Exhibit 1.1
PPL Capital Funding,
Inc.
$
Medium-Term Notes, Series [
]
Unconditionally
Guaranteed
as to Payment of Principal,
Premium, if any,
and Interest by PPL
Corporation
DISTRIBUTION
AGREEMENT
,
200
[name]
[address]
[name]
[address]
[name]
[address]
[name]
[address]
Ladies and Gentlemen:
PPL Capital Funding, Inc. (formerly
known as PP&L Capital Funding, Inc.), a Delaware corporation
(the “Company”), and PPL Corporation (formerly known as
PP&L Resources, Inc.), a Pennsylvania corporation (the
“Guarantor”), confirm their agreement with [insert
names of Agents] (each, an “Agent”, and collectively,
the “Agents”) with respect to the issue and sale by the
Company of its Medium-Term Notes, Series [
] (the “Notes”). The
Notes will be unconditionally guaranteed as to payment of
principal, premium, if any, and interest by the Guarantor pursuant
to guarantees of the Guarantor (the “Guarantees”).
Certain terms of the Notes are set forth in Schedule A
hereto.
The Notes are to be issued pursuant
to an Indenture, dated as of November 1, 1997, as amended or
modified from time to time (the “Base Indenture”),
among the Company, the Guarantor and JPMorgan Chase Bank, as
trustee
(the “Trustee”), as supplemented by
a Supplemental Indenture No. 6, dated as of
, 200 (the
“Supplemental Indenture” and, together with the Base
Indenture, the “Indenture”), among the Company, the
Guarantor and the Trustee. As of the date hereof, the Company has
authorized the issuance and sale of up to $
aggregate principal amount of Notes to or through the Agents
pursuant to the terms of this Agreement. It is understood, however,
that the Company may from time to time authorize the issuance of
additional Notes and that such additional Notes may be sold to or
through the Agents pursuant to the terms of this Agreement, all as
though the issuance of such Notes were authorized as of the date
hereof.
This Agreement provides both for the
sale of Notes by the Company to one or more Agents as principal for
resale to investors and other purchasers and for the sale of Notes
by the Company directly to investors through one or more agents (as
may from time to time be agreed to by the Company and the
applicable Agent), in which case the applicable Agent will act as
an agent of the Company in soliciting offers for the purchase of
Notes.
In connection with the foregoing,
the Company and the Guarantor have filed with the Securities and
Exchange Commission (the “Commission”) a joint
registration statement on Form S-3 (Nos. 333-
, 333-
-01 and 333-
-02) for the registration of debt securities, including the Notes
and the Guarantees, under the Securities Act of 1933, as amended
(the “1933 Act”) and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of
the Commission under the 1933 Act (the “1933 Act
Regulations”). Such registration statement (as so amended, if
applicable) has been declared effective by the Commission and the
Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the “1939 Act”). Such registration
statement (as so amended, if applicable) is referred to herein as
the “Registration Statement”; and the final prospectus
and all applicable amendments or supplements thereto (including the
final prospectus supplement relating to the offering of Notes), in
the form first furnished to the applicable Agent(s) and to be
transmitted for filing pursuant to Rule 424(b) of the 1933 Act
Regulations, are collectively referred to herein as the
“Prospectus”; provided, however , that all
references to
the “Registration Statement” and the
“Prospectus” shall also be deemed to include all
documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the “1934
Act”), prior to any acceptance by the Company of an offer for
the purchase of Notes; provided, further , that if the
Company files a registration statement with the Commission pursuant
to Rule 462(b) of the 1933 Act Regulations (the “Rule 462(b)
Registration Statement”), then, after such filing, all
references to the “Registration Statement” shall also
be deemed to include the Rule 462(b) Registration Statement. For
purposes of this Agreement, all references to the Registration
Statement or Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
system (“EDGAR”). All references in this Agreement to
financial statements and schedules and other information that is
“contained,” “included” or
“stated” in the Registration Statement or Prospectus
(and all other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other
information that are or are deemed to be incorporated by reference
in the Registration Statement or Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements
to the Registration Statement or Prospectus shall be deemed to mean
and include the filing of any document under the 1934 Act that is
or is deemed to be incorporated by reference in the Registration
Statement or Prospectus, as the case may be.
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1.
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Appointment
as Agent .
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(a) Appointment . On the
basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein contained
and subject to the reservation by the Company of the right to sell
Notes directly to investors on its own behalf (and not through any
Agent), offers for the purchase of Notes may be solicited by an
Agent as agent for the Company at such times and in such amounts as
such Agent deems advisable. The Company may appoint additional
agents in connection with the offering of the Notes; provided
that (i) the Company promptly notifies the Agents of such
appointment and (ii) the commission paid to any such additional
agent with respect to the sale of Notes by the Company as a result
of a
solicitation made by such additional agent does
not exceed that percentage specified in Schedule B hereto of the
aggregate principal amount of such Notes sold by the Company; and
provided further that , unless the appointment of such
additional agent is expressly limited to the solicitation of offers
to purchase a specified principal amount of Notes on specified
terms, such additional agent enters into an agreement with the
Company making such agent an Agent under this Agreement or enters
into an agreement with the Company on terms which are substantially
similar to those contained in this Agreement, which agreement shall
include appropriate changes to reflect the arrangements between the
Company and such additional agent.
(b) Sale of Notes . The
Company shall not sell or approve the solicitation of offers for
the purchase of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the
aggregate principal amount of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for
maintaining records with respect to the aggregate principal amount
of Notes sold, or of otherwise monitoring the availability of Notes
for sale, under the Registration Statement.
(c) Purchases as Principal .
The Agents shall not have any obligation to purchase Notes from the
Company as principal. However, absent an agreement between an Agent
and the Company that such Agent shall be acting solely as an agent
for the Company, such Agent shall be deemed to be acting as
principal in connection with any offering of Notes by the Company
through such Agent. Accordingly, the Agents, individually or in a
syndicate, may agree from time to time to purchase Notes from the
Company as principal for resale to investors and other purchasers
determined by such Agents. Any purchase of Notes from the Company
by an Agent as principal shall be made in accordance with Section
3(a) hereof.
(d) Solicitations as Agent .
If agreed upon between an Agent and the Company, such Agent, acting
solely as an agent for the Company and not as principal, will
solicit offers for the purchase of Notes. Such Agent will
communicate to the Company, orally or in writing, each offer for
the purchase of Notes solicited by it on an agency basis
other than those offers rejected by such Agent.
Such Agent shall have the right, in its discretion reasonably
exercised, to reject any offer for the purchase of Notes, in whole
or in part, and any such rejection shall not be deemed a breach of
its agreement contained herein. The Company may accept or reject
any offer for the purchase of Notes, in whole or in part. Such
Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the
purchase of Notes has been solicited by it on an agency basis and
accepted by the Company. Such Agent shall not have any liability to
the Company in the event that any such purchase is not consummated
for any reason. If the Company shall default on its obligation to
deliver Notes against payment tendered by a purchaser whose offer
has been solicited by such Agent on an agency basis and accepted by
the Company, the Company shall hold such Agent harmless against any
loss, claim or damage arising from or as a result of such default
by the Company.
(e) Reliance . The Company
and the Agents agree that any Notes purchased from the Company by
one or more Agents as principal shall be purchased, and any Notes
the placement of which an Agent arranges as an agent of the Company
shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided
herein.
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2.
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Representations and Warranties
.
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(a) The Company and the Guarantor
jointly and severally represent and warrant to, and agree with,
each Agent as of the date hereof, as of the date of each acceptance
by the Company of an offer for the purchase of Notes (whether to
such Agent as principal or through such Agent as agent), as of the
date of each delivery of Notes (whether to such Agent as principal
or through such Agent as agent) (the date of each such delivery to
such Agent as principal is referred to herein as a
“Settlement Date”), and as of any time that the
Registration Statement or the Prospectus shall be amended or
supplemented (each of the times referenced above is referred to
herein as a “Representation Date”), that:
(i) The Registration Statement, when
it became effective and at each Representation Date, and the
Prospectus and any amendment or supplement thereto, when filed or
transmitted for filing with the Commission and at each
Representation Date, complied or will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the “1939 Act
Regulations”), and did not or 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; provided, however , that 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 the
information furnished to the Company in writing by the Agents
expressly for use in the Registration Statement or Prospectus or to
that part of the Registration Statement which constitutes the
Trustee’s Statement of Eligibility under the 1939 Act (the
“T-1”).
(ii) The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement or Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the “1934
Act Regulations”), and, when read together with the other
information in the Prospectus, at the date hereof, at the date of
the Prospectus and at each Representation Date, did not and will
not 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; provided, however ,
that 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 or through
any Agent
expressly for use in the
Registration Statement or Prospectus.
(iii) The Guarantor has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania with
corporate power and authority to enter into and perform its
obligations under this Agreement, the Indenture and the
Guarantees.
(iv) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware with corporate
power and authority to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement, the Indenture and the Notes; and the Company is and will
be treated as a consolidated subsidiary of the Guarantor pursuant
to generally accepted accounting principles.
(v) Neither the Guarantor nor the
Company is an “investment company” that is required to
be registered under the Investment Company Act of 1940, as amended
(the “1940 Act”).
(vi) This Agreement has been duly
authorized, executed and delivered by each of the Company and the
Guarantor.
(vii) The Indenture has been duly
authorized, executed and delivered by the Company and the Guarantor
and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and binding agreement of the Company
and the Guarantor enforceable in accordance with its terms except
to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, or reorganization,
moratorium, and other similar laws relating to or affecting the
enforcement of creditors’ rights and by general equity
principles, regardless of whether enforcement is considered in a
proceeding at law or in equity (the “Bankruptcy
Exceptions”); the Indenture conforms and will conform in all
material respects to the statements relating thereto contained in
the Prospectus; and at the effective date of the
Registration Statement, the
Indenture was duly qualified under the 1939 Act.
(viii) The Notes have been duly
authorized and, when issued, authenticated and delivered in the
manner provided for in the Indenture and delivered against payment
of the consideration therefor, will constitute valid and binding
obligations of the Company enforceable in accordance with their
terms except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; the Notes will be in the forms
established pursuant to, and entitled to the benefits of, the
Indenture; and the Notes will conform in all material respects to
the statements relating thereto contained in the
Prospectus.
(ix) The Guarantees have been duly
authorized and, when duly executed pursuant to the Indenture and
delivered, will constitute valid and binding obligations of the
Guarantor enforceable in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; the Guarantees will be in the forms established
pursuant to the Indenture; and the Guarantees will conform in all
material respects to the statements relating thereto contained in
the Prospectus. !
(x) Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein or contemplated
thereby, there has been no event or occurrence that would result in
a material adverse change, or any development involving a material
adverse change, in the financial position or results of operations
of the Guarantor and its subsidiaries considered as one enterprise
(a “Material Adverse Effect”).
(xi) The Medium-Term Note Program
under which the Notes are issued (the “Program”), as
well as the Notes, are rated Baa2 by Moody’s Investors
Service, Inc. and BBB by Standard & Poor’s Ratings
Service, or such other rating as to which the Company or the
Guarantor shall have most recently notified the Agents pursuant to
Section 5(a) hereof.
(b) Each of the several Agents
represents and warrants to, and agrees with, the Company and the
Guarantor, their respective directors and such of their respective
officers who shall have signed the Registration Statement, and to
each other Agent, that the information furnished in writing to the
Company and the Guarantor by such Agent expressly for use in the
Registration Statement or the Prospectus does not contain an untrue
statement of a material fact and does not omit to state a material
fact in connection with such information required to be stated
therein or necessary to make such information not
misleading.
(c) Additional Certifications
. Any certificate signed by any officer of the Company or the
Guarantor and delivered to one or more Agents or to counsel for the
Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company or the Guarantor, as the
case may be, to such Agent or Agents as to the matters covered
thereby on the date of such certificate.
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3.
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Purchases as
Principal; Solicitations as Agent .
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(a) Purchases as Principal .
Notes purchased from the Company by the Agents, individually or in
a syndicate, as principal shall be made in accordance with terms
agreed upon between such Agent or Agents and the Company in a
separate agreement (which may be an oral agreement confirmed in
writing between the applicable Agent and the Company). Each such
separate agreement is herein referred to as a “Terms
Agreement.” Each such Terms Agreement, whether oral (and
confirmed in writing, which may be a facsimile transmission) or in
writing, shall include such information (as applicable) as is
specified in Schedule A hereto. An Agent’s commitment to
purchase Notes as principal shall be deemed to have been made on
the basis of the representations, warranties and agreements of the
Company herein contained, but subject to the terms and conditions
herein contained. Unless the context otherwise requires, references
herein to “this Agreement” shall include the applicable
Terms Agreement of one or more Agents to purchase Notes from the
Company as principal. Each purchase of Notes, unless otherwise
agreed, shall be at a discount from the principal amount of each
such Note equivalent to the
applicable commission set forth in Schedule B
hereto. The Agents may engage the services of any broker or dealer
in connection with the resale of the Notes purchased by them as
principal and may allow all or any portion of the discount received
from the Company in connection with such purchases to such brokers
or dealers. At the time of each Terms Agreement to purchase Notes
from the Company by one or more Agents as principal, such Agent or
Agents shall specify the requirements for the comfort letter,
opinions of counsel and officers’ certificate pursuant to
Section 8 hereof.
(b) Solicitations as Agent .
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein
contained, when agreed by the Company and an Agent, such Agent, as
an agent of the Company, will use its reasonable efforts to solicit
offers for the purchase of Notes upon the terms set forth in the
Prospectus. The Agents are not authorized to appoint sub-agents
with respect to Notes sold through them as agent. All Notes sold
through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such
Agent.
The Company reserves the right, in
its sole discretion, to suspend solicitation of offers for the
purchase of Notes through an Agent, as an agent of the Company,
commencing at any time for any period of time or permanently. As
soon as practicable after receipt of instructions from the Company,
such Agent will suspend solicitation of offers for the purchase of
Notes from the Company until such time as the Company has advised
such Agent that such solicitation may be resumed.
The Company agrees to pay each Agent
a commission, in the form of a discount, equal to the applicable
percentage of the principal amount of each Note sold by the Company
as a result of a solicitation made by such Agent, as an agent of
the Company, at the time of settlement of any such sale, as set
forth in Schedule B hereto.
(c) Administrative Procedures
. The purchase price, interest rate or formula, maturity date and
other terms of the Notes specified in Schedule A hereto (as
applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement
to
the Prospectus (each, a “Pricing
Supplement”) to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable
Pricing Supplement, the Notes will be issued in denominations of
$1,000 or any larger amount that is an integral multiple of $1,000.
Administrative procedures with respect to the issuance and sale of
the Notes (the “Procedures”) shall be agreed upon from
time to time among the Company, the Agents and the Trustee. The
initial Procedures, which are set forth in Schedule C hereto, shall
remain in effect until changed by agreement among the Company, the
Agents and the Trustee. The Agents and the Company agree to
perform, and the Company agrees to request the Trustee to perform,
their respective duties and obligations specifically provided to be
performed by them in the Procedures.
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4.
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Delivery and
Payment for Notes Sold through an Agent as Agent
.
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Delivery of Notes sold through an
Agent as an agent of the Company shall be made by the Company to
such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make
payment for a Note on the date fixed for settlement, such Agent
shall promptly notify the Company and deliver such Note to the
Company and, if such Agent has theretofore paid the Company for
such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than
default by such Agent in the performance of its obligations
hereunder, the Company will reimburse such Agent on an equitable
basis for its loss of the use of the funds for the period such
funds were credited to the Company’s account.
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5.
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Certain
Covenants of the Company and the Guarantor .
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Each of the Company and the
Guarantor jointly and severally covenant with the several Agents as
follows:
(a) To notify the Agents promptly,
and confirm the notice in writing, of (i) any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information, (ii) the institution by the Commission of
any
stop order proceedings in respect of the
Registration Statement, or the initiation of proceedings for that
purpose, and to make every reasonable effort to prevent the
issuance of any such stop order and to obtain as soon as possible
its lifting, if issued, and (iii) any change in the rating assigned
by any nationally recognized statistical rating organization to the
Program or any debt securities (including the Notes) of the Company
or the Guarantor, or the public announcement by any nationally
recognized statistical rating organization that it has under
surveillance or review, with possible negative implications, its
rating of the Program or any such debt securities, or the
withdrawal by any nationally recognized statistical rating
organization of its rating of the Program or any such debt
securities;
(b) To advise the Agents, or
Sullivan & Cromwell LLP as counsel to the Agents, promptly of
any such filing, and to advise the Agents, or Sullivan &
Cromwell LLP, as counsel to the Agents, promptly of any proposal to
file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment), (ii) any amendment or
supplement to the Prospectus (other than an amendment or supplement
providing solely for the determination of the variable terms of the
Notes or relating solely to the offering of securities other than
the Notes), or (iii) any document that would as a result thereof be
incorporated by reference in the Prospectus whether pursuant to the
1933 Act, the 1934 Act or otherwise; and will furnish the Agents
with copies of any such amendment, supplement or other document a
reasonable amount of time prior to such proposed filing or use, as
the case may be;
(c) To endeavor, in cooperation with
the Agents, to qualify the Notes for offer and sale under the
securities or blue sky laws of such states and the other
jurisdictions of the United States as the Agents may from time to
time designate, to continue such qualifications in effect so long
as required for the distribution of the Notes and to reimburse the
Agents for any expenses (including filing fees and reasonable fees
and disbursements of counsel) paid by the Agents or on their behalf
to qualify the Notes for offer and sale, to continue such
qualification, to determine the eligibility of the Notes for
investment and to print the memoranda relating thereto; provided
that neither the
Company nor the Guarantor shall be required to
qualify as a foreign corporation in any jurisdiction in which it is
not so qualified, to consent to service of process in any
jurisdiction other than with respect to claims arising out of the
offering or sale of the Notes, or to meet any other requirement in
connection with this paragraph (c) deemed by them to be unduly
burdensome;
(d) To deliver promptly to the
Agents signed copies of the Registration Statement as originally
filed and of all amendments thereto heretofore or hereafter filed,
including conformed copies of all exhibits except those
incorporated by reference, and such number of conformed copies of
the Registration Statement (but excluding the exhibits), the
Prospectus, and any amendments and supplements thereto, as the
Agents may reasonably request;
(e) To prepare, with respect to any
Notes to be sold to or through one or more Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a
form previously approved by the Agents. The Company will deliver
such Pricing Supplement no later than 11:00 A.M., New York City
time, on the business day following the date of the Company’s
acceptance of the offer for the purchase of such Notes and will
file such Pricing Supplement pursuant to Rule 424(b) under the 1933
Act within the time periods prescribed thereunder, and, in any
event, not later than the close of business of the Commission on
the fifth business day after the date on which such Pricing
Supplement is first used;
(f) Except as otherwise provided in
subsection (l) of this Section 5, if at any time during the term of
this Agreement any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include 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 existing at
the time the Prospectus is delivered to a purchaser, not
misleading, or if it shall be necessary at any time to amend the
Registration Statement or amend or supplement the Prospectus to
comply with the 1933 Act or the 1933 Act Regulations, to advise the
Agents immediately, confirmed in writing, to cease the solicitation
of offers for the purchase of Notes in their capacity as
agents and to cease sales of any Notes they may
then own as principal, and to promptly prepare and file with the
Commission, subject to Section 5(b) hereof, such amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance; provided, however,
that the cost of any amendment or supplement which relates solely
to the activities of any Agent shall be borne by the Agent or
Agents requiring the same;
(g) Except as otherwise provided in
subsection (l) of this Section 5, on or prior to the date on which
there shall be released to the general public interim financial
statement information related to the Company or the Guarantor with
respect to each of the first three quarters of any fiscal year or
preliminary financial statement information with respect to any
fiscal year, or financial information included in the audited
consolidated financial statements of the Company or the Guarantor
for the preceding fiscal year, the Company and the Guarantor shall
furnish such information to the Agents;
(h) As soon as practicable, the
Guarantor will make generally available to its security holders an
earnings statement covering a period of at least twelve months
beginning after the “effective date of the registration
statement” within the meaning of Rule 158 under the 1933 Act
which will satisfy the provisions of Section 11(a) of the 1933
Act;
(i) The Company and the Guarantor
during the period when the Prospectus is required to be delivered
under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the 1934 Act within the time periods prescribed by the 1934 Act
and the 1934 Act Regulations;
(j) Unless otherwise agreed upon
between one or more Agents acting as principal and the Company,
between the date of any Terms Agreement by such Agent(s) to
purchase Notes from the Company and the Settlement Date with
respect thereto, the Company will not, without the prior written
consent of such Agent(s), issue, sell, offer or contract to sell,
grant any option for the sale of, or otherwise dispose of, any debt
securities of the Company with maturities and other terms
substantially similar to the Notes being sold
pursuant to such Terms Agreement (other than the
Notes that are to be sold pursuant to such Terms Agreement, notes
to banks under any revolving credit agreement of the Company or
commercial paper in the ordinary course of business);
(k) The Company will apply the net
proceeds from the sale of the Notes for the purposes set forth in
the Prospectus;
(l) The Company shall not be
required to comply with the provisions of subsections (f) or (g) of
this Section 5 during any period from the time the Agents shall
have suspended solicitation of offers for the purchase of Notes in
their capacity as agents pursuant to a request from the Company
until the time the Company shall determine that solicitation of
offers for the purchase of Notes should be resumed; provided,
however, that compliance with such subsections shall be required
for any portion of such period during which an Agent shall hold any
Notes as principal purchased pursuant to a Terms Agreement; and
provided further that the Agents shall, upon inquiry by the Company
or the Guarantor, advise the Company and the Guarantor whether or
not any of them retains any Notes for purposes of this subsection
(1), and from the 30th day immediately following the issuance of
such Notes, unless otherwise advised by an Agent, the Company and
the Guarantor shall be entitled to assume that the distribution of
such Notes is complete; and
(m) The Company will comply with the
conditions set forth in Rule 3a-5 under the 1940 Act (“Rule
3a-5”), necessary for the Company to not be considered an
“investment company” under the 1940 Act.
The Company will pay or bear (i) all
expenses in connection with the matters herein required to be
performed by the Company or the Guarantor, including all expenses
in connection with the preparation and filing of the Registration
Statement and the Prospectus, and any amendment or supplement
thereto, and the furnishing of copies thereof to the Agents, and
all audits, statements or reports in connection therewith, and all
expenses in connection with the issue and delivery of the Notes and
the related Guarantees, including the reasonable fees and
disbursements
of counsel to the Agents incurred in connection
with the establishment of the Program and incurred from time to
time in connection with the transactions contemplated hereby, any
fees and expenses relating to the eligibility and issuance of Notes
in book-entry form and the cost of obtaining CUSIP or other
identification numbers for the Notes, all Federal and State taxes
(if any) payable (not including any transfer taxes) upon the issue
of the Notes or the related Guarantees, any fee charged by
securities ratings services for rating the Program and the Notes,
the fees and expenses incurred in connection with any listing of
the Notes on a securities exchange, and the fee of the National
Association of Securities Dealers, Inc., if any, and (ii) all
expenses in connection with the printing, reproduction and delivery
of this Agreement and the printing, reproduction and delivery of
such other documents or certificates as may be required in
connection with the offering, purchase, sale, issuance or delivery
of the Notes or the Guarantees.
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7.
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Conditions
of Agents’ Obligations .
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The obligations of one or more
Agents to purchase Notes as principal and to solicit offers for the
purchase of Notes as an agent of the Company, and the obligations
of any purchasers of Notes sold through an Agent as an agent of the
Company, will be subject to the following conditions:
(a) The Agents shall have received
from PricewaterhouseCoopers LLP a letter, dated the date of this
Agreement, in form and substance satisfactory to you, to the effect
that:
(i) They are independent accountants
with respect to the Guarantor and its subsidiaries within the
meaning of the 1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the
consolidated financial statements of the Guarantor and its
subsidiaries audited by them and incorporated by reference in the
Registration Statement comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1934 Act and the published rules and regulations thereunder with
respect to registration statements on Form S-3;
(iii) On the basis of procedures
(but not an audit in accordance with generally accepted auditing
standards) consisting of:
(A) Reading the minutes of meetings
of the shareowners and the Boards of Directors of the Guarantor and
the Company and their Executive, Compensation and Corporate
Governance, Finance and the Audit and Corporate Responsibility
Committees since the day after the end of the last audited period
as set forth in the minute books through a specified date not more
than five business days prior to the date of delivery of such
letter; and
(B) With respect to the unaudited
consolidated balance sheet as of the most recent quarter ended and
the unaudited consolidated statements of income and of cash flows
included in the Guarantor’s Quarterly Report on Form 10-Q for
the most recent quarter ended (“Form 10-Q”)
incorporated by reference in the Registration Statement,
(i) Performing the procedures
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in SAS
No. 71, Interim Financial Information , on the unaudited
consolidated balance sheet and the unaudited consolidated
statements of income and of cash flows for the most recent quarter
ended and year to date, and prior year periods, included in the
Guarantor’s Form 10-Q incorporated by reference in the
Registration Statement;
(ii) Making inquiries of certain
officials of the Guarantor who have responsibility for financial
and accounting matters as to whether the unaudited consolidated
financial statements referred to in (B)(i) comply as to form in all
material respects with the applicable accounting requirements of
the 1934 Act, as it applies to Form 10-Q and the related published
rules and regulations thereunder;
(C) Reading the unaudited interim
financial data for the period from the date
of the latest balance sheet included
or incorporated in the Registration Statement to the date of the
latest available interim financial data; and
(D) Making inquiries of certain
officials of the Guarantor who have responsibility for financial
and accounting matters regarding the specific items for which
representations are requested below;
nothing has come to their attention
as a result of the foregoing procedures that caused them to believe
that (i) the unaudited consolidated financial statements described
in (B)(i), included in the Form 10-Q and incorporated by reference
in the Registration Statement, do not comply as to form in all
material respects with the applicable accounting requirements of
the 1933 Act and the 1934 Act, as it applies to Form 10-Q, and the
related published rules and regulations thereunder; or (ii) any
material modifications should be made to the unaudited consolidated
financial statements described in (B)(i), included in the Form 10-Q
and incorporated by reference in the Registration Statement, for
them to be in conformity with generally accepted accounting
principles; or (iii) at the date of the latest available interim
financial data and at the date of the latest available month end,
there was any change in the common equity; (iv) at the date of the
latest available interim financial data and at a specified date not
more than five business days prior to the date of delivery of such
letter, there was any change in the common stock or preferred stock
(with or without sinking fund requirements) (except for changes in
shares of certain series of preferred stock of a subsidiary of the
Guarantor redeemed for, purchased or otherwise retired in
anticipation of, sinking fund requirements for such series or as a
result of the surrender by the Guarantor of any preferred stock of
PPL Electric Utilities Corporation theretofore purchased by the
Guarantor) or increase in long-term debt of the Guarantor and
subsidiaries
consolidated as compared with
amounts shown in the latest balance sheet incorporated by reference
in the Registration Statement; or (v) for the period from the
closing date of the latest consolidated income statement
incorporated by reference in the Registration Statement to the date
of the latest available interim financial data there were any
decreases, as compared with the corresponding period in the
preceding year, in net income, except in all instances for changes,
increases or decreases which the Registration Statement, including
the documents incorporated therein by reference, discloses have
occurred or may occur, or they shall state any specific changes or
decreases.
(iv) The letter shall also state
that the information set forth in Schedule D hereto, which is
expressed in dollars (or percentages derived from such dollar
amounts) and has been obtained from accounting records which are
subject to the internal controls of the Guarantor’s
accounting system or which has been derived directly from such
accounting records by analysis or computation, is in agreement with
such records or computations made therefrom, except as otherwise
specified in such letter.
(b) The Registration Statement has
become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been
instituted, or, to the knowledge of the Company or the Guarantor,
shall be contemplated by the Commission and the Agents shall have
received certificates of the Company and of the Guarantor dated the
date hereof to such effect.
(c) On the date hereof the Agents
shall have received from Thomas D. Salus, Esq., Senior Counsel, or
such other counsel for the Company and the Guarantor as may be
acceptable to you, an opinion, dated as of the date hereof, in form
and substance satisfactory to counsel for the Agents, to the effect
that:
(i) The Guarantor has been duly
incorporated and is validly existing as a corporation in good
standing
under the laws of the Commonwealth
of Pennsylvania with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Prospectus;
(ii) The portions of the information
contained in the Prospectus, which are stated therein to have been
made on the authority of any such counsel, have been reviewed by
such counsel and, as to matters of law and legal conclusions, are
correct;
(iii) The Guarantor is a
“holding company” within the meaning of the Public
Utility Holding Company Act of 1935, as amended, but is exempt from
such Act (except for the provisions of Section 9(a)(2) thereof) by
virtue of an order of the Commission pursuant to Section 3(a)(1)
thereof;
(iv) The descriptions in the
Registration Statement and the Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown;
and such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement
or Prospectus which are not described, or of any contracts or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement which are not described and filed as
required; it being understood that such counsel need express no
opinion as to the financial statements and other financial data
contained or incorporated by reference in the Registration
Statement or the Prospectus;
(v) This Agreement has been duly
authorized, executed and delivered by the Guarantor;
(vi) The Indenture has been duly
authorized, executed and delivered by the Guarantor and, assuming
due authorization, execution, and delivery by the Company and the
Trustee, is a valid and binding obligation of the Guarantor,
enforceable in accordance with its terms, except to the extent
limited by the Bankruptcy Exceptions;
(vii) The Guarantees are in the form
established pursuant to the Indenture, have been duly authorized by
the Guarantor, and, when duly executed pursuant to the Indenture
and delivered in accordance with the provisions of this Agreement,
will constitute valid and binding obligations of the Guarantor, as
guarantor, enforceable in accordance with their terms, except to
the extent limited by the Bankruptcy Exceptions;
(viii) No approval, authorization,
consent or other order of any public board or body is legally
required for the authorization of the offering, issuance and sale
of the Notes, except (a) such as may be required under the 1933 Act
or the 1933 Act Regulations or the securities or “blue
sky” laws of any jurisdiction and (b) the qualification of
the Indenture under the 1939 Act and 1939 Act
Regulations.
In rendering such opinion, such
counsel may rely as to matters governed by New York law upon the
opinion of Dewey Ballantine LLP referred to in Section 7(d) of this
Agreement.
(d) On the date hereof, the Agents
shall have received from Dewey Ballantine LLP, special counsel to
the Company and the Guarantor, an opinion, dated as of the date
hereof, in form and substance satisfactory to counsel for the
Agents, to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware;
(ii) The Notes are in the form
established pursuant to the Indenture, have been duly authorized by
the Company, and, when issued, authenticated and delivered in the
manner provided for in the Indenture and delivered against payment
therefor, will constitute valid and binding obligations of the
Company enforceable in accordance with their terms, except to the
extent limited by the Bankruptcy Exceptions, and are entitled to
the benefits of the Indenture;
(iii) The Guarantees are in the form
established pursuant to the Indenture, have been duly authorized by
the Guarantor, and, when duly executed pursuant to the Indenture
and delivered in accordance with the provisions of this Agreement,
will constitute valid and binding obligations of the Guarantor, as
guarantor, enforceable in accordance with their terms, except to
the extent limited by the Bankruptcy Exceptions;
(iv) This Agreement has been duly
authorized, executed and delivered by each of the Guarantor and the
Company;
(v) The Indenture has been duly
authorized, executed and delivered by the Company and the Guarantor
and, assuming due authorization, execution, and delivery by the
Trustee, is a valid and binding obligation of the Company and the
Guarantor, enforceable in accordance with its terms, except to the
extent limited by the Bankruptcy Exceptions; and the Indenture has
been duly qualified under the 1939 Act;
(vi) The Registration Statement has
become effective under the 1933 Act and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required, and, to the best of the knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act, and the Registration Statement, as
of its effective date, and any amendment thereto, as of its date,
and the Prospectus, as of its date, and each amendment or
supplement thereto, as of its date, complied as to form in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations, and nothing has come to the attention of such
counsel which would lead such counsel to believe either that the
Registration Statement or any amendment thereto, as of such dates,
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the
Prospectus or any amendment or supplement thereto, as of the date
issued
or the date of such opinion,
contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements and
other financial or statistical data contained or incorporated by
reference in the Registration Statement or the
Prospectus;
(vii) The statements in the
Prospectus under the captions “Description of the Debt
Securities” and “Description of the Notes”,
insofar as they purport to constitute summaries of certain terms of
the Indenture, the Notes and the Guarantees, in each case
constitute accurate summaries of such terms of such documents and
securities, in all material respects;
(viii) The Company is a
“finance subsidiary” within the meaning of Rule 3a-5 of
the 1940 Act, and the Guarantees satisfy the conditions of clauses
(a)(1) and (3) of Rule 3a-5. Assuming that the Company continues to
qualify as a “finance subsidiary” within the meaning of
Rule 3a-5, satisfies the conditions of clauses (a)(5) and (6) of
Rule 3a-5 and satisfies the conditions of Rule 3a-5 in respect of
any securities other than the Notes issued by the Company, upon
giving effect to the transactions contemplated by this Agreement,
the Prospectus and the application of the proceeds from the sale of
the Notes contemplated in the Prospectus, the Company will not be
an “investment company” within the meaning of the 1940
Act. The Guarantor is not an “investment company”
within the meaning of the 1940 Act;
(ix) No approval, authorization,
consent or other order of any public board or body is legally
required under federal or New York law for the authorization of the
offering, issuance and sale of the Notes, except (a) such as may be
required under the 1933 Act or the 1933 Act Regulations or the
securities or “blue sky” laws of any jurisdiction and
(b) the qualification of the Indenture under the 1939 Act and 1939
Act Regulations; and
(x) The statements in the
Prospectus, under the caption “Certain United States Federal
Income Tax Considerations” constitute an accurate
description, in general terms, of certain tax considerations that
may be relevant to a holder of a Note.
In rendering their opinion, Dewey
Ballantine LLP may rely as to matters governed by Pennsylvania law
upon the opinion of Thomas D. Salus, Esq., or such other counsel
referred to in Section 7(c) of this Agreement.
(e) On the date hereof, the Agents
shall have received from Sullivan & Cromwell LLP, counsel for
the Agents, such opinion or opinions, dated as of the date hereof,
with respect to the validity of the Notes and the Guarantees, this
Agreement, the Registration Statement, the Prospectus and other
related matters as the Agents may require, and the Company and the
Guarantor shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters. In rendering such opinion or opinions, Sullivan &
Cromwell LLP may assume the due incorporation and valid existence
of the Company and the Guarantor and may rely as to matters
governed by Pennsylvania law upon the opinion of Thomas D. Salus,
Esq. or such other counsel for the Company and the Guarantor
referred to in Section 7(c) of this Agreement.
(f) On the date hereof, the Agents
shall have received certificates, dated the date hereof, of the
President, the Senior Vice President and Chief Financial Officer,
the Vice President-Finance, or the Vice President and Controller,
or any other Vice President who is also a financial or accounting
officer of the Guarantor, and of the President, and Vice President
or the Treasurer of the Company in which such officers, to the best
of their knowledge after reasonable investigation, shall state that
(i) the representations and warranties of the Company or the
Guarantor, as the case may be, in this Agreement are true and
correct (except for immaterial details) as of the date of such
certificate, (ii) the Company or Guarantor, as the case may be, has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the date of such
certificate, (iii) 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 by the
Commission, and (iv) subsequent to the date of the latest financial
statements in the Prospectus, there has been no Material Adverse
Effect, whether or not arising in the ordinary course of business,
except as set forth or contemplated in the Prospectus or as
described in such certificate.
In case any such condition shall not
have been satisfied, this Agreement may be terminated by the
applicable Agent or Agents upon notice in writing or by telegram to
the Company and the Guarantor without liability or obligation of
any party, except as provided in Sections 5(c), 6, 9, 11, 12 and 14
hereof.
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8
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Additional
Covenants of the Company and the Guarantor .
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The Company and the Guarantor
further covenant and agree with each Agent as follows:
(a) Reaffirmation of
Representations and Warranties . Each acceptance by the Company
of an offer for the purchase of Notes (whether to one or more
Agents as principal or through an Agent as agent), and each
delivery of Notes (whether to one or more Agents as principal or
through an Agent as Agent), shall be deemed to be an affirmation
that the representations and warranties of the Company and the
Guarantor herein contained and contained in any certificate
delivered therewith to the Agents pursuant to this Agreement are
true and correct at the time of such acceptance or sale, as the
case may be (it being understood that such representations and
warranties shall relate to the Registration Statement and
Prospectus as amended and supplemented to each such
time).
(b) Subsequent Delivery of
Certificates . Each time that (i) the Registration Statement or
the Prospectus shall be amended or supplemented (other than by an
amendment or supplement providing solely for the determination of
the variable terms of the Notes or relating solely to the offering
of securities other than the Notes) or (ii) (if required by the
Terms Agreement relating to such Notes) the Company sells Notes to
one or more Agents as principal, each of the Company and the
Guarantor shall furnish or cause to
be furnished to the Agent(s), forthwith a
certificate dated the date of filing with the Commission or the
date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s) to the effect that the statements
contained in the certificate referred to in Section 7(f) hereof
which were last furnished to the Agents are true and correct at the
time of the filing or effectiveness of such amendment or
supplement, as applicable, or the time of such sale, as the case
may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to such time) or, in
lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 7(f) hereof, modified as
necessary to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of
such certificate (it being understood that, in the case
of
