17
statements covered by such report, signed by the accountants, and
additional copies thereof in such quantities as the Initial Purchasers
from time to time reasonably request, and if, at any time prior to the
consummation of any Exempt Resale, any event shall have occurred as a
result of which, in the judgment of the Company or in the opinion of
counsel for the Initial Purchasers, the Final Offering Memorandum as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Final Offering Memorandum is delivered,
not misleading, or, if for any other reason it shall be necessary or
desirable, during such same period to amend or supplement the Final
Offering Memorandum, the Company will prepare and furnish without
charge to the Initial Purchasers and to any dealer in securities as
many copies as the Initial Purchasers may from time to time reasonably
request of the amended Final Offering Memorandum or supplement to the
Final Offering Memorandum which will correct such statement or omission
or effect such compliance. For the purposes of this paragraph, "New
York Business Day" shall mean any day that is not a day on which
banking institutions in New York are generally authorized or required
by law or regulation to close;
(e) During the period beginning on the date hereof until
the 90th day following the Closing Date, the Company will not offer,
sell, contract to sell or otherwise dispose of, directly or indirectly,
any debt securities of the Company substantially similar to the
Securities (other than the Securities) or any securities convertible
into, or exercisable for, such debt securities issued or guaranteed by
the Company, without the prior written consent of the Initial
Purchasers.
(f) The Company will arrange for the qualification of the
Securities for sale under the laws ("BLUE SKY LAWS") of such states in
the United States as the Initial Purchasers designate and will continue
such qualifications in effect so long as required for the resale of the
Securities by the Initial Purchasers; provided that the Company will
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(g) The Company consents to the use, in accordance with
the Offering Memorandum and the Blue Sky Laws of the jurisdictions in
which the Securities are offered by the Initial Purchasers and by
dealers, prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Company. The
Company consents to the use of the Offering Memorandum in accordance
with the Offering
18
Memorandum and the Blue Sky Laws of the jurisdictions in which the
Securities are offered by the Initial Purchasers and by all dealers to
whom Securities may be sold, in connection with the offering and sale
of the Securities.
(h) So long as any of the Securities are outstanding, the
Company will furnish to the Initial Purchasers (i) promptly after it is
available, a copy of each report of the Company filed with any stock
exchange or the Commission and (ii) from time to time such other
information concerning the Company as the Initial Purchasers may
reasonably request.
(i) The Company and its affiliates have not taken, nor
will any of them take, directly or indirectly, any action designed to
or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Securities to
facilitate the sale or resale of the Securities. Except as permitted by
the Securities Act, the Company will not distribute any offering
material in connection with the Exempt Resales.
(j) The Company will take all reasonable action necessary
to permit the Securities to be designated Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market securities in
accordance with the rules and regulations adopted by the National
Association of Securities Dealers, Inc. relating to trading in the
PORTAL market.
(k) The Company will take all reasonable action necessary
to enable Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service, Inc.
("MOODY'S") to provide their respective ratings of the Securities.
(l) The Company will cooperate with the Initial
Purchasers and use its reasonable best efforts to permit the Securities
to be eligible for clearance and settlement through the facilities of
The Depository Trust Company.
(m) The Company will use an amount equal to the net
proceeds from the offering of the Securities solely as set forth under
the caption "Use of Proceeds" in the Final Offering Memorandum.
(n) The Company will not voluntarily claim, and will
resist actively all attempts to claim, the benefit of any usury laws
against holders of the Securities.
19
(o) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) expenses associated with the
preparation, printing and distribution of the Offering Memorandum and
all amendments and supplements thereto; (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of the
Company's counsel and accountants and of the Trustee and its counsel;
(iv) the costs of qualification of the Securities under state
securities or blue sky laws in accordance with the provisions of
Section 6(f), including filing fees and the fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in
connection with the preparation of any blue sky or legal investment
memoranda; (v) the costs of printing and delivery to the Initial
Purchasers in quantities as herein above stated of copies of the
Offering Memorandum and any amendments or supplements thereto; (vi) the
costs of printing and delivery to the Initial Purchasers of copies of
any blue sky or legal investment memoranda; (vii) any fees charged by
rating agencies for the rating of the Securities; (viii) the fees
(including listing fees) and expenses incurred in connection with the
application for quotation of the Securities in the PORTAL market; (ix)
any expenses incurred by the Company in connection with any "road show"
presentation to potential investors, including without limitation,
expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show and (x) the
performance by the Company of its other obligations under this
Agreement to the extent not provided for above.
(p) The Company will use its reasonable best efforts to
do and perform all things required or necessary to be done and
performed under this Agreement by it prior to the Closing Date, and to
satisfy all conditions precedent to the Initial Purchasers' obligations
hereunder to purchase the Securities.
7. COVENANTS OF THE INITIAL PURCHASERS.
(a) Each Initial Purchaser severally acknowledges that
the Securities have not been and will not be registered under the
Securities Act
20
and severally agrees that it, its affiliates and any person acting on
its or their behalf:
(i) will not offer or sell the Securities in the
United States by any form of general solicitation or general
advertising (within the meaning of Regulation D under the
Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) if the Securities Act; and
(ii) will offer or sell the Securities only to
persons whom it reasonably believes to be qualified
institutional buyers ("QIBs") within the meaning of Rule 144A
under the Securities Act in compliance with Rule 144A or in
offshore transactions to non-U.S. persons in reliance on
Regulation S.
8. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless
each Initial Purchaser, its directors, its officers, its employees and
each person, if any, who controls any of the Initial Purchasers within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Initial Purchaser or any such
controlling person in connection with defending or investigating any
such action or claim) caused by (i) any untrue statement or alleged
untrue statement of a material fact contained in the Offering
Memorandum or any amendment thereof (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or
(ii) caused by any omission or alleged omission to state in the
Offering Memorandum or any amendment thereof (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission
based upon information relating to each Initial Purchaser furnished to
the Company in writing by the Initial Purchasers through ▇▇▇▇▇▇
Brothers Inc. expressly for use in the Offering Memorandum or any
amendments or supplements thereto; provided, however, that the
foregoing indemnity agreement with respect to the Preliminary Offering
Memorandum shall not inure to the benefit of the Initial Purchasers, or
any person controlling any of the Initial Purchasers, if the person
asserting any such losses, claims, damages or liabilities purchased any
Securities in an Exempt Resale and a copy of the
21
Final Offering Memorandum (as then amended or supplemented if the
Company shall have timely furnished any amendment or supplement
thereto) was not sent or given by or on behalf of the Initial
Purchasers to such person, at or prior to the written confirmation of
the sale of the Securities to such person, and if such Final Offering
Memorandum would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(b) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers, its employees and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to each Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished
to the Company in writing by such Initial Purchaser through ▇▇▇▇▇▇
Brothers Inc. expressly for use in the Offering Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b)
of this Section 8, such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel, (ii) the
indemnifying party shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the indemnified
party or (iii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. Such firm shall be designated in writing by
▇▇▇▇▇▇ Brothers Inc., in the case of the parties indemnified pursuant
to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or
22
related proceedings in the same jurisdiction, be liable for the fees
and expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences
of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be
unreasonably withheld), settle, compromise or consent to the entry of
any judgment with respect to any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding and does not
include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 8 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each
Initial Purchaser on the other hand from the offering and sale of the
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of
the Initial Purchasers on the other hand in connection with the
statements or omissions that
23
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Initial Purchasers on the other
hand in connection with the offering of the Securities shall be deemed
to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received
by the Initial Purchasers, in each case as set forth in the Offering
Memorandum, bears to the aggregate initial offering price of the
Securities. The relative fault of the Company on the one hand and the
Initial Purchasers on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and the Initial Purchasers agree that it
would not be just or equitable if contribution pursuant to this Section
8 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 8. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
appearing as a third party witness in any such action or claim.
Notwithstanding the provisions of this Section 8, the Initial
Purchasers shall not be required to contribute any amount in excess of
the amount by which the total price at which the Securities purchased
by them exceeds the amount of any damages that the Initial Purchasers
have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party
at law or in equity.
(f) The indemnity and contribution provisions contained
in this Section 8 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on
behalf of the Initial Purchasers or any person controlling the Initial
Purchasers or by or on behalf of the Company, its
24
officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Securities. The Initial
Purchasers' obligations to contribute as provided in Sections 8(d) and
(e) are several in proportion to their respective purchase obligations
and not joint.
(g) The Initial Purchasers severally confirm and the
Company acknowledges that the statements with respect to the public
offering of the Securities by the Initial Purchasers set forth on the
last paragraph of the cover page, the fifth sentence of the sixth
paragraph of text under "Plan of Distribution" and the seventh, tenth,
twelfth, thirteenth and fourteenth paragraphs of text under "Plan of
Distribution" in the Offering Memorandum are correct and constitute the
only information concerning such Initial Purchasers furnished in
writing to the Company by or on behalf of the Initial Purchasers
specifically for inclusion in the Offering Memorandum.
9. TERMINATION. This Agreement shall be subject to termination by
notice given by the Initial Purchasers to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date any of
the events described in Section 5(a) shall have occurred or (b) (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company or ▇▇▇▇▇▇▇▇ shall have been suspended
on any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States
shall have occurred or (iv) there shall have occurred any outbreak or escalation
of hostilities (including, without limitation, an act of terrorism) or any
material adverse change in general economic, political or financial conditions
(or the effect of international conditions or the financial markets in the
United States shall be such) as to make it, in the judgment of a majority in
interest of the several Initial Purchasers, impracticable or inadvisable to
market the Securities on the terms and in the manner contemplated in the
Offering Memorandum. Notice of such cancellation shall be given to the Company
by telecopy or telephone but shall be subsequently confirmed by letter.
10. EFFECTIVENESS; DEFAULTING INITIAL PURCHASERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto. If, on the Closing Date, any one or more of the Initial Purchasers shall
fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such
25
date, and the aggregate principal amount of Securities which such defaulting
Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Securities
to be purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the principal amount of Securities set forth
opposite their respective names in Schedule I bear to the principal amount of
Securities set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as you may specify, to purchase the
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Initial Purchaser has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 10 by
an amount in excess of one-ninth of such principal amount of Securities without
the written consent of such Initial Purchaser. If, on the Closing Date, any
Initial Purchaser or Initial Purchasers shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, and arrangements satisfactory
to you and the Company for the purchase of such Securities are not made within
36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Initial Purchaser or the Company. In any such
case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes in the Offering Memorandum or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
Any notice under this Section 10 may be made by telecopy or telephone
but shall be subsequently confirmed by letter.
11. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If this
Agreement shall be terminated by the Initial Purchasers because of any failure
or refusal on the part of the Company to comply with the terms or to fulfill any
of the conditions of this Agreement, or if for any reason the Company shall be
unable to perform its obligations under this Agreement, the Company will
reimburse the Initial Purchasers for all out-of-pocket expenses (including the
fees and disbursements of its counsel) reasonably incurred by the Initial
Purchasers in connection with this Agreement and the offering contemplated
hereunder.
12. NOTICES. All statements, requests, notices and agreements
hereunder shall be in writing, and:
26
(a) if to the Initial Purchasers, shall be delivered or
sent by mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department (Fax: ▇▇▇-▇▇▇-▇▇▇▇) with a copy, in the case of
any notice pursuant to Section 8(c), to the Director of Litigation,
Office of the General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇;
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission c/o The ▇▇▇▇▇▇▇▇ Companies, Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer (Fax:
▇▇▇-▇▇▇-▇▇▇▇).
provided, however, that any notice to an Initial Purchaser pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its acceptance telex to ▇▇▇▇▇▇
Brothers Inc., which address will be supplied to any other party hereto by
▇▇▇▇▇▇ Brothers Inc. upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by ▇▇▇▇▇▇ Brothers Inc.
13. SUCCESSORS. This Agreement shall inure to the benefit of and
be binding upon the Initial Purchasers, the Company, and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any, who control
any Initial Purchaser within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
15. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
27
16. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
17. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
18. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
28
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchasers.
Very truly yours,
NORTHWEST PIPELINE
CORPORATION
By: ________________________________
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇ BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
CREDIT LYONNAIS SECURITIES (USA) INC.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
SCOTIA CAPITAL (USA) INC.
TD SECURITIES (USA) INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
By: ▇▇▇▇▇▇ BROTHERS INC.
________________________
Name:
Title:
EXHIBIT A
OPINION OF ▇▇▇▇▇ ▇▇▇▇▇▇, ESQ.,
SENIOR VICE PRESIDENT AND GENERAL COUNSEL OF
THE ▇▇▇▇▇▇▇▇ COMPANIES, INC.
1. The Company and each of its Subsidiaries have been duly
incorporated or otherwise validly organized or validly formed and are validly
existing in good standing under the laws of their respective jurisdictions of
formation or incorporation, have the requisite power and authority to own their
property and to conduct their business as described in the Offering Memorandum
and are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, except to
the extent such failure to be qualified or in good standing would not reasonably
be expected to have a Material Adverse Effect, and all of the issued shares of
capital stock of each Subsidiary have been duly and validly authorized and
issued and are fully paid, non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or claims;
2. Each of the Company and its Subsidiaries has all Licenses
necessary to own, hold, or lease, as the case may be, and to operate its
properties and to carry on its business as presently conducted, except where the
failure to possess such Licenses could not reasonably be expected to have a
Material Adverse Effect, and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to revocation or modification of any
such Licenses, except to the extent that any such revocation or modification
could not reasonably be expected to have a Material Adverse Effect;
3. The Company is not in violation of its charter or bylaws and,
to the best of such counsel's knowledge, neither the Company nor ▇▇▇▇▇▇▇▇ (i) is
in default, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any Material Contract or (ii) is in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject, except as disclosed in the
Offering Memorandum, and in case of (ii) and (iii), for such defaults or
violations are not reasonably expected to have a Material Adverse Effect;
A-1
4. Each of the Purchase Agreement, the Registration Rights
Agreement, the Indenture and the Securities have been duly authorized, executed,
and delivered by the Company.
5. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Purchase Agreement, the
Registration Rights Agreement, the Securities and the Indenture will not
contravene any law applicable to the Company, or the Certificate of
Incorporation or By-laws of the Company or any Material Contract, or any
judgment, order, decree of any governmental body, agency or court having
jurisdiction over the Company. This paragraph 5 does not include any opinion
regarding any federal or state securities or Blue Sky laws or regulations.
6. The Company has filed all documents with the Commission that
it is required to file under the Exchange Act and the rules and regulations of
the Commission thereunder, and such documents (other than the financial
statements, including the notes thereto, and related schedules therein, and the
other financial and accounting data, as to which such counsel need express no
opinion) conformed, when filed, in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
7. To the best of such counsel's knowledge, other than as set
forth or incorporated by reference in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or threatened against
the Company or to which any of its properties are subject that could reasonably
be expected to result in any Material Adverse Effect, or that could reasonably
be expected to adversely affect the consummation of the transactions
contemplated in this Agreement;
8. The Company is not, and immediately following the consummation
of the offering of the Securities and the application of the proceeds therefrom
as contemplated by the Offering Memorandum will not be, an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended;
9. Such counsel shall state that such counsel or personnel under
such counsel's supervision have participated in conferences with officers and
other representatives of the Company, the Company's outside counsel,
representatives of the independent auditors for the Company, your
representatives and your counsel at which the contents of the Offering
Memorandum and related matters were discussed and, although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Offering Memorandum; on the basis
A-2
of the foregoing, no facts have come to such counsel's attention that have led
such counsel to believe that the Final Offering Memorandum, as of its date or as
of the Closing Date, contained or contains an untrue statement of 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 such counsel need not express an opinion or belief
with respect to the financial statements, schedules and other financial and
accounting data included or incorporated by reference in the Final Offering
Memorandum.
"MATERIAL CONTRACT" means all agreements and instruments included in the list of
exhibits in the Company's or ▇▇▇▇▇▇▇▇', as applicable, Annual Report on Form
10-K for the year ended December 31, 2001 and subsequent Quarterly Reports on
Form 10-Q and Current Reports on Form 8-K (except for employment agreements,
stock option plans, stock election plans, stock incentive plans, officer and
director indemnification agreements and deferred compensation plans, all of
which are excluded).
A-3
EXHIBIT B
OPINION OF ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
1. The Securities, when executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of the Purchase Agreement, will be valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
2. The Indenture is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
3. The issuance of the Securities and the execution, delivery and
performance by the Company of the Purchase Agreement, the Indenture, the
Securities and the Registration Rights Agreement do not violate, or require any
filing with or approval of any governmental authority or regulatory body of the
State of New York or the United States of America under, any law or regulation
of the State of New York or the United States of America applicable to the
Company that, in our experience, is generally applicable to transactions in the
nature of those contemplated by the Purchase Agreement, except for such filings
or approvals as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Securities and by
Federal and state securities laws with respect to the Company's obligations
under the Registration Rights Agreement.
4. The execution, delivery and performance by the Company of the
Purchase Agreement, the Registration Rights Agreement, the Securities and the
Indenture will not violate (i) the Certificate of Incorporation or By-laws of
the Company, (ii) the terms of any Material Contract or (iii) any order,
judgment or decree of any court or other agency of government identified to such
counsel in an officers' certificate of the Company as constituting all orders,
judgments or decrees binding on the Company and attached to such opinion. This
paragraph 4 does not include any opinion regarding any federal or state
securities or Blue Sky laws or regulations. "MATERIAL CONTRACT" means all
agreements and instruments included in the list of exhibits in the Company's or
▇▇▇▇▇▇▇▇', as applicable, Annual Report on Form 10-K for the year ended December
31, 2001 and subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K (except for employment agreements, stock option plans, stock election
plans, stock incentive plans, officer and director indemnification agreements
and deferred compensation plans, all of which are excluded).
B-1
5. The Registration Rights Agreement is a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms.
6. The Indenture, the Registration Rights Agreement and the
Securities conform in all material respects with the descriptions thereof
contained in the Final Offering Memorandum. The statements in the Final Offering
Memorandum under the caption "Description of Other Indebtedness," insofar as
such statements constitute a general summary of provisions of documents referred
to therein, are accurate in all material respects and fairly summarize the
matters referred to therein, and the statements under the caption "Certain U.S.
Federal Income Tax Consequences," insofar as such statements constitute matters
of United States law, are accurate in all material respects, subject to the
qualifications and limitations set forth therein.
7. Assuming (i) the accuracy of the representations and
warranties of the Company set forth in Section 1 of the Purchase Agreement, (ii)
the due performance by the Company of the covenants and agreements set forth in
Section 6 of the Purchase Agreement, (iii) the compliance by the Initial
Purchasers with the offering and transfer procedures and the restrictions
described in the Offering Memorandum and their covenants and agreements in
Sections 2 and 7 of the Purchase Agreement and (iv) the accuracy of the
representations and warranties of the Initial Purchasers set forth in Section 2
of the Purchase Agreement, the offer, sale and delivery of the Securities to the
Initial Purchasers in the manner contemplated by the Purchase Agreement and the
Offering Memorandum and the initial resale of the Securities by the Initial
Purchasers in the manner contemplated in the Offering Memorandum and the
Purchase Agreement, do not require registration under the Securities Act or
qualification of the Indenture under the TIA, it being understood that such
counsel expresses no opinion as to any subsequent resale of any Security.
8. Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent auditors for the Company, your
representatives and your counsel at which the contents of the Offering
Memorandum and related matters were discussed and, although such counsel is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in the Offering Memorandum, on the basis of the foregoing, no facts
have come to such counsel's attention that have led such counsel to believe that
the Final Offering Memorandum, as of its date or as of the Closing Date,
contained or contains an untrue statement of material fact or omitted or omits
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
B-2
misleading, except that such counsel need not express an opinion or belief with
respect to the financial statements, schedules and other financial and
accounting data included or incorporated by reference in the Final Offering
Memorandum. ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may also state that they do not express
any opinion regarding any federal or state laws or regulations applicable to
entities operating in the energy industry, including regulations of the Federal
Energy Regulatory Commission.
B-3
Schedule I
PRINCIPAL AMOUNT
INITIAL PURCHASER PURCHASED
--------------------------------------------------------------------- ----------------
▇▇▇▇▇▇ Brothers Inc................................................. $ 43,750,000
Banc of America Securities LLC...................................... $ 43,750,000
Credit Lyonnais Securities (USA) Inc................................ $ 16,450,000
▇.▇. ▇▇▇▇▇▇ Securities Inc.......................................... $ 16,450,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc............................................ $ 16,450,000
Scotia Capital (USA) Inc............................................ $ 16,450,000
TD Securities (USA) Inc............................................. $ 16,450,000
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.................. $ 5,250,000
------------
$175,000,000
============