Exhibit 1
DISTRIBUTION AGREEMENT
Central Xxxxxx Gas & Electric Corporation
$140,000,000
Medium-Term Notes, Series F
DISTRIBUTION AGREEMENT
March 19, 2007
New York, New York
Banc of America Securities LLC
Hearst Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
McDonald Investments Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Dear Sirs:
Central Xxxxxx Gas & Electric Corporation, a New York corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale by the Company of up to $140,000,000 aggregate principal amount of its
Medium-Term Notes, Series F (the "Notes").
The Company proposes to issue the Notes under its Indenture (the
"Indenture") dated as of April 1, 1992 to U.S. Bank Trust National Association
(formerly known as First Trust of New York, National Association) ("U.S. Bank
Trust") as successor to Xxxxxx Guaranty Trust Company of New York, as trustee
(the "Trustee").
The Notes will be issued in minimum denominations of $1,000 and integral
multiples thereof (unless otherwise specified by the Company), will be issued
only in fully registered form and will have the annual interest rates,
maturities and, if appropriate, other terms set forth in a supplement or
supplements to the Prospectus referred to below. The Notes will be issued, and
the terms thereof established, in accordance with the Indenture and, in the case
of Notes sold pursuant to Section 2(a), the Administrative Procedures attached
as Exhibit A hereto (the
"Procedures"). The Procedures may only be amended by written agreement of the
Company and you after notice to, and with the approval of, the Trustee. For the
purposes of this Agreement, the term "Agent" shall refer to any of you, the term
"Purchaser" shall refer to any of you acting solely as principal for resale to
investors pursuant to Section 2(b) and not as agent, and the term "you" shall
refer to you together at any time any of you is acting in both such capacities
or in either such capacity; provided that any additional person appointed as an
Agent pursuant to Section 2(a) shall be included in the terms "Agent" and "you".
1. Representations and Warranties.The Company represents and warrants to,
and agrees with, you as set forth below in this Section 1. Certain terms used in
this Section 1 are defined in paragraph (b) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). The Company filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such Form (File No. 333-138510), including a base prospectus, which is
effective, for the registration under the Act and the offering thereof from time
to time pursuant to Rule 415 of, among other things, up to $140,000,000
aggregate principal amount of debt securities. The Company has filed or will
file with the Commission pursuant to the applicable paragraph of Rule 424 under
the Act, any supplement or supplements to such base prospectus relating to the
Notes and the plan of distribution thereof (such supplement being hereinafter
called a "Prospectus Supplement"). Such registration statement, as amended at
the date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other material respects
with said Rule. In connection with the sale of any Notes, the Company proposes
to file with the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Act one or more further supplements to any Prospectus Supplement
providing for the specification of or a change in the interest rates, if any,
maturity dates, issuance prices, redemption terms and prices, if any, and, if
appropriate, other terms of such Notes or the offering thereof which, unless the
Company and the Agents otherwise agree, shall be substantially in the form of
Exhibit B attached hereto (any such supplement being hereinafter called a
"Pricing Supplement").
(b) The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean the latest of (i) the
date that the Registration Statement or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission, (ii) the time and
date of the filing of the Company's most recent Annual Report on Form 10-K and
(iii) the date as of which any part of the Registration Statement is deemed to
have become effective under the Act in accordance with Rule 430B under the Act.
"Execution Time" shall mean the date and time that this Agreement is executed
and delivered by the parties hereto. "Base Prospectus" shall mean the base
prospectus relating to the debt securities contained in the Registration
Statement at the Effective Date (unless such base prospectus has been amended by
the Company subsequent to the Effective Date, in which case "Base Prospectus"
shall mean the base prospectus as so amended). "Prospectus" shall mean the Base
Prospectus, as supplemented by any Prospectus Supplement and as it may be
further amended or supplemented at the particular time referred to. "Free
Writing Prospectus" shall mean a "free writing prospectus," as defined in Rule
405 under the Act (which term includes use of any written information furnished
to the Commission by the Company and not incorporated by reference into the
Registration Statement and any press release issued by the Company).
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"Registration Statement" shall mean the registration statement referred to in
paragraph (a) above, including incorporated documents, exhibits and financial
statements, as they may be amended at the particular time referred to, and shall
include any Prospectus Supplement and any Pricing Supplement that are deemed
pursuant to Rule 430B under the Act to be part of the Registration Statement.
"Rule 415" and "Rule 424" refer to such rules under the Act. Any reference
herein to the Registration Statement, the Base Prospectus, any Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Prospectus
Supplement or the Prospectus, as the case may be; and any reference herein to
the terms "amend", "amended", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement or
the issue date of the Base Prospectus, any Prospectus Supplement or the
Prospectus, as the case may be, deemed to be incorporated therein by reference.
"Time of Sale" shall mean, with respect to any Notes, the time when sales of
such Notes were first made. "Time of Sale Information" shall mean the
Prospectus, including the documents deemed to be incorporated by reference
therein, as of the Time of Sale for any Notes, together with any Free Writing
Prospectuses used in conformity with this Agreement for such Notes at or prior
to such Time of Sale.
(c) At each of the following times: (i) as of the Execution Time, (ii) on
the Effective Date, (iii) when any supplement to the Prospectus is filed with
the Commission, (iv) as of the date of any Terms Agreement (as defined by
Section 2(b)), and (v) at the date of delivery by the Company of any Notes sold
hereunder (each such delivery date, a "Closing Date"), (1) the Registration
Statement, as amended as of any such time, the Prospectus, as supplemented as of
any such time, the Indenture, as amended or supplemented as of any such time,
complied or will comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the respective rules thereunder; (2) the Registration
Statement, as amended as of any such time, 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 in order to make the statements therein not
misleading; and (3) the Prospectus, as supplemented as of any such time, will
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to (A) that part of
the Registration Statement which shall constitute the Statements of Eligibility
(Form T-1) under the Trust Indenture Act of the Trustee or (B) the information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished in writing to the
Company by any of you specifically for use in connection with the preparation of
the Registration Statement or the Prospectus (or any supplement thereto).
(d) Neither the Company nor the Subsidiary (as hereinafter defined) has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus, any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
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dispute or court or governmental action, order or decree, which has had or is
reasonably likely to have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Company and the Subsidiary
taken as a whole, otherwise than as set forth or contemplated in the
Registration Statement, the Prospectus and any Time of Sale Information; and,
since the respective dates as of which information is given in the Registration
Statement, the Prospectus and any Time of Sale Information, there has not been
any change in the capital stock (other than pursuant to any stock purchase,
dividend reinvestment, savings, bonus, incentive, or similar plan, conversions
of convertible securities into common stock or shares of capital stock issued or
to be issued by the Subsidiary pursuant to one or more subscription agreements
in effect between the Subsidiary and the Company at the date hereof) or
long-term debt (other than normal amortization of debt premium and discount,
bank or finance company borrowings and repayments in the ordinary course, or
additional issuances or repurchases of commercial paper) of the Company or the
Subsidiary or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and the Subsidiary taken as a whole, otherwise than as set forth or
contemplated in the Registration Statement, the Prospectus and any Time of Sale
Information.
(e) Each of the Company and Phoenix Development Company, Inc., a New York
corporation (the "Subsidiary"), which is the only subsidiary of the Company, has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus and any Time of Sale Information and is duly
qualified to do business in each jurisdiction in which it owns or leases real
property or in which the conduct of its business requires such qualification
except where the failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business, properties,
financial position or results of operations of the Company and the Subsidiary
taken as a whole; and all of the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and are owned beneficially by the Company subject to no security
interest, other encumbrance or adverse claim. Notwithstanding the foregoing, if
the Subsidiary as of the date hereof or any subsequent date should hereafter or
thereafter cease to be a subsidiary (within the meaning of Rule 405 promulgated
by the Commission under the Act) of the Company, such corporation shall be
deemed to be excluded from the definition of such term from and after such date.
(f) The issuance and sale of the Notes have been duly and validly
authorized by the Company and, when issued within the limitations set forth in
the order or orders of the Public Service Commission of the State of New York
referred to in subsection (g) below and executed and authenticated in accordance
with the provisions of the Indenture and delivered and paid for by the
purchasers thereof, the Notes will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the Indenture
equally and ratably with the securities outstanding thereunder; the Indenture
has been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and to an implied covenant
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of good faith and fair dealing; and the Notes and the Indenture conform to the
descriptions thereof in the Registration Statement, the Prospectus and any Time
of Sale Information.
(g) The issue and sale of the Notes and the compliance by the Company with
all of the provisions of the Notes, the Indenture, this Agreement and any Terms
Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject (except that, for purposes of this representation and
warranty, compliance with any financial covenant requiring an arithmetic
computation (not determinable at the Execution Time) in respect of any Notes
shall be measured at the time of the establishment of the terms of such Notes),
nor will such action result in any violation of the provisions of the Company's
Certificate of Incorporation, as amended, or the Bylaws of the Company or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its property or assets; and
no consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Notes or the consummation by the Company of the other transactions
contemplated by this Agreement or any Terms Agreement or the Indenture except
such as have been obtained prior to the Execution Time under the Act and the
Trust Indenture Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the public offering of the Notes, and except for filings with
and the orders from the Public Service Commission of the State of New York
authorizing the issuance and sale by the Company of the Notes subject to certain
conditions set forth therein, which orders have been obtained and are in full
effect.
(h) Other than as set forth or contemplated in the Prospectus and any Time
of Sale Information, there are no legal or governmental proceedings pending to
which the Company or the Subsidiary is a party or of which any property of the
Company or the Subsidiary is the subject which, if determined adversely to the
Company or the Subsidiary, would individually or in the aggregate have a
material adverse effect on the financial position, shareholders' equity or
results of operations of the Company and the Subsidiary taken as a whole; and,
to the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(i) There are no contracts or documents of the Company or the Subsidiary
that are required to be described in the Registration Statement, the Prospectus
or any Time of Sale Information or to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations thereunder that have not
been so described or filed.
(j) The Time of Sale Information for any Notes: (i) will not, at the Time
of Sale and at the Closing Date for such Notes, contain any 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 that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Agent furnished to the Company in
writing by
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such Agent expressly for use in such Time of Sale Information, and (ii) will
comply in all material respects with the applicable requirements of the Act, the
Trust Indenture Act and the Exchange and the respective rules thereunder.. No
statement of material fact included in the Time of Sale Information that is
required to be included in the Prospectus has been omitted therefrom.
(k) The Company (including its agents and representatives, other than the
Agents in their capacity as such) has not prepared, made, used, authorized,
approved or referred to, and will not prepare, make, use, authorize, approve or
refer to, any "written communication" (as defined in Rule 405 under the Act)
that constitutes an offer to sell or solicitation of an offer to buy Notes (each
such communication by the Company or its agents and representatives (other than
a communication referred to in clauses (i), (ii), (iii) and (iv) below), an
"Issuer Free Writing Prospectus") other than (i) any document not constituting a
prospectus pursuant to Section 2(a)(10)(a) of the Act or Rule 134 under the Act,
(ii) the Base Prospectus, (iii) any Prospectus Supplement, (iv) a Pricing
Supplement and (v) any electronic road show or other written communications, in
each case approved in writing in advance by the Agents. Each such Issuer Free
Writing Prospectus complied in all material respects with the Act, has been or
will be (within the time period specified in Rule 433 under the Act) filed in
accordance with the Act (to the extent required thereby) and, when taken
together with the Prospectus accompanying, or delivered prior to delivery of, or
filed prior to the first use of, such Issuer Free Writing Prospectus, did not,
and at the Closing Date will not, contain any 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 that the Company makes no representation and warranty with
respect to any statements or omissions made in each such Issuer Free Writing
Prospectus in reliance upon and in conformity with information relating to any
Agent furnished to the Company in writing by such Agent expressly for use in any
Issuer Free Writing Prospectus.
(l) The Company will not be an ineligible issuer as defined under the Act
at the times specified in the Act in connection with an offering of Notes.
(m) Each Issuer Free Writing Prospectus, including any Term Sheet (as
defined in Section 4(q)), will not include any information that conflicts with
the information contained in the Registration Statement, including any document
incorporated therein by reference and any Prospectus Supplement deemed to be a
part thereof that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written information furnished to
the Company by any Agent specifically for use therein.
(n) The Company and the Subsidiary maintain an effective system of
"disclosure controls and procedures" (as defined in Rule 13a-15(e) under the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding required
disclosure. The
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Company and the Subsidiary have carried out evaluations of the effectiveness of
their disclosure controls and procedures as required by Rule 13a-15 under the
Exchange Act.
(o) The Company and the Subsidiary maintain systems of "internal control
over financial reporting" (as defined in Rule 13a-15(f) under the Exchange Act)
that comply with the requirements of the Exchange Act and have been designed by,
or under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, including, but not limited to 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 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. Except as disclosed in the Registration Statement,
any Time of Sale Information and the Prospectus, there are no material
weaknesses in the Company's internal controls.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions
set forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company. On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures.
The Company reserves the right, in its sole discretion, to reject any
offer to purchase Notes, in whole or in part. In addition, the Company reserves
the right, in its sole discretion, to instruct the Agents to suspend at any
time, for any period of time or permanently, the solicitation of offers to
purchase the Notes. Upon receipt of instructions from the Company, the Agents
will forthwith suspend solicitations of offers to purchase Notes from the
Company until such time as the Company has advised them that such solicitation
may be resumed.
The Company agrees to pay each Agent a commission on the Closing Date with
respect to each sale of Notes by the Company as a result of a solicitation made
by such Agent pursuant to this subsection, in an amount equal to that percentage
specified in Schedule I hereto of the aggregate principal amount of the Notes
sold by the Company or in such other amount as may be agreed to in writing
between the Company and an Agent; provided that such amount shall not exceed the
amounts set forth on Schedule I hereto. Such commission shall be payable as
specified in the Procedures.
Subject to the provisions of this Section 2 and to the Procedures, 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, upon five (5) days' prior written
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notice to the Agents, appoint additional persons to serve as Agents hereunder,
but only if each such additional person agrees to be bound by all the terms of
this Agreement as an Agent. The Company reserves the right to sell, and may
solicit and accept offers to purchase, Notes directly on its own behalf, and, in
case of any such sale not resulting from a solicitation made by any Agent, no
commission shall be payable by the Company with respect to such sale. To the
extent a potential investor contacts the Company directly with an offer or
inquiry to purchase Notes, the Company, in lieu of accepting such offer to
purchase and selling Notes directly on its own behalf, may refer such potential
investor to any Agent to complete such sale (each a "Reverse Offer"). Any
commission payable to such Agent on the Closing Date with respect to a Reverse
Offer shall be in an amount as may be agreed to by the Company and such Agent at
such time. The Company agrees, so long as any Agent is serving in such capacity
hereunder, that it will not contact or solicit potential investors introduced to
it by such Agent to purchase Notes.
(b) Subject to the terms and conditions stated herein, whenever the
Company and any of you determine that the Company shall sell Notes directly to
any of you as Purchaser, each such sale of Notes shall be made in accordance
with the terms of this Agreement and, unless otherwise agreed by the Company and
the Purchaser, any supplemental agreement relating thereto between the Company
and the Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit C attached hereto) is herein referred to as
a "Terms Agreement." The Purchaser's commitment to purchase Notes pursuant to
any Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
describe the Notes to be purchased by the Purchaser pursuant thereto, specify
the principal amount of such Notes, the price to be paid to the Company for such
Notes, the rate at which interest will be paid on the Notes, the Closing Date
for such Notes, the place of delivery of the Notes and payment therefor, the
method of payment and any modification of the requirements for the delivery of
the opinions of counsel, the certificates from the Company or its officers, and
the letter from the Company's independent public accounting firm, pursuant to
Section 6(b). Such Terms Agreement shall also specify the period of time
referred to in Section 4(m). Except as set forth in any Terms Agreement, no
commission shall be payable by the Company with respect to any sale of Notes
pursuant to a Terms Agreement.
Delivery of the Notes sold to the Purchaser pursuant to any Terms
Agreement shall be made as agreed to between the Company and the Purchaser as
set forth in the respective Terms Agreement, not later than the Closing Date set
forth in such Terms Agreement, against payment of funds to the Company in the
net amount due to the Company for such Notes by the method and in the form set
forth in the respective Terms Agreement.
Each of the Agents represent that it has not and will not use, authorize
use of, refer to, or participate in the planning for use of, any Free Writing
Prospectus, other than (i) a Free Writing Prospectus that, solely as a result of
use by such Agent, would not trigger an obligation to file such Free Writing
Prospectus with the Commission pursuant to Rule 433 under the Act, (ii) any
Issuer Free Writing Prospectus prepared pursuant to Section 1(j) or Section 4(o)
(including any electronic road show) or (iii) any Free Writing Prospectus
prepared by such Agent and approved by the Company in advance in writing.
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The Company acknowledges and agrees that (i) the offer and sale of any
Notes, including the determination of the public offering price thereof, will be
arm's-length commercial transactions between the Company, on the one hand, and
the Agents, on the other hand, (ii) in connection with the offer and sale of any
Notes and the process leading to such transaction, each Agent is not the
fiduciary of the Company or its stockholders, creditors, employees or any other
party, (iii) no Agent has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offer or sale of any
Notes or the process leading thereto (irrespective of whether such Agent has
advised or is currently advising the Company on other matters), and no Agent has
any obligation to the Company with respect thereto, except the obligations
expressly set forth in this Agreement, (iv) the Agents and their respective
affiliates may be engaged in a broad range of transactions not in violation of
law that involve interests that differ from those of the Company and (v) no
Agent has provided any legal, accounting, regulatory or tax advice with respect
to the offer and sale of any Notes and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.
3. Offering and Sale of Notes. Each Agent and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the Company
will not file any amendment of the Registration Statement or supplement to the
Prospectus (except for (i) periodic or current reports filed under the Exchange
Act, (ii) a Pricing Supplement or (iii) a supplement relating to an offering of
debt securities other than the Notes) unless the Company has furnished each of
you a copy for your review prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or supplement. Subject to
the foregoing sentence, the Company will cause each supplement to the Prospectus
to be filed with the Commission pursuant to the applicable paragraph of Rule 424
within the time period prescribed. The Company will promptly advise each of you
(i) when the Prospectus, and any supplement thereto, and any Issuer Free Writing
Prospectus, shall have been filed with the Commission pursuant to Rule 424, (ii)
when, prior to the termination of the offering of the Notes, any amendment of
the Registration Statement shall have been filed or become effective, (iii) of
any request by the Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its reasonable best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as reasonably
possible the withdrawal thereof.
(b) If, at any time prior to a Closing Date for any of the Notes, any
event occurs as a result of which the Time of Sale Information for such Notes as
then supplemented would include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
9
misleading, or if, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if, at any time prior to a Closing Date for any of the Notes, it
shall be necessary to amend the Registration Statement or to supplement the Time
of Sale Information for such Notes to comply with the Act or the Exchange Act or
the respective rules thereunder, or if, at any time when a prospectus relating
to the Notes is required to be delivered under the Act, it shall be necessary to
amend the Registration Statement or to supplement the Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, the Company
promptly will (i) notify each of you to suspend solicitation of offers to
purchase Notes (and, if so notified by the Company, each of you shall forthwith
suspend such solicitation and cease using the Prospectus as then supplemented),
(ii) prepare and file with the Commission, subject to the first sentence of
paragraph (a) of this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and (iii) supply any
supplemented Time of Sale Information or Prospectus, as the case may be, to each
of you in such quantities as you may reasonably request; provided, however, that
should any such event relate solely to activities of you, then you shall assume
the expense of preparing and furnishing any such amendment or supplement. If
such amendment or supplement, and any documents, certificates and opinions
furnished to each of you pursuant to paragraphs (g), (j), (k) and (l) of this
Section 4 in connection with the preparation of filing of such amendment or
supplement are satisfactory in all respects to you, you will, upon the filing of
such amendment or supplement with the Commission and upon the effectiveness of
an amendment to the Registration Statement, if such an amendment is required,
resume your obligation to solicit offers to purchase Notes hereunder.
(c) During the term of this Agreement, the Company will timely file all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act. In addition, on the date on which the
Company (or as soon as practicable thereafter) makes any announcement to the
general public concerning earnings or concerning any other event which is
required to be described, or which the Company proposes to describe, in a
document filed pursuant to the Exchange Act, the Company will furnish to each of
you the information contained in such announcement. The Company will notify each
of you of any downgrading in the rating of the Notes or any other debt
securities of the Company, or any public announcement of placement of the Notes
or any other debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), promptly
after the Company learns of any such downgrading or public announcement.
(d) As soon as practicable, the Company will make generally available to
its security holders and to each of you an earnings statement or statements of
the Company and the Subsidiary which will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your counsel, without
charge (except as otherwise provided herein), a reasonable number of copies of
the Registration Statement (including exhibits thereto) and, so long as delivery
of a prospectus may be required by the Act, as many copies of the Prospectus and
any supplement thereto as you may reasonably request.
10
(f) The Company will arrange for the qualification of the Notes for sale
under the laws of such jurisdictions as any of you may designate, will maintain
such qualifications in effect so long as required for the distribution of the
Notes, and upon your request will arrange for the determination of the legality
of the Notes for purchase by institutional investors; provided, however, that
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction, to pay filing fees
and other expenses in connection therewith in the aggregate exceeding $4,000, or
to comply with any other requirement reasonably deemed by the Company to be
unduly burdensome.
(g) During the term of this Agreement, the Company shall furnish to each
of you (i) copies of all annual, quarterly and other reports furnished to
stockholders, (ii) copies of all annual, quarterly and current reports (without
exhibits but including documents incorporated by reference therein) of the
Company filed with the Commission under the Exchange Act and (iii) such other
information concerning the Company as you may reasonably request from time to
time.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its obligations
under this Agreement, including the fees and disbursements of its accountants
and counsel, the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and supplements
thereto, the Indenture, this Agreement and all other documents relating to the
offering, the cost of preparing, printing, packaging and delivering the Notes,
the fees and disbursements, including reasonable fees of counsel, incurred
pursuant to Section 4(f), the fees and disbursements of the Trustee and the fees
of any ratings agency that rates the Notes, (ii) reimburse each of you on a
monthly basis for all reasonable out-of-pocket expenses incurred by you in
connection with this Agreement (including, but not limited to, advertising
expenses), in the aggregate not to exceed $2,500 per Agent for the term of this
Agreement, and (iii) pay the reasonable fees and expenses of your counsel
incurred in connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes will be
deemed to be a new making to you of the representations and warranties of the
Company in Section 1 (except that such representations and warranties shall be
deemed to relate solely to the Registration Statement as then amended and to the
Prospectus as then amended and supplemented to relate to such Notes).
(j) Except as otherwise provided in subsection (n) of this Section 4, each
time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of debt securities other than the Notes or (ii) a Pricing Supplement)
the Company will deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by any of the Chairman of the Board, the
President and Chief Executive Officer, any Vice President having
responsibilities for financial matters or the Controller or the Treasurer of the
Company, dated the date of the effectiveness of such amendment or the date of
the filing of such supplement, in form reasonably satisfactory to you, of the
same tenor as the certificate referred to in Section 5(d) but modified to relate
to the last day of the fiscal quarter for which financial statements of the
Company were last filed with the Commission and to the Registration Statement
and the Prospectus as amended and supplemented to the time of the effectiveness
of such amendment or the filing of such supplement.
11
(k) Except as otherwise provided in subsection (n) of this Section 4, each
time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of debt securities other than the Notes or (ii) a Pricing Supplement),
the Company shall furnish or cause to be furnished promptly to each of you a
written opinion, satisfactory to you, by counsel for the Company, dated the date
of the effectiveness of such amendment or the date of the filing of such
supplement, in form satisfactory to each of you, of the same tenor as the
opinion referred to in Section 5(b), but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement or, in lieu of
such opinion, such counsel may furnish each of you with a letter to the effect
that you may rely on such counsel's last opinion to the same extent as though it
were dated the date of such letter authorizing reliance (except that statements
in such last opinion will be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of the effectiveness of
such amendment or the filing of such supplement).
(l) Except as otherwise provided in subsection (n) of this Section 4, each
time that the Registration Statement or the Prospectus is amended or
supplemented (other than by (i) an amendment or supplement relating to any
offering of debt securities other than the Notes or (ii) a Pricing Supplement)
to set forth amended or supplemental financial information (derived from the
accounting records of the Company subject to the internal controls of the
Company's accounting system or derived directly from such records by
computation), the Company shall cause its registered independent public
accounting firm promptly to furnish each of you a letter, dated the date of the
effectiveness of such amendment or the date of the filing of such supplement, in
form satisfactory to each of you, of the same tenor as the letter referred to in
Section 5(e) with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented to the
date of such letter.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser thereunder, issue
or announce the proposed issuance of any of its debt securities, including the
Notes, with maturities or other terms substantially similar to the Notes being
purchased pursuant to such Terms Agreement.
(n) The Company shall not be required to comply with the provisions of
subsections (j), (k) and (l) of this Section 4 during any period (which may
occur from time to time during the term of this Agreement) for which the Company
has instructed the Agents to suspend the solicitation of offers to purchase
Notes with respect to any Agent who is not a Purchaser holding Notes during any
such period pursuant to any Terms Agreement. Whenever the Company has instructed
the Agents to suspend the solicitation of offers to purchase Notes for any such
period, however, prior to instructing the Agents to resume the solicitation of
offers to purchase Notes or prior to entering into any Terms Agreement, the
Company shall be required to comply with the provisions of subsections (j), (k)
and (l) of this Section 4, but only to the extent of delivering or causing to be
delivered the most recent certificate, opinion or letter, as the case may be,
which would have otherwise been required under each such subsection unless the
Agents otherwise reasonably request that such documents in respect of prior
periods be delivered.
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(o) Before making, preparing, using, authorizing, approving, referring to
or filing any Issuer Free Writing Prospectus, and before filing any amendment or
supplement to the Registration Statement or the Prospectus, the Company will
furnish to each of the Agents and their counsel a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not make,
prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the Agents
reasonably object.
(p) If at any time after the Time of Sale for any Notes and prior to the
Closing Date for such Notes (i) any event shall occur or condition shall exist
as a result of which the Time of Sale Information for such Notes as then amended
or supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances, not misleading or (ii) it is necessary to amend
or supplement such Time of Sale Information to comply with law, the Company will
immediately notify the Agents thereof and forthwith prepare and, subject to
Section 4(o), file with the Commission (to the extent required) and furnish to
the Agents and to such dealers as the Agents may designate, such amendments or
supplements to such Time of Sale Information as may be necessary so that the
statements in such Time of Sale Information as so amended or supplemented will
not, in the light of the circumstances, be misleading or so that such Time of
Sale Information will comply with law.
(q) The Company shall prepare a Term Sheet with respect to each offering
of Notes, containing solely a description of the final terms of the Notes and
the offering thereof, which shall be substantially in the form of Exhibit D
attached hereto (a "Term Sheet"), and shall file such Term Sheet with the
Commission pursuant to Rule 433 under the Act within the time required by such
Rule.
5. Conditions to the Obligations of the Agents. The obligations of each
Agent to solicit offers to purchase the Notes shall be subject to (i) the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date and when any
supplement to the Prospectus is filed with the Commission, (ii) the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, (iii) the performance by the Company of its obligations
hereunder and (iv) the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424, the Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule 424; 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
threatened.
(b) The Company shall have furnished to each Agent the opinion of counsel
for the Company, dated the Execution Time, 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 jurisdiction of
its incorporation, with power and authority (corporate and governmental)
to own its properties and conduct its
13
business as described in the Prospectus, as amended or supplemented, and
is duly qualified to do business in each jurisdiction in which it owns or
leases real property or in which the conduct of its business requires such
qualification except where the failure to be so qualified, considering all
such cases in the aggregate, does not involve a material risk to the
business, properties, financial position or results of operations of the
Company; provided, however, that at such time, if ever, the Subsidiary
constitutes 10% or more of the consolidated assets of the Company or
contributes 10% or more of the consolidated net income of the Company for
the then most recent 12-month period, the Agents may request that counsel
for the Company include in any written opinion to them required by this
Section 5(b) or Section 4(k), an opinion to the effect that the Subsidiary
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with power and authority (corporate and governmental) to own its
properties and conduct its business as described in the Prospectus, as
amended or supplemented, and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the
conduct of its business requires such qualification except where the
failure to be so qualified, considering all such cases in the aggregate,
does not involve a material risk to the business, properties, financial
position or results of operations of the Company and the Subsidiary taken
as a whole; and all of the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially by the Company subject to no
security interest, other encumbrance, or adverse claim.
(ii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject which, if determined
adversely to the Company, would individually or in the aggregate have a
material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and the
Subsidiary, taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(iii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iv) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting the enforcement of
creditors' rights generally, to general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and to an implied covenant of good faith and fair dealing; and the
Indenture has been duly qualified under the Trust Indenture Act.
(v) The issuance and sale of the Notes have been duly and validly
authorized by the Company and, when issued within the limitations set
forth in the applicable order or orders from the Public Service Commission
of the State of New York referred to in
14
paragraph (x) below and executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
purchasers thereof in accordance with this Agreement, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting the enforcement of
creditors' rights generally, to general equitable principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and to an implied covenant of good faith and fair dealing, and
will be entitled to the benefit provided by the Indenture equally and
ratably with the securities outstanding thereunder (except insofar as a
sinking fund established in accordance with the provisions of the
Indenture may afford additional benefit for the securities of any
particular series); and the Notes and the Indenture conform as to legal
matters to the descriptions thereof contained in the Registration
Statement and the Prospectus.
(vi) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture and this
Agreement and the consummation of the transactions therein and herein
contemplated (except as to compliance with any financial covenant
requiring an arithmetic computation not determinable at the Execution Time
as to which such counsel need express no opinion) will not conflict with
or result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement or
material other agreement or instrument known, as of the date of such
opinion, to such counsel to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject, nor will such action result in any violation of the provisions
of the Company's Certificate of Incorporation, as amended, or the Bylaws
of the Company or any statute or any order, rule or regulation known, as
of the date of such opinion, to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties.
(vii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body having
jurisdiction over the Company or any of its properties is required for the
issue and sale of the Notes or the consummation by the Company of the
other transactions contemplated by this Agreement or the Indenture, except
such as have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the public offering of the Notes, and except for filings with and the
order or orders from the Public Service Commission of the State of New
York authorizing the issuance and sale by the Company of the Notes subject
to certain conditions set forth therein, which order or orders have been
obtained and, to the best knowledge of such counsel, are in full force and
effect.
(viii) The Registration Statement, at the Effective Date, and the
Prospectus, as of the date of such opinion (except as to the financial
statements and other financial or statistical data contained or
incorporated by reference therein and except for that part of the
Registration Statement which shall constitute the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee, as to which such
15
counsel need express no opinion) comply as to form in all material
respects with all applicable requirements of the Act, and, with respect to
the documents or portions thereof filed with the Commission pursuant to
the Exchange Act and incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3, the Exchange Act and the applicable instructions,
rules and regulations of the Commission thereunder; on the basis of
information received from the Commission, at the date of such opinion, the
Registration Statement has become effective under the Act, and, to the
best knowledge of such counsel, no proceedings for a stop order with
respect thereto have been instituted or are pending or threatened under
Section 8 of the Act; and based on such counsel's participation in the
preparation of the Registration Statement and Prospectus and its services
as counsel to the Company (but such opinion may state that such counsel
did not independently check or verify the correctness of the statements
made by the Company or factual information included in the Registration
Statement and Prospectus, and thereby may assume the correctness thereof,
except insofar as such statements or information relate to such counsel or
are stated in the Registration Statement or Prospectus as having been made
on their authority as experts), no facts have come to the attention of
such counsel to cause them to believe, and such counsel have no reason to
believe, that the Registration Statement, at the Effective Date, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading (except as to the financial statements or other financial
or statistical data contained in or incorporated by reference in the
Registration Statement and the Prospectus and except for that part of the
Registration Statement which shall constitute the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee), or that the Prospectus, as of the date of such opinion,
includes an untrue statement of a material fact or omits 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
(except as to the financial statements or other financial or statistical
data contained in or incorporated by reference in the Registration
Statement and the Prospectus).
(ix) The Company's gas distribution activities are exempt from the
Natural Gas Act.
(x) The Public Service Commission of the State of New York has
issued an appropriate order or orders with respect to the issuance and
sale of the Notes in accordance with this Agreement; to the best knowledge
of such counsel, such order or orders are still in full force and effect;
the issuance and sale of the Notes in accordance with this Agreement and
subject to the limitations set forth in such orders will conform with the
terms of such order or orders.
As to factual matters (including relating to the Company's financial
condition) included in said opinion, such counsel may rely upon certificates of
public officials as of a recent date, the warranties and representations of the
Company set forth in this Agreement, and certificates of the Company made
pursuant to the provisions of this Agreement.
(c) Each Agent shall have received from counsel for the Agents an opinion,
dated the Execution Time, with respect to the issuance and sale of the Notes,
the Indenture, the
16
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Agents 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.
(d) The Company shall have furnished to each Agent a certificate of the
Company, signed by any of the Chairman of the Board, the President, the Chief
Financial Officer or any Vice President having responsibilities for financial
matters, the Controller or the Treasurer of the Company, dated the Execution
Time, to the effect that the signer of such certificate has carefully examined
the Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects and the Company
has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied as a condition to the obligation of
the Agents to solicit offers to purchase the Notes.
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened.
(iii) (A) Neither the Company nor the Subsidiary has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, which has had or is reasonably likely to have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and the Subsidiary taken as a whole, otherwise
than as set forth or contemplated in the Registration Statement and the
Prospectus and (B) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the capital stock (other than pursuant to any stock
purchase, dividend reinvestment, savings, bonus, incentive, or similar
plan, conversions of convertible securities into common stock, or shares
of capital stock issued or to be issued by the Subsidiary pursuant to one
or more subscription agreements in effect between the Subsidiary and the
Company at the date hereof), or long-term debt (other than normal
amortization of debt premium and discount, bank or finance company
borrowings and repayments in the ordinary course, or additional issuances
or repurchases of commercial paper) of the Company or the Subsidiary or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and the Subsidiary taken as a whole, otherwise than as set forth
or contemplated in the Registration Statement and the Prospectus.
(e) At the Execution Time, the Company's independent registered public
accounting firm shall have furnished to each Agent a letter, dated as of the
Execution Time, in form and substance satisfactory to the Agents, stating in
effect that:
17
(i) They are an independent registered public accounting firm with
respect to the Company within the meaning of the Act and the applicable
rules and regulations thereunder adopted by the Commission and the Public
Company Accounting Oversight Board (United States) ("PCAOB").
(ii) In their opinion, the consolidated financial statements of the
Company and the Subsidiary audited by them and included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2006, which are
incorporated by reference in the Registration Statement and the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission.
(iii) On the basis of procedures (but not an audit in accordance
with the standards of the PCAOB) consisting of:
(A) reading the minutes of meetings of the stockholders and
the Board of Directors of the Company and the Subsidiary since
December 31, 2006, as set forth in the minute books through a
specified date not more than three business days prior to the date
of delivery of such letter;
(B) performing the procedures specified by the PCAOB for a
review of interim financial information as described in SAS 100,
Interim Financial Information, on the unaudited condensed interim
financial statements of the Company and the Subsidiary incorporated
by reference in the Registration Statement and the Prospectus (the
"Unaudited Statements") and reading the unaudited interim financial
data for the period from the date of the latest balance sheet
included in the Unaudited Statements to the date of the latest
available interim financial data; and
(C) making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters regarding
the specific items for which representations are requested in
Sections 5(e)(iii)(1) through 5(e)(iii)(4) below,
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
(1) the Unaudited Statements do not comply in form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and with the related rules and regulations
adopted by the Commission;
(2) any material modifications should be made to the Unaudited
Statements for them to be in conformity with generally accepted
accounting principles; and
(3) (i) at the date of the latest available interim financial
data, there was any change in the capital stock or increase in
long-term debt or any decreases in consolidated net current assets
(working capital) or shareholders' equity of the Company and the
Subsidiary consolidated as compared with amounts shown in
18
the latest balance sheet incorporated by reference in the
Registration Statement and the Prospectus, and at a specified date
not more than three business days prior to the date of delivery of
such letter, there was any change in the capital stock or increase
in long-term debt of the Company and the Subsidiary consolidated as
compared with amounts shown in the latest balance sheet incorporated
by reference in the Registration Statement and the Prospectus, or
(ii) for the period from the date of the latest income statement
incorporated by reference in the Registration Statement and the
Prospectus to the date of the latest available financial data, there
were any decreases, as compared with the corresponding period in the
preceding year, in consolidated net sales or in the total or
per-share amounts of net income, except in all instances for
changes, increases or decreases which the Registration Statement and
the Prospectus disclose have occurred or may occur, or they shall
state any specific changes, increases or decreases.
(iv) They have read the dollar amounts (or percentages derived from
such dollar amounts) and other financial information specified by the
Agents (A) which appear in the Prospectus under the caption "Ratios of
Earnings to Fixed Charges", (B) which appear or are incorporated by
reference in the Company's Annual Report on Form 10-K incorporated by
reference in the Registration Statement and the Prospectus under the
captions "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Ratio of Earnings to Fixed Charges" and in the
table captioned "Five Year Summary of Consolidated Operations and Selected
Financial Information", or (C) which appear in any of the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus under the captions "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and "Ratio of Earnings to Fixed Charges" and agreed such dollar amounts,
percentages and other financial information respectively to appropriate
accounts in the Company's accounting records subject to controls over
financial reporting and to schedules prepared by the Company therefor.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) Each Agent shall have received copies of the Letter of Representations
between the Company, U.S. Bank Trust and The Depository Trust Company ("DTC"),
satisfactory to each of you, summarizing DTC's agreement to hold, safekeep and
effect book-entry transfers of the Notes.
(g) Prior to the Execution Time, the Company shall have furnished to each
Agent such further information, documents, certificates and opinions of counsel
as the Agents may reasonably request.
If any of the conditions specified in this Section 5 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 such Agents and counsel for the Agents, this Agreement and all
obligations of any Agent hereunder may be canceled at any time by the
19
Agents. Notice of such cancellation shall be given to the Company in writing or
by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 at the Execution
Time shall be delivered at the office designated by the Company in New York, New
York.
6. Conditions to the Obligations of the Purchaser. The obligations of the
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of any related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) 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 threatened.
(b) If specified by any related Terms Agreement and except to the extent
modified by such Terms Agreement, the Purchaser shall have received,
appropriately updated, (i) a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d), (ii) the opinion of counsel for
the Company, dated as of the Closing Date, substantially to the effect set forth
in Section 5(b), (iii) the opinion of counsel for the Purchaser, dated as of the
Closing Date, substantially to the effect set forth in Section 5(c) and (iv) the
letter of the Company's independent registered public accounting firm, dated as
of the Closing Date, substantially to the effect set forth in Section 5(e);
provided, however, that references to the Registration Statement and the
Prospectus in such certificate, opinions and letter shall be to the Registration
Statement and the Prospectus as then amended and supplemented.
(c) Prior to the Closing Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the Purchaser
may reasonably request.
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 and
any Terms Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be canceled at, or
any time prior to, the respective Closing Date by the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company agrees that any person who has agreed to purchase and pay for any Note,
including a Purchaser and any person who purchases pursuant to a solicitation by
any of the Agents, shall have the right to refuse to purchase such Note if, at
the Closing Date therefor, either (a) any condition set forth in Section 5 or
Section 6, as applicable, shall not be satisfied or (b) subsequent to the
agreement to purchase such Note, there shall have occurred (i) any change in or
affecting the business or properties of the Company and the Subsidiary,
considered as one enterprise, the effect of which, in the reasonable judgment of
such person, has a material adverse effect on the
20
investment quality of such Note or (ii) any event described in paragraphs (ii),
(iii), (iv) or (v) of Section 9(b).
8. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each of you against all losses, claims, damages or liabilities,
joint or several, to which you may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, any Prospectus Supplement and any other prospectus relating to the
Notes (including, without limitation, any Time of Sale Information, any Issuer
Free Writing Prospectus and any "issuer information" filed or required to be
filed pursuant to Rule 433(d) under the Act), or any amendment 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 not misleading, and will reimburse each of you for any
legal or other expenses reasonably incurred by each of you in connection with
investigating or defending any such action or claim; provided, however, that the
Company shall 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 an untrue statement or
alleged untrue statement in or omission or alleged omission from the
Registration Statement, the Prospectus, any Prospectus Supplement and any other
prospectus relating to the Notes (including, without limitation, any Time of
Sale Information, any Issuer Free Writing Prospectus and any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act) or any such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any of you
expressly for use in any such documents.
(b) Each of you, severally, will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus, any Prospectus
Supplement and any other prospectus relating to the Notes (including, without
limitation, any Time of Sale Information, any Issuer Free Writing Prospectus and
any "issuer information" filed or required to be filed pursuant to Rule 433(d)
under the Act), or any amendment 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 not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, any Prospectus Supplement and any
other prospectus relating to the Notes (including, without limitation, any Time
of Sale Information, any Issuer Free Writing Prospectus and any "issuer
information" filed or required to be filed pursuant to Rule 433(d) under the
Act), or any amendment or supplement thereto, in reliance upon and in conformity
with written information furnished to the Company by each of you, respectively,
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect
21
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it (except and only to the extent that it has been prejudiced in
any material respect by such failure to notify) may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. Any losses, claims, damages or liabilities for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages or liabilities are incurred. In no event shall the
indemnifying party be liable for fees and expenses for more than one counsel
separate from their own counsel for all indemnified parties in connection with
any one action or related actions in the same jurisdiction arising out of the
same allegations or circumstances unless any such indemnified party shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to or in conflict with
those available to the other indemnified parties and in the judgment of such
counsel it is advisable for such indemnified party to employ separate counsel.
An indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or 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, action, suit or proceeding) unless such settlement, compromise or consent
(i) includes an unconditional release of such indemnified party from all
liability arising out of such claim, action, suit or proceeding and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and you on the other from the offering of the
Notes, as well as other equitable considerations, including relative fault in
connection with the statements or omissions which resulted in such losses,
claims damages or liabilities. The relative benefits received by the Company on
the one hand and the Agents on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes received by
the Company bear to the total discounts and commissions received by you. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
22
the Company on the one hand or you on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and you agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if you were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. 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. In connection
with an offering of Notes purchased from the Company by two or more Agents as
principal, the respective obligations of such Agents to contribute pursuant to
this Section 8(d) are several, and not joint, in proportion to the aggregate
principal amount of Notes that each Agent has agreed to purchase from the
Company.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any who controls any of
you within the meaning of the Act or the Exchange Act; and the obligations of
you under this Section 8 shall be in addition to any liability which you may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated by
either the Company as to any of you or all of you insofar as this Agreement
relates to such of you, giving written notice of such termination to such of you
or the Company, as the case may be. This Agreement shall so terminate at the
close of business on the first business day following the receipt of such notice
by the party to whom such notice is given. In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the third paragraph of Section 2(a), Section 4(h), Section 8 and Section 10 and,
so long as any Purchaser continues to own Notes, subsections (a), (b) and (c) of
Section 4.
(b) Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to delivery of
any payment for Notes to be purchased thereunder, if prior to such time (i) the
Purchaser shall exercise its right to refuse to purchase the Notes which are the
subject of such Terms Agreement in accordance with the provisions of Section 7,
or (ii) there shall have occurred any outbreak or escalation of hostilities or
other national or international calamity or crisis, the effect of which shall be
such as to make it, in the reasonable judgment of the Purchaser, impractical to
market the Notes or enforce contracts for the sale of the Notes, or (iii)
trading in any securities of the Company shall have been suspended by the
Commission or a national securities exchange, or if trading generally on either
the American Stock Exchange or the New York Stock Exchange shall have been
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, by either of
said exchanges or by order
23
of the Commission or any other governmental authority, or if a banking
moratorium shall have been declared by either Federal or New York authorities,
or (iv) if the rating assigned by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) to the
Notes or any other debt securities of the Company as of the date of the
applicable Terms Agreement shall have been lowered since that date or if any
such rating agency shall have publicly announced that it has placed the Notes or
any other debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, or (v) the subject matter of any amendment or
supplement to the Registration Statement, the Prospectus or any Time of Sale
Information prepared and issued by the Company, or the exceptions set forth in
any letter of the Company's independent registered public accounting firm
furnished pursuant to Section 5(e), shall have made it, in the judgment of the
Purchaser, impracticable or inadvisable to market the Notes or enforce contracts
for the sale of the Notes.
10. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you 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 you or the Company or any of the officers, directors or controlling
persons referred to in Section 8, and will survive delivery of and payment for
the Notes. The provisions of the third paragraph of Section 2(a) and Sections
4(d), 4(h) and 8 shall survive the termination or cancellation of this
Agreement; provided, however, that if at the time of such termination or
cancellation any Purchaser continues to own Notes, the provisions of subsections
(a), (b) and (c) of Section 4 shall also survive such termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to any of you, will be mailed, delivered or
telegraphed and confirmed to such of you, at the address specified in Schedule I
hereto; or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000-0000,
Attention: Treasurer.
12. 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 persons referred to in Section 8, and no other person
will have any right or obligation hereunder.
13. 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.
14. Counterparts.This Agreement may be executed in counterparts, which
together shall constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you in accordance with its terms.
Very truly yours,
CENTRAL XXXXXX GAS & ELECTRIC
CORPORATION
By:
---------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first written above.
BANC OF AMERICA SECURITIES LLC
By:
---------------------------------
Title:
X.X. XXXXXX SECURITIES INC.
By:
---------------------------------
Title:
MCDONALD INVESTMENTS INC.
By:
---------------------------------
Title:
25
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the following
percentage of the principal amount of each Note sold by such Agent:
Term Commission Rate
---- ---------------
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years up to and including 30 years .750%
From 30 years up to and including 50 years By agreement with the
Agents
Address for Notice to You:
Notices to Banc of America Securities LLC shall be directed to it at 00 Xxxx
00xx Xxxxxx, XX0-000-00-00, Xxx Xxxx, Xxx Xxxx 00000, Attention: High Grade
Transaction Management/Legal.
Notices to X.X. Xxxxxx Securities Inc. shall be directed to it at 000 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Medium-Term Note Desk.
Notices to McDonald Investments Inc. shall be directed to it at 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxx Xxxxxxxx, Director.
EXHIBIT A
Central Xxxxxx Gas & Electric Corporation
Medium-Term Notes, Series F
Administrative Procedures
Medium-Term Notes, Series F (the "Notes"), are to be offered on a
continuing basis by Central Xxxxxx Gas & Electric Corporation (the "Company") in
an aggregate principal amount of up to $140,000,000. Banc of America Securities
LLC, X.X. Xxxxxx Securities Inc. and McDonald Investments Inc., as agents (each
an "Agent" and collectively the "Agents"), have agreed to use their reasonable
best efforts to solicit offers to purchase the Notes. The Notes are being sold
pursuant to a Distribution Agreement between the Company and the Agents dated
March 19, 2007 (the "Distribution Agreement"), to which these administrative
procedures are attached as an exhibit.
The Notes will be issued under the Company's Indenture, dated as of April
1, 1992 (the "Indenture"), to U.S. Bank Trust National Association (formerly
known as First Trust of New York, National Association) ("U.S. Bank Trust"), as
successor to Xxxxxx Guaranty Trust Company of New York, as trustee (the
"Trustee"). U.S. Bank Trust will act as the paying agent (the "Paying Agent")
for the payment of principal and premium, if any, and interest on the Notes and
will perform, as the Paying Agent, unless otherwise specified, the other duties
specified herein.
The Notes will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Notes have been registered with
the Securities and Exchange Commission (the "Commission") and may bear interest
at fixed rates or, if issued at a discount, may not bear interest.
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to U.S. Bank Trust, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the holder thereof or a person
designated by such holder (a "Certificated Note"). Except as set forth in the
Prospectus (as defined in Section 1(c) of the Distribution Agreement), (i) each
Note will be initially issued as a Book-Entry Note and (ii) an owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Book-Entry Notes will be issued in accordance with
the administrative procedures set forth in Part I hereof and Certificated Notes
will be issued in accordance with the administrative procedures set forth in
Part II hereof. Administrative procedures applicable to both Book-Entry Notes
and Certificated Notes are set forth in Part III hereof. Administrative
responsibilities, document
A-1
control and record-keeping functions will be handled for the Company by its
Controller or Treasurer. The Company will promptly advise the Agents and the
Trustee in writing of those persons handling administrative responsibilities
with whom the Agents and the Trustee are to communicate regarding offers to
purchase Notes and the details of their delivery.
To the extent the procedures set forth below conflict with the provisions
of the Notes, the Indenture or the Distribution Agreement, the relevant
provisions of the Notes, the Indenture and the Distribution Agreement shall
control. Unless otherwise defined herein, terms defined in the Indenture shall
be used herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, U.S. Bank Trust will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations to be delivered from the Company and U.S. Bank Trust to DTC and
a Medium-Term Note Certificate Agreement between U.S. Bank Trust National
Association (under its then name First Trust, National Association) and DTC,
dated as of January 31, 1991 (the "MTN Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in fully registered form without coupons
(a "Global Security") representing up to
$140,000,000 aggregate principal amount of all
such Notes that have the same date of maturity
("Maturity Date"), redemption provisions, if any,
provisions for the repayment or purchase by the
Company at the option of the Holder, if any,
Interest Payment Dates, Original Issue Date, and
interest rate (in each case, and for all purposes
of these administrative procedures, as defined in
the Prospectus) (as defined in Section 1(c) of the
Distribution Agreement) (collectively, the
"Terms"). Each Global Security will be dated and
issued as of the date of its authentication by the
Trustee. No Global Security will represent any
Certificated Note.
Identification Numbers: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Rating Services, a
division of The XxXxxx-Xxxx Companies, Inc. (the
"CUSIP Service Bureau") for the reservation of one
series of CUSIP numbers (including tranche
numbers), which series consists of approximately
900 CUSIP numbers and relates to Global Securities
representing the Book-Entry Notes and previously
issued Medium-Term Notes of the Company. The
Company has obtained from the CUSIP Service Bureau
a written list of such series of reserved CUSIP
numbers and has delivered to
A-2
DTC and the Trustee a written list of 900 CUSIP
numbers of such series. The Company will assign
CUSIP numbers to Global Securities as described
below under Settlement Procedure "B". It is
expected that DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the
Company has assigned to Global Securities. At any
time when fewer than 100 of the reserved CUSIP
numbers of the series remain unassigned to Global
Securities, the Trustee shall so advise the
Company and, if it deems necessary, the Company
will reserve additional CUSIP numbers for
assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional
CUSIP numbers, the Company shall deliver a list of
such additional CUSIP numbers to the Trustee and
DTC.
Registration: Each Global Security will be registered in the
name of Cede & Co., as nominee for DTC, on the
Security Register maintained under the Indenture.
It is expected that the beneficial owner of a
Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Note, the "Participants") to act
as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and
it is expected that DTC will record in book-entry
form, in accordance with instructions provided by
such Participants, a credit balance with respect
to such beneficial owner in such Note in the
account of such Participants. The ownership
interest of such beneficial owner in such Note
will be recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
behalf of beneficial transferees and transferors
of such Note.
Consolidations: Upon receipt of written instructions from the
Company, U.S. Bank Trust may deliver to DTC and
the CUSIP Service Bureau at any time a written
notice of consolidation (a copy of which shall be
attached to the resulting Global Security)
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent
Book-Entry Notes having the same Terms and for
which interest has been paid to the same date,
(ii) a date, occurring at least thirty days after
such written notice is delivered and at least
thirty days before the next Interest Payment Date
for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP
A-3
number to be assigned to such replacement Global
Security. Upon receipt of such a notice, it is
expected that DTC will send to its participants
(including U.S. Bank Trust) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, U.S. Bank Trust will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the
new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, U.S. Bank
Trust will exchange such Global Securities for a
single Global Security bearing the new CUSIP
number, and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not
reassigned until the Book-Entry Notes represented
by such exchanged Global Securities have matured
or been redeemed.
Maturities: Each Book-Entry Note will mature on a date not
less than one year nor more than 50 years after
the date of settlement for such Note.
Denominations: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. Global
Securities will be denominated in principal
amounts not in excess of $140,000,000.
Interest: General. Interest on each Book-Entry Note will
accrue from and including the original issue date
of, or the last date to which interest has been
paid on, the Global Security representing such
Note. Each payment of interest on a Book-Entry
Note will include interest accrued to but
excluding the Interest Payment Date or the
Maturity Date or, upon earlier redemption or
repayment, the date of such redemption or
repayment (the "Redemption Date"), as the case may
be. Interest payable on the Maturity Date or the
Redemption Date of a Book-Entry Note will be
payable to the person to whom the principal of
such Note is payable. Standard & Poor's Rating
Services, a division of The XxXxxx-Xxxx Companies,
Inc. will use the information received in the
pending deposit message described under Settlement
Procedure "C" below in order to include the amount
of any interest payable and certain other
information regarding the related Global Security
in the appropriate weekly bond report published by
Standard & Poor's Corporation.
Record Dates. The record date with respect to any
Interest Payment Date shall be the April 15 or
October 15, as the case may
A-4
be (whether or not a Business Day) immediately
preceding such Interest Payment Date (each a
"Regular Record Date").
Interest Payment Dates. Interest payments on
Book-Entry Notes will be made semi-annually on May
1 and November 1 of each year and on the Maturity
Date or the Redemption Date; provided, however,
that in the case of a Book-Entry Note issued
between a Regular Record Date and an Interest
Payment Date, the first interest payment will be
made on the Interest Payment Date following the
next succeeding Regular Record Date.
Payments of Principal Payment of Interest Only. Promptly after each
and Interest: Regular Record Date, the Paying Agent will deliver
to the Company and DTC a written notice specifying
by CUSIP number the amount of interest to be paid
on each Global Security on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with the Maturity Date) and the total
of such amounts. It is expected that DTC will
confirm the amount payable on each Global Security
on such Interest Payment Date by reference to the
appropriate (daily or weekly) bond reports
published by Standard & Poor's Corporation. The
Company will pay to the Paying Agent the total
amount of interest due on such Interest Payment
Date (other than on the Maturity Date), and the
Paying Agent will pay such amount to DTC at the
times and in the manner set forth under "Manner of
Payment" below. If any Interest Payment Date for a
Book-Entry Note is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day, and no interest shall
accrue on such payment for the period from and
after such Interest Payment Date.
Payments on Maturity Date, Etc. On or about the
first Business Day of each month, the Paying Agent
will deliver to the Company and DTC a written list
of principal and, to the extent known at such
time, interest to be paid on each Global Security
maturing either on the Maturity Date or the
Redemption Date in the following month. The
Company and DTC will confirm with the Paying Agent
the amounts of such principal and interest
payments with respect to each such Global Security
on or about the fifth Business Day preceding the
Maturity Date or the Redemption Date, as the case
may be, of such Global Security. The Company will
pay to the Paying Agent the principal amount of
such Global Security, together with interest due
on such Maturity Date or Redemption Date in the
manner set forth below under "Manner of Payment".
The Paying Agent will pay such amounts to DTC at
the times and in the manner set forth below under
"Manner of Payment". If the Maturity Date or the
Redemption Date of a Global Security
A-5
representing Book-Entry Notes is not a Business
Day, the payment due on such day shall be made on
the next succeeding Business Day, and no interest
shall accrue on such payment for the period from
and after such Maturity Date or the Redemption
Date. Promptly after payment to DTC of the
principal and interest due at the Maturity Date or
the Redemption Date of such Global Security, the
Paying Agent will cancel such Global Security in
accordance with the terms of the Indenture.
Manner of Payment. The total amount of any
principal and interest due on Global Securities on
any Interest Payment Date or on the Maturity Date
or the Redemption Date shall be paid by the
Company to the Paying Agent in immediately
available funds for use by the Paying Agent no
later than 9:30 A.M. (New York City time) on such
date. The Company will make such payment on such
Global Securities by wire transfer to the Paying
Agent or by the Paying Agent's debiting the
account of the Company maintained with the Paying
Agent. The Company will confirm such instructions
in writing to the Paying Agent. Prior to 10:00
A.M. (New York City time) on each Maturity Date or
Redemption Date or as soon as reasonably possible
thereafter, the Paying Agent will pay by separate
wire transfer (using Fedwire message entry
instructions in a form previously agreed to with
DTC) to an account at the Federal Reserve Bank of
New York previously agreed to with DTC, in funds
available for immediate use by DTC, each payment
of principal (together with interest thereon) due
on Global Securities on any Maturity Date or
Redemption Date. On each Interest Payment Date,
interest payments shall be made to DTC in same day
funds in accordance with existing arrangements
between the Paying Agent and DTC. Thereafter, on
each such date, it is expected that DTC will pay,
in accordance with its SDFS operating procedures
then in effect, such amounts in funds available
for immediate use to the respective Participants
in whose names the Book-Entry Notes represented by
such Global Securities are recorded in the
book-entry system maintained by DTC. Neither the
Company nor the Paying Agent shall have any
responsibility or liability for the payment by DTC
to such Participants of the principal of and
interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from
any interest payment on a Book-Entry Note will be
determined and withheld by the Participant,
indirect participant in DTC or other person
responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
A-6
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry Note
and the authentication and issuance of the Global
Security representing such Note shall constitute
"settlement" with respect to such Note. All orders
accepted by the Company will be settled on the
third Business Day following the date of sale of a
Book-Entry Note unless the Company, the Trustee
and the purchaser agree to settlement on another
day that shall be no earlier than the next
Business Day.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company through an
Agent, as agent, shall be as follows:
A. Such Agent will advise the Company by
telephone, followed by facsimile
transmission, of the following settlement
information:
1. Principal amount.
2. Maturity Date.
3. The interest rate.
4. Interest Payment Dates.
5. Redemption provisions, if any, or
provisions for the repayment or
purchase by the Company at the option
of the Holder, if any.
6. Settlement date.
7. Issue price.
8. Agent's commission, determined as
provided in Section 2(a) of the
Distribution Agreement.
B. The Company will assign a CUSIP number to
such Book-Entry Note and will advise U.S.
Bank Trust by facsimile transmission or
other mutually acceptable means of the
information set forth in Settlement
Procedure "A" above, the name of such Agent
and the CUSIP number assigned to such
Book-Entry Note. The Company will notify the
Agent of such CUSIP number by telephone as
soon as practicable. Each such communication
by the Company shall constitute a
representation and warranty by the Company
to U.S. Bank Trust and each Agent that (i)
such Note is then, and at the time of
issuance and sale thereof will be, duly
authorized for issuance and sale by the
Company, (ii) the Global Security
A-7
representing such Note will conform with the
terms of the Indenture pursuant to which
such Note and Global Security are issued and
(iii) upon authentication and delivery of
such Global Security, the aggregate
principal amount of all Notes initially
offered issued under the Indenture will not
exceed $140,000,000 (except for Global
Securities or Notes represented by and
authenticated and delivered in exchange for
or in lieu of Notes in accordance with the
Indenture).
C. U.S. Bank Trust will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, which shall route such
information to such Agent and Standard &
Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc.:
1. The information set forth in
Settlement Procedure "A".
2. Identification of such Note as a fixed
rate Book-Entry Note.
3. Initial Interest Payment Date for such
Note, number of days by which such
date succeeds the related Regular
Record Date (which shall be the
Regular Record Date as defined in the
Note) and amount of interest payable
on such Interest Payment Date.
4. CUSIP number of the Global Security
representing such Note.
5. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. The Trustee will complete and authenticate
the Global Security representing such Note.
E. It is expected that DTC will credit such
Note to U.S. Bank Trust's participant
account at DTC.
F. U.S. Bank Trust will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such
Note to U.S. Bank Trust's participant
account and credit such Note to such Agent's
participant account and (ii) debit such
Agent's settlement account and credit U.S.
Bank Trust's settlement account for an
amount equal to the price of such Note less
such Agent's commission. The entry of such a
deliver order shall constitute a
representation and warranty
A-8
by U.S. Bank Trust to DTC that (a) the
Global Security representing such Book-Entry
Note has been issued and authenticated and
(b) U.S. Bank Trust is holding such Global
Security pursuant to the MTN Certificate
Agreement.
G. Such Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to
such Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and
(ii) to debit the settlement accounts of
such Participants and credit the settlement
account of such Agent for an amount equal to
the price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. U.S. Bank Trust will, upon confirming
receipt of such funds from the Agent, wire
transfer to the account of the Company
maintained at HSBC Bank USA, 000 Xxxx Xxxx
Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 (for credit
to Central Xxxxxx Gas & Electric
Corporation, HSBC Bank USA, Regular Account,
ABA Routing No. 000000000, Account No.
080-00017-0) in immediately available funds
in the amount transferred to U.S. Bank Trust
in accordance with Settlement Procedure "F".
Promptly upon completion of such wire
transfer, U.S. Bank Trust shall notify the
Company thereof by telephone (Attn. Cash
Management Specialist, Tel. No.
000-000-0000, or such other person or
telephone number, as the Company shall
request of U.S. Bank Trust).
J. Such Agent will confirm the purchase of such
Note to the purchaser either by transmitting
to the Participants with respect to such
Note a confirmation order or orders through
DTC's institutional delivery system or by
mailing a written confirmation to such
purchaser.
Settlement Procedures For orders of Book-Entry Notes solicited by an
Timetable: Agent, as agent, and accepted by the Company for
settlement on the first Business Day after the
sale date, Settlement Procedures "A" through "J"
set forth above shall be completed as soon as
possible but not later than the respective times
(New York City time) set forth below:
A-9
Settlement
Procedure Time
--------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 5:00 P.M. on the sale date
D 3:00 P.M. on the sale date
E 8:05 A.M. on the settlement date
F-G 3:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures
"A", "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M. and 12:00
Noon on the first Business Day after the sale date
with respect to Settlement Procedures "A" and "B",
respectively, and no later than 5:00 P.M. on the
first Business Day after the sale date, with
respect to Settlement Procedure "C". Settlement
Procedure "D" shall occur no later than 3:00 P.M.
on the last Business Day prior to the settlement
date. Settlement Procedures "H" and "I" are
subject to extension in accordance with any
extension of Fedwire closing deadlines and in the
other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled
or canceled, the Company will instruct U.S. Bank
Trust by no later than 12:00 Noon on the Business
Day immediately preceding the scheduled settlement
date to deliver to DTC through DTC's Participant
Terminal System a cancellation message to such
effect and U.S. Bank Trust will enter such
message, by no later than 2:00 P.M. on such
Business Day, through DTC's Participation Terminal
System.
Monthly Reports: Monthly, the Trustee will send to the Company a
statement setting forth the principal amount of
Notes outstanding as of that date under the
Indenture and setting forth a brief description of
any sales of which the Company has advised the
Trustee but which have not yet been settled.
Failure to Settle: If U.S. Bank Trust or the Agent fails to enter an
SDFS deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "F" or "G,"
U.S. Bank Trust may upon the approval of the
Company deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to U.S. Bank Trust's participant account,
provided that U.S. Bank Trust's participant
account contains a
A-10
principal amount of the Global Security
representing such Note that is at least equal to
the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, U.S. Bank Trust will xxxx such Global
Security "canceled", make appropriate entries in
U.S. Bank Trust's records and send such canceled
Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures,
be canceled and not reassigned until the
Book-Entry Notes represented by such Global
Security have matured or been redeemed. If a
withdrawal message is processed with respect to
one or more, but not all, of the Book-Entry Notes
represented by a Global Security, U.S. Bank Trust
will exchange such Global Security for another
Global Security, which shall represent the
Book-Entry Notes previously represented by the
surrendered Global Security with respect to which
a withdrawal message has not been processed and
shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such purchaser), such
Participants and, in turn, the Agent for such Note
may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "G" and
"F", respectively. Thereafter, U.S. Bank Trust
will deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than a default by the Agent in
the performance of its obligations hereunder or
under the Distribution Agreement, then the Company
will reimburse such Agent or U.S. Bank Trust, for
the account of such Agent, as applicable, on an
equitable basis for the loss of the use of funds
during the period when they were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the Trustee
will provide, in accordance with Settlement
Procedure "D," for the authentication and issuance
of a Global Security representing the other
Book-Entry Notes to have been represented by such
Global Security and will make appropriate entries
in its records.
A-11
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
U.S. Bank Trust will serve as registrar in connection with the
Certificated Notes.
Maturities: Each Certificated Note will mature on a date not
less than one year and not more than 50 years
after the date of delivery by the Company of such
Note.
Price to Public: Each Certificated Note will be issued at the
percentage of principal amount specified in the
Prospectus relating to the Notes.
Denominations: The denomination of any Certificated Note will be
a minimum of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000.
Registration: Certificated Notes will be issued only in fully
registered form.
Interest: General. Interest on each Certificated Note will
accrue from and including the original issue date
of, or the last date to which interest has been
paid on, such Note. Each payment of interest on a
Certificated Note will include interest accrued to
but excluding the Interest Payment Date or the
Maturity Date or, upon earlier redemption, the
Redemption Date, as the case may be. Interest
payable on the Maturity Date or the Redemption
Date of a Certificated Note will be payable to the
person to whom the principal of such Note is
payable.
Record Dates. Unless otherwise set forth in the
applicable Pricing Supplement, the record dates
with respect to the Interest Payment Dates shall
be the Regular Record Dates.
Interest Payment Date. Unless otherwise specified
pursuant to "Settlement Procedures" below,
interest payments on Certificated Notes will be
made semi-annually on May 1 and November 1 and on
the Maturity Date or the Redemption Date;
provided, however, that in the case of a
Certificated Note issued between a Regular Record
Date and an Interest Payment Date, the first
interest payment will be made on the Interest
Payment Date following the next succeeding Regular
Record Date.
Payments of Principal Interest will be payable to the person in whose
and Interest: name a Certificated Note is registered at the
close of business on the Regular Record Date next
preceding an Interest Payment Date; provided,
however, that, in the case of a Certificated Note
originally issued between a Regular Record Date
and an Interest Payment Date, the first payment of
interest will be made on the Interest Payment Date
following the next succeeding Regular Record Date
to the person
A-12
in whose name such Note was registered at the
close of business on such next Regular Record
Date. Unless other arrangements are made
acceptable to the Company, all interest payments
(excluding interest payments made on the Maturity
Date or the Redemption Date) on a Certificated
Note will be made by check mailed to the person
entitled thereto as provided above.
U.S. Bank Trust will pay the principal amount of
each Certificated Note on the Maturity Date upon
presentation of such Certificated Note to U.S.
Bank Trust at the principal corporate trust office
of U.S. Bank Trust in New York, New York. Such
payment, together with payment of interest due on
the Maturity Date, will be made from funds
deposited with U.S. Bank Trust by the Company.
U.S. Bank Trust will be responsible for compliance
with withholding taxes on interest paid on
Certificated Notes by it as required by applicable
federal law.
Within 10 days following each Regular Record Date,
the Trustee will inform the Company of the total
amount of the interest payments to be made by the
Company on the next succeeding Interest Payment
Date. The Trustee will provide monthly to the
Company a list of the principal and interest to be
paid on Certificated Notes maturing in the next
succeeding month.
Settlement: The settlement date with respect to any offer to
purchase Certificated Notes accepted by the
Company will be a date on or before the third
Business Day next succeeding the date of
acceptance unless otherwise agreed by the
purchaser, the Trustee and the Company and shall
be specified upon acceptance of such offer. The
Company will instruct the Trustee to effect
delivery of each Certificated Note no later than
1:00 P.M. (New York City time) on the settlement
date to the Presenting Agent (as defined under
"Preparation of Pricing Supplement" in Part III
below) for delivery to the purchaser.
Settlement Procedures: For each offer to purchase a Certificated Note
that is accepted by the Company, the Presenting
Agent will provide (unless provided by the
purchaser directly to the Company) by telephone
and facsimile transmission or other mutually
acceptable means the following information to the
Company:
1. Name in which such Note is to be registered
(the "Registered Owner").
A-13
2. Address of the Registered Owner and, if
different, address for payment of principal
and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount.
5. Maturity Date.
6. The interest rate.
7. Interest Payment Dates.
8. Redemption provisions, if any, or provisions
for the repayment or repurchase by the
Company at the option of the Holder, if any.
9. Settlement date.
10. Issue price.
11. Agent's commission, determined as provided
in Section 2(a) of the Distribution
Agreement.
The Presenting Agent will advise the Company of
the foregoing information (unless provided by the
purchaser directly to the Company) for each offer
to purchase a Certificated Note solicited by such
Agent and accepted by the Company in time for the
Trustee to prepare and authenticate the required
Certificated Note. Before accepting any offer to
purchase a Certificated Note to be settled in less
than three Business Days, the Company shall verify
that the Trustee will have adequate time to
prepare and authenticate such Note. After
receiving from the Presenting Agent the details
for each offer to purchase a Certificated Note
that has been accepted by the Company, the Company
will, after recording the details and any
necessary calculations, provide appropriate
documentation to the Trustee, including the
information provided by the Presenting Agent
necessary for the preparation and authentication
of such Note.
Note Deliveries Upon receipt of appropriate documentation and
and Cash Payment: instructions, the Company will cause the Trustee
to prepare and authenticate the pre-printed 4-ply
Certificated Note packet containing the following
documents in forms approved by the Company, the
Presenting Agent and the Trustee:
1. Note with customer receipt.
A-14
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Trustee.
Each Certificated Note shall be authenticated on
the settlement date therefor. The Trustee will
authenticate each Certificated Note and deliver it
(with the confirmation) to the Presenting Agent
(and deliver the stubs as indicated above), all in
accordance with written or electronic instructions
(or oral instructions confirmed in writing (which
may be given by facsimile transmission) on the
next Business Day) from the Company. Delivery by
the Trustee of each Certificated Note will be made
in accordance with said instructions against
receipts therefor and in connection with
contemporaneous receipt by the Company from the
Presenting Agent on the settlement date in
immediately available funds of an amount equal to
the issue price of such Note less the Presenting
Agent's commission.
Upon verification ("Verification") by the
Presenting Agent that a Certificated Note has been
prepared and properly authenticated by the Trustee
and registered in the name of the purchaser in the
proper principal amount and other terms in
accordance with the aforementioned confirmation,
payment will be made to the Company by the
Presenting Agent the same day as the Presenting
Agent's receipt of the Certificated Note in
immediately available funds. Such payment shall be
made by the Presenting Agent only upon prior
receipt by the Presenting Agent of immediately
available funds from or on behalf of the purchaser
unless the Presenting Agent decides, at its
option, to advance its own funds for such payment
against subsequent receipt of funds from the
purchaser.
Upon delivery of a Certificated Note to the
Presenting Agent, Verification by the Presenting
Agent and the giving of instructions for payment,
the Presenting Agent shall promptly deliver such
Note to the purchaser.
In the event any Certificated Note is incorrectly
prepared, the Trustee shall promptly issue a
replacement Certificated Note in exchange for such
incorrectly prepared Note.
Failure to Settle: If the Presenting Agent, at its own option, has
advanced its own funds for payment against
subsequent receipt of funds from the
A-15
purchaser, and if the purchaser shall fail to make
payment for the Certificated Note on the
settlement date therefor, the Presenting Agent
will promptly notify the Trustee and the Company
by telephone, promptly confirmed in writing (but
no later than the next Business Day). In such
event, the Company shall promptly provide the
Trustee with appropriate documentation and
instructions consistent with these procedures for
the return of the Certificated Note to the Trustee
and the Presenting Agent will promptly return the
Certificated Note to the Trustee. Upon (i)
confirmation from the Trustee in writing (which
may be given by facsimile transmission) that the
Trustee has received the Certificated Note and
upon (ii) confirmation from the Presenting Agent
in writing (which may be given by facsimile
transmission) that the Presenting Agent has not
received payment from the purchaser (the matters
referred to in clauses (i) and (ii) are referred
to hereinafter as the "Confirmations"), the
Company will promptly pay to the Presenting Agent
an amount in immediately available funds equal to
the amount previously paid by the Presenting Agent
in respect of such Note. Assuming receipt of the
Certificated Note by the Trustee and of the
Confirmations by the Company, such payment will be
made on the settlement date, if reasonably
practical, and in any event not later than the
Business Day following the date of receipt of the
Certificated Note and Confirmations. If a
purchaser shall fail to make payment for the
Certificated Note for any reason other than the
failure of the Presenting Agent to provide the
necessary information to the Company as described
above for settlement or to provide a confirmation
to the purchaser within a reasonable period of
time as described above or otherwise to satisfy
its obligation hereunder or in the Distribution
Agreement, and if the Presenting Agent shall have
otherwise complied with its obligations hereunder
and in the Distribution Agreement, the Company
will reimburse the Presenting Agent on an
equitable basis for its loss of the use of funds
during the period when they were credited to the
account of the Company.
Immediately upon receipt of the Certificated Note
in respect of which the failure occurred, the
Trustee will void such Note, make appropriate
entries in its records and send such cancelled
Note to the Company; and upon such action, the
Certificated Note will be deemed not to have been
issued, authenticated and delivered.
A-16
PART III: ADMINISTRATIVE PROCEDURES APPLICABLE TO BOTH BOOK-ENTRY NOTES AND
CERTIFICATED NOTES
Calculation of Interest: Interest on Notes (including interest for partial
periods) will be calculated on the basis of a
360-day year of twelve thirty-day months.
(Examples of interest calculations are as follows:
The period from August 15, 2005 to February 15,
2006 equals 6 months and 0 days, or 180 days; the
interest payable equals 180/360 times the annual
rate of interest times the principal amount of the
Note. The period from September 17, 2005 to
February 15, 2006 equals 4 months and 28 days, or
148 days; the interest payable equals 148/360
times the annual rate of interest times the
principal amount of the Note.)
Procedure for Rate The Company and the Agents will discuss from time
Setting and Posting: to time the aggregate amount of, the issuance
price of, and the interest rates to be borne by,
Notes that may be sold as a result of the
solicitation of offers by the Agents. If the
Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agents are
to solicit offers (the setting of such prices and
rates to be referred to herein as "posting") or if
the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance of Offers: If the Company posts prices and rates as provided
above, each Agent as agent for and on behalf of
the Company, shall promptly accept offers received
by such Agent to purchase Notes at the prices and
rates so posted, subject to (i) any instructions
from the Company received by such Agent concerning
the aggregate principal amount of such Notes to be
sold at the prices and rates so posted or the
period during which such posted prices and rates
are to be in effect, (ii) any instructions from
the Company received by such Agent changing or
revoking any posted prices and rates, (iii)
compliance with the securities laws of the United
States and all other jurisdictions and (iv) such
Agent's right to reject any such offer as provided
below.
If the Company does not post prices and rates and
an Agent receives an offer to purchase Notes or,
if while posted prices and rates are in effect, an
Agent receives an offer to purchase Notes on terms
other than those posted by the Company, such Agent
will promptly advise the Company of each such
offer other than offers rejected by such Agent as
provided below. The Company will have the sole
right to accept any such offer to purchase Notes.
The Company may reject any such offer in whole or
in part.
A-17
Each Agent may, in its discretion reasonably
exercised, reject any offer to purchase Notes
received by it in whole or in part.
Preparation of If any offer to purchase a Note is accepted by the
Pricing Supplement: Company, the Company, with the approval of the
Agent that presented such offer (the "Presenting
Agent"), will prepare a pricing supplement (a
"Pricing Supplement") reflecting the terms of such
Note and will arrange to have a copy
electronically filed with the Commission in
accordance with the applicable paragraph of Rule
424 under the Act and the provision of Regulation
S-T thereunder and will supply at least 10 copies
thereof (or additional copies if requested) to the
Presenting Agent. The Presenting Agent will cause
a Prospectus and Pricing Supplement to be
delivered to the purchaser of such Note.
In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements (other than those
retained for files) will be destroyed.
Procedures for When the Company has determined to change the
Rate Changes: interest rates of Notes being offered, it will
promptly advise the Agents and the Agents will
forthwith suspend solicitation of offers. The
Agents will telephone the Company with
recommendations as to the changed interest rates.
At such time as the Company has advised the Agents
of the new interest rates, the Agents may resume
solicitation of offers. Until such time only
"indications of interest" may be recorded.
Suspension of Solicitation; The Company may instruct the Agents to suspend at
Amendment or Supplement any time, for any period of time or permanently,
of Prospectus: the solicitation of offers to purchase Notes. Upon
receipt of such instructions from the Company, the
Agents will forthwith suspend solicitation of
offers to purchase Notes from the Company until
such time as the Company has advised them that
such solicitation may be resumed.
If the Company decides to amend or supplement the
Registration Statement (as defined in Section 1(c)
of the Distribution Agreement) or the Prospectus
(except for a supplement relating to an offering
of securities other than the Notes), it will
promptly advise the Agents and the Trustee and
will furnish the Agents and the Trustee with the
proposed amendment or supplement in accordance
with the terms of, and its obligations under, the
Distribution Agreement. The Company will,
consistent with such obligations, promptly advise
each Agent and the Trustee whether orders
outstanding at the time each Agent suspends
solicitation
A-18
may be settled and whether copies of such
Prospectus and Prospectus Supplement as in effect
at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered
in connection with the settlement of such orders.
The Company will have the sole responsibility for
such decision and for any arrangements that may be
made in the event that the Company determines that
such orders may not be settled or that copies of
such Prospectus, Prospectus Supplement and Pricing
Supplement may not be so delivered.
The Company will file with the Commission for
filing therewith any supplement to the Prospectus
relating to the Notes, provide the Agents with
copies of any such supplement, and confirm to the
Agents that such supplement has been filed with
the Commission pursuant to the applicable
paragraph of Rule 424.
Confirmation: For each offer to purchase a Note solicited by an
Agent and accepted by or on behalf of the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth above and delivery and
payment instructions.
Trustee/Paying Agent Nothing herein shall be deemed to require the
Not to Risk Funds: Trustee or Paying Agent to risk or expend its own
funds in connection with any payment to the
Company, DTC, the Agents or the purchaser or a
holder, it being understood by all parties that
payments made by the Trustee/Paying Agent to the
Company, DTC, the Agents or a purchaser or holder
shall be made only to the extent that funds are
provided to the Trustee/Paying Agent for such
purpose.
Authenticity The Company will cause the Trustee to furnish the
of Signatures: Agents from time to time with the specimen
signatures of each of the Trustee's officers,
employees or agents who has been authorized by the
Trustee to authenticate Notes, but the Agents will
have no obligation or liability to the Company or
the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company or the Trustee on any such Note.
Payment of Expenses: Each Agent shall forward to the Company, on a
monthly basis, a statement of the reasonable
out-of-pocket expenses incurred by such Agent
during that month which are reimbursable to it
pursuant to the terms of the Distribution
Agreement. The Company will remit payment to the
Agents currently on a monthly basis.
A-19
Delivery of Prospectus: A copy of the Prospectus, Prospectus Supplement
and Pricing Supplement relating to a Note must
accompany or precede the earliest of any written
offer of such Note, confirmation of the purchase
of such Note or payment for such Note by its
purchaser. If notice of a change in the terms of
the Notes is received by an Agent between the time
an order for a Note is placed and the time written
confirmation thereof is sent by such Agent to a
customer or his agent, such confirmation shall be
accompanied by a Prospectus, Prospectus Supplement
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement of Prospectus" above, each Agent will
deliver a Prospectus, Prospectus Supplement and
Pricing Supplement as herein described with
respect to each Note sold by it.
A-20
EXHIBIT B
Filed Pursuant to [_] Rule 424(b)(2) [_] Rule 424(b)(5)
Registration No. 333-138510
[Date]
Pricing Supplement No. [_], Dated [_____]
(to Prospectus dated December 1, 2006, as supplemented by Prospectus Supplement
dated March 19, 2007)
Central Xxxxxx Gas & Electric Corporation
$140,000,000
Medium-Term Notes, Series F
Principal Amount: $ [__________]
Issue Price:
Settlement Date (Original Issue Date):
Maturity Date (Stated Maturity):
Type of Note:
|_| Fixed Rate Note
|_| Zero Coupon Note
Form:
|_| Book-Entry
|_| Definitive Certificates
Authorized denominations: $1,000 and integral multiples thereof
CUSIP No: ___________
Interest Rate: [ ]% per annum
Interest Payment Dates:
Record Dates:
Initial Interest Payment Date:
Redemption Terms (at option of the issuer):
|_| Not redeemable prior to Stated Maturity
|_| Redeemable in accordance with the following terms:
B-1
Repayment Terms (at option of the holder):
|_| Not repayable prior to Stated Maturity
|_| Repayable in accordance with the following terms:
Sinking Fund Provisions:
|_| None
|_| Applicable in accordance with the following terms:
Agents and Principal Amounts placed:
Agent acting in capacity indicated below:
|_| As Agents
|_| As Principals
The notes are being offered at the Issue Price set forth above.
Agents' Commissions (based on Principal Amounts placed) as follows:
Net proceeds to issuer (before expenses): $ [__________]
Additional Terms:
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAVE ANY OF THESE
ORGANIZATIONS DETERMINED THAT THIS PRICING SUPPLEMENT OR THE APPLICABLE
PROSPECTUS SUPPLEMENT OR PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
B-2
EXHIBIT C
TERMS AGREEMENT
Central Xxxxxx Gas & Electric Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000-0000
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement (the "Distribution Agreement"), dated March 19, 2007 among Banc of
America Securities LLC, X.X. Xxxxxx Securities Inc. and McDonald Investments
Inc. and Central Xxxxxx Gas & Electric Corporation (the "Company"), the
undersigned agrees to purchase the following principal amount of the Company's
$140,000,000 Medium-Term Notes, Series F (the "Notes"):
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest
from _____________, 200_]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the requirements
to deliver the documents specified in
Section 6(b) of the Distribution Agreement:
Period during which additional Notes
may not be sold pursuant to Section 4(m)
of the Distribution Agreement:
C-1
Book-Entry Notes or Certificated Notes:
This Agreement shall be governed by and construed in accordance with the
laws of New York.
[Insert name of Purchaser[s]]
By
------------------------------
Title:
Accepted:_____________, ____
CENTRAL XXXXXX GAS & ELECTRIC
CORPORATION
By
-------------------------------
Title:
C-2
EXHIBIT D
Filed Pursuant to Rule 433
Registration No. 333-138510
[Date]
Central Xxxxxx Gas & Electric Corporation
Medium-Term Notes, Series F
[$_________________] [__%] due [__________]
Term Sheet
Issuer: Central Xxxxxx Gas & Electric Corporation
Market Type: Senior Unsecured MTN
Ratings: [_____________]
Principal Amount: $[_____________]
Trade Date: [_____________]
Settlement Date: [_____________]
Final Maturity: [_____________]
Interest Payment Dates: May 1 and November 1, and at maturity
1st Coupon Payment Date: [_____________]
Coupon: [_____________]
US Treasury Benchmark: [_____________]
US Treasury Yield: [_____________]
Business day convention: 30/360
Re-offer Price: [_____________]
Redemption: [_____________]
Denomination: $1,000 x $$1,000
D-1
Joint Bookrunners: [Banc of America Securities LLC] $[_____________]
[X.X. Xxxxxx Securities Inc. $[_____________]
[KeyBanc Capital Markets, $[_____________]
A division of McDonald Investments Inc.]
CUSIP: [_____________]
The security ratings above are not a recommendation to buy, sell or hold the
securities hereby. The ratings may be subject to revision or withdrawal at any
time by [Xxxxx'x Investors Service and Standard & Poor's Ratings Services]. Each
of the security ratings above should be evaluated independently of any other
security rating.
The issuer has filed a registration statement (including a prospectus) with the
SEC for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement and other documents
the issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting XXXXX on the
SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus if
you request it by calling toll-free 1-800-294-1322 at Banc of America Securities
LLC, 0- 000-000-0000 at X.X. Xxxxxx Securities Inc., and 0-000-000-0000 at
KeyBanc Capital Markets.
D-2
