<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________
CASCADE NATURAL GAS CORPORATION
(Exact name of registrant as specified in its charter)
Washington 91-0599090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
222 Fairview Avenue North
Seattle, Washington 98109
(206) 624-3900
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
J.D. WESSLING
Vice President-Finance
Cascade Natural Gas Corporation
222 Fairview Avenue North
Seattle, Washington 98109
(206) 624-3900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________
Copies to:
Mary Ann Frantz, Esq. David P. Falck, Esq.
Miller, Nash, Wiener, Winthrop, Stimson, Putnam &
Hager & Carlsen LLP Roberts
111 S.W. Fifth Avenue One Battery Park Plaza
Portland, Oregon 97204-3699 New York, New York 10004-1490
(503) 224-5858 (212) 858-1438
_____________
Approximate date of commencement of proposed sales to the public:
As soon as practicable after the Registration Statement becomes effective.
_____________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]_____________
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CALCULATION OF REGISTRATION FEE
=============================================================================
Proposed
Title of Each Proposed Maximum
Class of Maximum Aggregate Amount of
Securities to Amount to be Offering Price Offering Registration
be Registered Registered (1) Per Share (2) Price (2) Fee
________________ ____________ ______________ ___________ ____________
Common Stock 3,500,000
$1 par value. . . shares $13.875 $48,562,500 $16,746
=============================================================================
(1) Each share of Common Stock being registered hereunder includes one
preferred stock purchase right exercisable on the terms and conditions set
forth under "Preferred Stock Purchase Rights" herein.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sale prices of
the Common Stock reported on the New York Stock Exchange Composite
Transactions Tape on July 16, 1996.
_____________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
PROSPECTUS
CASCADE NATURAL GAS CORPORATION
Common Stock
($1.00 Par Value)
Cascade Natural Gas Corporation ("the Company" or "Cascade") may
offer and sell up to 3,500,000 shares of its Common Stock, $1.00 par value per
share (the "Common Stock"), in one or more issuances at prices and on terms to
be determined at the time of sale. The number of shares being sold, the
purchase price, the initial public offering price, the proceeds to the
Company, and the other terms of the offering of such shares of Common Stock
will be set forth in a Prospectus Supplement to be delivered at the time of
any such offering.
The Common Stock of the Company is listed for trading on the New
York Stock Exchange under the symbol "CGC." The shares of Common Stock
offered hereby will be listed, subject to notice of issuance, on such
exchange.
__________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________________________
The shares of Common Stock offered hereby may be sold directly by
the Company or through agents, underwriters or dealers designated from time to
time. If any agents of the Company or any underwriters are involved in the
sale of shares of Common Stock in respect of which this Prospectus is being
delivered, the names of such agents or underwriters and any applicable
discounts or commissions with respect to such shares of Common Stock will also
be set forth in a Prospectus Supplement.
The date of this Prospectus is July ___, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; Seven World Trade Center, Suite 1300, New York,
New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials can be obtained at prescribed rates by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material can also be inspected and copied at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding reporting
companies under the Exchange Act. The address of such Internet Web site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement
on Form S-3 with respect to the Common Stock offered hereby. This Prospectus
does not contain all of the information in the Registration Statement and in
the exhibits thereto, certain portions of which have been omitted as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement, including the schedules and exhibits thereto,
which may be inspected without charge at the principal office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and copies of
which may be obtained from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed with the Commission are
hereby incorporated by reference in this Prospectus, and shall be deemed to be
a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996.
3. The Company's Current Reports on Form 8-K dated February 7,
1996, and July 18, 1996.
4. The description of the Company's Common Stock and related
preferred stock purchase rights included as Exhibit 99 to the Company's
Current Report on Form 8-K dated July 18, 1996.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of
filing of such documents. The documents described above, and such later-filed
documents, are hereinafter referred to as "Incorporated Documents." Any
statement contained in an Incorporated Document shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed Incorporated Document
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The information relating to the Company contained in this
Prospectus summarizes, is based upon, or refers to, information and financial
statements contained in one or more of the Incorporated Documents;
accordingly, such information contained herein is qualified in its entirety by
reference to such Incorporated Documents and should be read in conjunction
therewith.
The Company undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of the documents referred to above, which
have been incorporated in this Prospectus by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference into documents.) Requests for such copies should be directed to:
J.D. Wessling, Vice President-Finance, Cascade Natural Gas Corporation,
222 Fairview Avenue North, Seattle, Washington 98109 (telephone 206-624-3900).
THE COMPANY
Incorporated in 1953 in the State of Washington, Cascade is a
local gas distribution utility with operations in the States of Washington and
Oregon. Cascade currently serves over 151,000 customers in 90 communities in
the two states with approximately 81% of its deliveries in the State of
Washington. As of March 31, 1996, Cascade served 128,653 residential
customers, 23,993 commercial customers, 328 firm industrial customers, and 25
interruptible customers, all of which are classified as core customers, and
121 noncore, large volume customers. Core customers are those who elect to
purchase traditional fully bundled services, which primarily include gas
supply and transportation services from the Company; noncore customers, on the
other hand, select supply and transportation services from the Company's menu
of unbundled services. For the twelve months ended March 31, 1996, the
percentage of operating margin attributable to each customer class was as
follows: residential customers, 35%; commercial customers, 27%; firm
industrial customers, 5%; interruptible customers, 3%; and noncore, large
volume customers, 30%.
Cascade has experienced significant growth in its core customer
base during the last five years due primarily to customer conversion from
other energy sources to gas space and water heating and new residential
construction in its service territory. Cascade's residential customer base
increased by 8.3%, 8.3% and 6.1% during 1993, 1994 and 1995, respectively. At
March 31, 1996, Cascade's residential customer count was 6.2% higher than at
March 31, 1995. Cascade believes its current residential growth rate is one
of the highest among companies in the local gas distribution business in the
United States.
The Company's executive offices are located at 222 Fairview Avenue
North, Seattle, Washington 98109. Its telephone number is (206) 624-3900.
CERTAIN ISSUES FACING THE COMPANY AND THE GAS DISTRIBUTION INDUSTRY
Cascade is subject to factors affecting both the natural gas
distribution industry generally and those companies which, like itself, are
experiencing customer growth, including: the need for adequate and timely
rate relief to recover increased capital and operating costs resulting from
customer growth and to sustain dividend levels; increasing competition brought
on by deregulation initiatives at the federal and state regulatory levels; the
increasing shift by industrial and institutional customers to the noncore side
of the gas distribution business, which has historically yielded lower
operating margins; the potential loss of large volume industrial customers due
to bypass (bypass occurs when a natural gas customer connects directly to an
interstate pipeline and "bypasses" the local gas distribution company);
exposure to environmental cleanup requirements; and general economic
conditions.
USE OF PROCEEDS
Except as may otherwise be set forth in any Prospectus Supplement,
the net proceeds, after deduction of expenses, from the sale of the shares of
Common Stock offered hereby will be used by the Company to repay short-term
debt incurred in connection with the Company's capital construction program,
to fund future capital construction under the program, and for other corporate
purposes.
CAPITAL CONSTRUCTION PROGRAM
The Company's capital expenditures in 1993, 1994, and 1995 were
$32,990,000, $27,251,000, and $37,637,000, respectively. The 1996 capital
expenditure budget is $35,147,000 of which $5,200,000 had been expended
through March 31, 1996. Approximately 59% of the 1996 budget will be expended
for equipment and facilities to service additional customers, with the
remaining 41% being expended to maintain customer service and upgrade
equipment and facilities. The percentage of capital expenditures expended in
connection with servicing new customers has declined from 74% in 1995 and 82%
in 1994 due to the commencement in 1995 of a construction program to reinforce
the Company's system on the Kitsap Peninsula in the State of Washington, which
is expected to be completed in 1997.
Including the budgeted 1996 expenditures, Cascade will have
invested over $168,000,000 on new plant facilities in the five years ending in
1996, compared to a total of $133,252,000 in the 12-year period from 1980
through 1991. The Company presently anticipates that capital expenditures
will total approximately $150,000,000 during the five-year period ending in
2001.
DESCRIPTION OF COMMON STOCK
General
The number of authorized shares of Common Stock of Cascade is
15,000,000 shares, with 9,249,611 shares issued and outstanding as of June 30,
1996. Also at that date, Cascade had outstanding 156,560 shares of preferred
stock ("Preferred Stock"), consisting of 96,560 shares of $.55 cumulative
senior preferred stock, without par value (the "$.55 Preferred Stock"), and
60,000 shares of 7.85% cumulative preferred stock, $1.00 par value (the "7.85%
Preferred Stock"). An additional 940,000 shares of preferred stock, $1.00 par
value, are authorized for issuance pursuant to Cascade's Restated Articles of
Incorporation, as amended (the "Restated Articles"), including 110,000 shares
reserved for issuance as Series Z Junior Participating Preferred Stock (the
"Series Z Preferred Stock"). See "Preferred Stock Purchase Rights" below.
The following statements summarize certain provisions of the
Restated Articles. Such summary does not purport to be complete and is
qualified in its entirety by reference to the Restated Articles, which are
filed as an exhibit to the Registration Statement of which this Prospectus is
a part.
Dividends
After the payment of all preferential dividends on shares of the
Preferred Stock, holders of the Common Stock are entitled to dividends when
and as declared by the Board of Directors. The Company's bank loan agreements
contain provisions requiring maintenance of a minimum net worth. Under these
provisions, approximately $23,220,000 was available for dividends on the
Common Stock and the Preferred Stock at March 31, 1996.
Voting Rights
Except as described below and except as otherwise provided by law,
holders of the Common Stock have exclusive voting power and are entitled to
one vote for each share held of record. Approval of matters brought before
the shareholders requires the affirmative vote of a plurality of the shares of
Common Stock present and voting, except as otherwise required by law or by the
Restated Articles in the case of certain business combinations. The holders
of Common Stock are entitled to cumulate their votes in electing directors.
If the Company fails to pay six full quarterly dividends on the
$.55 Preferred Stock, the holders of such stock will have the right to elect,
voting as a class to the exclusion of the holders of Common Stock and the
7.85% Preferred Stock, three members of the Board of Directors until all
arrears and dividends have been paid in full, whereupon all voting rights will
revest in the holders of Common Stock and, to the extent applicable, the
holders of the 7.85% Preferred Stock. In addition, the Company, without
obtaining the affirmative vote of the holders of at least two-thirds of the
shares of $.55 Preferred Stock then outstanding, may not increase the
authorized number of shares of $.55 Preferred Stock, authorize or issue any
stock having priority or preference over, or ranking on a parity with, the
$.55 Preferred Stock as to dividends or assets, amend the Restated Articles so
as to affect adversely any rights of the $.55 Preferred Stock, or merge or
consolidate with or into any other corporation or dispose of all or
substantially all of its assets. The holders of the 7.85% Preferred Stock
have similar voting rights with respect to the election of directors in the
event of dividend arrearages; provided that, if the holders of the $.55
Preferred Stock then have the right to elect three directors, the holders of
the 7.85% Preferred Stock may exercise their voting rights as to the election
of directors only to the extent that the holders of the $.55 Preferred Stock
have elected fewer than three directors, such that the total number of
directors elected by the holders of the $.55 Preferred Stock and the 7.85%
Preferred Stock is not more than three. The holders of the 7.85% Preferred
Stock also have approval rights comparable to those of the $.55 Preferred
Stock with respect to changes in the rights or priority of the 7.85% Preferred
Stock and certain other extraordinary corporate events.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of
Cascade, the holders of the Common Stock are entitled to receive pro rata all
assets of Cascade, if any, remaining after payment of all debt and payment to
the holders of any outstanding preferred stock of the full preferential
amounts fixed for such stock.
Dividend Reinvestment Plan
The Company maintains an Automatic Dividend Reinvestment Plan (the
"Plan"). All holders of Common Stock may participate in the Plan and may have
cash dividends on their shares of Common Stock automatically reinvested in
additional shares of Common Stock and may invest in additional shares of
Common Stock by making optional cash payments without the payment of brokerage
commissions or service charges. Participation in the Plan is offered only
through a separate prospectus available from the Company.
The Company may issue authorized but unissued shares or, at its
option, direct an independent agent, who acts on behalf of participants, to
purchase shares in the open market for the Plan. The Company has been issuing
authorized but unissued shares for such purpose. During the 12 months ended
March 31, 1996, approximately 181,089 shares of Common Stock were issued under
the Plan.
Changes in Control and Business Combinations
The Restated Articles and Washington law contain certain
provisions that may have the effect of delaying or discouraging a hostile
takeover of the Company. Article XII of the Restated Articles provides that
certain business combinations involving the Company and any person who is or
who has announced a plan to become the beneficial owner of 10% or more of the
outstanding Common Stock (an "Interested Shareholder"), must be approved by
the affirmative vote of the holders of at least 80% of the outstanding shares
of the capital stock of the Company which are not owned by the Interested
Shareholder or its affiliates. The 80% voting requirement does not apply in
the case of a business combination which provides for conversion of Common
Stock into cash, securities or property with a fair market value not less than
the highest per share price paid by the Interested Shareholder or its
affiliates for any of their shares of Common Stock or, under certain
circumstances, if the business combination is approved by the Board of
Directors.
In addition, Chapter 23B.19 of the Washington Business Corporation
Act prohibits certain Washington corporations, including the Company, from
engaging in certain significant business transactions, such as a merger, share
exchange or consolidation, sale, exchange or mortgage of significant assets,
or termination of more than 5% of the employees of such a corporation, for a
period of five years following an acquiring person's acquisition of beneficial
ownership of 10% or more of the outstanding voting shares of such corporation,
unless the significant business transaction or the purchase of such shares is
approved in advance of the share acquisition by a majority of the members of
the board of directors of such corporation.
Preferred Stock Purchase Rights
In May 1993, the Company distributed to holders of Common Stock
rights ("Rights") to purchase shares of Series Z Preferred Stock on the basis
of one Right for each share of Common Stock. Each share of Common Stock
offered hereby will, upon issuance, be accompanied by one Right. The Rights
may not be exercised and will be attached to and trade with shares of Common
Stock until the Distribution Date, which will occur on the earlier of (i) the
tenth day following a public announcement that there has been a "Share
Acquisition," i.e., that a person or group (other than the Company and certain
other persons) has acquired or obtained the right to acquire 20% or more of
the outstanding Common Stock and (ii) the tenth business day following the
commencement or announcement of certain offers to acquire beneficial ownership
of 30% or more of the outstanding Common Stock. Subject to restrictions on
exercisability while the Rights are redeemable as discussed below, each Right
entitles the holder to buy from the Company one one-hundredth of a share of
Series Z Preferred Stock at a price of $85, subject to adjustment. Upon the
occurrence of a Share Acquisition, and provided that all necessary regulatory
approvals have been obtained, each Right will thereafter entitle the holder
(other than the acquiring person or group and transferees) to buy from the
Company for $85 shares of Common Stock having a market value of $170, subject
to adjustment.
Until a Right is exercised, the holder of a Right will not thereby
have any rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends. There is no assurance
that all regulatory approvals for the exercise of the Rights or the issuance
of the underlying securities could be obtained in a timely fashion or at all.
Furthermore, prior to the Distribution Date, the Company may, without the
consent of holders of the Rights, amend the Rights in any manner, including
amendments which result in the cancellation of the Rights. Until the tenth
day following a Share Acquisition, the Company may redeem all outstanding
Rights at a redemption price of $.01 per Right, subject to adjustment. While
the Rights are so subject to redemption, they are not exercisable.
Accordingly, no purchaser of shares of Common Stock offered hereby should buy
such shares with the expectation that the Rights will be of material benefit
to the holders of Common Stock.
The Rights have certain antitakeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not sanctioned by the Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
sanctioned by the Board of Directors at a time when the Rights are redeemable.
The foregoing description of the Rights is subject to and
qualified by reference to the Rights Agreement dated as of March 19, 1993, and
the First Amendment to Rights Agreement dated as of June 15, 1993, which are
filed as exhibits to the Registration Statement of which this Prospectus is a
part. A more complete description of the Rights is set forth in Exhibit 99 to
the Company's Current Report on Form 8-K dated July 18, 1996, which
description has been incorporated by reference herein. See "Incorporation of
Certain Documents by Reference."
Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is The Bank
of New York, New York, New York.
Miscellaneous
All shares of Common Stock presently outstanding are fully paid
and nonassessable and the shares of Common Stock offered hereby, upon issuance
and payment therefor, will be fully paid and nonassessable. Holders of Common
Stock have no preemptive or similar rights to subscribe for additional
securities of the Company.
PLAN OF DISTRIBUTION
The Company may offer the Common Stock offered hereby in any of
three ways: (i) through underwriters or dealers; (ii) directly to a limited
number of purchasers or to a single purchaser; or (iii) through agents. Any
Prospectus Supplement with respect to shares of the Common Stock offered
hereby will set forth the terms of the offering and the proceeds to the
Company from the sale thereof, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price,
and any discounts or concessions allowed or reallowed or paid to dealers. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If underwriters are utilized, the Common Stock being sold to them
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The underwriter or underwriters with respect to the
Common Stock being offered will be named in the Prospectus Supplement relating
to such offering and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover page of such
Prospectus Supplement. Any underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent,
and that, in general, the underwriters will be obligated to purchase all of
the shares of Common Stock to which such underwriting agreement relates if any
is purchased. The Company will agree to indemnify any underwriters against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended.
The Common Stock offered hereby may be sold directly by the
Company or through agents designated by the Company from time to time. Any
agent involved in the offer or sale of the Common Stock in respect of which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
LEGAL MATTERS
The legality of the securities offered hereby and certain other
legal matters will be passed upon for the Company by Miller, Nash, Wiener,
Hager & Carlsen LLP, Seattle, Washington, and certain legal matters will be
passed upon for any underwriters, dealers or agents by Winthrop, Stimson,
Putnam & Roberts, New York, New York.
EXPERTS
The consolidated financial statements incorporated in this
Prospectus by reference from the Company's annual report on Form 10-K for the
year ended December 31, 1995, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the securities being
registered hereby are estimated as follows:
Securities and Exchange Commission registration fee $ 16,746
New York Stock Exchange listing fee . . . . . . . . 22,125
*Legal fees and expenses . . . . . . . . . . . . . . 50,000
*Accounting fees and expenses. . . . . . . . . . . . 10,000
*Printing and engraving expenses . . . . . . . . . . 25,000
*Blue Sky fees and expenses (including legal fees) . 15,000
*Transfer agent's fees . . . . . . . . . . . . . . . 5,000
*Miscellaneous . . . . . . . . . . . . . . . . . . . 6,129
-------------
*Total . . . . . . . . . . . . . . . . . . . $ 150,000
=============
* Estimated
Item 15. Indemnification of Directors and Officers
Indemnification
Section 23B.08.310 of the Revised Code of Washington, a part of
the Washington Business Corporation Act (the "Act"), provides that any
director against whom a claim shall be asserted under or pursuant to said
section for the making of any distribution contrary to the provisions of the
Act or any other restrictions contained in the Registrant's Restated Articles
of Incorporation, and who shall be held liable thereon, shall be entitled to
contribution from each shareholder for the amount the shareholder accepted
knowing the distribution was made in violation of the Act. Said section also
provides that any such director shall be entitled to contribution from every
other director who could be held liable under the Act for the unlawful
distribution.
Article XI of the Restated Articles of Incorporation of the
Registrant provides as follows:
"To the fullest extent permitted by Washington law at the time
this Article becomes effective or as may be thereafter in effect, this
Corporation is authorized to indemnify any director of this Corporation.
The Board of Directors shall be entitled to determine the terms of such
indemnification, including advance of expenses, and to give effect
thereto through the adoption of By-Laws, approval of agreements, or by
any other manner approved by the Board of Directors. Any amendment to
or repeal of this Article XI shall not adversely affect any right of a
director of this Corporation hereunder with respect to any right to
indemnification that arises prior to such amendment or repeal."
Sections 23B.08.500-600 of the Act authorize the Registrant to
provide for the indemnification, under certain circumstances, of directors,
officers, employees, or agents of the Registrant for certain liabilities which
may be incurred by them in their capacities as such.
Article XVI, as amended, of the Restated Bylaws of the Registrant
provides as follows:
"Sec. 1. Each person who was or is made a party or is threatened
to be made a party to or is involved (including, without limitation, as a
witness) in any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative or investigative, formal or informal, by
reason of the fact that he or she is or was a director or officer of the
corporation or, being or having been such a director or officer, he or she is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent or in any other
capacity, shall be indemnified and held harmless by the corporation to the
full extent permitted by applicable law as then in effect, against all
expense, liability and loss (including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts to be paid in
settlement) actually or reasonably incurred or suffered by such person in
connection therewith. Such indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; provided, however,
that no indemnification shall be provided under this Article to any such
person to the extent that such indemnification would not be consistent with
the Washington Business Corporation Act or other applicable law as then in
effect; provided further, however, that except as provided in Sec. 2 of this
Article with respect to proceedings seeking to enforce rights to
indemnification, this corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of this corporation. The right to indemnification
conferred in this Article shall be a contract right and shall include the
right to be paid by the corporation the expense incurred in defending any such
proceeding in advance of its final disposition; provided, however, that the
payment of such expenses in advance of the final disposition of a proceeding
shall be made to or on behalf of a director or officer only upon delivery to
the corporation of an undertaking, by or on behalf of such director or
officer, to repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be indemnified under this
Section or otherwise.
"Sec. 2. If a claim under Sec. 1 of this Article is not paid in
full by this corporation within sixty days after a written claim has been
received by this corporation (except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final disposition, in
which case the applicable period shall be twenty days), the claimant may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, to the extent successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. The claimant shall be presumed to be entitled to indemnification
hereunder upon submission of a written claim (and, in an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition, where the required undertaking has been tendered to
this corporation), and thereafter this corporation shall have the burden of
proof to overcome the presumption that the claimant is not so entitled. It
shall be a defense to any such action (other than an action brought to enforce
a claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is required, has been
tendered to this corporation) that the claimant has not met the standards of
conduct which make it permissible hereunder or under the Washington Business
Corporation Act for this corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on this corporation.
Neither the failure of this corporation (including its board of directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth herein or in the Washington Business Corporation Act nor an actual
determination by this corporation (including its board of directors,
independent legal counsel, or its shareholders) that the claimant is not
entitled to indemnification or to the reimbursement or advancement of expenses
shall be a defense to the action or create a presumption that the claimant is
not so entitled.
"Sec. 3. The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition
conferred in this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
Articles of Incorporation, bylaws, agreement, vote of shareholders or
disinterested directors or otherwise.
"Sec. 4. The corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Washington Business Corporation Act. The
corporation may enter into contracts with any director or officer of the
corporation in furtherance of the provisions of this Article and may create a
trust fund, grant a security interest or use other means (including, without
limitation, a letter of credit) to ensure the payment of such amounts as may
be necessary to effect indemnification as provided in this Article.
"Sec. 5. The corporation may, by action of its board of directors
from time to time, provide indemnification and pay expenses in advance of the
final disposition of a proceeding to employees and agents of the corporation
with the same scope and effect as the provisions of this Article with respect
to indemnification and advancement of expenses of directors and officers of
the corporation or pursuant to rights granted pursuant to, or provided by, the
Washington Business Corporation Act or otherwise."
Reference is made to section 6 of the form of proposed
Underwriting Agreement filed herewith as Exhibit 1 for provisions regarding
the indemnification of the Registrant, its directors, certain of its officers
and its controlling persons against certain civil liabilities, including civil
liabilities under the Securities Act of 1933.
Insurance
The Registrant also has a Directors and Officers Liability
insurance policy insuring, among other matters, the liability of the
Registrant to its officers and directors under the indemnity provisions
described above and insuring its officers and directors against liability
incurred in their capacities as officers and directors.
Item 16. List of Exhibits
The exhibits to the Registration Statement required by Item 601 to
Regulation S-K are listed in the accompanying Index to Exhibits.
Item 17. Undertakings
(a) Rule 415 offering. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933 unless
the information required to be included in such
post-effective amendment is contained in a periodic
report filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") and incorporated herein by
reference;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in
the information set forth in the registration
statement, unless the information required to be
included in such post-effective amendment is contained
in a periodic report filed by the Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act and
incorporated herein by reference; provided that,
notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed
that which was registered) and any deviation from the
low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.
(2) That, for purposes of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) Filings incorporating subsequent Exchange Act documents by
reference. The undersigned Registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Acceleration of effectiveness. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue. The undertaking of the Registrant in
the preceding sentence does not apply to insurance against liability
arising under the Securities Act of 1933.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Seattle, state of
Washington, on the 19th day of July, 1996.
CASCADE NATURAL GAS CORPORATION
By /s/ J.D. WESSLING
J.D. Wessling
Vice President-Finance,
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 19th day of July, 1996. Each person whose
signature appears below hereby constitutes Ralph E. Boyd and J.D. Wessling,
and each of them singly, such person's true and lawful attorney, with full
power to them and each of them to sign, for such person and in such person's
name and capacity indicated below, any and all amendments to this Registration
Statement, hereby ratifying and confirming such person's signature as it may
be signed by said attorneys to any and all amendments.
Signature Title
--------- -----
(1) Principal Executive Officer and Director:
/s/ W. BRIAN MATSUYAMA Chairman of the Board, Chief
W. Brian Matsuyama Executive Officer and Director
(2) Principal Financial Officer:
/s/ J.D. WESSLING Vice President-Finance, Chief
J.D. Wessling Financial Officer
(3) Principal Accounting Officer:
/s/ JAMES E. HAUG Treasurer and Chief Accounting
James E. Haug Officer
(4) A majority of the Board of Directors:
Director
Carl Burnham, Jr.
/s/ MELVIN C. CLAPP Director
Melvin C. Clapp
/s/DAVID A. EDERER Director
David A. Ederer
/s/ HOWARD L. HUBBARD Director
Howard L. Hubbard
/s/ LARRY L. PINNT Director
Larry L. Pinnt
/s/ BROOKS G. RAGEN Director
Brooks G. Ragen
/s/ ANDREW V. SMITH Director
Andrew V. Smith
/s/ MARY A. WILLIAMS Director
Mary A. Williams
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
1 Form of proposed Underwriting Agreement.
4.1 Restated Articles of Incorporation of the Registrant as amended
through March 28, 1996. Incorporated by reference to Exhibit 3.1
to the Registrant's current report on Form 8-K dated July 18,
1996.
4.2 Restated Bylaws of the Registrant. Incorporated by reference to
Exhibit 3.2 to the Registrant's current report on Form 8-K dated
July 18, 1996.
4.3 Indenture dated as of August 1, 1992, between the Registrant and
The Bank of New York relating to Medium-Term Notes. Incorporated
by reference to Exhibit 4(c) to the Registrant's current report on
Form 8-K dated August 12, 1992.
4.4 First Supplemental Indenture dated as of October 25, 1993, between
the Registrant and The Bank of New York relating to Medium-Term
Notes. Incorporated by reference to Exhibit 4 to the Registrant's
quarterly report on Form 10-Q for the quarter ended September 30,
1993.
4.5 Rights Agreement dated as of March 19, 1993, between the
Registrant and Harris Trust and Savings Bank. Incorporated by
reference to Exhibit 2 to the Registrant's registration statement
on Form 8-A dated April 21, 1993.
4.6 First Amendment to Rights Agreement dated as of June 15, 1993,
between the Registrant and The Bank of New York. Incorporated by
reference to Exhibit 4 to the Registrant's quarterly report on
Form 10-Q for the quarter ended June 30, 1993.
5 Opinion of Miller, Nash, Wiener, Hager & Carlsen LLP.
23.1 Consent of Miller, Nash, Wiener, Hager & Carlsen LLP (included in
Exhibit 5).
23.2 Consent of Deloitte & Touche LLP, independent auditors.
24 Power of attorney of certain officers and directors (see page
II-5).
__________________________
All other exhibits listed in Item 601 of Regulation S-K are not applicable or
not required.
<PAGE>
<PAGE>
EXHIBIT 1
Draft of July 16, 1996
________________________________________________________________
_________________________________________________________________
CASCADE NATURAL GAS CORPORATION
1,250,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: ________, 1996
_________________________________________________________________
_________________________________________________________________
<PAGE>
CASCADE NATURAL GAS CORPORATION
1,250,000 Shares of Common Stock
(Par Value $1 Per Share)
UNDERWRITING AGREEMENT
----------------------
Dated: __________, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
A.G. Edwards & Sons, Inc.
Ragen Mackenzie Incorporated
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Cascade Natural Gas Corporation, a Washington corporation (the
"Company"), confirms its agreements with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), A.G. Edwards & Sons,
Inc. and Ragen Mackenzie Incorporated and each of the other Underwriters named
in Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), with respect to (i) the sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $1 per share, of the Company ("Common
Stock") set forth in Schedule A hereto and (ii) the grant by the Company to
the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 187,500 additional shares
of Common Stock to cover over-allotments, if any. The aforesaid 1,250,000
shares of Common Stock (the "Initial Securities") to be purchased by the
Underwriters and all or any part of the 187,500 shares of Common Stock subject
to the option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities". If you are the sole firms
or corporations listed in Schedule A hereto, then the terms "Underwriters" and
"Representatives," as used herein, shall each be deemed to refer to you, and
"Underwriter" or "Representative" shall each be deemed to refer to any of you.
The Company understands that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 33-__) covering
the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), which registration statement has been declared
effective by the Commission. Such registration statement, as amended to the
date of this Underwriting Agreement, and the prospectus, as supplemented by a
prospectus supplement, dated the date hereof, relating to the terms and
offering of the Securities proposed to be filed pursuant to Rule 424 ("Rule
424") of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations") (including, in each case, the documents incorporated,
or deemed to be incorporated, by reference therein pursuant to Item 12 of Form
S-3 under the 1933 Act) are herein called the "Registration Statement" and the
"Prospectus," respectively; any reference herein to the terms "amend," or
"amendment" with respect to the Registration Statement or the Prospectus shall
be deemed to include any document incorporated by reference therein after the
date hereof and prior to the termination of the offering of the Securities by
the Underwriters; provided however, that any supplement to the Prospectus
filed with the Commission pursuant to Rule 424 under the 1933 Act with respect
to an offering of Common Stock other than the Securities shall not be deemed
to be a supplement to, or a part of, the Prospectus. If any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Securities (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of
the 1933 Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters
for such use.
All references in this Agreement to financial statements, schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. The Registration
Statement has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement and any post-effective
amendments thereto became effective and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), the Registration
Statement and any amendments and supplements thereto complied and will comply
in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing
Time (and, if any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or omitted or
will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information furnished
to the Company in writing by any Underwriter through Merrill Lynch expressly
for use in the Registration Statement or Prospectus.
Each preliminary prospectus (which term, as used herein, shall be deemed
to include a prospectus supplemented by a preliminary prospectus supplement
relating to the Securities) and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, complied when delivered to the Underwriters for use in connection
with the offering (and, if applicable, when filed pursuant to Rule 434 under
the 1933 Act) in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus, at
the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the date of the Prospectus
and at the Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), 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 in the light of the circumstances under which they
were made, not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act and
the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in
the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the Common Stock and Preferred Stock in amounts
per share that are consistent with past practice, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Washington and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Subsidiaries. The only subsidiaries of the Company are subsidiaries
which, considered in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to this Agreement or pursuant to the dividend
reinvestment plan referred to in the Prospectus). The shares of issued and
outstanding capital stock have been duly authorized and validly issued and are
fully paid and non-assessable; none of the outstanding shares of capital stock
was issued in violation of the preemptive or other similar rights of any
security holder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities have
been duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; the Common Stock conforms to
all statements relating thereto contained or incorporated by reference in the
Prospectus and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the issuance of the
Securities is not subject to preemptive or other similar rights of any
security holder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation 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
subsidiary is subject (collectively, "Agreements and Instruments") except for
such defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary 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 subsidiary or
any of their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any subsidiary, which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation of
this Agreement or the performance by the Company of its obligations hereunder;
the aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits thereto
which have not been so described and filed as required.
(xv) Absence of Further Requirements. Orders of the Utilities and
Transportation Commission of the State of Washington ("WUTC") and the Oregon
Public Utility Commission have been obtained authorizing the issuance of the
Securities. No additional filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance
by the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act Regulations
or state securities laws.
(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be
in full force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xvii) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xviii) Environmental Laws. Except as described in the Registration
Statement and except such violations 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 and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface, strata)
or wildlife, including, without limitation, laws and regulations, relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and 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 might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to any Hazardous Materials or the violation of any
Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any subsidiary delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number
of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject, in each case, to such adjustments among the
Underwriters as Merrill Lynch in its sole discretion shall make to eliminate
any sales or purchases of fractional shares.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
187,500 shares of Common Stock at the price per share set forth in Schedule A,
less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the
Option Securities. The option hereby granted will expire 30 days after the
date hereof and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by
Merrill Lynch to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by Merrill
Lynch, but shall not be later than seven full business days after the exercise
of said option, nor in any event prior to the Closing Time, as hereinafter
defined. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase that proportion of the total number of Option Securities then being
purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as Merrill Lynch in its
discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of
__________________________ or at such other place as shall be agreed upon by
the Representatives and the Company, at 10:00 A.M. (Eastern Time) on the third
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called the "Closing
Time").
In addition, in the event that any or all of the Option Securities
are purchased by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer or certified
or official bank check or checks drawn in federal funds payable to the order
of the Company, against delivery to the Representatives for the respective
accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose
check has not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representatives may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
A.M. (Eastern Time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will file the prospectus
supplement with the Commission pursuant to Rule 424 setting forth, among other
things, the necessary information with respect to the price and terms of
offering of the Securities and will notify the Representatives immediately,
and confirm the notice in writing, (i) when any post-effective amendment to
the Registration Statement, shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take
such steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing by
the Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will 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 of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment to
the Registration Statement, any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such Proposed filing or use, as
the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters. If applicable, the copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to amend the Registration Statement
or amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements made therein not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may designate
and to maintain such qualifications in effect for a period of not less than
one year from the later of the effective date of the Registration Statement;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement.
(g) Rule 158. 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 as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Restriction on Sale of Securities. During a period of 120
days from the date of the Prospectus, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, or (B)
any shares of Common Stock issued pursuant to the Company's dividend
reinvestment plan.
(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 required by the 1934 Act and the 1934 Act
Regulations.
(k) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriters, including any stock or other transfer taxes or
duties payable upon the sale of the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus
and any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5, Section
9(a)(i) or Section 11 hereof, the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company delivered pursuant to
the provisions hereof, to the performance by the Company of its covenants and
other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement has become effective and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
counsel to the Underwriters. A prospectus supplement setting forth, among
other things, the necessary information with respect to the price and terms of
offering of the Securities shall have been filed with the Commission in
accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Miller, Nash, Wiener, Hager & Carlsen LLP, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At the Closing Time,
the Representatives shall have received the favorable opinion, dated as of the
Closing Time, of Winthrop, Stimson, Putnam & Roberts, counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, as to such matters as the Representatives
shall reasonably request.
(d) Officers' Certificate. At the Closing Time there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representatives shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of the Closing Time, to the effect that (i)
there has been no such material adverse change, (ii) the representations and
warranties in Section 1 (a) hereof are true and correct with the same force
and effect as though expressly made at and as of the Closing Time, (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 Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Deloitte & Touche
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, to the effect set forth in Annex A hereto.
(f) Bring-down Comfort Letter. At the Closing Time the
Representatives shall have received from Deloitte & Touche LLP a letter, dated
as of the Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than three
business days prior to the Closing Time.
(g) Approval of Listing. At the Closing Time the Securities
shall have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(h) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company hereunder shall be true and correct as
of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section
5(d) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion
of Miller, Nash, Wiener, Hager & Carlsen LLP, counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Winthrop, Stimson, Putnam & Roberts, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof
(iv) Bring-down Comfort Letter. A letter from Deloitte &
Touche LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representatives pursuant to Section 5(e)
hereof, except that the "specified date" in the letter furnished pursuant
to this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(a) Additional Documents. At the Closing Time and at each Date
of Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel to the Underwriters.
(b) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by Merrill Lynch by notice to the Company at any
time at or prior to the Closing Time or such Date of Delivery as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6 and 7
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in
clauses (i), (ii) and (iii) as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), 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 (i), (ii) or (iii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by
any Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of an
Underwriter or who controls an underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act and who, at the date of this
Agreement, is a director or officer of the Company, such indemnity agreement
is subject to the undertaking of the Company in the Registration Statement
under Item 13 thereof.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter 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
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto), 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 such Underwriter through Merrill Lynch 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 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties 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) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent
if (i) such Settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters 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 Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Underwriters,
in each case as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person,
or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. Merrill Lynch may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the prospectus,
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development 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 judgment of Merrill Lynch, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in any securities of the Company has been suspended or
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange has
been suspended or limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority,
or (iv) if a banking moratorium has been declared by either Federal or New
York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6 and 7 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), Merrill Lynch shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, Merrill Lynch
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the Underwriters to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the
relevant Option Securities, as the case may be, either Merrill Lynch or the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for an Underwriter under
this Section 10.
SECTION 11. Default by the Company. (a) If the Company shall
fail at the Closing Time or at the Date of Delivery to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 4, 6 and 7 shall remain in
full force and effect. No action taken pursuant to this Section shall relieve
the, Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to Merrill Lynch at North Tower, World
Financial Center, New York, New York 10281-1201; All notices to the Company
shall be directed to it at 222 Fairview Avenue North, Seattle, Washington
98109, attention of Chief Financial Officer.
SECTION 13. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriters and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
By_________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
RAGEN MACKENZIE INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
------------------------------
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
<PAGE>
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
-------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporate. . . . . . . . . . . . . . . . . . . . . . . . .
A.G. Edwards & Sons, Inc.. . . . . . . . . . . . . . . . . . . .
Ragen MacKenzie Incorporated . . . . . . . . . . . . . . . . . .
-----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,250,000
===========
<PAGE>
SCHEDULE B
____________ Shares of Common Stock
(Par Value $1 Per Share)
1. The initial public offering price per share for the
Securities shall be $ _____.
2. The purchase price per share for the Securities to be paid by
the several Underwriters shall be $ _____, being an amount equal to the
initial public offering price set forth above less $ _____ per share; provided
that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) shall be
reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial Securities but not payable
on the Option Securities.
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation. Each of the Company and
its subsidiaries has full corporate power and authority to own its properties
and to conduct its business as currently being carried on and as described in
the Registration Statement and Prospectus and is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in it
own or leases real property or in which the conduct of business makes such
qualification necessary, except where the failure to so qualify or be in good
standing would not have a material adverse effect upon the business, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole.
(2) The capital stock of the Company conforms as to legal matters
to the description thereof contained in the Prospectus under the caption
"Description of Common Stock." All of the issued and outstanding shares of
the Common Stock have been duly authorized and validly issued by the Company
and are fully paid and non-assessable, and the holders thereof are not subject
to personal liability by reason of being such holders. Except as otherwise
stated in the Registration Statement and the Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's Restated Articles of Incorporation, by-laws or any
agreement or other instrument known to us to which the Company is bound. To
the best of our knowledge, except as described in the Registration Statement
or the Prospectus, neither the filing of the Registration Statement nor the
offering of the Securities as contemplated in the Underwriting Agreement gives
rise to any rights for or relating to the registration of any shares of Common
Stock or other securities of the Company.
(3) All of the issued and outstanding shares of capital stock of
each of the Company's subsidiaries have been duly and validly authorized and
issued and are fully paid and nonassessable, and, to the best of our
knowledge, except as described in the Registration Statement and Prospectus,
the Company owns of record and beneficially, free and clear of any security
interests, claims liens, proxies, equities or other encumbrances, all of the
issued and outstanding shares of such stock. To the best of our knowledge,
except as described in the Registration Statement and Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary any shares of the
capital stock of the Company or any subsidiary of the Company.
(4) The Registration Statement has been declared effective under
the 1933 Act and to the best of our knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated or threatened by the
Commission.
(5) The description in the Registration Statement and Prospectus
of statutes, legal and governmental proceedings, contracts and other documents
are accurate and fairly present the information required to be shown; and we
do not know of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or filed as exhibits to the Registration
Statement that are not described or filed as required.
(6) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company. The execution, delivery and performance of the
Underwriting Agreement and any other agreement or instrument entered into or
issued or to be entered into or issued by the Company in connection with the
transactions contemplated in the Registration Statement and the Prospectus and
the consummation of the transactions contemplated in the Underwriting
Agreement and in the Registration Statement and the Prospectus (including the
issuance and sale of the Securities and the use of the proceeds from the sale
of the Securities as described under the caption "Use of Proceeds") and
compliance by the Company with its obligations thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Company
or any subsidiary is a party or by which it or any of them may be bound, or to
which any of the assets, properties or operations of the Company or any
subsidiary is subject, except for such conflicts, breaches, defaults, events
or liens, charges or encumbrances that would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations.
(7) Orders of the WUTC and the OPUC have been obtained
authorizing the issuance of the Securities; such orders are in full force and
effect and are sufficient to authorize the transactions contemplated by the
Underwriting Agreement; and no other consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required for
the execution, delivery and performance of the Underwriting Agreement or for
the consummation of the transactions contemplated thereby, including the sale
of the Securities by the Company, except as may be required by the 1933 Act or
state securities laws.
(8) Except as disclosed in the Prospectus and to the best of our
knowledge, the Company and each of its subsidiaries holds, and is operating in
compliance in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and
orders of any governmental or self-regulatory body required for the conduct of
its business except for those whose absence does not have a Material Adverse
Effect, and all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders are valid and in full force and
effect.
(9) The Registration Statement, and as of its effective date, the
Prospectus, as of the date it was filed under Rule 424(b), and any amendment
thereof or supplement thereto, complied as to form in all material respects
with the requirements of the 1933 Act, the Rules and Regulations and, with
respect to the incorporated documents as of their respective filing dates, the
1934 Act, and the applicable published instructions, rules and regulations of
the Commission thereunder.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company and the Underwriters, and counsel for the
Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except as stated in the first sentence of paragraph 2 and the
first clause of paragraph 5 above) on the basis of the foregoing, no facts
have come to our attention that would lead us to believe that either the
Registration Statement or any amendment thereto at the time the Registration
Statement or amendment thereto became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented, as of the date it was filed under Rule
424(b), and as of the date hereof, includes or included, as the case may be,
an untrue statement of a material fact or omits or omitted, as the case may
be, 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 (it being understood that we express no opinion or belief with
respect to the financial statements, including the notes thereto, financial
schedules, or other financial or statistical data included in the Registration
Statement, Prospectus, any amendment or supplement thereto, or any document
incorporated by reference in the Prospectus).
<PAGE>
Annex A
[FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)]
We are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations.
(i) in our opinion, the audited financial statements and the
related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of the 1933 Act and the published rules and regulations thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim consolidated financial statements of the
Company for the three and six month periods ended March 31, 1996 and June
30, 1996 included or incorporated by reference in the Registration
Statement and the Prospectus (collectively, the "10-Q Financials"), a
reading of the unaudited interim consolidated financial statements of the
Company for the twelve-month periods ended June 30, 1996 and 1995,
included in the Registration Statement and the Prospectus (the 12-month
financials") [, a reading of the latest available unaudited interim
consolidated financial statements of the Company, a reading of the
minutes of all meetings of the stockholders and directors of the
Company and the -------------- and --------------- Committees of the
Company's Board of Directors [and any subsidiary committees] since
January 1, 1996, inquiries of certain officials of the Company [and its
subsidiaries] responsible for financial and accounting matters, a review
of interim financial information in accordance with standards established
by the American Institute of Certified Public Accountants in Statement on
Auditing Standards No. 71, Interim Financial Information ("SAS 71"), with
respect to the [description of relevant periods] and such other inquiries
and procedures as may be specified in such letter, nothing came to our
attention that caused us to believe that:
(A) the 10-Q Financials incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the 1934 Act and the 1934 Act Regulations
applicable to unaudited financial statements included in Form 10-Q
or any material modifications should be made to the 10-Q Financials
incorporated by reference in the Registration Statement and the
Prospectus for them to be in conformity with generally accepted
accounting principles;
[(B) the 12-month financials included in the Registration
Statement and the Prospectus do not comply as to form in material
respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations applicable to unaudited interim
financial statements included in registration statements or any
material modifications should be made to the 12-month financials
included in the Registration Statement and the Prospectus for them
to be in conformity with generally accepted accounting principles;]
(C) at [----------- 1996 and at] a specified date not more
than five days prior to the date of this Agreement, there was any
change in the capital stock or long-term debt of the Company or any
decrease in consolidated stockholders' equity in each case as
compared with amounts shown in the latest balance sheet included in
the Registration Statement, except in each case for changes,
decreases or increases that the Registration Statement discloses
have occurred or may occur; or
(D) for the period from January 1, 1996 to ------------ 19-
- and for the period from --------------- 19-- to a specified date
not more than five days prior to the date of this Agreement, there
was any material changes or decreases in consolidated operating
revenues or net earnings to common stockholders, in each case as
compared with the comparable period in the preceding year, except
in each case for any decreases that the Registration Statement
discloses have occurred or may occur; and
(iii) in addition to the procedures referred to in clause (ii)
above, we have performed, as requested by the Underwriters, other
procedures, not constituting an audit, with respect to certain amounts,
percentages, numerical data and financial information appearing in the
Registration Statement, which are specified below, and have compared
certain of such items with, and have found such items to be in agreement
with, the accounting and financial records of the Company.
<PAGE>
EXHIBIT 5
MILLER, NASH, WIENER, HAGER & CARLSEN LLP
ATTORNEYS AND COUNSELORS AT LAW
3500 U. S. BANCORP TOWER
111 S.W. FIFTH AVENUE
PORTLAND, OREGON 97204-3699
TELEPHONE (503) 224-5858
FACSIMILE (503) 224-0155
July 19, 1996
Board of Directors
Cascade Natural Gas Corporation
222 Fairview Avenue North
Seattle, Washington 98198
Ladies and Gentlemen:
Reference is made to the Registration Statement dated July 19,
1996, on Form S-3 (the "Registration Statement"), to be filed by Cascade
Natural Gas Corporation, a Washington corporation (the "Company"), with the
Securities and Exchange Commission (the "Commission") for the purpose of
registering under the Securities Act of 1933, as amended (the "Act"),
3,500,000 shares of the Company's common stock, $1.00 par value (the "Common
Stock"). Such shares of Common Stock may be offered and sold from time to
time as set forth in the prospectus (the "Prospectus") included in the
Registration Statement and in supplements to the Prospectus.
As counsel for the Company, we are familiar with the actions taken
by the board of directors of the Company with respect to the authorization and
issuance of the Common Stock. We have examined the Registration Statement and
originals or copies, certified or otherwise identified to our satisfaction, of
such corporate records, certificates of public officials, and other documents
as we have deemed necessary or relevant as a basis for the opinions set forth
herein.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly
existing under the laws of the State of Washington with corporate power and
authority under such laws to issue the Common Stock.
2. The shares of Common Stock to be issued and sold pursuant to
the Registration Statement have been duly authorized for issuance and when
such shares have been issued and sold as described in the Registration
Statement, the Prospectus, and supplements to the Prospectus, and payment is
received therefor, while the Registration Statement is effective and in
compliance with state securities laws and applicable public utilities laws,
such shares will be validly issued, fully paid, and nonassessable.
We consent to the use of this opinion in the Registration Statement
and in any amendment thereto and to the references to our firm under the
caption "Legal Matters" in the Prospectus. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
MILLER, NASH, WIENER, HAGER & CARLSEN LLP
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Cascade Natural Gas Corporation on Form S-3 of our report dated February 5,
1996, appearing in the Annual Report on Form 10-K of Cascade Natural Gas
Corporation for the year ended December 31, 1995 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
Deloitte & Touche LLP
Seattle, Washington
July 18, 1996
