EXHIBIT 1.1
CONFORMED COPY
NORTHEAST GENERATION COMPANY
US$440,000,000
4.998% Series A Senior Secured Bonds Due 2005
8.812% Series B Senior Secured Bonds Due 2026
Purchase Agreement
New York, New York
October 12, 2001
Xxxxxxx Xxxxx Xxxxxx
As Representative of the Initial Purchasers
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Northeast Generation Company, a corporation organized under
the laws of Connecticut (the "Company"), proposes to issue and sell to the
several parties named in Schedule I hereto (the "Initial Purchasers"), for whom
you (the "Representative") are acting as representative, US$120,000,000
principal amount of its 4.998% Series A Senior Secured Bonds Due 2005 and
US$320,000,000 principal amount of its 8.812% Series B Senior Secured Bonds Due
2026 (the "Securities"). The Securities are to be issued under an indenture
dated as of October 18, 2001 as supplemented by a First Supplemental Indenture
dated as of October 18, 2001 (the "Indenture") between the Company and the Bank
of New York (the "Trustee"). The Securities have the benefit of a Registration
Rights Agreement (the "Registration Rights Agreement"), dated as of October 12,
2001, between the Company and the Initial Purchasers, pursuant to which the
Company has agreed to register the Securities under the Act subject to the terms
and conditions therein specified. The use of the neuter in this Agreement shall
include the feminine and masculine wherever appropriate. Certain terms used
herein are defined in Section 18 hereof. Capitalized terms used and not defined
herein shall have the meanings ascribed to such terms in the Indenture.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Act in reliance upon
exemptions from the registration requirements of the Act.
NGC Purchase Agreement
----------------------
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated October 1, 2001 (including any
and all exhibits thereto and any information incorporated by reference therein,
the "Preliminary Memorandum"), and a final offering memorandum, dated October
11, 2001 (as amended or supplemented at the Execution Time, including any and
all exhibits thereto and any information incorporated by reference therein, the
"Final Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum
sets forth certain information concerning the Company and the Securities. The
Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum (other than with respect to
Appendix A and Appendix B thereto), at the date thereof, did not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. At the Execution Time, on the Closing Date
and on any settlement date, the Final Memorandum (other than with respect to
Appendix A and Appendix B thereto) did not, and will not (and any amendment or
supplement thereto, at the date thereof, at the Closing Date and on any
settlement date, will not), contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representation or warranty as to
the information contained in or omitted from the Preliminary Memorandum or the
Final Memorandum, or any amendment or supplement thereto, in reliance upon and
in conformity with information furnished in writing to the Company by or on
behalf of the Initial Purchasers through the Representative specifically for
inclusion therein; and PROVIDED, FURTHER, that with respect to Appendix A and
Appendix B to the Preliminary Memorandum and the Final Memorandum, the Company
represents and warrants solely that reliance on the information contained in
such appendices is reasonable and that nothing has come to its attention that
would lead it to believe that such appendices contain an untrue statement of
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) Each of the Preliminary Memorandum and the Final
Memorandum, as of their respective dates, contains all of the information that,
if requested by a prospective purchaser of the Securities, would be required to
be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the
Act.
(c) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under the
Act.
(d) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the
2
meaning of Regulation D) in connection with any offer or sale of the Securities
in the United States.
(e) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed selling efforts
with respect to the Securities, and each of them has complied with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(g) There are no securities of the Company registered under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or listed
on a national securities exchange or quoted in a U.S. automated inter-dealer
quotation system.
(h) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained
in the Preliminary Memorandum or the Final Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(i) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Final Memorandum will not be, an "investment company" within
the meaning of the Investment Company Act, without taking account of any
exemption arising out of the number of holders of the Company's securities.
(j) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(k) The Company has not taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.
(l) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(m) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and conduct its
business as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business, results
of operations or financial condition of the Company.
3
(n) Since the respective dates as of which information is
given in the Preliminary Memorandum and the Final Memorandum, there has not been
any change in the capital stock or long-term debt of the Company, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the Final
Memorandum; and except as set forth or contemplated in the Final Memorandum, the
Company has not entered into any transaction or agreement whether or not in the
ordinary course of business that is material to the Company; and except as
disclosed in the Final Memorandum, there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
(o) The statements in the Final Memorandum under the headings
"Federal Income Tax Consequences", "Description of the Bonds", "Exchange Offer;
Registration Rights," "Regulation" and "ERISA Considerations" fairly summarize
the matters therein described.
(p) This Agreement has been duly authorized, executed and
delivered by the Company.
(q) The Indenture has been duly authorized on the part of the
Company and, assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Company, will constitute a legal and
valid instrument of the Company, binding and enforceable against the Company in
accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity (whether considered in a
proceeding in equity or at law)). On the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
and the rules and regulations of the Commission applicable to an indenture which
is qualified therefor.
(r) The Securities have been duly authorized, and, when
executed and authenticated in accordance with the provisions of the Indenture
and the First Supplemental Indenture and delivered to and paid for by the
Initial Purchasers, will have been duly executed and delivered by the Company
and will constitute the legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
general principles of equity).
(s) The Registration Rights Agreement has been duly authorized
on the part of the Company and constitutes the legal, valid, binding and
enforceable instrument of the Company (except that (i) the enforcement of
remedies may be limited by applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity
(whether considered in a proceeding in equity or at law) and (ii) the rights to
indemnification and contribution thereunder may be limited by federal and state
securities laws or the public policy underlying such laws).
4
(t) Each of the Security Agreement and each of the Mortgages
has been duly authorized on the part of the Company and will constitute the
legal, valid, binding and enforceable instrument of the Company (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity
(whether considered in a proceeding in equity or at law)).
(u) No currently effective mortgage or financing statement or
other instrument or recordation covering all or any part of the Collateral
purported to be covered by the Security Agreement is on file in any relevant
recording office in the United States, except such as may have been filed in
connection with liens granted pursuant to the Credit Agreement dated as of March
3, 2000 among Northeast Generation Company and the lenders thereto, or in
respect of any Permitted Lien, and which, in the case of the Credit Agreement,
will be replaced by mortgages, financing statements or instruments in favor of
the Trustee for the benefit of holders of Securities on or prior to the Closing
Date.
(v) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering Memorandum to the
extent described therein.
(w) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection with the
transactions contemplated herein or in the Indenture, the Registration Rights
Agreement, the Security Agreement or any other Transaction Document, except such
as will be obtained and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
by the Initial Purchasers in the manner contemplated herein and in the Final
Memorandum and the Registration Rights Agreement.
(x) The execution and delivery of the Indenture, this
Agreement, the Registration Rights Agreement, the Security Agreement, any other
Transaction Document, and the issue and sale of the Securities, the consummation
of any other of the transactions herein or therein contemplated, and the
fulfillment of the terms hereof or thereof will not conflict with, or result in
a breach or violation or imposition of any lien, charge or encumbrance (except
for the Security Agreement and the Mortgages) upon any property or assets of the
Company pursuant to (i) the charter or by-laws of the Company; (ii) the terms of
any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property is subject; or
(iii) any statute, law, rule, regulation, judgment, order or decree applicable
to the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its properties.
(y) The historical financial statements of the Company
included in the Final Memorandum present fairly in all material respects the
financial condition, results of operations and cash flows of the Company as of
the dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein); and the selected financial
5
data set forth under the caption "Selected Financial Data" in the Final
Memorandum fairly present, on the basis stated in the Final Memorandum, the
information included therein.
(z) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its properties is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a material adverse
effect on the performance of this Agreement, the Indenture or the Registration
Rights Agreement, or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) could reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto).
(aa) The Company has good and marketable title to all items of
real property and good and marketable title to all personal property owned by it
that is material to its business, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Final Memorandum or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company; and any real property and buildings held under lease by the
Company that are material to its business are held by the Company under valid,
existing and enforceable leases with such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property and
buildings by the Company.
(bb) The Company is not in violation or default of (i) any
provision of its charter or bylaws; (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a party
or bound or to which its property is subject; or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its properties, as
applicable, except, in the case of clause (ii) or (iii), for such violations or
defaults as would not have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company.
(cc) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and delivered their report with respect to the audited
financial statements included in the Final Memorandum, are independent public
accountants with respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder.
(dd) Each of (i) S&W Consultants, Inc., whose report appears
in the Final Memorandum and who will deliver the letter referred to in Section
6(o) hereof, and (ii) PA Consulting, Inc., whose report appears in the Final
Memorandum and who will deliver the letter referred to in Section 6(p) hereof,
was, as of the date of such report, and is, as of the date hereof,
"independent". For purposes of this paragraph (x) S&W Consultants, Inc. or PA
Consulting, Inc. (together the "Independent Consultants"), as applicable, shall
be considered "independent" if, from the date which was six months prior to the
date of the Final Memorandum, neither such person nor any Member of such person
(i) had, or was committed to acquire, any direct material financial interest in
the Company or (ii) was, or will be connected as a promoter, underwriter,
6
voting trustee, director, officer or employee of the Company or any affiliate
thereof. "Member" shall mean (a) all partners, shareholders and other principals
of the applicable person, (b) any professional employee involved in providing
any professional service to the Company or any affiliate thereof and (c) any
professional employee having managerial responsibilities and located in an
office of such person which will participate in a significant portion of the
services to be performed by such person.
(ee) There are no stamp or other issuance of transfer taxes or
duties or other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in connection
with the execution and delivery of this Agreement or the issuance or sale by the
Company of the Securities.
(ff) The Company (or Northeast Utilities on the Company's
behalf) has filed all foreign, Federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company, whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto)) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, (except
for any such assessment, fine or penalty that is currently being contested in
good faith or as would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company, whether or not arising from transactions in the ordinary course of
business), except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(gg) No labor problem or dispute with the employees of the
Company exists or, to the knowledge of the Company, is threatened or imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, contractors or customers, that
could have a material adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereto).
(hh) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the business in which it is engaged; all policies
of insurance insuring the Company or its business, assets, employees, officers
and directors are in full force and effect; the Company is in compliance with
the terms of such policies and instruments in all material respects; and there
are no claims by the Company under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; the Company has not been refused any insurance coverage sought or
applied for; and the Company does not have any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings, business or
properties of the Company, whether or not arising from
7
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Memorandum.
(ii) Except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto) (i) the Company
possesses all licenses, certificates, permits and other authorizations issued by
the appropriate Federal, state, local or foreign regulatory authorities
necessary to conduct its business, except where the failure to possess such
license, certificate, permit or other authorization would not have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, and (ii) the Company has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit (except for proceedings for the
re-licensing of facilities upon the expiration of licenses currently in effect)
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company, whether or not arising from transactions in the ordinary course of
business.
(jj) The Company maintains (or affiliates of the Company
maintain on the Company's behalf) a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles in the
United States and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(kk) Except as set forth in or contemplated in the Final
Memorandum, (exclusive of any amendment or supplement thereto) the Company (i)
is in compliance with any and all applicable foreign, Federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"); (ii) has received and is in compliance with
all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business; and (iii) has not received notice of
any actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws, failure
to receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company, whether or not arising from transactions in the ordinary course
of business; except as set forth in the Final Memorandum, the Company has not
been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended.
(ll) The Company's costs and liabilities resulting from the
effect of Environmental Laws on its business, operations and properties
(including, without limitation, any capital or operating expenditures required
for cleanup, closure of properties or compliance with Environmental Laws, or any
permit, license or approval, any related constraints on operating
8
activities and any potential liabilities to third parties) would not, singly or
in the aggregate, have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company, whether
or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto).
(mm) Neither the Company nor any of the stockholders of the
Company or any operator of any facility owned by the Company is a "public
utility company" within the meaning of the Public Utility Holding Company Act of
1935, as amended ("PUHCA").
(nn) The Company is an "exempt wholesale generator" under
Section 32(a) of PUHCA and neither the Trustee nor any holder of Securities is
or will be, solely as a result of the participation by such parties individually
or as a group in the ownership of the Company or the Company's use or operation
of each facility and sale of power generated by any such facility, subject to
regulation as a "public-utility company," a "holding company" or a "subsidiary
company" or "affiliate" of any of the foregoing, under PUHCA.
(oo) So long as the Company is an "exempt wholesale generator"
under Section 32(a) of PUHCA, neither the Trustee nor any holder of Securities
will solely by reason of the exercise of remedies under the Security Agreement
be subject to regulation as a "public-utility company," or a "holding company,"
or a "subsidiary company" or "affiliate" of any of the foregoing, under PUHCA;
provided that (i) the Company remains the sole owner and/or operator of each
facility, and maintains its "exempt wholesale generator" status, or (ii) the
Trustee or holder of Securities assumes ownership or operation of a facility
through a special purpose subsidiary that obtains a determination of "exempt
wholesale generator" status under Section 32(a) of PUHCA.
(pp) Neither the Company nor any of its affiliates has taken
or will take any action that would cause this Agreement or the sale of the
Securities to violate Regulation T, U or X of the Federal Reserve Board.
(qq) Since the date as of which information is given in the
Final Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs, management or business prospects of the Company, whether or
not arising in the ordinary course of business, (ii) the Company has not
incurred any material liability or obligation, direct or contingent, other than
in the ordinary course of business, (iii) the Company has not entered into any
material transaction other than in the ordinary course of business and (iv)
there has not been any change in the ownership or long-term debt of the Company,
or any dividend or distribution of any kind declared, paid or made by the
Company on any class of its shares.
Any certificate signed by any officer of the Company and
delivered to the Representative or counsel for the Initial Purchasers in
connection with the offering of the Securities shall be deemed a representation
and warranty by the Company, as to matters covered thereby, to each Initial
Purchaser.
9
2. PURCHASE AND SALE. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 100% of the principal amount thereof, plus accrued interest, if any,
from October 11, 2001 to the Closing Date, the principal amount of Securities
set forth opposite such Initial Purchaser's name in Schedule I hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Securities shall be made at 10:00 A.M., New York City time, on October 18, 2001,
or at such time on such later date (not later than October 19, 2001) as the
Representative shall designate, which date and time may be postponed by
agreement between the Representative and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representative for the respective accounts of the several Initial Purchasers
against payment by the several Initial Purchasers through the Representative of
the purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representative shall otherwise instruct.
4. OFFERING BY INITIAL PURCHASERS. Each Initial Purchaser,
severally and not jointly, represents and warrants to and agrees with the
Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A; (ii) to
other institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D) who provide to it and to
the Company a letter in the form of Exhibit A hereto; or (iii) in
accordance with the restrictions set forth in Exhibit B hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
5. AGREEMENTS. The Company agrees with each Initial Purchaser
that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request.
(b) The Company will not amend or supplement the Final
Memorandum prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by the Initial
Purchasers) unless, prior to such amendment or supplement, the Company
has furnished the Representative with a copy of such amendment or
10
supplement for its review and the Representative has not reasonably
objected to such amendment or supplement.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representative), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representative of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as you may
reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions in the United States of America as
the Initial Purchasers may designate and will maintain such
qualifications in effect so long as required for the sale of the
Securities; PROVIDED that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
The Company will promptly advise the Representative of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Act, except as contemplated by the Registration
Rights Agreement.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted
11
securities, upon the request of such holder or prospective purchaser,
any information required to be provided by Rule 144A(d)(4) under the
Act. This covenant is intended to be for the benefit of the holders,
and the prospective purchasers designated by such holders, from time to
time of such restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Representative and use
its best efforts to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company.
(k) The Company will not for a period of 60 days following the
Execution Time, without the prior written consent of Xxxxxxx Xxxxx
Barney Inc., offer, sell or contract to sell, or otherwise dispose of
(or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any Affiliate of the Company or any person
in privity with the Company or any Affiliate of the Company), directly
or indirectly, or announce the offering of, any debt securities issued
or guaranteed by the Company (other than the Securities) except as
contemplated by the Registration Rights Agreement.
(l) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(m) In connection with any disposition of Securities pursuant
to a transaction made in compliance with paragraph 6 of Exhibit A, the
Company will reissue certificates evidencing such Securities without
the legend referred to in paragraph 5 of Exhibit A (provided, in the
case of a transaction made in compliance with paragraph 6(f) of Exhibit
A, that the legal opinion referred to therein so permits).
(n) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation of the Indenture and the
Registration Rights Agreement, the issuance of the Securities and the
fees of the Trustee; (ii) the preparation, printing or reproduction of
the Preliminary Memorandum and the Final Memorandum and each amendment
or supplement to either of them; (iii) the printing (or reproduction)
and delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Preliminary Memorandum
and Final Memorandum, and all amendments or supplements to either of
them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities;
(v) the printing (or reproduction) and delivery of this
12
Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (vi) any registration or qualification of
the Securities required for offer and sale under the securities or blue
sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Initial Purchasers
relating to such registration and qualification); (vii) the
transportation and other expenses incurred by or on behalf of the
Company representatives in connection with presentations to prospective
purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (ix) all other costs
and expenses incident to the performance by the Company of its
obligations hereunder.
6. CONDITIONS TO THE OBLIGATIONS OF THE INITIAL PURCHASERS.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have requested and caused Day, Xxxxx &
Xxxxxx LLP, counsel for the Company, and Xxxxxxx X. Xxxxxx, Assistant
General Counsel of Northeast Utilities Service Company, to furnish to
the Representative their opinions, dated the Closing Date and addressed
to the Representative, in form and substance reasonably satisfactory to
the Representative and its counsel.
In rendering such opinions, such counsels may rely (A) as to
matters involving the application of laws of any jurisdiction other than
Connecticut, the State of New York or Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
(b) The Representative shall have received from Milbank,
Tweed, Xxxxxx & XxXxxx LLP counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date and addressed to the Representative, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or supplemented
at the Closing Date) and other related matters as the Representative may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(c) The Company shall have furnished to the Representative a
certificate of the Company, signed by the President and the principal financial
or accounting officer of the Company or comparable officers of Northeast
Utilities Service Company as agents of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined the
Final Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and that:
13
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the Closing Date with the same effect as if made
on the Closing Date;
(ii) the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied hereunder at or prior to the Closing Date; and
(iii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated by
the Final Memorandum (exclusive of any amendment or supplement
thereto).
(d) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Xxxxxx Xxxxxxxx LLP to furnish to the
Representative letters, dated respectively as of the Execution Time and as of
the Closing Date, in form and substance satisfactory to the Representative,
confirming that they are independent accountants within the meaning of the Act
and the Exchange Act and the applicable rules and regulations thereunder, that
they have performed a review of the unaudited interim financial information of
the Company for the six-month period ended June 30, 2001 and as at June 30,
2001, in accordance with the Statement on Auditing Standards No. 71, and stating
in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Final
Memorandum and reported on by them comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations thereunder;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company; their
limited review in accordance with the standards established
under Statement on Auditing Standards No. 71, of the unaudited
interim financial information for the six-month period ended
June 30, 2001, and as at June 30, 2001, as indicated in their
report included in the Final Memorandum; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders and Board of Directors of the
Company; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of
the Company as to transactions and events subsequent to
December 31, 2000, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included in
the Final Memorandum do not comply in form in all
material respects with applicable accounting
requirements and with the published rules and
regulations of the
14
Commission with respect to financial statements included
in quarterly reports on Form 10-Q under the Exchange
Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited financial statements included in the Final
Memorandum; or
(2) with respect to the period subsequent to
December 31, 2000, there were any changes, at a
specified date not more than five days prior to the date
of the letter, in the long-term debt of the Company or
capital stock of the Company or decreases in the
stockholders' equity of the Company as compared with the
amounts shown on the December 31, 2000 balance sheet
included in the Final Memorandum, or for the period from
January 1, 2001 to such specified date there were any
decreases, as compared with the corresponding period in
the preceding year, in net revenues or income before
income taxes or in total net income or operating income
of the Company, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said
explanation is not deemed necessary by the
Representative;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company) set forth in the Final Memorandum, including the
information set forth under the caption "Our Affiliates" in
the Final Memorandum and the information included in
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" included in the Final Memorandum,
agrees with the accounting records of the Company, excluding
any questions of legal interpretation.
References to the Final Memorandum in this Section 6(d)
include any amendment or supplement thereto at the date of the letter.
(e) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (d) of this Section 6; or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), prospects, earnings, business or properties of the Company whether
or not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Memorandum (exclusive of any amendment
or supplement thereto), the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representative, so material
and adverse as to make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereto).
(f) The Initial Purchasers shall have received on and as of
the Closing Date a certificate of an authorized officer of the Company, as to
and attaching (i) resolutions of the
15
Company's board of directors authorizing and approving the transactions
contemplated by the Transaction Documents to which it is a party, (ii) the
Company's organizational documents and (iii) the incumbency of the officers of
the Company or Northeast Utilities Service Company as agents of the Company
executing the Transaction Documents to which the Company is a party.
(g) The Initial Purchasers shall have received on and as of
the Closing Date a certificate of an authorized officer of the Trustee, as to
and attaching (i) resolutions of the Trustee's board of directors authorizing
and approving the transactions contemplated by the Transaction Documents, (ii)
the Trustee's organizational documents and (iii) certified copies of powers of
attorney or signature circulars, if any, pursuant to which officers of the
Trustee shall execute the Transaction Documents.
(h) Each Transaction Document (other than the Initial Select
Power Sales Agreement) shall have been duly executed by each of the parties
thereto on or prior to the Closing Date, shall be in form and substance
satisfactory to the Initial Purchasers and shall have been delivered to the
Initial Purchasers. A copy of the Initial Select Power Sales Agreement shall
have been delivered to the Initial Purchasers.
(i) The Initial Purchasers shall have received on and as of
the Closing Date a certificate of an authorized representative of the Trustee to
the effect that the Debt Service Reserve Account has been established.
(j) The Securities shall be eligible for clearance and
settlement through The Depository Trust Company.
(k) Xxxxx'x Investors Service Inc. ("Xxxxx'x"), Xxxxx IBCA
Inc. ("Fitch") and Standard & Poor's Ratings Services Inc. ("S&P") shall have
rated the Securities at least Baa3, BBB- and BBB-, respectively. Subsequent to
the execution and delivery of this Agreement and prior to the Closing Date (i)
no downgrading shall have occurred in the rating accorded the Securities by
Moody's, Fitch, S&P or any other "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes of Rule
436(g)(2) of the rules and regulations of the Commission under the Securities
Act and (ii) no such organization shall have publicly announced that it has
under surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Securities.
(l) S&W Consultants, Inc. shall have (i) consented to the
inclusion of its report in the Preliminary Memorandum, the Final Memorandum and
any registration statement filed in accordance with the Registration Rights
Agreement and (ii) provided a letter, dated the Closing Date, confirming its
report and the conclusions therein as of the Closing Date.
(m) PA Consulting, Inc. shall have (i) consented to the
inclusion of its report in the Preliminary Memorandum, the Final Memorandum and
any registration statement filed in accordance with the Registration Rights
Agreement and (ii) provided a letter, dated the Closing Date, confirming its
report and the conclusions therein as of the Closing Date.
(n) Prior to the Closing Date, the Initial Purchasers shall
have received such further information, certificates and documents as the
Representative may reasonably request.
16
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representative. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will
be delivered at the office of counsel for the Initial Purchasers, at 0 Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, on the Closing Date.
7. REIMBURSEMENT OF EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers, the Company will reimburse the Initial
Purchasers severally through Xxxxxxx Xxxxx Xxxxxx on demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum, the Final
Memorandum (or in any supplement or amendment thereto) or any information
provided by the Company to any holder or prospective purchaser of Securities
pursuant to Section 5(h), or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
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, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Preliminary Memorandum or
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchasers through the Representative
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
17
(b) Each Initial Purchaser severally, and not jointly, agrees
to indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representative specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding delivery of the Securities, the legend in block capital letters
and the related disclosure on page [___] concerning stabilization, syndicate
covering transactions and penalty bids and, under the heading "Plan of
Distribution", (i) the sentences related to concessions and reallowances; and
(ii) the paragraph related to stabilization, syndicate covering transactions and
penalty bids in the Preliminary Memorandum and the Final Memorandum, constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action against the indemnified
party and such failure results in the forfeiture by the indemnifying party of
any substantial right or defense; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action;
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or
18
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; PROVIDED, HOWEVER, that in no case shall any Initial Purchaser
(except as may be provided in any agreement among the Initial Purchasers
relating to the offering of the Securities) be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Initial Purchasers on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Initial Purchaser within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an Initial
Purchaser shall have the same rights to contribution as such Initial Purchaser,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act and each officer and director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. DEFAULT BY AN INITIAL PURCHASER. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set
19
forth opposite their names in Schedule I hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining Initial
Purchasers) the Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase; PROVIDED, HOWEVER, that in the event
that the aggregate principal amount of Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase shall exceed 10%
of the aggregate principal amount of Securities set forth in Schedule I hereto,
the remaining Initial Purchasers shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the Securities, and if such
nondefaulting Initial Purchasers do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Initial
Purchaser or the Company. In the event of a default by any Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding five Business Days, as the Representative shall determine
in order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any nondefaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Company prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such exchange; (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities; or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representative, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representative, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, if sent to the Company,
will be mailed, delivered or telefaxed to 000-000-0000 and confirmed to it at
000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxx 00000, attention of the Legal Department.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling
20
persons referred to in Section 8 hereof, and, except as expressly set forth in
Section 5(h) hereof, no other person will have any right or obligation
hereunder.
14. JURISDICTION. The Company agrees that any suit, action or
proceeding against the Company brought by any Initial Purchaser, the directors,
officers, employees and agents of any Initial Purchaser, or by any person who
controls any Initial Purchaser, arising out of or based upon this Agreement or
the transactions contemplated hereby may be instituted in any State or Federal
court in The City of New York, New York, and waives any objection which it may
now or hereafter have to the laying of venue of any such proceeding, and
irrevocably submits to the nonexclusive jurisdiction of such courts in any suit,
action or proceeding. Notwithstanding the foregoing, any action arising out of
or based upon this Agreement may be instituted by any Initial Purchaser, the
directors, officers, employees and agents of any Initial Purchaser, or by any
person who controls any Initial Purchaser, in any court of competent
jurisdiction in Connecticut.
15. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
16. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
18. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Initial Select Power Sales Agreement" means the Power
Purchase and Sales Agreement dated December 27, 1999 between the Company and
Select Energy.
21
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission thereunder.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Security Agreement" shall mean the Security Agreement between
the Company and the Trustee dated October 18, 2001.
"Select Energy" shall mean Select Energy, Inc., a Connecticut
corporation.
"Transaction Documents" shall mean the Indenture, the First
Supplemental Indenture, the Securities, the Registration Rights Agreement, the
Security Agreement, the Mortgages and the Initial Select Power Sales Agreement.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission promulgated
thereunder.
22
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the several Initial Purchasers.
Very truly yours,
Northeast Generation Company
By /s/ Xxxxx X. XxXxxx
--------------------
Name: Xxxxx X. XxXxxx
Title: Vice President and
Treasurer, Northeast
Utilities Service Company,
as agent for Northeast
Generation Company
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
By /s/ Xxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
For itself and the other several
Initial Purchasers named in Schedule I
to the foregoing Agreement.
NGC Purchase Agreement
----------------------
SCHEDULE I
Principal Amount of
Securities
Initial Purchasers to Be Purchased
------------------ ---------------
Series A Series B
Xxxxxxx Xxxxx Xxxxxx Inc................. US$ 84,000,999 224,000,000
TD Securities............................ 18,000,000 48,000,000
Barclays Capital......................... 18,000,000 48,000,000
----------- -----------
Total........................... US$ 120,000,000 320,000,000
NGC Purchase Agreement
----------------------
EXHIBIT A
Non-Distribution Letter for Institutional Accredited Investors
--------------------------------------------------------------
______, 2001
Xxxxxxx Xxxxx Xxxxxx
As Representative of the
Initial Purchasers
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[NAME AND ADDRESS OF COMPANY]
Re: Purchase of US$_____ principal amount of 8.812% Series A Senior
Secured Bonds Due 2005 and 4.998% Series B Senior Secured Bonds
Due 2026 (the "Securities") of
Northeast Generation Company
(the "Company")(1)
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with our purchase of the Securities we confirm
that:
1. We understand that the Securities are not being and will
not be registered under the Securities Act of 1933, as amended (the "Act"), and
are being sold to us in a transaction that is exempt from the registration
requirements of the Act.
2. We acknowledge that (a) neither the Company, nor the
Initial Purchasers (as defined in the Offering Memorandum dated October 11, 2001
relating to the Securities (the "Final Memorandum")) nor any person acting on
behalf of the Company or the Initial Purchasers has made any representation to
us with respect to the Company or the offer or sale of any Securities; and (b)
any information we desire concerning the Company and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Final Memorandum) is or has been made available to us.
3. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and we are (or any account for which we are
purchasing under paragraph 4 below is) an institutional "accredited investor"
(within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Act) able to bear the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the
----------
(1) Each U.S. purchaser, or account for which each U.S. purchaser is
acting, should purchase at least US$250,000 of Securities.
statements contained in this letter) and not with a view to any distribution of
the Securities, subject, nevertheless, to the understanding that the disposition
of our property will at all times be and remain within our control.
5. We understand that (a) the Securities will be in registered
form only and that any certificates delivered to us in respect of the Securities
will bear a legend substantially to the following effect:
"These Securities have not been registered under the
Securities Act of 1933. Further offers or sales of these
Securities are subject to certain restrictions, as set forth
in the Offering Memorandum dated October 11, 2001 relating to
these Securities."
and (b) the Company has agreed to reissue such certificates without the
foregoing legend only in the event of a disposition of the Securities in
accordance with the provisions of paragraph 6 below (provided, in the case of a
disposition of the Securities in accordance with paragraph 6(f) below, that the
legal opinion referred to in such paragraph so permits), or at our request at
such time as we would be permitted to dispose of them in accordance with
paragraph 6(a) below.
6. We agree that in the event that at some future time we wish
to dispose of any of the Securities, we will not do so unless such disposition
is made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Securities are sold in compliance with Rule 144(k)
under the Act; or
(b) the Securities are sold in compliance with Rule 144A under
the Act; or
(c) the Securities are sold in compliance with Rule 904 of
Regulation S under the Act; or
(d) the Securities are sold pursuant to an effective
registration statement under the Act; or
(e) the Securities are sold to the Company or an affiliate (as
defined in Rule 501(b) of Regulation D) of the Company; or
2
(f) the Securities are disposed of in any other transaction
that does not require registration under the Act, and we theretofore
have furnished to the Company or its designee an opinion of counsel
experienced in securities law matters to such effect or such other
documentation as the Company or its designee may reasonably request.
Very truly yours,
By
------------------------
(Authorized Officer)
EXHIBIT B
Selling Restrictions for Offers and
Sales Outside the United States
-------------------------------
(1) (a) The Securities have not been and will not be registered
under the Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except in accordance with Regulation
S under the Act or pursuant to an exemption from the registration requirements
of the Act. Each Initial Purchaser represents and agrees that, except as
otherwise permitted by Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit, it has offered and sold the Securities, and will offer and sell the
Securities, (i) as part of their distribution at any time; and (ii) otherwise
until 40 days after the later of the commencement of the offering and the
Closing Date, only in accordance with Rule 903 of Regulation S under the Act.
Accordingly, each Initial Purchaser represents and agrees that neither it, nor
any of its affiliates nor any person acting on its or their behalf has engaged
or will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) or (ii) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the "Act")
and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons (i) as part of
their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and
October 18, 2001, except in either case in accordance with
Regulation S or Rule 144A under the Act. Terms used above have
the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it
has not offered or sold, and will not offer or sell, in the United Kingdom, by
means of any document, any Securities other than to persons whose ordinary
business it is to buy or sell shares or debentures, whether as principal or as
agent (except in circumstances which do not constitute an offer to the public
within the meaning of the Companies Act 1989 of Great Britain); (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 of the United Kingdom with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom;
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Act 1986 (Investment
NGC Purchase Agreement
----------------------
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
2
