Contract
Exhibit 10.1
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
|
Barclays
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
|
Xxxxxx
Brothers Inc.
|
|
May 27, 2003
|
Xxxxxxx
Xxxxx Government Securities Inc.
|
|
June 10, 2003
|
Xxxxxx
Xxxxxxx & Co., Incorporated
|
|
September 26, 2006
|
Suntrust
Xxxxxxxx Xxxxxxxx
|
|
May 14, 2003
|
TENNESSEE VALLEY
AUTHORITY
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.
2
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
3
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
4
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).
5
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
6
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.
7
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.
8
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
9
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
10
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.
11
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.
12
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.
|
|
Very truly yours,
|
|
|
By:
|
|
|
Xxxx X. Xxxxxxx
Senior Vice President and Treasurer
|
|||
Date: | ___________________________________ |
Accepted:
|
|
Selling Group Member
(Please type)
|
|
Signature of Authorized
Partner or Officer
|
|
Name and Title of Partner or
Officer (Please type)
|
|
Date:
|
________________________
|
13
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
14