EXHIBIT (1)
Central Xxxxxx Gas & Electric Corporation
$___,000,000
Medium-Term Notes, Series __
DISTRIBUTION AGREEMENT
----------- ---, ----
New York, New York
[Agents' Names and Addresses]
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 $___,000,000 aggregate principal amount of its
Medium-Term Notes, Series __ (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
hereto as Exhibit A (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 acting solely in the capacity as agent for the Company
pursuant to Section 2(a) and not as principal (together, the "Agents"), the term
"Purchaser" shall refer to any of you acting solely as principal 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.
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 (c) 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. 333-65597), which became effective, for the
registration under the Act of, among other things, up to $45,000,000 aggregate
initial offering price of debt securities. With $42,500,000 aggregate initial
offering price of such securities remaining registered but unissued under such
registration statement, the Company filed with the Commission a second
registration statement on such Form (File No. 333-_____), which became
effective, for the registration under the Act of an additional $57,500,000
aggregate principal amount of debt securities. Said second registration
statement, as amended, included a basic prospectus which pursuant to Rule 429
under the Act related to the $57,500,000 aggregate principal amount of debt
securities registered thereunder and the $42,500,000 aggregate initial offering
price of debt securities registered but unissued under the first registration
statement, in each case, including the Notes. Such registration statements, as
amended at the date of this Agreement, meet the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and comply in all other material respects
with said Rule. The Company has included in said second registration statement,
or has filed or will file with the Commission pursuant to the applicable
paragraph of Rule 424 under the Act, a supplement or supplements to the form of
prospectus included in such registration statement relating to the Notes and the
plan of distribution thereof (such supplement being hereinafter called a
"Prospectus Supplement"). In connection with the sale of Notes, the Company
proposes to file with the Commission pursuant to the applicable paragraph of
Rule 424 under the Act one or more further supplements to the 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 the Notes sold pursuant hereto or the
offering thereof (any such supplement being hereinafter called a "Pricing
Supplement").
(b) 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 (a "Closing Date"), (1) the Registration Statement, as
amended as of any such time, and 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 and Qualification (Form
T-1) under the Trust Indenture Act of the Trustee or (B)
2
the information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) 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).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean the later of
(i) each date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective or (ii) the time and date of
the filing of the Company's most recent Annual Report on Form 10-K. "Execution
Time" shall mean the date and time that this Agreement is executed and delivered
by the parties hereto. "Basic Prospectus" shall mean the form of basic
prospectus relating to the debt securities contained in the Registration
Statement at the Effective Date (unless such basic prospectus has been amended
by the Company subsequent to the Effective Date, in which case "Basic
Prospectus" shall mean the form of basic prospectus as so amended). "Prospectus"
shall mean the Basic Prospectus as supplemented by the Prospectus Supplement and
as it may be further amended or supplemented at the particular time referred to.
"Registration Statement" shall mean the registration statements referred to in
paragraph (a) above, including incorporated documents, exhibits and financial
statements, as they may be amended at the particular time referred to. "Rule
415" and "Rule 424" refer to such rules under the Act. Any reference herein to
the Registration Statement, the Basic Prospectus, the 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 Basic Prospectus, the 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 Basic Prospectus, the 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 Basic Prospectus, the Prospectus Supplement or the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
(d) Neither the Company nor its 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
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,
stockholders' equity or results of operations of the Company and its Subsidiary
taken as a whole, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus; and, 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 as a result of the defeasance on
November 6, 2001 of the Company's Indenture of Mortgage, dated as of January 1,
1927, to The Bank of New York (under its then name American Exchange Irving
Trust Company), as heretofore and as may
3
hereafter be supplemented and amended ("First Mortgage Bonds")), 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 its Subsidiary or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its Subsidiary taken as a
whole, otherwise than as set forth or contemplated in the Registration Statement
and the Prospectus.
(e) Each of Phoenix Development Company, Inc. (the
"Subsidiary") and 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 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 its 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 creation, 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 of
good faith and fair dealing; and the Notes and the Indenture conform to the
descriptions thereof in the Registration Statement and the Prospectus.
(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
4
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,
there are no legal or governmental proceedings pending to which the Company or
its Subsidiary is a party or of which any property of the Company or its
Subsidiary is the subject which, if determined adversely to the Company or its
Subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, stockholders' equity or results of operations
of the Company and its 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 its
Subsidiary that are required to be described in the Registration Statement or
the Prospectus 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.
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, on an exclusive basis, 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.
5
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. 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 from time to time offer Notes for sale otherwise than through an
Agent; PROVIDED, HOWEVER, that so long as this Agreement shall be in effect the
Company shall not solicit or accept offers to purchase Notes through any agent
other than an Agent.
(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 B 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 accountants, pursuant to Section 6(b). Such
Terms Agreement shall also specify the period of time referred to in Section
4(m).
Delivery of the certificates for 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.
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
6
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, 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 best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) 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 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 Prospectus 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
7
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 its 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.
(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 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
8
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.
(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 of Xxxxx & Xxxxxx LLP, counsel for the Company,
satisfactory to each of you, 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 independent public accountants
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
9
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; PROVIDED that, during any such period, any Purchaser does not
then hold any Notes purchased pursuant to a 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.
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 Xxxxx & Xxxxxx LLP, 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
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 Xxxxx & Xxxxxx LLP 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
10
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, stockholders' equity or results of operations of the Company
and its Subsidiary; 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 creation, 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
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
11
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 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
12
services as general 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 is not subject to the provisions of the
Public Utility Holding Company Act of 1935, except Section 9(a)(2)
thereof; and 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 Pillsbury Winthrop
LLP, counsel for the Agents, an opinion, dated the Execution Time, with respect
to the issuance and sale of the Notes, the Indenture, the 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 and Chief Executive Officer, 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
13
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) (1) Neither the Company nor its 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, stockholders' equity
or results of operations of the Company and its Subsidiary taken as a
whole, otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus and (2) 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 as a result of the defeasance on
November 6, 2001 of the Indenture of Mortgage under which its First
Mortgage Bonds were issued, 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 its Subsidiary or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiary taken as a whole, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus.
(e) At the Execution Time, PricewaterhouseCoopers LLP 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:
(i) They are independent accountants with respect
to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
(ii) In their opinion the financial statements and
schedules of the Company included in the Company's Annual Report on
Form 10-K for the year ended
14
December 31, 2001, which are incorporated by reference in the
Prospectus and examined by such firm, comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act, and the respective published rules and regulations
thereunder.
(iii) On the basis of procedures (but not an audit
in accordance with generally accepted auditing standards) consisting
of: (A) reading the amounts included in the Annual Report appearing in
the table captioned "Five-Year Summary of Consolidated Operations and
Selected Financial Information" for the five years ended December 31,
2001 (the "Audited Amounts") which were derived from the financial
statements for such years as examined by such accountants (the "Audited
Statements"); (B) performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the unaudited condensed interim financial statements of
the Company included in the Registration Statement and the Prospectus
(the "Unaudited Statements"), and reading any more recent unaudited
interim financial data of the Company; (C) reading the minutes of
meetings of the shareholders, Board of Directors and Committees of the
Board of Directors of the Company held during the period from December
31, 2001 as set forth in the minutes book through a specified date not
more than five business days prior to the date of such letter; and (D)
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) to 5(e)(iii)(4), nothing has come to their attention as a
result of the foregoing procedures that caused them to believe that:
(1) the Unaudited Statements incorporated by
reference in the Registration Statement and the Prospectus do
not comply in form in all material respects with the
applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in Quarterly
Reports on Form 10-Q under the Exchange Act; or that any
material modifications should be made to said Unaudited
Statements for them to be in conformity with generally
accepted accounting principles;
(2) the Audited Amounts were not derived
from the Audited Statements;
(3) at the date of the latest available
monthly unconsolidated balance sheet (as adjusted to reflect
the relevant activity of the Subsidiary through said date) of
the Company read by such accountants, there was any change in
the capital stock or long-term debt of the Company, or any
decrease in the total shareholders' equity, as compared with
amounts shown on the latest balance sheet included in the
Audited Statements, except, in all instances, for changes or
decreases which are described in such letter; or
(4) for the period subsequent to the date of
the Audited Statements to the date of the latest available
monthly unconsolidated income statement (as adjusted to
reflect the relevant activity of the Subsidiary through
15
said date) of the Company read by such accountants, there were
any decreases, as compared with the corresponding period of
the previous year, in total operating revenues or net income
of the Company, except, in all instances, for changes or
decreases which are described in such letter.
(iv) They have compared certain 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 caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" 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 "Ratios of Earnings
to Fixed Charges" (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the
accounting records of the Company subject to the internal controls of
the Company's accounting system or are derived directly from such
records by computation) to the accounting records of the Company or
schedules prepared from data in such records and have found such dollar
amounts, percentages and other financial information to be in
agreement.
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 Depositary 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 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 of Xxxxx & Xxxxxx LLP, Xxx Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
16
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 Xxxxx &
Xxxxxx LLP, counsel for the Company, dated as of the Closing Date, substantially
to the effect set forth in Section 5(b), (iii) the opinion of Pillsbury Winthrop
LLP, 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
PricewaterhouseCoopers LLP, independent public accountants for the Company,
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 its Subsidiary,
considered as one enterprise, the effect of which, in the reasonable judgment of
such person, has a material adverse effect on the investment quality of such
Note or (ii) any event described in paragraphs (ii), (iii), (iv) or (v) of
Section 9(b).
17
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 any preliminary prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus
and any other prospectus relating to the Notes, 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 or omission or alleged omission made in any preliminary
prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus and any other prospectus relating to the Notes or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any of you expressly for use in the
Prospectus.
(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 any preliminary prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any other prospectus
relating to the Notes, 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 any preliminary prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus and any other prospectus relating to the
Notes, 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 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 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
18
party shall be entitled to participate therein and, to the extent that it shall
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.
(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
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as other
equitable considerations, including relative fault. 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 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 any 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
19
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(d),
Section 4(h), Section 8 and Section 10 and, so long as any Agent continues to
own Notes purchased from the Company by such Agent as principal, 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 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 or the
Prospectus prepared and issued by the Company, or the exceptions set forth in
any letter of PricewaterhouseCoopers LLP furnished pursuant to Section 5(e)
hereof, 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 hereof, 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 hereof shall survive the termination or
cancellation of this Agreement; provided, however, that if at the time of such
termination or cancellation any Agent continues to own Notes purchased from the
Company by such Agent as principal, 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,
20
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 hereof, 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.
21
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.
Very truly yours,
CENTRAL XXXXXX GAS & ELECTRIC CORPORATION
By:--------------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
---------------------------------
By:------------------------------
Title:
---------------------------------
By:------------------------------
Title:
---------------------------------
By:------------------------------
Title:
22
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%
ADDRESS FOR NOTICE TO YOU:
--------------------------
Notices to _______________________________, shall be directed to it at
__________________ ______________________________________________, attention of
________________, __________. Notices to ____________________________, shall be
directed to it at ______________________ _____________________________________,
attention of ________________, __________. Notices to ________________________,
shall be directed to it at ___________________________________________________
_____________________________________, attention of ________________,_________.
EXHIBIT A
Central Xxxxxx Gas & Electric Corporation
Medium-Term Notes, Series __
Administrative Procedures
Medium-Term Notes, Series __ (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 $___,000,000. ____________________,
____________________ and ____________________, 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 ________ __,
2002 (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
A-1
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 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 _______ __, ____ (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
$___,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
A-2
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 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
A-3
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 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
30 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 $___,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.
A-4
RECORD DATES. The record date with respect to any Interest Payment Date shall be
the December 15 or June 15, as the case may 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 January 1 and July 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 Regular Record Date, the Paying
AND INTEREST: 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
A-5
in the manner set forth below under "Manner of Payment". If the Maturity Date or
the Redemption Date of a Global Security 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
A-6
for forwarding payments and materials directly to the beneficial owner of such Note.
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
A-7
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 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 $___,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
A-8
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 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 The Bank of Xxx Xxxx, Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (for credit to Central Xxxxxx Gas & Electric
Corporation, The Bank of New York - Special Acct. #2, ABA Routing No.: 000000000
Account No. 8751004282) 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. Xxxx Xxxxxx, 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 Agent, as agent, and accepted by
TIMETABLE: 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 30 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 January 1 and July 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 AND INTEREST: Interest will be payable to the person in whose 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 instructions, the
AND CASH PAYMENT: 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.
2. Stub 1 - For the Presenting Agent.
A-14
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 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
A-15
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, 1990 to February 15,
1991 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, 1990 to February 15, 1991 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 to time the aggregate amount
SETTING AND POSTING: 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 Company, the Company, with
PRICING SUPPLEMENT: 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 interest rates of Notes being
RATE CHANGES: 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 any time, for any period of
AMENDMENT OF SUPPLEMENT time or permanently, the solicitation of offers to purchase Notes. Upon receipt
OF PROSPECTUS: 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 Trustee or Paying Agent to risk or
NOT TO RISK FUNDS: 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 Agents from time to time with
OF SIGNATURES: 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
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 _________________ __, ____ among
____________________, ____________________, ________________________ and Central
Xxxxxx Gas & Electric Corporation (the "Company"), the undersigned agrees to
purchase the following principal amount of the Company's $____,000,000
Medium-Term Notes, Series __ (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:
B-1
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:
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:
B-2
