Contract
Exhibit 10.2
This
Discount Notes Selling Group Agreement has been filed to provide investors with
information regarding its terms. It is not intended to provide any
other factual information about the Tennessee Valley Authority. The
representations and warranties of the parties in this Discount Notes Selling
Group Agreement were made to, and solely for the benefit of, the other parties
to this Discount Notes Selling Group Agreement. The assertions
embodied in the representations and warranties may be qualified by information
included in schedules, exhibits, or other materials exchanged by the parties
that may modify or create exceptions to the representations and
warranties. Accordingly, investors should not rely on the
representations and warranties as characterizations of the actual state of facts
at the time they were made or otherwise.
This
Form Discount Note Selling Group Agreement has been executed between TVA
and each of the following parties on the dates noted:
|
Party
|
Date
executed
|
|
|
Banc
of America Securities LLC
|
May 28,
2003
|
|
|
Barlcays
Capital, Inc.
Credit
Suisse First Boston LLC
|
October
23, 2007
May 23,
2003
|
|
|
FTN
Financial
|
May 22,
2003
|
|
|
Xxxxxxx,
Xxxxx & Co.
|
July 2,
2003
|
|
|
X.X.
Xxxxxx Securities Inc.
|
August 5,
2004
|
|
|
Xxxxxxx
Xxxxx Government Securities Inc.
|
June 10,
2003
|
|
|
Xxxxxx
Xxxxxxx & Co., Incorporated
|
September 26,
2006
|
|
|
Suntrust
Xxxxxxxx Xxxxxxxx
The
Xxxxxxxx Capital Group, L.P.
|
May 14,
2003
June
13, 2008
|
DISCOUNT
NOTES
SELLING
GROUP AGREEMENT
The
Tennessee Valley Authority (“TVA”) may offer Discount Notes (“Notes”), which
Notes are described in TVA’s Discount Notes Offering Circular, for public
distribution through a group of investment dealers and dealer banks (“Selling
Group”). You are invited to become a member of the Selling Group
(“Member”).
The
signature of a person authorized to bind your organization at the conclusion of
this Selling Group Agreement (“Agreement”) constitutes both your organization’s
acceptance of this invitation and its consent to be bound by all the terms and
conditions contained in this Agreement and by any instructions contemplated by
this Agreement, written or otherwise transmitted, in connection with the
distribution of the Notes which may be issued by TVA by its Treasurer or
designees.
SECTION
1. AUTHORIZATION. The
Notes will be issued pursuant to (1) authority vested in TVA by section 15d of
the Tennessee Valley Authority Act of 1933, as amended, 16 U.S.C. §§
831-831ee (2000), (2) section 2.5 of the Basic Tennessee Valley Authority Power
Bond Resolution adopted by the Board of Directors of TVA (“Board”) on October 6,
1960, as amended, and (3) a Resolution adopted by the Board on January 23, 1991,
as amended, authorizing the issuance of certain short-term debt through the use
of the book-entry system of the Federal Reserve Banks. The Notes will not be obligations of,
nor will they be guaranteed by, the United States of
America.
SECTION
2. OFFERING. Each Member will offer Notes of
original issue to investors, according to the rate schedule established by
TVA. Unless otherwise instructed, Members must receive approval from
TVA of all sales prior to confirmation with the customer pursuant to section 7
of this Agreement. TVA reserves the right, in its sole discretion, to
reject any offer for the purchase of the Notes, allot less than the face amount
of the Notes requested by a Member, change the rate schedule, or terminate the
sale of the Notes. Members will be notified as promptly as
practicable of any such action.
SECTION
3. POSITIONING AND RECORDS. Members are prohibited
from purchasing original issue Notes acting as principal unless expressly
authorized to do so by TVA. Any violation of this restriction
regarding purchasing original issue Notes acting as principal may result in a
Member’s immediate removal from the Selling Group at TVA’s sole
discretion.
Reallowance
of all or any part of the concession is allowed on all sales to dealers outside
the Selling Group subject to prior approval by TVA. Such reallowance
must be reported to TVA monthly in an electronic or written format. Any
violation of the restriction regarding concession reallowance or the restriction
regarding sales to dealers outside the Selling Group may result in a Member’s
immediate removal from the Selling Group.
TVA will
maintain records of sales and amounts of Notes maturing on each future maturity
date and will, when requested by a Member, advise it of such dates and
amounts.
SECTION
4. PRICING. Rate schedules for the Notes will
usually be adjusted on a daily basis to reflect TVA’s cash needs, current market
conditions, and TVA’s maturity strategy. TVA will make available to
each Member of the Selling Group the appropriate rate schedule to be used in
offering Notes to the public. Such information will be transmitted by
telephone or other electronic means as soon as practicable. Rates may
be changed at any time at the sole discretion of TVA. Members will be
notified of a pending change as soon as practicable and instructed to cease
offering Notes, except in the secondary market, until a new schedule is
established.
The
purchase price of each Note to the public shall be the difference between the
face amount of the Note and the quotient arrived at by dividing by 360 the
product of (1) the principal amount of the Note, (2) the percentage rate of
discount applicable to the Note (said percentage rate of discount being
hereinafter called the “Discount Rate”), and (3) the actual number of days
the Note will be outstanding (excluding the date of issue but including the
maturity date).
SECTION
5. SELLING CONCESSION. For all Notes confirmed by
TVA to, and paid for by, a Member, that Member will be allowed a concession, the
amount of which will be determined from time to time by TVA. Members
will receive the concession by
TVA’s
deducting the amount of the concession from the gross amount otherwise due from
each Member in settlement of the Notes on the settlement date or through direct
payment to a Member on a periodic basis as TVA and such Member may
agree. The concession with respect to any sale of Notes may be
withheld in whole or in part as to any Member at the discretion of TVA upon
TVA’s determination that such sale of Notes by such Member is in violation of
the terms of this Agreement or is otherwise improper. Except for
concessions withheld as described above, no change in the concession amount will
be effective until TVA informs Member of such change by telephone or other
electronic means.
SECTION
6. SECONDARY MARKET. Each Member shall use its best
efforts to maintain a viable secondary market for the Notes and shall submit an
electronic or written report to TVA, no later than the fifth working day of each
month, of such Member’s purchases and sales of the Notes in the secondary market
during the previous month. Each Member shall be responsible for
continually advising TVA of secondary Note inventories and market
developments.
SECTION
7. TRANSMITTAL OF ORDERS AND CONFIRMATION OF SALES. Members shall confirm to
TVA by telephone or other means acceptable to TVA offers to purchase as to par
amount, Discount Rate, issue date, and maturity prior to the execution of the
sale. It is hereby expressly agreed that TVA shall have no obligation
to accept an offer to purchase any Note prior to TVA’s acceptance, by telephone
or otherwise, of such offer to purchase. TVA’s acceptance of an offer
to purchase shall bind the Member and
TVA to
proceed with such sale, unless both parties agree otherwise.
SECTION
8. SETTLEMENT. Settlement for cash (same day),
regular (next business day), skip (2 business days forward) or other settlement
delivery options as deemed appropriate will normally be
available. However, temporary restrictions on settlement type may be
imposed by TVA at any time. If restrictions are imposed, Members will
be notified as quickly as possible by telephone or other electronic
means. Delivery of the Notes allotted to each Member shall be made on
the settlement date against payment in federal funds through the Federal
Reserve’s wire transfer system.
Failure
of a Member to make payment for the Notes on the settlement date shall result in
the Member being liable to TVA in an amount equal to the sum of (1) the product
of (a) the annual Discount Rate of the Notes computed on a daily basis, (b)
the principal amount of the Notes (with respect to which Member failed to make
payment), and (c) the number of days payment is not made, (2) any Federal
Reserve charges, and (3) other expenses or losses incurred by TVA as a result of
a Member’s failure to make payment; provided that no Member shall be liable for
failure to make such payment due to actions of TVA or its agents in violation of
this Agreement or for any failure of the Federal Reserve Banks, except when
Member fails to follow applicable operating procedures of the Federal Reserve
Banks (including alternative procedures), or for any events beyond the
reasonable control of Member; and provided further, however, that Member’s
liability pursuant to this section 8 shall not exceed an amount equal to the
principal amount of the Notes (with respect to which Member failed to make
payment).
SECTION
9. AUTHORIZED PERSONNEL. Member must provide TVA
with electronic or written notification of those persons within its organization
authorized to act as liaisons to TVA in connection with the distribution of the
Notes. TVA is not obligated to coordinate any aspect of the
distribution of Notes with any person other than those authorized to act in
Member’s behalf. TVA will notify the Member, which notification may
be oral and confirmed later in writing, of those persons authorized to approve
sales of Notes and otherwise act for TVA under this Agreement.
SECTION
10. WEB SITE. When a Member uses the web site
provided by the Grant Street Group or any similar web site related to the Notes
(“Web Site”), the following provisions shall apply:
(1) Member
shall designate in writing one or more employees it will authorize to use the
Web Site (each such individual being referred to herein as an “Authorized User”)
by submitting the information set forth in Exhibit A. An Authorized
User may have access (a) to view the Web Site and submit offers to buy Notes,
(b) to view the Web Site and confirm offers to buy Notes, or (c) to view the Web
Site, submit offers to buy the Notes, and confirm offers to buy the
Notes.
(2) Member
and its Authorized Users are responsible for controlling access to the Web Site
and for securing their computer systems (or the computer systems under their
custody and control) to prevent unauthorized use of the Web Site and purchase of
Notes by means of the Web Site. Member bears the risk of loss in
the
event an
unauthorized purchase of Notes is made through its computer systems (or the
computer systems under its custody and control) or if an Authorized User makes
an unauthorized purchase of Notes offered by sale by means of the Web
Site.
(3) Member
shall advise TVA in writing if there is a change in employment of any of its
Authorized Users, if Member wants to terminate an employee’s status as an
Authorized User, or if Member wants to designate additional employees as
Authorized Users.
(4) Member
shall not allow employees, Authorized Users, or others located outside of the
United States to use the Web Site to participate in the purchase of Notes from
TVA.
SECTION
11. FINANCIAL STATEMENTS. Members must provide for
TVA’s review current audited financial statements or other written financial
information in a form satisfactory to TVA on a regular basis but in no case less
frequently than yearly.
SECTION
12. OTHER AGREEMENTS. TVA hereby reserves the right
to select special Selling Groups of investment dealers and dealer banks for the
issuance of Notes or other debt securities in circumstances that are deemed to
be special situations. TVA has sole discretion and final decision in
such matters.
SECTION
13. MEMBER LIABILITY. No Member has the authority
to obligate TVA or any employee of TVA for any expenses incurred by the Member,
and TVA and its employees assume no such liability under this
Agreement. In connection with the distribution of the Notes, Member
agrees to (1) provide no information or make no representation that is
inconsistent with the Discount Notes Offering Circular, TVA’s current
Information Statement, any supplement to any of the foregoing, and any
brochures, memoranda, and other descriptive material relating to the Notes
furnished to Member by TVA or approved by TVA in writing prior to their use; (2)
comply with all applicable laws and regulations relating to the sale of the
Notes in each jurisdiction in which a Member offers, sells, or otherwise
distributes the Notes; and (3) permit TVA to inspect to the extent allowed by
applicable law, during regular business hours and on reasonable notice, the
Member’s books and records associated with its activities under this
Agreement.
SECTION
14. CANCELLATION OF AGREEMENT. A Member may
withdraw from membership in the Selling Group upon written notice to
TVA. Similarly, TVA may terminate, at no cost to TVA, the membership
of any Member at any time, but such termination shall not affect the obligation
of the Member or TVA to complete its performance with respect to any outstanding
sales commitments. Notice of such termination by TVA may be oral and
confirmed later in writing
SECTION
15. SEVERABILITY OF PROVISIONS. In the
event that one or more provisions contained in this Agreement is determined to
be invalid, illegal, or unenforceable in any respect, the validity, legality,
and enforceability of the remaining provisions contained in this Agreement shall
not be affected or impaired thereby, and this Agreement shall be interpreted as
if such invalid, illegal, or unenforceable provision was not contained in this
Agreement.
SECTION
16. OFFICIALS NOT TO BENEFIT. No
member of or delegate to Congress or Resident Commissioner, or any officer,
employee, special Government employee, or agent of TVA shall be admitted to any
share or part of this Agreement or to any benefit that may arise therefrom, but
this provision shall not be construed to extend to a corporation contracting for
its general benefit; nor shall any Member offer or give, directly or indirectly,
to any officer, employee, special Government employee, or agent of TVA, any
gift, gratuity, favor, entertainment, loan, or any other thing of monetary
value, except as provided in 5 C.F.R. part 2635.
SECTION
17. INDEMNIFICATION. Member agrees to indemnify and
hold TVA harmless from and against any losses, liabilities, damages, or claims
(or actions in respect thereof) to which TVA may become subject insofar as such
losses, liabilities, damages, or claims (or actions in respect thereof) arise
out of or relate to the making by Member of any representation or the giving by
Member of any information in connection
with the
offering or sale of the Notes which is inconsistent with TVA’s Discount Notes
Offering Circular, Information Statement, any supplement to the foregoing, or
brochures, memoranda, or other descriptive material relating to the Notes
furnished to Member by TVA or approved by TVA in writing prior to their
use. Member further agrees to reimburse TVA for any legal or other
expenses reasonably incurred by TVA in connection with investigating or
defending any such losses, liabilities, damages, claims, or actions as such
expenses are incurred. TVA agrees to give prompt written notice to
Member of any claim or the commencement of any action as to which
indemnification will be requested. Member’s obligation under this
section shall be in addition to any liability that it may otherwise have and
shall extend, upon the same terms and conditions, to each director, officer, and
employee of TVA. Further, Member shall indemnify, protect, and hold
TVA harmless from and against any and all losses, liabilities, judgments, suits,
actions, proceedings, claims, damages, and costs (including attorney’s fees)
resulting from the breach of section 10 of this Agreement.
TVA
agrees to indemnify and hold each Member harmless from and against any losses,
claims, damages, or liabilities, joint or several, to which such Member may
become subject, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in TVA’s Discount
Notes Offering Circular, Information Statement, any supplements to the
foregoing, or any brochures, memoranda, or other descriptive material relating
to the Notes furnished to Members by TVA or approved by TVA in writing prior to
their use with respect to the Notes (collectively, “Information”) or arise out
of or are based
upon the
omission or alleged omission to state therein a material fact necessary to make
the statements therein not misleading, and will reimburse each Member for any
legal or other expenses reasonably incurred by such Member in connection with
the investigation or defense of any such loss, claim, damage, liability, or
action as such expenses are incurred; provided, however, that the foregoing
indemnity agreement with respect to the Information shall not inure to the
benefit of Member from whom the person asserting any such losses, claims,
damages, liabilities, or actions purchased Notes, or any person controlling
Member, if a copy of the Information (as then amended and supplemented if TVA
shall have furnished any amendments or supplements thereto) was furnished by TVA
to Member in reasonably sufficient quantities prior to mailing by
Member of confirmation of the sale of the Notes and was not sent or given by or
on behalf of Member to such person, at or prior to the confirmation of the sale
of the Notes to such person, and if the Information (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages, liabilities, or actions; and provided, further, that TVA will not be
liable in any such case to the extent that any such loss, claim, damage,
liability, or action arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from the Information
made in reliance upon and in conformity with written information furnished to
TVA by Member specifically for use therein. Member agrees to give
prompt notice to TVA of any claim or the commencement of any action as to which
indemnification will be requested. The obligations of TVA under this
section shall be in addition to any liability which TVA may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls Member within the meaning of the Securities Act of 1933.
SECTION
18. SEVERAL LIABILITLY. The obligations of
each Member of the Selling Group will be several and no Member of the Selling
Group will incur any liability as a result of the performance or failure to
perform by any other Member.
SECTION
19. COMPLIANCE WITH INTERNAL REVENUE CODE. Income
on Notes and other evidences of indebtedness issued by TVA is subject to federal
tax consequences. Accordingly, Member agrees to comply with all applicable
provisions of the Internal Revenue Code, as amended from time to time, with
respect to taxation of, information reporting about, and backup withholding on,
the Notes.
SECTION
20. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the law of the State of New
York.
If the
foregoing terms and conditions are acceptable, please have an authorized person
sign and return one copy of this Agreement to the Tennessee Valley Authority,
000 Xxxx Xxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx, 00000, Attention: Xxxx X.
Xxxxxxx, Senior Vice President and Treasurer. A second copy has been
included for your files.
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Very
truly yours,
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By:
Date:
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Xxxx
X. Xxxxxxx
Senior
Vice President and Treasurer
_____________________________
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Accepted:
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Selling
Group Member
(Please
type)
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|
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Signature
of Authorized
Partner
or Officer
|
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Name
and Title of Partner or
Officer
(Please type)
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Date:
|
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.
EXHIBIT
A
Authorized
User Authorized
User
_____________________________ ______________________________
Name
Name
_____________________________ ______________________________
Title
Title
_____________________________ ______________________________
Mailing
Address
Mailing
Address
_____________________________ ______________________________
City State Zip
Code City State Zip
Code
_____________________________ ______________________________
Phone
Number Phone Number
_____________________________ ______________________________
Fax
Number
Fax Number
_____________________________ ______________________________
E-mail
Address
E-mail
Address
Check as
appropriate: Check
as appropriate:
__ Viewing & Offering
Authority __
Viewing & Offering
Authority
__ Viewing & Confirming
Authority __
Viewing & Confirming
Authority
|
__ Viewing, Offering,
& Confirming Authority
|
__ Viewing, Offering,
& Confirming Authority
|
