SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(E)(1) of the Securities
Exchange Act of 1934)
________________
THE CINCINNATI GAS & ELECTRIC COMPANY
(Name of Issuer)
CINERGY CORP.
(Name of Person Filing Statement)
__________________________________________________________
Title CUSIP
The Cincinnati Gas & Electric Company,
Cumulative Preferred Stock
- 4% Series 172070 20 3
- 4-3/4% Series 172070 30 2
- 7-7/8% Series 172070 86 4
- 7-3/8% Series 172070 84 9
__________________________________________________________
(Title of Class of Securities)
(CUSIP No. of Class of Securities)
William L. Sheafer
Treasurer
Cinergy Corp.
The Cincinnati Gas & Electric Company
139 East Fourth Street
Cincinnati, Ohio 45202
(513) 287-3852
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
August 20, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
<PAGE>
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$208,480,000.00 $41,696.00
* Solely for purposes of calculating the filing fee and computed pursuant to
Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and Rule
0-11(b)(1) thereunder, the transaction value equals the total amount of funds,
excluding fees and other expenses, required to purchase all outstanding shares
of each class of securities listed above pursuant to the Offer described in the
Offer to Purchase and Proxy Statement filed as an Exhibit hereto.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the
form or schedule and the date of its filing.
Amount Previously Paid: ________________
Form or Registration No.: ______________
Filing Party: __________________________
Date Filed: ____________________________
<PAGE>
Item 1. Security and Issuer.
(a) Incorporated herein by reference to the information appearing under
the caption "Proposed Amendment and Proxy Solicitation -- Financial and Other
Information Relating to CG&E" in the Offer to Purchase and Proxy Statement,
dated August 20, 1996, filed as Exhibit 99.(a)(1) to this Issuer Tender Offer
Statement on Schedule 13E-4 (the "Offer to Purchase and Proxy Statement").
(b) Incorporated herein by reference to the information appearing on the
front cover of the Offer to Purchase and Proxy Statement, and to the information
appearing under the captions "Terms of the Offer -- Number of Shares; Purchase
Prices; Expiration Date; Dividends" and "Transactions and Agreements Concerning
the Shares" in the Offer to Purchase and Proxy Statement.
(c) Incorporated herein by reference to the information appearing under
the caption "Price Range of Shares; Dividends" in the Offer to Purchase and
Proxy Statement.
(d) Cinergy Corp., a Delaware corporation ("Cinergy"), is the person
filing this Statement and is the parent holding company of the Issuer, The
Cincinnati Gas & Electric Company ("CG&E"). Cinergy's principal office is at
139 East Fourth Street, Cincinnati, Ohio 45202.
Item 2. Source and Amount of Funds or Other Consideration.
(a) Incorporated herein by reference to the information appearing under
the caption "Source and Amount of Funds" in the Offer to Purchase and Proxy
Statement.
(b) Incorporated herein by reference to the information appearing under
the caption "Source and Amount of Funds" in the Offer to Purchase and Proxy
Statement.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
Incorporated herein by reference to the information appearing under the
caption "Purpose of the Offer; Certain Effects of the Offer" in the Offer to
Purchase and Proxy Statement.
Item 4. Interest in Securities of the Issuer.
Incorporated herein by reference to the information appearing under the
caption "Transactions and Agreements Concerning the Shares" in the Offer to
Purchase and Proxy Statement.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
to the Issuer's Securities.
Incorporated herein by reference to the information appearing under the
caption "Transactions and Agreements Concerning the Shares" in the Offer to
Purchase and Proxy Statement.
Item 6. Persons Retained, Employed or to be Compensated.
Incorporated herein by reference to the information appearing under the
caption "Fees and Expenses Associated with the Offer" in the Offer to Purchase
and Proxy Statement.
Item 7. Financial Information.
(a) Incorporated herein by reference to the financial statements included
in the Annual Report on Form 10-K for the year ended December 31, 1995 of CG&E
and the Quarterly Reports on Form 10-Q for the quarterly periods ended June 30,
1996 and June 30, 1995 of CG&E, and to the information appearing under the
caption "Summary of Consolidated Financial Information" in the Offer to Purchase
and Proxy Statement.
(b) Not applicable.
Item 8. Additional Information.
(a) Not applicable.
(b) Incorporated herein by reference to the information appearing under
the caption "Terms of the Offer -- Certain Conditions of the Offer" in the Offer
to Purchase and Proxy Statement.
(c) Not applicable.
(d) Not applicable.
(e) See Exhibits 99.(a)(1) and 99.(a)(2).
Item 9. Material to be Filed as Exhibits.
Exhibit No. Description
99.(a)(1) Offer to Purchase and Proxy Statement, dated August 20,
1996.
99.(a)(2) Letter of Transmittal and Proxy for each series of
securities.
99.(a)(3) Notice of Guaranteed Delivery and Proxy.
99.(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees.
99.(a)(5) Form of Letter to Clients of Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees.
99.(a)(6) Summary Advertisement, dated August 20, 1996.
99.(a)(7) Letter to Shareholders, dated August 20, 1996.
99.(a)(8) Press Release, dated August 19, 1996.
99.(b) Credit Agreement, dated as of May 6, 1996, as Amended and
Restated as of July 15, 1996, among Cinergy, the Lenders
from time to time parties thereto, the Co-Agents named
therein, the Lead Managers named therein, and Barclays
Bank PLC, as Administrative Agent.
99.(c) Not applicable.
99.(d) Tax Opinion of Taft, Stettinius & Hollister.
99.(e) Not applicable.
99.(f) Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: August 19, 1996
Cinergy Corp.
By: /s/ William L. Sheafer
-------------------------
William L. Sheafer
Treasurer
EXHIBIT 99.(a)(1)
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OFFER TO PURCHASE AND PROXY STATEMENT
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF THE FOLLOWING SERIES OF
CUMULATIVE PREFERRED STOCK OF THE CINCINNATI GAS & ELECTRIC COMPANY
270,000 SHARES, CUMULATIVE PREFERRED STOCK, 4% SERIES AT A PURCHASE PRICE OF
$64.00 PER SHARE
130,000 SHARES, CUMULATIVE PREFERRED STOCK, 4 3/4% SERIES AT A PURCHASE PRICE OF
$80.00 PER SHARE
800,000 SHARES, CUMULATIVE PREFERRED STOCK, 7 7/8% SERIES AT A PURCHASE PRICE OF
$116.00 PER SHARE
800,000 SHARES, CUMULATIVE PREFERRED STOCK, 7 3/8% SERIES AT A PURCHASE PRICE OF
$110.00 PER SHARE
----------------
THE CINCINNATI GAS & ELECTRIC COMPANY
PROXY STATEMENT
WITH RESPECT TO ITS COMMON STOCK AND CUMULATIVE PREFERRED STOCK
------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
------------------
Cinergy Corp., a Delaware corporation ("Cinergy"), invites the holders of
each series of cumulative preferred stock listed above (each a "Series of
Preferred," and the holder thereof a "Preferred Shareholder") of The Cincinnati
Gas & Electric Company, an Ohio corporation and direct utility subsidiary of
Cinergy ("CG&E"), to tender any and all of their shares of a Series of Preferred
("Shares") for purchase at the purchase price per Share listed above for the
Shares tendered, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and Proxy Statement and in the
accompanying Letter of Transmittal and Proxy (which together constitutes the
"Offer"). Cinergy will purchase all Shares validly tendered and not withdrawn,
upon the terms and subject to the conditions of the Offer. See "Terms of the
Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension
of Tender Period; Termination; Amendments."
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED
BELOW, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. SEE "TERMS OF THE
OFFER -- CERTAIN CONDITIONS OF THE OFFER."
Concurrently with the Offer, the Board of Directors of CG&E is soliciting
proxies for use at the Special Meeting of Shareholders of CG&E to be held at its
principal office, 139 East Fourth Street, Cincinnati, Ohio 45202, on September
18, 1996, or any adjournment or postponement of such meeting (the "Special
Meeting"). The Special Meeting is being held to consider an amendment (the
"Proposed Amendment") to CG&E's Amended Articles of Incorporation (the
"Articles") which would remove a provision of the Articles that limits CG&E's
ability to issue unsecured debt. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER
THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED
AMENDMENT, THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED
AND ADOPTED AT THE SPECIAL MEETING. IN ADDITION, PREFERRED SHAREHOLDERS HAVE THE
RIGHT TO VOTE FOR THE PROPOSED AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR
SHARES. IF THE PROPOSED AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A
SPECIAL CASH PAYMENT IN THE AMOUNT OF $1.00 PER SHARE TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT SUCH
SHARES HAVE NOT BEEN TENDERED PURSUANT TO THE OFFER. THOSE PREFERRED
SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO THE
PURCHASE PRICE PER SHARE LISTED ABOVE.
IMPORTANT
Any Preferred Shareholder desiring to accept the Offer and tender all or any
portion of his or her Shares should either (i) request his or her broker,
dealer, commercial bank, trust company or nominee to effect the transaction for
him or her, or (ii) complete and sign the Letter of Transmittal and Proxy or a
facsimile thereof, in accordance with the instructions in the Letter of
Transmittal and Proxy, mail or deliver it and any other required documents to
The Bank of New York (the "Depositary"), and deliver the certificates for such
Shares to the Depositary, along with the Letter of Transmittal and Proxy, or
tender such Shares pursuant to the procedure for book-entry transfer set forth
below under "Terms of the Offer -- Procedure for Tendering Shares," prior to the
Expiration Date (as defined below). A Preferred Shareholder whose Shares are
registered in the name of a broker, dealer, commercial bank, trust company or
nominee must contact such broker, dealer, commercial bank, trust company or
nominee if he or she desires to tender such Shares. Any Preferred Shareholder
who desires to tender Shares and whose certificates for such Shares are not
immediately available, or who cannot comply in a timely manner with the
procedure for book-entry transfer, should tender such Shares by following the
procedures for guaranteed delivery set forth below under "Terms of the Offer --
Procedure for Tendering Shares."
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY, AND
ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR SUCH SERIES OF PREFERRED
OR A NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER SHARES OF
SUCH SERIES OF PREFERRED.
------------------
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF
THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER
AS TO WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER.
------------------
This Offer to Purchase and Proxy Statement is first being mailed to
Preferred Shareholders on or about August 20, 1996.
--------------------
Each Series of Preferred is listed and traded on The New York Stock
Exchange, Inc. (the "NYSE"). On August 15, 1996, the last reported sale prices
on the NYSE were $58.75 for the 4% Series of Preferred (on August 15, 1996),
$71.25 for the 4 3/4% Series of Preferred (on August 14, 1996), $108.75 for the
7 7/8% Series of Preferred (on May 31, 1996) and $105.50 for the 7 3/8% Series
of Preferred (on July 16, 1996). Preferred Shareholders are urged to obtain a
current market quotation, if available, for the Shares. On August 20, 1996,
there were issued and outstanding 270,000 Shares of the 4% Series of Preferred,
130,000 Shares of the 4 3/4% Series of Preferred, 800,000 Shares of the 7 7/8%
Series of Preferred and 800,000 Shares of the 7 3/8% Series of Preferred.
------------------
Questions or requests for assistance or for additional copies of this Offer
to Purchase and Proxy Statement, the Letter of Transmittal and Proxy for a
Series of Preferred, or other tender offer or proxy solicitation materials may
be directed to MacKenzie Partners, Inc. (the "Information Agent") or Smith
Barney Inc. and Morgan Stanley & Co. Incorporated (the "Dealer Managers") at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase and Proxy Statement.
------------------
The Dealer Managers for the Offer are:
SMITH BARNEY INC. MORGAN STANLEY & CO.
INCORPORATED
--------------------
The date of this Offer to Purchase and Proxy Statement is August 20, 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
CINERGY OR CG&E AS TO WHETHER PREFERRED SHAREHOLDERS SHOULD TENDER SHARES
PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE
CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL AND PROXY. IF GIVEN OR
MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY CINERGY OR CG&E.
TABLE OF CONTENTS
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PAGE
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<S> <C>
SUMMARY.................................................................................................... 2
TERMS OF THE OFFER......................................................................................... 4
Number of Shares; Purchase Prices; Expiration Date; Dividends............................................ 4
Procedure for Tendering Shares........................................................................... 4
Withdrawal Rights........................................................................................ 6
Acceptance of Shares for Payment and Payment of Purchase Price and Dividends............................. 7
Certain Conditions of the Offer.......................................................................... 7
Extension of Tender Period; Termination; Amendments...................................................... 9
PROPOSED AMENDMENT AND PROXY SOLICITATION.................................................................. 10
Introduction............................................................................................. 10
Voting Securities, Rights and Procedures................................................................. 10
Proxies.................................................................................................. 10
Cash Payments............................................................................................ 11
Security Ownership of Certain Beneficial Owners and Management........................................... 11
Business to come before the Special Meeting.............................................................. 12
Explanation of the Proposed Amendment.................................................................... 12
Reasons for the Proposed Amendment....................................................................... 13
Financial and Other Information Relating to CG&E......................................................... 14
Relationship with Independent Public Accountants......................................................... 14
PRICE RANGE OF SHARES; DIVIDENDS........................................................................... 14
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER......................................................... 16
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................................................... 17
SOURCE AND AMOUNT OF FUNDS................................................................................. 18
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES.......................................................... 19
FEES AND EXPENSES ASSOCIATED WITH THE OFFER................................................................ 19
CERTAIN INFORMATION REGARDING CINERGY AND CG&E............................................................. 19
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION.............................................................. 21
ADDITIONAL INFORMATION REGARDING CINERGY................................................................... 22
MISCELLANEOUS.............................................................................................. 22
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1
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS PROVIDED SOLELY FOR THE CONVENIENCE OF THE
PREFERRED SHAREHOLDERS. THIS SUMMARY IS NOT INTENDED TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT AND MORE SPECIFIC
DETAILS CONTAINED IN THE OFFER AND ANY AMENDMENTS HERETO. PREFERRED SHAREHOLDERS
ARE URGED TO READ THIS OFFER IN ITS ENTIRETY. EACH OF THE CAPITALIZED TERMS USED
IN THIS SUMMARY AND NOT DEFINED HEREIN HAS THE MEANING SET FORTH ELSEWHERE IN
THIS OFFER TO PURCHASE AND PROXY STATEMENT.
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The Companies..................... Cinergy is a registered holding company under the Public
Utility Holding Company Act of 1935 (the "Holding
Company Act"), and is the parent company of CG&E, PSI
Energy, Inc. ("PSI"), Cinergy Services, Inc. ("Cinergy
Services") and Cinergy Investments, Inc. ("Cinergy
Investments"). CG&E is an operating utility primarily
engaged in providing electric and gas service in the
southwestern portion of Ohio and, through its principal
subsidiary, The Union Light, Heat and Power Company
("ULH&P"), in adjacent areas in Kentucky. PSI is an
operating utility primarily engaged in providing
electric service in north central, central, and southern
Indiana. Cinergy Services provides management, finan-
cial, administrative, engineering, legal and other
services to Cinergy, CG&E, PSI Energy, Cinergy
Investments and subsidiaries thereof. Cinergy conducts
its non-utility businesses through Cinergy Investments
and its subsidiaries.
The Shares........................ CG&E 4% Cumulative Preferred Stock ($100 par value)
CG&E 4 3/4% Cumulative Preferred Stock ($100 par value)
CG&E 7 7/8% Cumulative Preferred Stock ($100 par value)
CG&E 7 3/8% Cumulative Preferred Stock ($100 par value)
The Offer......................... Offer to purchase any or all shares of each Series of
Preferred at the price per Share set forth below.
Purchase Price.................... $64.00 per 4% Share
$80.00 per 4 3/4% Share
$116.00 per 7 7/8% Share
$110.00 per 7 3/8% Share
Independent Offer................. The Offer for one Series of Preferred is independent of
the Offer for any other Series of Preferred. The Offer
is not conditioned upon any minimum number of Shares of
the applicable Series of Preferred being tendered, but
is conditioned upon the Proposed Amendment being
approved and adopted at the Special Meeting. The Offer
is subject to certain other conditions.
Expiration Date of the Offer...... The Offer expires at 5:00 p.m., New York City time, on
Wednesday, September 18, 1996, unless extended (the
"Expiration Date").
How to Tender Shares.............. See "Terms of the Offer -- Procedure for Tendering
Shares." For further information, call the Information
Agent or the Dealer Managers or consult your broker for
assistance.
Withdrawal Rights................. Tendered Shares of any Series of Preferred may be
withdrawn at any time until the Expiration Date with
respect to such Series of Preferred and, unless
theretofore accepted for payment, may also be withdrawn
after Tuesday, October 15, 1996. See "Terms of the Offer
-- Withdrawal Rights."
Purpose of the Offer.............. Cinergy is making the Offer because it believes that the
purchase of Shares is attractive to Cinergy, its
shareholders and CG&E. In
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2
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addition, the Offer gives Preferred Shareholders the
opportunity to sell their Shares at a premium over the
market price and without the usual transaction costs
associated with a market sale. See "Purpose of the
Offer; Certain Effects of the Offer."
Dividends......................... A regular quarterly dividend has been declared on each
Series of Preferred, payable on October 1, 1996 to the
owners of record on September 3, 1996 (the "October 1996
Dividend"). A tender and purchase of Shares pursuant to
the Offer will not deprive a Preferred Shareholder of
his or her right to receive the October 1996 Dividend on
Shares held of record on September 3, 1996. Tendering
Preferred Shareholders will not be entitled to any
dividends in respect of any later dividend periods (or
any portion thereof).
Brokerage Commissions............. Not payable by Preferred Shareholders.
Solicitation Fee.................. Cinergy will pay to each designated Soliciting Dealer a
solicitation fee of $1.50 per Share (except that for
transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of
$1.25 per Share) for any Shares tendered, accepted for
payment and paid for pursuant to the Offer. However,
Soliciting Dealers will not be entitled to a
solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
Proposed Amendment................ Concurrently with the Offer, the Board of Directors of
CG&E is soliciting proxies for use at the Special
Meeting of Shareholders of CG&E. The Special Meeting is
being held to consider an amendment to CG&E's Articles
which would remove a provision that limits CG&E's
ability to issue unsecured debt.
Special Cash Payment.............. Preferred Shareholders have the right to vote for the
Proposed Amendment regardless of whether they tender
their Shares. If the Proposed Amendment is approved and
adopted by CG&E's shareholders, CG&E will make a special
cash payment of $1.00 per Share to each Preferred
Shareholder who voted in favor of the Proposed
Amendment, provided that such Shares have not been
tendered pursuant to the Offer. Preferred Shareholders
who validly tender their Shares will be entitled only to
the purchase price per Share listed on the front cover
of this Offer to Purchase and Proxy Statement.
Stock Transfer Tax................ Cinergy will pay or cause to be paid any stock transfer
taxes with respect to the sale and transfer of any
Shares to it or its order pursuant to the Offer. See
Instruction 6 of the applicable Letter of Transmittal
and Proxy. See "Terms of the Offer -- Acceptance of
Shares for Payment of Purchase Price and Dividends."
Payment Date...................... Promptly after the Expiration Date.
Further Information............... Additional copies of this Offer to Purchase and Proxy
Statement and the applicable Letter of Transmittal and
Proxy may be obtained by contacting MacKenzie Partners
Inc., 156 Fifth Avenue, New York, NY 10010, telephone
(800) 322-2885 (toll-free) and (212) 929-5500 (brokers
and dealers). Questions about the Offer should be
directed to Smith Barney Inc. at (800) 655-4811 or
Morgan Stanley & Co. Incorporated at (800) 223-2440
Extension 1965.
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3
<PAGE>
TERMS OF THE OFFER
NUMBER OF SHARES; PURCHASE PRICES; EXPIRATION DATE; DIVIDENDS
Upon the terms and subject to the conditions described herein and in the
applicable Letter of Transmittal and Proxy, Cinergy will purchase any and all
Shares that are validly tendered on or prior to the applicable Expiration Date
(and not properly withdrawn in accordance with "Terms of the Offer -- Withdrawal
Rights") at the purchase price per Share listed on the front cover of this Offer
to Purchase and Proxy Statement for the Shares tendered, net to the seller in
cash. See "Terms of the Offer -- Certain Conditions of the Offer" and "Terms of
the Offer -- Extension of Tender Period; Termination."
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED UPON ANY MINIMUM
NUMBER OF SHARES OF SUCH SERIES OF PREFERRED BEING TENDERED AND IS INDEPENDENT
OF THE OFFER FOR ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED AMENDMENT, AS DESCRIBED
HEREIN, BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING. SEE "TERMS OF THE
OFFER -- CERTAIN CONDITIONS OF THE OFFER."
The Offer is being sent to all persons in whose names Shares are registered
on the books of CG&E on the Record Date (as defined below) and on August 15,
1996. Only a record holder of Shares on the Record Date may vote in person or by
proxy at the Special Meeting. No record date is fixed for determining which
persons are permitted to tender Shares. Any person who is the beneficial owner
but not the record holder of Shares must arrange for the record transfer of such
Shares prior to tendering.
With respect to each Series of Preferred, the Expiration Date is the later
of 5:00 p.m., New York City time, on Wednesday, September 18, 1996 or the latest
time and date to which the Offer with respect to such Series of Preferred is
extended. Cinergy expressly reserves the right, in its sole discretion, and at
any time and/or from time to time, to extend the period of time during which the
Offer for any Series of Preferred is open, by giving oral or written notice of
such extension to the Depositary, without extending the period of time during
which the Offer for any other Series of Preferred is open. There is no assurance
whatsoever that Cinergy will exercise its right to extend the Offer for any
Series of Preferred. If Cinergy decides, in its sole discretion, to decrease the
number of Shares of any Series of Preferred being sought or to increase or
decrease the consideration offered in the Offer to holders of any Series of
Preferred and, at the time that notice of such increase or decrease is first
published, sent or given to holders of such Series of Preferred in the manner
specified herein, the Offer for such Series of Preferred is scheduled to expire
at any time earlier than the tenth business day from the date that such notice
is first so published, sent or given, such Offer will be extended until the
expiration of such ten-business-day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED.
The October 1996 Dividend has been declared on each Series of Preferred,
payable October 1, 1996 to owners of record on September 3, 1996. A tender and
purchase of Shares pursuant to the Offer will not deprive a Preferred
Shareholder of his or her right to receive the October 1996 Dividend on Shares
held of record on September 3, 1996. Tendering Preferred Shareholders will not
be entitled to any dividends in respect of any later dividend periods (or any
portion thereof).
PROCEDURE FOR TENDERING SHARES
To tender Shares pursuant to the Offer, the tendering owner of Shares must
either:
(a) send to the Depositary (at one of its addresses set forth on the
back cover of this Offer to Purchase and Proxy Statement) a properly
completed and duly executed Letter of Transmittal and Proxy or facsimile
thereof, together with any required signature guarantees and any other
documents required by the Letter of Transmittal and Proxy and either (i)
certificates for the Shares to be tendered
4
<PAGE>
must be received by the Depositary at one of such addresses or (ii) such
Shares must be delivered pursuant to the procedures for book-entry transfer
described herein (and a confirmation of such delivery must be received by
the Depositary), in each case by the Expiration Date; or
(b) comply with the guaranteed delivery procedure described under
"Guaranteed Delivery Procedure" below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company and Philadelphia Depository Trust Company (collectively
referred to as the "Book-Entry Transfer Facilities") for purposes of the Offer
within two business days after the date of this Offer to Purchase and Proxy
Statement, and any financial institution that is a participant in the system of
any Book-Entry Transfer Facility may make delivery of Shares by causing such
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the procedures of such Book-Entry Transfer Facility.
Although delivery of Shares may be effected through book-entry transfer, such
delivery must be accompanied by either (i) a properly completed and duly
executed Letter of Transmittal and Proxy or facsimile thereof, together with any
required signature guarantees and any other required documents or (ii) an
Agent's Message (as hereinafter defined) and, in any case, must be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase and Proxy Statement by the Expiration Date.
The term "Agent's Message" means a message, transmitted by one of the
Book-Entry Transfer Facilities, received by the Depositary and forming a part of
the book-entry transfer when a tender is initiated, which states that the
Book-Entry Transfer Facility has received an express acknowledgment from a
participant tendering Shares that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and Proxy and that Cinergy may
enforce such agreement against such participant.
Except as otherwise provided below, all signatures on a Letter of
Transmittal and Proxy must be guaranteed by a firm that is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States that is a participant in an
approved Signature Guarantee Medallion Program (each of the foregoing being
referred to as an "Eligible Institution"). Signatures on a Letter of Transmittal
and Proxy need not be guaranteed if (a) the Letter of Transmittal and Proxy is
signed by the registered owner of the shares tendered therewith and such owner
has not completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal and Proxy,
(b) such Shares are tendered for the account of an Eligible Institution or (c)
such Letter of Transmittal and Proxy is being used solely for the purpose of
voting Shares which are not being tendered pursuant to the Offer. See
Instructions 1 and 5 of the Letter of Transmittal and Proxy.
GUARANTEED DELIVERY PROCEDURE. If a Preferred Shareholder desires to tender
Shares pursuant to the Offer and such Preferred Shareholder's certificates are
not immediately available or the procedures for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered if all of the following guaranteed delivery procedures are complied
with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery and Proxy, substantially in the form provided by Cinergy and CG&E
herewith, is received (with any required signatures or signature guarantees)
by the Depositary as provided below prior to the Expiration Date; and
(iii) the certificates for all tendered Shares in proper form for
transfer or a Book-Entry Confirmation with respect to all tendered Shares,
together with a properly completed and duly executed Letter of Transmittal
and Proxy (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal and Proxy, are received by the
Depositary no later than 5:00 p.m., New York City time, within three NYSE
trading days after the date of such Notice of Guaranteed Delivery and Proxy.
5
<PAGE>
THE NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE DELIVERED BY HAND OR
TRANSMITTED BY FACSIMILE TRANSMISSION OR MAILED TO THE DEPOSITARY AND MUST
INCLUDE AN ENDORSEMENT BY AN ELIGIBLE INSTITUTION IN THE FORM SET FORTH IN SUCH
NOTICE OF GUARANTEED DELIVERY AND PROXY.
In all cases, Shares shall not be deemed validly tendered unless a properly
completed and duly executed Letter of Transmittal and Proxy (or a manually
signed facsimile thereof) or, if applicable, an Agent's Message is received by
the Depositary.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer in all cases will be made only after timely
receipt by the Depositary of certificates for (or an Agent's Message with
respect to) such Shares, a Letter of Transmittal and Proxy or a manually signed
facsimile thereof, properly completed and duly executed, with any required
signature guarantees and all other documents required by the Letter of
Transmittal and Proxy.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
BECAUSE IT IS THE TIME OF RECEIPT, NOT THE TIME OF MAILING, WHICH DETERMINES
WHETHER A TENDER HAS BEEN MADE PRIOR TO THE EXPIRATION DATE, SUFFICIENT TIME
SHOULD BE ALLOWED FOR DELIVERY.
TO AVOID FEDERAL INCOME TAX BACKUP WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE PURSUANT TO THE OFFER, EACH TENDERING PREFERRED SHAREHOLDER MUST
NOTIFY THE DEPOSITARY OF SUCH PREFERRED SHAREHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY PROPERLY
COMPLETING AND EXECUTING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF
TRANSMITTAL AND PROXY. FOREIGN PREFERRED SHAREHOLDERS MUST SUBMIT A PROPERLY
COMPLETED FORM W-8 IN ORDER TO AVOID THE APPLICABLE BACKUP WITHHOLDING;
PROVIDED, HOWEVER, THAT BACKUP WITHHOLDING WILL NOT APPLY TO FOREIGN
STOCKHOLDERS SUBJECT TO 30% (OR LOWER TREATY RATE) WITHHOLDING ON GROSS PAYMENTS
RECEIVED PURSUANT TO THE OFFER. SEE "CERTAIN FEDERAL INCOME TAX CONSEQUENCES."
EACH PREFERRED SHAREHOLDER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR REGARDING THE TAX CONSEQUENCES OF THE OFFER.
All questions as to the form of documents and the validity, eligibility
(including the time of receipt) and acceptance for payment of any tender of
Shares will be determined by Cinergy, in its sole discretion, and its
determination will be final and binding. Cinergy reserves the absolute right to
reject any or all tenders of Shares that (i) it determines are not in proper
form or (ii) the acceptance for payment of or payment for which may, in the
opinion of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute
right to waive any defect or irregularity in any tender of Shares. None of
Cinergy, the Dealer Managers, the Depositary, the Information Agent or any other
person will be under any duty to give notice of any defect or irregularity in
tenders, nor shall any of them incur any liability for failure to give any such
notice.
WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date. Thereafter, such tenders are irrevocable, except
that they may be withdrawn after Tuesday, October 15, 1996, unless theretofore
accepted for payment as provided in this Offer to Purchase and Proxy Statement.
To be effective, a written or facsimile transmission notice of withdrawal
must be timely received by the Depositary, at one of its addresses set forth on
the back cover of this Offer to Purchase and Proxy Statement, and must specify
the name of the person who tendered the Shares to be withdrawn and the number of
Shares to be withdrawn. If the Shares to be withdrawn have been delivered to the
Depositary, a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution (except in the case of Shares tendered by an
6
<PAGE>
Eligible Institution) must be submitted prior to the release of such Shares. In
addition, such notice must specify, in the case of Shares tendered by delivery
of certificates, the name of the registered owner (if different from that of the
tendering Preferred Shareholder) and the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn or, in the case of Shares
tendered by book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities to be credited with the withdrawn Shares and
the name of the registered holder (if different from the name of such account).
Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed
not validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered by again following one of the procedures described in "Terms of the
Offer -- Procedure for Tendering Shares" at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Cinergy, in its sole discretion, and
its determination will be final and binding. None of Cinergy, the Dealer
Managers, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity in any notice
of withdrawal or will incur any liability for failure to give any such
notification.
ACCEPTANCE OF SHARES FOR PAYMENT AND PAYMENT OF PURCHASE PRICE AND DIVIDENDS
Upon the terms and subject to the conditions of the Offer, and as promptly
as practicable after the Expiration Date, Cinergy will accept for payment (and
thereby purchase) and pay for Shares validly tendered and not withdrawn as
permitted in "Terms of the Offer -- Withdrawal Rights." In all cases, payment
for Shares accepted for payment pursuant to the Offer will be made promptly but
only after timely receipt by the Depositary of certificates for such Shares (or
of an Agent's Message), a properly completed and duly executed Letter of
Transmittal and Proxy (or facsimile thereof) and any other required documents.
For purposes of the Offer, Cinergy will be deemed to have accepted for
payment (and thereby purchased) Shares that are validly tendered and not
withdrawn as, if and when it gives oral or written notice to the Depositary of
its acceptance for payment of such Shares. Cinergy will pay for Shares that it
has purchased pursuant to the Offer by depositing the purchase price therefor
with the Depositary, which will act as agent for tendering Preferred
Shareholders for the purpose of receiving payment from Cinergy and transmitting
payment to tendering Preferred Shareholders. Under no circumstances will
interest be paid on amounts to be paid to tendering Preferred Shareholders,
regardless of any delay in making such payment.
Certificates for all Shares not validly tendered will be returned or, in the
case of Shares tendered by book-entry transfer, such Shares will be credited to
an account maintained with a Book-Entry Transfer Facility, as promptly as
practicable, without expense to the tendering Preferred Shareholder.
If certain events occur, Cinergy may not be obligated to purchase Shares
pursuant to the Offer. See "Terms of the Offer -- Certain Conditions of the
Offer."
Cinergy will pay or cause to be paid any stock transfer taxes with respect
to the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to any person other
than the registered owner, or if tendered Shares are registered in the name of
any person other than the person signing the Letter of Transmittal and Proxy,
the amount of any stock transfer taxes (whether imposed on the registered owner,
such other person or otherwise) payable on account of the transfer to such
person will be deducted from the purchase price unless satisfactory evidence of
the payment of such taxes, or exemption therefrom, is submitted. See Instruction
6 of the accompanying Letter of Transmittal and Proxy.
CERTAIN CONDITIONS OF THE OFFER
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. IF THE PROPOSED
AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT, AS
DESCRIBED HEREIN, TO EACH PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE
PROPOSED AMENDMENT, PROVIDED THAT THEIR SHARES HAVE NOT BEEN
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<PAGE>
TENDERED PURSUANT TO THE OFFER. PREFERRED SHAREHOLDERS WHO TENDER THEIR SHARES
WILL ONLY BE ENTITLED TO THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER
OF THIS OFFER TO PURCHASE AND PROXY STATEMENT.
Notwithstanding any other provision of the Offer, Cinergy will not be
required to accept for payment or pay for any Shares tendered, and may terminate
or amend the Offer or may postpone (subject to the requirements of the
Securities Exchange Act of 1934 [the "Exchange Act"] for prompt payment for or
return of Shares) the acceptance for payment of, or payment for, Shares
tendered, if at any time after August 20, 1996, and at or before acceptance for
payment of or payment for any Shares, any of the following shall have occurred:
(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person, domestic
or foreign, or before any court, authority, agency or tribunal that (i)
challenges the acquisition of Shares pursuant to the Offer or otherwise in
any manner relates to or affects the Offer or (ii) could materially and
adversely affect the business, condition (financial or otherwise), income,
operations or prospects of Cinergy and its subsidiaries taken as a whole, or
otherwise materially impair in any way the contemplated future conduct of
the business of Cinergy or any of its subsidiaries or materially impair the
Offer's contemplated benefits to Cinergy;
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or Cinergy or any
of its subsidiaries, by any legislative body, court, authority, agency or
tribunal that would or might directly or indirectly (i) make the acceptance
for payment of, or payment for, some or all of the Shares illegal or
otherwise restrict or prohibit consummation of the Offer, (ii) delay or
restrict the ability of Cinergy, or render Cinergy unable, to accept for
payment or pay for some or all of the Shares, (iii) materially impair the
contemplated benefits of the Offer to Cinergy or (iv) materially affect the
business, condition (financial or otherwise), income, operations or
prospects of Cinergy and its subsidiaries taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the business
of Cinergy or any of its subsidiaries;
(c) there shall have occurred (i) any significant decrease in the market
price of the Shares or any change in the general political, market, economic
or financial conditions in the United States or abroad that could have a
material adverse effect on Cinergy's business, operations, prospects or
ability to obtain financing generally or the trading in the other equity
securities of Cinergy, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or any
limitation on, or any event that might affect the extension of credit by
lending institutions in the United States, (iii) the commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (v) in the case of
any of the foregoing existing at the time of the commencement of the Offer,
a material acceleration or worsening thereof or (vi) any decline in either
the Dow Jones Industrial Average or the Standard and Poor's Composite 500
Stock Index by an amount in excess of 15% measured from the close of
business on August 15, 1996;
(d) any tender or exchange offer with respect to some or all of the
Shares (other than the Offer), or a merger, acquisition or other business
combination proposal for Cinergy, shall have been proposed, announced or
made by any person or entity;
(e) there shall have occurred any event or events that have resulted, or
may result, in an actual or threatened change in the business, condition
(financial or otherwise), income, operations, stock ownership or prospects
of Cinergy and its subsidiaries; or
8
<PAGE>
(f) the Securities and Exchange Commission (the "SEC") shall have
withheld approval, under the Holding Company Act, of the acquisition of the
Shares by Cinergy pursuant to the Offer or the approval and adoption of the
Proposed Amendment at the Special Meeting;
and, in the sole judgment of Cinergy, such event or events make it
undesirable or inadvisable to proceed with the Offer or with such acceptance for
payment or payment. With respect to the approval of the SEC referenced in clause
(f) above, the SEC must find that the acquisition of the Shares by Cinergy is
not detrimental to the public interest or the interest of the investors or
consumers, and that the consideration paid in connection with the acquisition
and the adoption of the Proposed Amendment, including fees, commissions and
other remuneration, is reasonable.
The foregoing conditions (including the condition that the Proposed
Amendment be approved and adopted at the Special Meeting) are for the sole
benefit of Cinergy and may be asserted by Cinergy regardless of the
circumstances (including any action or inaction by Cinergy) giving rise to any
such condition, and any such condition may be waived by Cinergy, in whole or in
part, at any time and from time to time in its sole discretion. The failure by
Cinergy at any time to exercise any of the foregoing rights shall not be deemed
a waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time. Any determination by
Cinergy concerning the events described above will be final and binding on all
parties.
EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
Cinergy expressly reserves the right, in its sole discretion, and at any
time and/or from time to time, to extend the period of time during which the
Offer for any Series of Preferred is open by giving oral or written notice of
such extension to the Depositary, without extending the period of time during
which the Offer for any other Series of Preferred is open. There can be no
assurance, however, that Cinergy will exercise its right to extend the Offer for
any Series of Preferred. During any such extension, all Shares of the subject
Series of Preferred previously tendered will remain subject to the Offer, except
to the extent that such Shares may be withdrawn as set forth in "Terms of the
Offer -- Withdrawal Rights." Cinergy also expressly reserves the right, in its
sole discretion, to terminate the Offer and not accept for payment or pay for
any Shares tendered, subject to Rule 13e-4(f)(5) under the Exchange Act, which
requires Cinergy either to pay the consideration offered or to return the Shares
tendered promptly after the termination or withdrawal of the Offer, upon the
occurrence of any of the conditions specified in "Terms of the Offer -- Certain
Conditions of the Offer" by giving oral or written notice of such termination to
the Depositary, and making a public announcement thereof.
Subject to compliance with applicable law, Cinergy further reserves the
right, in its sole discretion, to amend the Offer in any respect. Amendments to
the Offer may be made at any time and/or from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date. Any public announcement made
pursuant to the Offer will be disseminated promptly to Preferred Shareholders
affected thereby in a manner reasonably designed to inform such Preferred
Shareholders of such change. Without limiting the manner in which Cinergy may
choose to make a public announcement, except as required by applicable law,
Cinergy shall have no obligation to publish, advertise or otherwise communicate
any such public announcement other than by making a release to the Dow Jones
News Service.
If Cinergy materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, Cinergy
will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) under the Exchange Act. Those rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer (other than a change in price
or change in percentage of securities sought) will depend on the facts and
circumstances, including the relative materiality of such terms or information.
The SEC has stated that, in its view, an offer should remain open for a minimum
of five business days from the date that a notice of such a material change is
first published, sent or given. If the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date
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<PAGE>
that Cinergy publishes, sends or gives to Preferred Shareholders a notice that
it will (a) increase or decrease the price it will pay for Shares or (b)
decrease the percentage of Shares it seeks, the Offer will be extended until the
expiration of such period of ten business days.
PROPOSED AMENDMENT AND PROXY SOLICITATION
INTRODUCTION
This Offer to Purchase and Proxy Statement is first being mailed on or about
August 20, 1996 to the shareholders of CG&E in connection with the solicitation
of proxies by the Board of Directors (the "Board") of CG&E for use at the
Special Meeting. At the Special Meeting, the shareholders of CG&E will vote upon
the Proposed Amendment to the Articles.
While Preferred Shareholders who wish to tender their Shares pursuant to the
Offer need not vote in favor of the Proposed Amendment, the Offer is conditioned
upon the Proposed Amendment being approved and adopted at the Special Meeting.
In addition, Preferred Shareholders have the right to vote for the Proposed
Amendment regardless of whether they tender their Shares. If the Proposed
Amendment is approved and adopted by CG&E's shareholders, CG&E will make a
special cash payment in the amount of $1.00 per Share (the "Cash Payment") to
each Preferred Shareholder who voted in favor of the Proposed Amendment,
provided that such Shares have not been tendered pursuant to the Offer. If a
Preferred Shareholder votes against the Proposed Amendment or abstains, such
Preferred Shareholder shall not be entitled to the Cash Payment (regardless of
whether the Proposed Amendment is approved and adopted). Those Preferred
Shareholders who validly tender their Shares will be entitled only to the
purchase price per Share listed on the front cover of this Offer to Purchase and
Proxy Statement.
VOTING SECURITIES, RIGHTS AND PROCEDURES
Only holders of record of CG&E's voting securities at the close of business
on July 22, 1996 (the "Record Date") will be entitled to vote in person or by
proxy at the Special Meeting. The outstanding voting securities of CG&E are
divided into two classes: common stock and cumulative preferred stock. The class
of cumulative preferred stock has been issued in the four Series of Preferred
with the record holders of all Shares of the cumulative preferred stock voting
together as one class. The shares outstanding as of the Record Date, and the
vote to which each share is entitled in consideration of the Proposed Amendment,
are as follows:
<TABLE>
<CAPTION>
VOTES PER
CLASS SHARES OUTSTANDING SHARE
- ------------------------------------------------------------------- ------------------ --------------
<S> <C> <C>
Common Stock (Par Value $8.50 per share)........................... 89,663,086 1 vote
Cumulative Preferred Stock (Par Value $100 per Share).............. 2,000,000 1 vote
</TABLE>
The affirmative vote of the holders of two-thirds of the outstanding shares
of each of CG&E's (i) common stock and (ii) cumulative preferred stock, all
series voting together as one class, is required to approve the Proposed
Amendment to be presented at the Special Meeting. Abstentions and broker non-
votes will have the effect of votes against the Proposed Amendment. CINERGY HAS
ADVISED CG&E THAT IT INTENDS TO VOTE ALL OF THE OUTSTANDING SHARES OF COMMON
STOCK OF CG&E IN FAVOR OF THE PROPOSED AMENDMENT.
Votes at the Special Meeting will be tabulated preliminarily by the
Depositary. Inspectors of Election, duly appointed by the presiding officer of
the Special Meeting, will definitively count and tabulate the votes and
determine and announce the results at the meeting. CG&E has no established
procedure for confidential voting. There are no rights of appraisal in
connection with the Proposed Amendment.
PROXIES
THE ENCLOSED PROXY, WHICH IS CONTAINED WITHIN THE LETTER OF TRANSMITTAL AND
PROXY (AND THE NOTICE OF GUARANTEED DELIVERY AND PROXY), IS SOLICITED BY CG&E'S
BOARD, WHICH RECOMMENDS VOTING FOR THE PROPOSED AMENDMENT. ALL SHARES OF CG&E'S
COMMON STOCK WILL BE VOTED IN ACCORDANCE WITH THE BOARD'S RECOMMENDATION. Shares
of CG&E's cumulative preferred stock represented by properly executed proxies
received at or prior to the Special Meeting will be voted in accordance with the
instructions thereon. If no instructions are indicated, duly executed proxies
will be voted in accordance with the recommendation of the
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<PAGE>
Board. It is not anticipated that any other matters will be brought before the
Special Meeting. However, the enclosed proxy gives discretionary authority to
the proxy holders named therein should any other matters be presented at the
Special Meeting, and it is the intention of the proxy holders to act on any
other matters in accordance with their best judgment.
Execution of a proxy will not prevent a shareholder from attending the
Special Meeting and voting in person. Any shareholder giving a proxy may revoke
it at any time before it is voted by delivering to the Secretary of CG&E written
notice of revocation bearing a later date than the proxy, by delivering a duly
executed proxy bearing a later date, or by voting in person by ballot at the
Special Meeting.
CG&E will bear the cost of the solicitation of proxies by the Board. CG&E
has engaged MacKenzie Partners, Inc. to act as Information Agent in connection
with the solicitation of proxies for a fee of $12,500 plus reimbursement of
reasonable out-of-pocket expenses. Proxies will be solicited by mail or by
telephone. In addition, officers and employees of CG&E may also solicit proxies
personally or by telephone; such persons will receive no additional compensation
for these services. The Information Agent has not been retained to make, and
will not make, solicitations or recommendations in connection with the Proposed
Amendment. The Dealer Managers have not been retained to act in any capacity in
connection with the solicitation of proxies.
CG&E has requested that brokerage houses and other custodians, nominees and
fiduciaries forward solicitation materials to the beneficial owners of shares of
CG&E's cumulative preferred stock held of record by such persons and will
reimburse such brokers and other fiduciaries for their reasonable out-of-pocket
expenses incurred in connection therewith.
The solicitation of proxies has been approved by the SEC under the Holding
Company Act. An application has been filed with the SEC under the Holding
Company Act requesting approval of the Proposed Amendment and the acquisition of
the Shares by Cinergy pursuant to the Offer.
CASH PAYMENTS
Subject to the terms and conditions set forth in this Offer to Purchase and
Proxy Statement, if (but only if) the Proposed Amendment is approved and adopted
by the shareholders of CG&E, CG&E will make a Cash Payment to each Preferred
Shareholder who voted in favor of the Proposed Amendment, in person by ballot or
by proxy, at the Special Meeting in the amount of $1.00 for each Share held by
such Preferred Shareholder on the Record Date which is so voted, provided that
such Shares have not been tendered pursuant to the Offer. CASH PAYMENTS WILL BE
MADE TO PREFERRED SHAREHOLDERS AS OF THE RECORD DATE (IF SUCH SHARES HAVE NOT
BEEN TENDERED PURSUANT TO THE OFFER) ONLY IN RESPECT OF EACH SHARE WHICH IS
VOTED FOR THE ADOPTION OF THE PROPOSED AMENDMENT; PROVIDED, HOWEVER, THAT THOSE
PREFERRED SHAREHOLDERS WHO VALIDLY TENDER THEIR SHARES WILL BE ENTITLED ONLY TO
THE PURCHASE PRICE PER SHARE LISTED ON THE FRONT COVER OF THIS OFFER TO PURCHASE
AND PROXY STATEMENT. If the Proposed Amendment is approved and adopted, Cash
Payments will be paid out of CG&E's general funds, promptly after the Proposed
Amendment shall have become effective.
Only Preferred Shareholders on the Record Date (or their legal
representatives or attorneys-in-fact) are entitled to vote at the Special
Meeting and to receive Cash Payments from CG&E. Any beneficial holder of Shares
who is not the registered holder of such Shares as of the Record Date (as would
be the case for any beneficial owner whose Shares are registered in the name of
such holder's broker, dealer, commercial bank, trust company or other nominee)
must arrange with the record Preferred Shareholder to execute and deliver a
proxy form on such beneficial owner's behalf. If a beneficial holder of Shares
intends to attend the Special Meeting and vote in person, such beneficial holder
must obtain a legal proxy form from his or her broker, dealer, commercial bank,
trust company or other nominee.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As noted above, Cinergy owns all the outstanding common stock of CG&E.
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<PAGE>
Pursuant to Section 13(d) of the Exchange Act, a beneficial owner of a
security is any person who directly or indirectly has or shares voting or
investment power over such security. No person or group is known by management
of CG&E to be the beneficial owner of more than 5% of CG&E's class of cumulative
preferred stock as of the Record Date.
CG&E's directors and executive officers do not beneficially own any Shares
as of the Record Date. The beneficial ownership of Cinergy's common stock held
by each director, as well as directors and executive officers as a group, as of
June 30, 1996, is set forth in the following table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER (1) OF BENEFICIAL OWNERSHIP (2)
- ----------------------------------------------------------------- -------------------------------------
<S> <C>
Jackson H. Randolph.............................................. 79,239 shares
James E. Rogers.................................................. 264,979 shares
William J. Grealis............................................... 22,462 shares
All directors and executive officers as a group.................. 732,372 shares
(representing 0.47% of the class)
</TABLE>
- ------------------------
(1) No individual listed beneficially owned more than 0.17% of the outstanding
shares of common stock of Cinergy.
(2) Includes shares which there is a right to acquire within 60 days pursuant to
the exercise of stock options in the following amounts: Mr. Rogers --
189,403; Mr. Grealis -- 20,000; and all directors and executive officers as
a group -- 472,922.
BUSINESS TO COME BEFORE THE SPECIAL MEETING
The following Proposed Amendment to CG&E's Articles is the only item of
business expected to be presented at the Special Meeting:
To remove in its entirety ARTICLE FOURTH, Clause 6-A(b), limiting CG&E's
ability to issue unsecured indebtedness.
EXPLANATION OF THE PROPOSED AMENDMENT
Without the consent of the holders of CG&E's cumulative preferred stock, the
Articles currently prohibit the issuance or assumption of any unsecured notes,
debentures or other securities representing unsecured indebtedness (other than
for the purpose of refunding outstanding unsecured indebtedness or for the
redemption or retirement of outstanding shares of stock ranking prior to the
cumulative preferred stock with respect to the payment of dividends or upon the
dissolution, liquidation or winding up of CG&E) if, immediately after such
issuance or assumption, the total outstanding principal amount of all securities
representing unsecured debt (including unsecured securities then to be issued or
assumed) would exceed 20% of the aggregate of (1) the total principal amount of
all outstanding secured debt of CG&E at the time of such issuance or assumption
and (2) the capital and surplus of CG&E, as stated on CG&E's books. The Proposed
Amendment, if adopted, would eliminate in its entirety clause 6-A(b), as set
forth below, from the Articles.
Clause 6-A.
* * * *
"(b) Issue any unsecured notes, debentures or other securities
representing unsecured indebtedness, or assume any such unsecured
securities, for purposes other than the refunding of outstanding
unsecured indebtedness theretofore incurred or assumed by the Company or
the redemption or other retirement of outstanding shares of stock
ranking prior to the Cumulative Preferred Stock with respect to the
payment of dividends or upon the dissolution, liquidation or winding up
of the Company, whether voluntary or involuntary, if, immediately after
such issue or assumption, the total principal amount of all unsecured
notes, debentures or other securities representing unsecured
indebtedness issued or assumed by the Company and then outstanding
(including unsecured securities then to be issued or assumed) would
exceed 20% of the aggregate of (i) the total
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<PAGE>
principal amount of all bonds and other securities representing secured
indebtedness issued or assumed by the Company and then to be
outstanding, and (ii) the capital and surplus of the Company as then to
be stated on the books of account of the Company;"
REASONS FOR THE PROPOSED AMENDMENT
CG&E believes that regulatory, legislative and market developments will lead
to a more competitive environment in the electric and gas utility industry. As
competition intensifies, flexibility and cost leadership will be even more
crucial to success in the future. Given that the electric and gas industry is
extremely capital intensive, controlling and minimizing financing costs are
essential ingredients to operating effectively in the new competitive
environment. It is, therefore, for those two reasons, flexibility and cost
leadership, that you are being asked to vote in favor of the Proposed Amendment.
CG&E believes that adoption of the Proposed Amendment is key to meeting the
objectives of flexibility and cost leadership. If adopted, the amendment would
eliminate the current provision of CG&E's Articles that limits the total amount
of CG&E's unsecured indebtedness to 20% of the total amount of CG&E's secured
indebtedness, plus capital and surplus. Historically, CG&E's debt financing
generally has been accomplished through the issuance of long-term first mortgage
bonds and a modest amount of unsecured short-term debt. First mortgage bonds
represent secured indebtedness because they place a first priority lien on
substantially all of CG&E's assets. The First Mortgage Indenture between CG&E
and its bondholders contains certain restrictive covenants with respect to,
among other things, the disposition of assets and the ability to issue
additional first mortgage bonds. Short-term debt, usually the lowest cost debt
available to CG&E, represents one type of unsecured indebtedness. While the
Proposed Amendment will not only allow CG&E to issue a greater amount of
unsecured debt, it will also allow CG&E to issue a greater amount of total debt;
however, CG&E presently has no intention of issuing a greater amount of total
debt than it otherwise would have issued absent the adoption of the Proposed
Amendment. It is, however, CG&E's intention to change the mix of debt securities
toward more issuances on a short-term and unsecured basis.
Inasmuch as the 20% provision contained in the Articles limits CG&E's
flexibility in planning and financing its business activities, CG&E believes it
ultimately will be at a competitive disadvantage if the provision is not
eliminated. The industry's new competitors (for example, power marketers,
independent power producers and cogenerating facilities) generally are not
subject to the type of financing restrictions the Articles impose on CG&E.
Recently, several other utilities with the same or similar charter restrictions
have successfully eliminated such provisions by soliciting their shareholders
for the same or similar amendments. Therefore, many potential utility
competitors, and even CG&E's Indiana affiliate, PSI, have no comparable
provision restricting the use of unsecured debt. While CG&E's current low-cost
structure has been instrumental in reducing the ability of other competitors to
attract CG&E's large bulk power customers, CG&E must continue to explore new
ways of reducing costs and enhancing flexibility. CG&E believes that the
adoption of the Proposed Amendment will be in the best long-term competitive
interests of shareholders by enhancing its ability to meet the two objectives
described below.
FINANCIAL FLEXIBILITY
CG&E believes that in the long run, various types of unsecured debt
alternatives will increase in importance as an option in financing its
construction program and refinancing high-cost mortgage bonds. The availability
and flexibility of unsecured debt is necessary to take full advantage of
changing conditions in securities markets. CG&E intends to continue to rely on
unsecured debt up to the 20% maximum currently allowable under the Articles. In
addition, although CG&E's earnings currently are sufficient to meet the earnings
coverage tests that must be satisfied before issuing additional first mortgage
bonds and preferred stock, there have been periods, including virtually all of
the year 1994, when, because of its inability to meet the Articles test, CG&E
was unable to issue any additional preferred stock. A similar inability to issue
preferred stock in the future, combined with the inability to issue additional
unsecured debt, would limit CG&E's financing options to either additional first
mortgage bonds (assuming that the earnings coverage test could be met) or
additional common stock.
CG&E's use of unsecured short-term debt is subject to the 20% provision
contained in the Articles. CG&E believes that the prudent use of such debt in
excess of this provision is vital to effective financial
13
<PAGE>
management of the business. Not only is unsecured short-term debt generally the
least expensive form of capital, it also provides flexibility in meeting
seasonal fluctuations in cash requirements, acts as a bridge between issues of
permanent capital and can be used when unfavorable conditions prevail in the
market for long-term capital.
With these benefits in mind, in 1995, CG&E sought and received the approval
of The Public Utilities Commission of Ohio (the "PUCO") to increase the maximum
amount of short-term debt it is permitted to have outstanding from $200 million
to $400 million. However, because of the 20% provision of the Articles, CG&E had
only $150 million of short-term debt capacity available, based on capitalization
as of June 30, 1996. Beyond that, the amount of short-term debt available to
CG&E will continue to decline as additional unsecured long- and short-term debt
is issued.
LOWER COSTS
As previously mentioned, CG&E's short-term debt issuances generally
represent the lowest-cost form of financing. The corporate reorganization during
1994 resulted in the formation of Cinergy, a combined company that is larger and
financially stronger than either CG&E or PSI would have been on a stand-alone
basis. Accordingly, CG&E has been able to reassess its historically modest use
of short-term debt. By increasing its use of short-term debt, it may be possible
for CG&E to lower its cost structure further, thereby making its products more
competitive, increasing earnings and reducing its business risks. However, with
the Articles' 20% provision in place and with CG&E's increasing reliance on
unsecured debt, the availability and concomitant benefits of short-term debt
diminish. And although short-term debt, by its nature, exposes the borrower to
potentially more volatility in interest rates, it should be noted that the cost
of short-term debt rarely exceeds the cost of other forms of capital available
at the same time.
IT IS FOR ALL THE ABOVE REASONS THAT CG&E'S BOARD BELIEVES THE BEST
LONG-TERM INTERESTS OF SHAREHOLDERS ARE SERVED BY, AND ENCOURAGES SHAREHOLDERS
TO VOTE FOR, THE ADOPTION OF THE PROPOSED AMENDMENT.
FINANCIAL AND OTHER INFORMATION RELATING TO CG&E
The financial statements of CG&E and related information included in its
Annual Report on Form 10-K for the year ended December 31, 1995, and its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, each as filed with the SEC, are hereby incorporated by reference. CG&E
will provide without charge, upon the written or oral request of any person
(including any beneficial owner) to whom this Offer to Purchase and Proxy
Statement is delivered, a copy of such information (excluding certain exhibits).
Such requests for information should be directed to CG&E's principal office at
139 East Fourth Street, Cincinnati, Ohio 45202, Attention: Corporate Secretary;
telephone (513) 381-2000.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee of Cinergy's board of directors,
such board employed on January 25, 1996 Arthur Andersen LLP as independent
public accountants for Cinergy and its subsidiaries, including CG&E, for the
year 1996. Representatives of Arthur Andersen LLP are expected to be present at
the Special Meeting with the opportunity to make a statement if they desire to
do so, and will be available to respond to appropriate questions.
PRICE RANGE OF SHARES; DIVIDENDS
CG&E's Cumulative Preferred Stock 4% Series, 4 3/4% Series, 7 7/8% Series
and 7 3/8% Series are listed and traded on the NYSE under the symbols "CIN-A,"
"CIN-B," "CIN-I" and "CIN-G," respectively. The last reported sale price on the
NYSE, as of the close of business on August 15, 1996, for each of the Series of
Preferred is shown on the front cover of this Offer to Purchase and Proxy
Statement.
PREFERRED SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS, IF
AVAILABLE, FOR THE SHARES.
14
<PAGE>
The following table sets forth the high and low sales prices of each Series
of Preferred on the NYSE and the cash dividends paid thereon for the fiscal
quarters indicated.
<TABLE>
<CAPTION>
4% SERIES OF PREFERRED 4 3/4% SERIES OF PREFERRED
--------------------------------- ---------------------------------
CASH CASH
DIVIDENDS DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
--------- --------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994
1st Quarter...................... $ 58.500 $ 53.000 $ 1.000 $ 68.000 $ 63.250 $ 1.188
2nd Quarter...................... $ 56.000 $ 52.000 $ 1.000 $ 65.000 $ 61.500 $ 1.188
3rd Quarter...................... $ 53.000 $ 46.500 $ 1.000 $ 62.000 $ 55.000 $ 1.188
4th Quarter...................... $ 51.000 $ 46.500 $ 1.000 $ 57.000 $ 52.500 $ 1.188
1995
1st Quarter...................... $ 50.500 $ 47.000 $ 1.000 $ 59.000 $ 52.500 $ 1.188
2nd Quarter...................... $ 52.500 $ 49.000 $ 1.000 $ 67.625 $ 57.000 $ 1.188
3rd Quarter...................... $ 56.000 $ 51.500 $ 1.000 $ 67.000 $ 64.000 $ 1.188
4th Quarter...................... $ 58.500 $ 53.500 $ 1.000 $ 72.500 $ 64.000 $ 1.188
1996
1st Quarter...................... $ 57.000 $ 53.250 $ 1.000 $ 73.375 $ 64.500 $ 1.188
2nd Quarter...................... $ 56.000 $ 50.500 $ 1.000 $ 67.000 $ 63.500 $ 1.188
</TABLE>
<TABLE>
<CAPTION>
7 3/8% SERIES OF PREFERRED 7 7/8% SERIES OF PREFERRED
----------------------------------- -----------------------------------
CASH CASH
DIVIDENDS DIVIDENDS
HIGH LOW PER SHARE HIGH LOW PER SHARE
---------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1994
1st Quarter................. $ 106.500 $ 104.500 $ 1.844 $ 112.375 $ 112.375 $ 1.969
2nd Quarter................. * * $ 1.844 $ 106.875 $ 106.500 $ 1.969
3rd Quarter................. * * $ 1.844 * * $ 1.969
4th Quarter................. * * $ 1.844 $ 107.250 $ 105.000 $ 1.969
1995
1st Quarter................. $ 94.250 $ 93.797 $ 1.844 * * $ 1.969
2nd Quarter................. $ 105.000 $ 101.703 $ 1.844 * * $ 1.969
3rd Quarter................. $ 104.500 $ 104.031 $ 1.844 * * $ 1.969
4th Quarter................. * * $ 1.844 * * $ 1.969
1996
1st Quarter................. * * $ 1.844 $ 112.188 $ 112.188 $ 1.969
2nd Quarter................. * * $ 1.844 $ 108.750 $ 108.750 $ 1.969
</TABLE>
- ------------------------
* No trades reported on the NYSE.
Dividends for a Series of Preferred are payable when, as and if declared by
CG&E's Board of Directors at the rate per annum included in such title of the
Series of Preferred listed on the front cover of this Offer to Purchase and
Proxy Statement. The October 1996 Dividend has been declared on each Series of
Preferred, payable October 1, 1996 to owners of record on September 3, 1996. A
tender and purchase of Shares pursuant to the Offer will not deprive a Preferred
Shareholder of his or her right to receive the October 1996 Dividend on Shares
held of record on September 3, 1996. Tendering Preferred Shareholders will not
be entitled to any dividends in respect of any later dividend periods (or any
portion thereof).
15
<PAGE>
PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
Cinergy believes that the purchase of the Shares at this time represents an
attractive opportunity that will benefit Cinergy, its shareholders, and CG&E. In
addition, the Offer gives Preferred Shareholders the opportunity to sell their
Shares at a premium to the market price on the date of the announcement of the
Offer and without the usual transaction costs associated with a sale.
After the consummation of the Offer, Cinergy may determine to purchase
additional Shares on the open market, in privately negotiated transactions,
through one or more tender offers or otherwise. Any such purchases may be on the
same terms as, or on terms which are more or less favorable to holders of Shares
than, the terms of the Offer. However, Rule 13e-4(f)(6) under the Exchange Act
prohibits Cinergy and its affiliates (including CG&E) from purchasing any Shares
of a Series of Preferred, other than pursuant to the Offer, until at least ten
business days after the Expiration Date with respect to that Series of
Preferred. Any future purchases of Shares by Cinergy would depend on many
factors, including the market price of the Shares, Cinergy's business and
financial position, restrictions on Cinergy's ability to purchase Shares imposed
by law or by NYSE listing requirements and general economic and market
conditions.
Preferred Shareholders are not under any obligation to tender Shares
pursuant to the Offer. The Offer does not constitute notice of redemption of any
Series of Preferred pursuant to CG&E's Articles, nor does Cinergy or CG&E intend
to effect any such redemption by making the Offer. The Offer does not constitute
a waiver by CG&E of any option it has to redeem Shares. The 7 3/8% Series of
Preferred is subject to mandatory redemption in an amount sufficient to retire
on each August 1, beginning in 1998, and in each year thereafter, 40,000 Shares,
at a price of $100 per Share, plus accrued dividends, and CG&E has the
noncumulative option to redeem up to 40,000 additional Shares in each such year.
In addition, the 7 3/8% Series of Preferred is redeemable, upon call, after
August 1, 2002 at a price of $100 per Share, plus accrued dividends. The entire
7 7/8% Series of Preferred is subject to mandatory redemption on January 1, 2004
at a price of $100 per Share, plus accrued dividends. The Shares of each Series
of Preferred have no preemptive or conversion rights.
Upon liquidation or dissolution of CG&E, owners of the Shares would be
entitled to receive an amount equal to the liquidation preference per share
($100) plus all accrued and unpaid dividends (whether or not earned or declared)
thereon to the date of payment, prior to the payment of any amounts to the
holders of CG&E's common stock.
Shares validly tendered to the Depositary pursuant to the Offer and not
withdrawn in accordance with the procedures set forth herein shall be held until
the Expiration Date (or returned to the extent the Offer is terminated in
accordance herewith). To the extent that the Proposed Amendment is approved and
the Shares tendered are accepted for payment and paid for in accordance with the
terms hereof, Cinergy intends to transfer its Shares to CG&E and, at that time,
it is expected that CG&E will retire and cancel the Shares. However, in the
event the Proposed Amendment is not adopted at the Special Meeting, Cinergy may
elect, but is not obligated, to waive, subject to applicable law, such
condition. In that case, subsequent to Cinergy's waiver and purchase of the
Shares, CG&E anticipates, as promptly as practicable thereafter, that it would
call another special meeting of its shareholders and solicit proxies therefrom
for an amendment substantially similar to the Proposed Amendment. At that
meeting, Cinergy would vote any Shares acquired by it pursuant to the Offer or
otherwise (together with its shares of common stock) in favor of such amendment,
thereby maximizing the prospects for the adoption of the amendment. Therefore,
if the Proposed Amendment (or an amendment similar thereto) is ultimately
successful, it is likely that the Offer will reduce the number of Shares of each
of the Series of Preferred that might otherwise trade publicly or become
available for purchase and/or sale and likely will reduce the number of owners
of Shares of each of the Series of Preferred, which could adversely affect the
liquidity and sale value of the Shares not purchased in the Offer. Depending on
the number of Shares tendered and purchased pursuant to the Offer, the Series of
Preferred may no longer meet the requirements of the NYSE for continued listing,
which could adversely affect the market for the Shares. In addition, the Series
of Preferred are currently registered under Section 12(g) of the Exchange Act.
Registration of the Shares under the Exchange Act may be terminated upon the
application by CG&E to the SEC if the Shares are neither listed on a national
securities exchange nor held by more than
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<PAGE>
300 holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be furnished
to Preferred Shareholders and could make certain provisions of the Exchange Act
no longer applicable to CG&E.
Except as disclosed in this Offer to Purchase and Proxy Statement, Cinergy
and CG&E have no plans or proposals that relate to or would result in: (a) the
acquisition by any person of additional securities of CG&E or the disposition of
securities of CG&E; (b) an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving CG&E or any of its
subsidiaries; (c) a sale or transfer of a material amount of assets of CG&E or
any of its subsidiaries; (d) any change in the present Board or management of
CG&E; (e) any material change in the present dividend rate or policy, or
indebtedness or capitalization of CG&E; (f) any other material change in CG&E's
corporate structure or business; (g) any change in CG&E's Articles or
Regulations or any actions that may impede the acquisition of control of CG&E by
any person; (h) a class of equity securities of CG&E being delisted from a
national securities exchange; (i) a class of equity securities of CG&E becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or (j) the suspension of CG&E's obligation to file reports
pursuant to Section 15(d) of the Exchange Act.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS, NOR ANY OF
THEIR RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER
AS TO WHETHER TO TENDER ALL OR ANY SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE
HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Taft, Stettinius & Hollister, tax counsel to Cinergy and
CG&E, the following summary describes the principal United States federal income
tax consequences of sales of Shares pursuant to the Offer and the receipt of
Cash Payments in connection with the approval and adoption of the Proposed
Amendment. This summary is based on the Internal Revenue Code of 1986, as
amended to the date hereof (the "Code"), administrative pronouncements, judicial
decisions and existing and proposed Treasury Regulations, changes to any of
which subsequent to the date of this Offer to Purchase and Proxy Statement may
adversely affect the tax consequences described herein, possibly on a
retroactive basis. This summary is addressed to United States Holders, as
defined below, who hold Shares as capital assets within the meaning of Section
1221 of the Code. This summary does not discuss all of the tax consequences that
may be relevant to a Holder in light of his particular circumstances or to
Holders subject to special rules (including certain financial institutions,
insurance companies, dealers in securities, Holders who acquired their Shares
pursuant to the exercise of stock options or other compensation arrangements
with CG&E, and Holders who are not citizens or residents of the United States).
Holders of Shares should consult their tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "United States Holder" means an owner of a Share
that (a) is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of its source or (b)
is not described in (a) and whose income from a Share is effectively connected
with such Holder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States.
TENDER OFFER
A United States Holder will recognize gain or loss equal to the difference
between the tax basis of his or her Shares and the amount of cash received in
exchange therefor. A United States Holder's gain or loss will be long-term
capital gain or loss if the holding period for the Shares is more than one year
as of the date of the sale of such Shares. The excess of net long-term capital
gains over net short-term capital losses is taxed at
17
<PAGE>
a lower rate than ordinary income for certain non-corporate taxpayers. The
distinction between capital gain or loss and ordinary income or loss is also
relevant for purposes of, among other things, limitations on the deductibility
of capital losses.
CASH PAYMENTS/MODIFICATION
Cash Payments will be treated as fees for voting in favor of the Proposed
Amendment and will constitute ordinary income to recipient United States
Holders. United States Holders, whether or not they receive Cash Payments, will
not recognize any taxable income or loss with respect to the Shares as a result
of the modification of the Articles by the Proposed Amendment.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on Cash Payments. Each United States Holder
entitled to receive a Cash Payment pursuant to the Offer will be asked to
provide such Holder's correct taxpayer identification number and certify that
such Holder is not subject to backup withholding by completing the Substitute
Form W-9 included herewith.
The amount of any backup withholding from a payment to a United States
Holder will be allowed as a credit against such Holder's United States federal
income tax liability and may entitle such Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
SOURCE AND AMOUNT OF FUNDS
Assuming that Cinergy purchases all outstanding Shares pursuant to the
Offer, the total amount required by Cinergy to purchase such shares will be
approximately $208 million, exclusive of the dividend payments, fees and other
expenses. Cinergy intends to use its general funds (which, in the ordinary
course, include funds from CG&E) and funds borrowed pursuant to its revolving
credit agreement with a group of banks to purchase shares pursuant to the Offer.
This revolving credit agreement currently extends to May, 2001. The borrowing
limit of this facility, applicable to the transaction contemplated herein, is
$100 million. The facility permits Cinergy to borrow funds at a fluctuating
interest rate determined by the prime lending market in New York, and also
permits Cinergy to borrow money for fixed periods of time specified by Cinergy
at fixed interest rates determined by the Eurodollar interbank market in London,
or by offering its banks the opportunity to bid to make loans at competitive
rates, at Cinergy's option. If a material adverse change in the business,
operations, affairs, assets or condition, financial or otherwise, or prospects
of Cinergy and its subsidiaries, on a consolidated basis, should occur, the
banks may decline to lend additional money to Cinergy under this revolving
credit agreement, although borrowings outstanding at the time of such an
occurrence would not then become due and payable.
18
<PAGE>
TRANSACTIONS AND AGREEMENTS CONCERNING THE SHARES
Each of Cinergy and CG&E has been advised by its directors and executive
officers that no directors or executive officers of the respective companies own
any Shares. Based upon the companies' records and upon information provided to
each company by its directors and executive officers, neither company nor, to
the knowledge of either, any of their subsidiaries, directors, or executive
officers has engaged in any transactions involving Shares during the 40 business
days preceding the date hereof. Neither company nor, to the knowledge of either,
any of its directors or executive officers is a party to any contract,
arrangement, understanding or relationship relating directly or indirectly to
the Offer with any other person with respect to any securities of CG&E.
FEES AND EXPENSES ASSOCIATED WITH THE OFFER
DEALER MANAGER FEES. Smith Barney Inc. and Morgan Stanley & Co.
Incorporated will act as Dealer Managers for Cinergy in connection with the
Offer, but will not provide services to CG&E in connection with the Proposed
Amendment or the solicitation of proxies therewith. Cinergy has agreed to pay
each Dealer Manager a combined fee of $0.50 per Share for any Shares tendered,
accepted for payment and paid for pursuant to the Offer. Each Dealer Manager
will also be reimbursed by Cinergy for its reasonable out-of-pocket expenses,
including attorneys' fees, and will be indemnified against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Offer. Each Dealer Manager has rendered, is currently rendering and is
expected to continue to render various investment banking services to Cinergy
and CG&E. Each Dealer Manager has received, and will continue to receive,
customary compensation from the companies for such services. Cinergy has
retained The Bank of New York as Depositary and MacKenzie Partners, Inc. as
Information Agent in connection with the Offer. The Depositary and Information
Agent will receive reasonable and customary compensation for their services and
will also be reimbursed for certain out-of-pocket expenses. Cinergy has agreed
to indemnify the Depositary and Information Agent against certain liabilities,
including certain liabilities under the federal securities law, in connection
with the Offer. Neither the Depositary nor the Information Agent has been
retained to make solicitations or recommendations in connection with the Offer.
SOLICITED TENDER FEES. Pursuant to Instruction 10 of the accompanying
Letter of Transmittal and Proxy, Cinergy will pay to designated brokers and
dealers a solicitation fee of $1.50 per Share (except that for transactions for
beneficial owners equal to or exceeding 5,000 Shares, Cinergy will pay a
solicitation fee of $1.25 per Share) for any Shares tendered, accepted for
payment and paid for pursuant to the Offer. However, Soliciting Dealers will not
be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
STOCK TRANSFER TAXES. Cinergy will pay all stock transfer taxes, if any,
payable on account of the acquisition of Shares by Cinergy pursuant to the
Offer, except in certain circumstances where special payment or delivery
procedures are utilized pursuant to Instruction 6 of the accompanying Letter of
Transmittal and Proxy.
CERTAIN INFORMATION REGARDING CINERGY AND CG&E
JOINT VENTURE. During the second quarter of 1996, Avon Energy Partners plc
("Avon Energy"), a joint venture between Cinergy and General Public Utilities
Corporation, began to acquire all of the capital shares of Midlands Electricity
plc ("Midlands"). As of August 13, 1996, Avon Energy owned 381.3 million of
Midlands' shares, representing approximately 97.1% of the issued share capital
of Midlands. The remaining shares are expected to be acquired during the third
quarter of 1996. The total consideration to be paid by Avon Energy is estimated
to be approximately $2.6 billion.
Midlands is one of twelve regional electricity companies in the United
Kingdom. Midlands primarily distributes and supplies electricity to 2.2 million
industrial, commercial, and residential customers. In addition, Midlands,
together with its subsidiaries, generates power, supplies natural gas to
industrial and commercial customers, and performs electrical contracting
services.
19
<PAGE>
Following the announcement of the potential acquisition of Midlands, three
major credit rating agencies, Duff & Phelps Credit Rating Co., Fitch Investors
Service, Inc., and Standard & Poor's Corporation, affirmed the current ratings
of Cinergy's operating subsidiaries after their consideration of the effects of
the potential acquisition. The other major credit rating agency, Moody's
Investors Service ("Moody's"), placed the credit ratings of Cinergy's operating
subsidiaries, CG&E, PSI, and ULH&P, under review for possible downgrade. Moody's
indicated that its review will focus on the likelihood of the transaction being
completed and will assess the operating strategies of the combined companies and
the anticipated benefits of the transaction. It will also focus on the financial
impact the transaction will have on Cinergy and its operating subsidiaries,
including the credit implications. Cinergy cannot predict the outcome of this
review.
For further information relating to the Midlands acquisition, reference is
made to Cinergy's Current Reports on Form 8-K dated May 7, 1996 and June 6, 1996
(as amended) and Cinergy's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996 (as amended), which are hereby incorporated by reference.
COMPETITION AND CORPORATE STRUCTURE. The primary factor influencing the
future profitability of Cinergy and CG&E is the changing competitive environment
for energy services, including the impact of emerging technologies, and the
related commoditization of electric power markets. Changes in the industry
include increased competition in wholesale power markets and ongoing pressure
for "customer choice" by large industrial customers and, ultimately, by all
retail customers. Cinergy and CG&E support increased competition in the electric
utility industry and have chosen to take a leadership role in state and Federal
debates on industry reform.
As the electric utility industry moves toward a competitive environment,
Cinergy is reassessing its corporate structure, including the issue of whether
to remain vertically integrated. As a first step toward "unbundling" the
business for a competitive environment, Cinergy announced its intention to
reorganize into strategic business units. This functional reorganization will
separate Cinergy's utility businesses into an energy services business unit, an
energy delivery business unit and an energy commodities business unit. The
design of these new organizations is expected to be completed by the end of the
year. Cinergy continues to analyze what benefits, if any, may exist in the
future for its various stakeholders of separating the business units into
different corporations.
20
<PAGE>
SUMMARY OF CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain consolidated historical financial information of
CG&E and its subsidiaries. The historical financial information (other than the
ratios of earnings to fixed charges) was derived from the audited consolidated
financial statements included in CG&E's Annual Report on Form 10-K for the year
ended December 31, 1995 and from the unaudited consolidated financial statements
included in CG&E's Quarterly Reports on Form 10-Q for the period ended June 30,
1996 and the period ended June 30, 1995, which statements are hereby
incorporated by reference. More comprehensive financial information is included
in such reports and the financial information which follows is qualified in its
entirety by reference to such reports and all of the financial statements and
related notes contained therein, copies of which may be obtained as set forth
herein. The data as of and for the six months ended June 30, 1996 and June 30,
1995 has been derived from unaudited financial statements which, in the opinion
of CG&E, reflect all adjustments, consisting of any normal recurring
adjustments, necessary for a fair representation of such data. The results of
operations for such six month periods do not purport to be indicative of the
results to be expected for a full year.
CONDENSED INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------- --------------------
1995 1994 1996 1995
--------- ------------ --------- ---------
(UNAUDITED)
(THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C>
Operating Revenues........................... $1,848,075 $1,788,185 $1,012,113 $ 918,665
Operating Income............................. 360,032 291,336(a) 189,507 180,237
Allowance for Borrowed and Equity Funds Used
During Construction......................... 5,644 4,948 2,633 2,757
Phase-In Deferred Return..................... 8,537 15,351 4,186 4,268
Net Income................................... 236,201 158,311(a) 131,184 117,646
Preferred Dividend Requirement............... 17,673 22,377 6,948 10,724
Net Income Applicable to Common Stock........ 218,528 135,934(a) 124,236 106,922
Ratio of Earnings to Fixed Charges........... 3.40 2.60(a) 4.00 3.39
</TABLE>
- ------------------------
(a) In 1994, CG&E recognized charges to earnings of approximately $64 million
($46 million, net of taxes) primarily for certain merger-related and other
expenditures which cannot be recovered from customers under the merger
savings sharing mechanism authorized by the PUCO. The charges include the
PUCO electric jurisdictional portion of merger costs incurred through
December 31, 1994, previously capitalized information systems development
costs, and severance benefits to former officers of CG&E. Of the total $64
million charge, $52 million is reflected in "Operating Income."
21
<PAGE>
CONDENSED BALANCE SHEET DATA (AT END OF PERIOD):
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------- ----------------------
1995 1994 1996 1995
---------- ---------- ---------- ----------
(UNAUDITED)
(THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS:
Net Utility Plant In Service............ $3,698,240 $3,720,655 $3,679,128 $3,714,888
Construction Work In Progress........... 77,661 74,989 77,271 74,400
Cash and Temporary Cash Investments..... 6,612 52,516 31,855 3,500
Other Current Assets.................... 600,184 544,180 399,892 514,701
Other Assets............................ 814,699 789,325 796,534 786,448
---------- ---------- ---------- ----------
$5,197,396 $5,181,665 $4,984,680 $5,093,937
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
LIABILITIES:
Common Equity........................... $1,528,463 $1,532,972 $1,565,586 $1,528,894
Cumulative Preferred Stock.............. 200,000 290,000 200,000 200,000
Long-term Debt.......................... 1,702,650 1,837,757 1,694,627 1,774,404
Current Liabilities..................... 632,600 427,528 401,218 490,220
Other Liabilities....................... 1,133,683 1,093,408 1,123,249 1,100,419
---------- ---------- ---------- ----------
$5,197,396 $5,181,665 $4,984,680 $5,093,937
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
ADDITIONAL INFORMATION REGARDING CINERGY
Cinergy is subject to the informational requirements of the Exchange Act and
in accordance therewith files periodic reports, proxy statements and other
information with the SEC. Cinergy is required to disclose in such proxy
statements certain information, as of particular dates, concerning its directors
and officers, their remuneration, stock options granted to them, the principal
holders of its securities and any material interest of such persons in
transactions with Cinergy. In connection with the Offer, Cinergy has also filed
an Issuer Tender Offer Statement on Schedule 13E-4 with the SEC that includes
certain additional information relating to the Offer.
Such material can be inspected and copied at the public reference facilities
of the SEC, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its regional offices at Seven World Trade Center, 13th Floor, New York, New York
10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Reports, proxy materials and other information
about Cinergy are also available at the offices of the NYSE, 20 Broad Street,
New York, New York 10005. Copies may also be obtained by mail from the SEC's
Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 20549.
Cinergy's Schedule 13E-4 will not be available at the SEC's regional offices.
MISCELLANEOUS
The Offer is not being made to, nor will Cinergy accept tenders from, owners
of Shares in any jurisdiction in which the Offer or its acceptance would not be
in compliance with the laws of such jurisdiction. Cinergy is not aware of any
jurisdiction where the making of the Offer or the tender of Shares would not be
in compliance with applicable law. If Cinergy becomes aware of any jurisdiction
where the making of the Offer or the tender of Shares is not in compliance with
any applicable law, Cinergy will make a good faith effort to comply with such
law. If, after such good faith effort, Cinergy cannot comply with such law, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the owners of Shares residing in such jurisdiction. In any jurisdiction in which
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on Cinergy's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
CINERGY CORP.
THE CINCINNATI GAS & ELECTRIC COMPANY
22
<PAGE>
Facsimile copies of the Letter of Transmittal and Proxy will be accepted.
The Letter of Transmittal and Proxy and, if applicable, certificates for Shares
should be sent or delivered by each tendering or voting Preferred Shareholder of
CG&E or his or her broker, dealer, bank or trust company to the Depositary at
one of its addresses set forth below.
The Depositary is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:
(FOR ELIGIBLE INSTITUTIONS
ONLY)
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR INFORMATION,
TELEPHONE:
(800) 507-9357
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective telephone numbers and addresses
listed below. Requests for additional copies of this Offer to Purchase and Proxy
Statement, the Letter of Transmittal and Proxy or other tender offer or proxy
materials may be directed to the Information Agent or the Dealer Managers, and
such copies will be furnished promptly at the companies' expense. Preferred
Shareholders may also contact their local broker, dealer, commercial bank or
trust company for assistance concerning the Offer.
The Information Agent:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free -- (800) 322-2885
The Dealer Managers:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
23
<PAGE>
EXHIBIT 99.(a)(2)
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $64.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 4 3/4% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $80.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
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SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
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Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
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SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 7 7/8% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $116.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
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BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
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DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
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/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
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SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
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/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
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NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL AND PROXY
TO ACCOMPANY
SHARES OF 7 3/8% SERIES CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
TENDERED PURSUANT TO THE OFFER TO PURCHASE FOR CASH
BY
CINERGY CORP.,
DATED AUGUST 20, 1996, FOR PURCHASE AT A
PURCHASE PRICE OF $110.00 PER SHARE
AND/OR
VOTED PURSUANT TO THE PROXY STATEMENT
OF
THE CINCINNATI GAS & ELECTRIC COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
THE PROXY CONTAINED IN THIS DOCUMENT IS IN RESPECT OF THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON SEPTEMBER 18, 1996, OR ON SUCH DATE TO WHICH THE
MEETING IS ADJOURNED OR POSTPONED.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRM BY TELEPHONE:
(800) 507-9357
CINERGY WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY SHARES
TENDERED IF THE PROPOSED AMENDMENT IS NOT APPROVED AND ADOPTED AT THE SPECIAL
MEETING. PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THIS LETTER OF TRANSMITTAL AND PROXY OR
BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED AMENDMENT IS
APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH PREFERRED
SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED THAT THEIR
SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
The undersigned hereby appoints Jackson H. Randolph, James E. Rogers, and
William J. Grealis, or any of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all the shares of cumulative
preferred stock of The Cincinnati Gas & Electric Company ("CG&E") which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be
held on September 18, 1996, or any adjournment(s) or postponement(s) thereof.
NOTE: IF YOU ARE VOTING BUT NOT TENDERING SHARES, DO NOT SEND ANY SHARE
CERTIFICATES WITH THIS LETTER OF TRANSMITTAL AND PROXY.
THIS LETTER OF TRANSMITTAL AND PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF CG&E. The proxy contained herein, when properly executed, will be
voted in the manner directed herein by the undersigned shareholder(s). If no
direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
<PAGE>
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
SHARES REPRESENTED BY ALL PROPERLY EXECUTED PROXIES WILL BE VOTED IN
ACCORDANCE WITH INSTRUCTIONS APPEARING ON THIS PROXY. IN THE ABSENCE OF SPECIFIC
INSTRUCTIONS, PROXIES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS, AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
Please check box if you plan to attend the Special Meeting. / /
SIGNATURE(S) OF OWNER(S)
X
- --------------------------------------------------------------------------------
X
- --------------------------------------------------------------------------------
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
<TABLE>
<S> <C>
DESCRIPTION OF SHARES TENDERED
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY AS INFORMATION APPEARS ON CERTIFICATE(S)) (ATTACH
ADDITIONAL SIGNED LIST IF NECESSARY)
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S)*
<CAPTION>
DESCRIPTION OF
(IF TENDERING SHARES, PLEASE FILL IN EXACTLY A
ADDITIONAL SIGNED
CERTIFICATE NUMBER(S)* NUMBER OF SHARES TENDERED**
</TABLE>
*Need not be completed by shareholders tendering by book-entry transfer.
<PAGE>
**Unless otherwise indicated, it will be assumed that all Shares represented by
any certificates delivered to the Depositary are being tendered. See
Instruction 4.
GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: __________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address of Firm: _______________________________________________________________
Area Code and Telephone No.: ___________________________________________________
Dated: ___________________________________________________________________, 1996
NOTE: IF SHARES ARE BEING TENDERED, THE REMAINDER OF THIS LETTER OF TRANSMITTAL
AND PROXY MUST BE COMPLETED, INCLUDING, IF APPLICABLE, THE SUBSTITUTE FORM
W-9 BELOW.
DELIVERY OF THIS LETTER OF TRANSMITTAL AND PROXY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER
THAN ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL AND PROXY IN THE APPROPRIATE SPACE THEREFOR PROVIDED ABOVE
AND, IF YOU ARE TENDERING ANY SHARES, COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH
BELOW OR A FORM W-8, AS APPLICABLE. SEE INSTRUCTION 8 AND "IMPORTANT TAX
INFORMATION" BELOW.
DO NOT SEND ANY CERTIFICATES TO SMITH BARNEY INC., MORGAN STANLEY & CO.
INCORPORATED, MACKENZIE PARTNERS, INC., CINERGY CORP. OR THE CINCINNATI GAS &
ELECTRIC COMPANY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL AND PROXY SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND PROXY IS COMPLETED.
This Letter of Transmittal and Proxy is to be used (a) if Shares are to be
voted but not tendered, or (b) if certificates are to be forwarded herewith or
(c) if delivery of tendered Shares (as defined below) is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or Philadelphia Depository Trust Company ("PDTC") (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement (as defined
below).
Preferred Shareholders who wish to tender Shares yet who cannot deliver
their Shares and all other documents required hereby to the Depositary by the
Expiration Date (as defined in the Offer to Purchase and Proxy Statement) must
tender their Shares pursuant to the guaranteed delivery procedure set forth
under the heading "Terms of the Offer -- Procedure for Tendering Shares" in the
Offer to Purchase and Proxy Statement. See Instruction 2. DELIVERY OF DOCUMENTS
TO CINERGY, THE CINCINNATI GAS & ELECTRIC COMPANY OR A BOOK-ENTRY TRANSFER
FACILITY DOES NOT CONSTITUTE A VALID DELIVERY.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT
ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:
Name of tendering institution
Check applicable box:
/ / DTC / / PDTC
Account No.
Transaction Code No.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND PROXY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
</TABLE>
Name(s) of tendering shareholder(s) ____________________________________________
Date of execution of Notice of Guaranteed Delivery and Proxy ___________________
Name of institution that guaranteed delivery ___________________________________
If delivery is by book-entry transfer:
Name of tendering institution __________________________________________________
Account no. ________________________________________ at
/ / DTC / / PDTC
Transaction Code No. ___________________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED ABOVE.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The abovesigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), the shares in the amount set forth in the box above labelled
"Description of Shares Tendered" pursuant to Cinergy's offer to purchase any and
all of the outstanding shares of the series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), shown on the first page hereof as to which this
Letter of Transmittal and Proxy is applicable (the "Shares") at the purchase
price per Share shown on the first page hereof, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and Proxy
Statement"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal and Proxy (which as to the Shares, together with the Offer to
Purchase and Proxy Statement, constitutes the "Offer"). WHILE PREFERRED
SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE
IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES
<PAGE>
OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND PROXY STATEMENT (THE
"PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE PROPOSED AMENDMENT
BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED IN THE OFFER TO
PURCHASE AND PROXY STATEMENT). See "Proposed Amendment and Proxy Solicitation",
"Terms of the Offer -- Extension of Tender Period; Termination; Amendments" and
"Terms of the Offer -- Certain Conditions of the Offer" in the Offer to Purchase
and Proxy Statement.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the abovesigned hereby
sells, assigns and transfers to, or upon the order of, Cinergy all right, title
and interest in and to all the Shares that are being tendered hereby and hereby
constitutes and appoints The Bank of New York (the "Depositary") the true and
lawful agent and attorney-in-fact of the abovesigned with respect to such
Shares, with full power of substitution (such power of attorney being an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares, or transfer ownership of such Shares on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any such
case, with all accompanying evidences of transfer and authenticity, to or upon
the order of Cinergy, (b) present such Shares for registration and transfer on
the books of CG&E and (c) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares, all in accordance with the terms of the
Offer.
The abovesigned hereby represents and warrants that the abovesigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and that, when and to the extent the same are accepted for payment by
Cinergy, Cinergy will acquire good, marketable and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to the sale or transfer thereof,
and the same will not be subject to any adverse claims. The abovesigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or Cinergy to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby.
All authority herein conferred or agreed to be conferred shall not be
affected by, and shall survive the death or incapacity of the abovesigned, and
any obligations of the abovesigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the abovesigned. Except as
stated in the Offer, this tender is irrevocable.
The abovesigned understands that tenders of Shares pursuant to any one of
the procedures described under the heading "Terms of the Offer -- Procedure for
Tendering Shares" in the Offer to Purchase and Proxy Statement and in the
instructions hereto will constitute the abovesigned's acceptance of the terms
and conditions of the Offer, including the abovesigned's representation and
warranty that (a) the abovesigned has a net long position in the Shares being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended, and (b) the tender of such Shares complies
with Rule 14e-4. Cinergy's acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the abovesigned and
Cinergy upon the terms and subject to the conditions of the Offer.
The abovesigned recognizes that, under certain circumstances set forth in
the Offer to Purchase and Proxy Statement, Cinergy may terminate or amend the
Offer or may not be required to purchase any of the Shares tendered hereby. In
either event, the abovesigned understands that certificate(s) for any Shares not
tendered or not purchased will be returned to the abovesigned.
Unless otherwise indicated in the box below under the heading "Special
Payment Instructions", please issue the check for the purchase price of any
Shares purchased, and/or return any Shares not tendered or not purchased, in the
name(s) of the abovesigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Unless otherwise indicated in the box below under the heading
"Special Delivery Instructions", please mail the check for the purchase price of
any Shares purchased and/or any certificates for Shares not tendered or not
purchased (and accompanying documents, as appropriate) to the abovesigned at the
address shown below the abovesigned signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares purchased
and/or return any Shares not tendered or not purchased in the name(s) of, and
mail said check and/or any certificates to, the person(s) so indicated. The
abovesigned recognizes that Cinergy has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if Cinergy does not accept for payment any of the Shares so
tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 6 AND 7) (SEE INSTRUCTIONS 4, 6 AND 7)
To be completed ONLY if the check for the purchase To be completed ONLY if the check for the purchase
price of Shares purchased and/or certificates for price of Shares purchased and/or certificates for
Shares not tendered or not purchased are to be issued Shares not tendered or not purchased are to be mailed
in the name of someone other than the abovesigned. to someone other than the abovesigned or to the
abovesigned at an address other than that shown below
the abovesigned's signature(s).
Issue / / check and/or Mail / / check and/or
/ / certificate(s) to: / / certificate(s) to:
Name Name
(PLEASE PRINT) (PLEASE PRINT)
Address Address
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
</TABLE>
<TABLE>
<S> <C>
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN AND WISH TO TENDER HAVE BEEN LOST,
DESTROYED OR STOLEN. (SEE INSTRUCTION 12.)
Number of Shares represented by lost, destroyed or stolen certificates:
</TABLE>
<PAGE>
SOLICITED TENDERS
(SEE INSTRUCTION 10)
As provided in Instruction 10, Cinergy will pay to any Soliciting Dealer, as
defined in Instruction 10, a solicitation fee of $1.50 per Share (except that
for transactions for beneficial owners equal to or exceeding 5,000 Shares,
Cinergy will pay a solicitation fee of $1.25 per Share) for any Shares tendered,
accepted for payment and paid pursuant to the Offer. However, Soliciting Dealers
will not be entitled to a solicitation fee for Shares beneficially owned by such
Soliciting Dealer.
The undersigned represents that the Soliciting Dealer which solicited and
obtained this tender is:
Name of Firm: __________________________________________________________________
(PLEASE PRINT)
Name of Individual Broker
or Financial Consultant: _______________________________________________________
Telephone Number of Broker
or Financial Consultant: _______________________________________________________
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
(INCLUDE ZIP CODE)
The following to be completed ONLY if customer's Shares held in nominee name
are tendered.
<TABLE>
<S> <C>
NAME OF BENEFICIAL OWNER NUMBER OF SHARES TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
</TABLE>
The acceptance of compensation by such Soliciting Dealer will constitute a
representation by it that (a) it has complied with the applicable requirements
of the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder, in connection with such solicitation; (b) it is entitled
to such compensation for such solicitation under the terms and conditions of the
Offer to Purchase; (c) in soliciting tenders of Shares, it has used no
soliciting materials other than those furnished by Cinergy; and (d) if it is a
foreign broker or dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it has agreed to conform to the NASD's
Rules of Fair Practice in making solicitations.
The payment of compensation to any Soliciting Dealer is dependent on such
Soliciting Dealer returning a Notice of Solicited Tenders to the Depositary.
(IF SHARES ARE BEING TENDERED, PLEASE COMPLETE
SUBSTITUTE FORM W-9 BELOW OR A FORM W-8, AS APPLICABLE)
SIGN HERE: _____________________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal and Proxy must be guaranteed by a firm
that is a member of a registered national securities exchange or the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (an "Eligible
Institution"). Signatures on this Letter of Transmittal and Proxy need not be
guaranteed (a) if this Letter of Transmittal and Proxy is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in one of the Book-Entry Transfer Facilities whose
name appears on a security position listing as the owner of Shares) tendered
herewith and such holder(s) has not completed the box above under the heading
"Special Payment Instructions" or the box above under the heading "Special
Delivery Instructions" on this Letter of Transmittal and Proxy, (b) if such
Shares are tendered for the account of an Eligible Institution or (c) if this
Letter of Transmittal and Proxy is being used solely for the purpose of voting
Shares which are not being tendered pursuant to the Offer. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND PROXY AND SHARES. This Letter of
Transmittal and Proxy is to be used if (a) certificates are to be forwarded
herewith, (b) delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth under the heading "Terms of the Offer -- Procedure
for Tendering Shares" in the Offer to Purchase and Proxy Statement or (c) Shares
are being voted in connection with the Offer. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal and Proxy (or facsimile thereof) and any other documents
required by this Letter of Transmittal and Proxy, must be received by the
Depositary at one of its addresses set forth on the front page of this Letter of
Transmittal and Proxy on or prior to the Expiration Date (as defined in the
Offer to Purchase and Proxy Statement) with respect to all Shares. Preferred
Shareholders who wish to tender their Shares yet who cannot deliver their Shares
and all other required documents to the Depositary on or prior to the Expiration
Date must tender their Shares pursuant to the guaranteed delivery procedure set
forth under the heading "Terms of the Offer -- Procedure for Tendering Shares"
in the Offer to Purchase and Proxy Statement. Pursuant to such procedure: (a)
such tender must be made by or through an Eligible Institution, (b) a properly
completed and duly executed Notice of Guaranteed Delivery and Proxy in the form
provided by Cinergy (with any required signature guarantees) must be received by
the Depositary on or prior to the applicable Expiration Date and (c) the
certificates for all physically delivered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares delivered electronically, as well as a
properly completed and duly executed Letter of Transmittal and Proxy (or
facsimile thereof) and any other documents required by this Letter of
Transmittal and Proxy must be received by the Depositary by 5:00 p.m. (New York
City time) within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Proxy, all as provided under
the heading "Terms of the Offer -- Procedure for Tendering Shares" in the Offer
to Purchase and Proxy Statement.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE
OPTION AND RISK OF THE TENDERING PREFERRED SHAREHOLDER. IF CERTIFICATES FOR
SHARES ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted. See
"Terms of the Offer -- Number of Shares; Purchase Price; Expiration Date;
Dividends" in the Offer to Purchase and Proxy Statement. By executing this
Letter of Transmittal and Proxy (or facsimile thereof), the tendering
stockholder waives any right to receive any notice of the acceptance for payment
of the Shares.
3. VOTING. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER THEIR SHARES
PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED AMENDMENT TO CG&E'S
AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER TO PURCHASE AND
PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS CONDITIONED UPON THE
PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE SPECIAL MEETING (AS DEFINED
IN THE OFFER TO PURCHASE AND PROXY STATEMENT). In addition, Preferred
Shareholders have the right to vote for the proposed amendment regardless of
whether they tender their Shares by casting their vote and duly executing this
Letter of Transmittal and Proxy or by voting in person at the Special Meeting.
By executing a Notice of Guaranteed Delivery and Proxy, a Preferred Shareholder
is taken to have tendered the Shares described in such Notice of Guaranteed
Delivery and Proxy and to have voted such Shares in accordance with the proxy
contained therein. If no vote is indicated on an otherwise properly executed
proxy contained within this Letter of Transmittal and Proxy (or within a Notice
of Guaranteed Delivery and Proxy), then all Shares in respect of such proxy will
be voted in favor of the Proposed Amendment. See "PROPOSED AMENDMENT AND PROXY
SOLICITATION" in the Offer to Purchase and Proxy Statement. The Offer is being
sent to all persons in whose names Shares are registered on the books of CG&E on
the Record Date (as defined in the Offer to Purchase and Proxy Statement) and on
August 15, 1996. Only a record holder of Shares on the Record Date may vote in
person or by proxy at the Special Meeting (as defined in the Offer to Purchase
and Proxy Statement). No record date is fixed for determining which persons are
permitted to tender Shares. Any person who is the beneficial owner but not the
record holder of Shares must arrange for the record transfer of such Shares
prior to tendering.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box above under the heading "Description of
Shares Tendered". In such case, a new certificate for the remainder of the
Shares represented by the old certificate will be sent to the person(s) signing
this Letter of Transmittal and Proxy, unless otherwise provided in the box above
under the
<PAGE>
heading "Special Payment Instructions" or "Special Delivery Instructions", as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL AND PROXY AND/OR NOTICE OF
GUARANTEED DELIVERY AND PROXY; STOCK POWERS AND ENDORSEMENTS. If either this
Letter of Transmittal and Proxy or the Notice of Guaranteed Delivery and Proxy
(together, the "Tender and Proxy Documents") is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered or voted under either Tender and Proxy
Document is held of record by two or more persons, all such persons must sign
such Tender and Proxy Document.
If any of the Shares tendered or voted under either Tender and Proxy
Document is registered in different names or different certificates, it will be
necessary to complete, sign and submit as many separate applicable Tender and
Proxy Documents as there are different registrations of certificates.
If either Tender and Proxy Document is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s). Signatures on any such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
If this Letter of Transmittal and Proxy is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the certificates
for such Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If either Tender and Proxy Document or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Cinergy of the authority of such person so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Cinergy will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or Shares not
tendered or not purchased are to be registered in the name of, any person other
than the registered holder(s), or if tendered Shares are registered in the name
of any person other than the person(s) signing this Letter of Transmittal and
Proxy, the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. See
"Terms of the Offer -- Acceptance of Shares for Payment and Payment of Purchase
Price and Dividend" in the Offer to Purchase and Proxy Statement. EXCEPT AS
PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY TO AFFIX TRANSFER TAX
STAMPS TO THE CERTIFICATES REPRESENTING SHARES TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares purchased is to be issued in the name of, and/or
any Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal and Proxy or if the check
and/or any certificate for Shares not tendered or not purchased are to be mailed
to someone other than the person(s) signing this Letter of Transmittal and Proxy
or to an address other than that shown in the box above under the heading
"Name(s) and Address(es) of Registered Holder(s)", then the "Special Payment
Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal and Proxy should be completed. Preferred Shareholders tendering
Shares by book-entry transfer will have any Shares not accepted for payment
returned by crediting the account maintained by such Preferred Shareholder at
the Book-Entry Transfer Facility from which such transfer was made.
8. SUBSTITUTE FORM W-9 AND FORM W-8. The tendering Preferred Shareholder
is required to provide the Depositary with either a correct Taxpayer
Identification Number ("TIN") on Substitute Form W-9, which is provided under
"Important Tax Information" below, or a properly completed Form W-8. Failure to
provide the information on either Substitute Form W-9 or Form W-8 may subject
the tendering Preferred Shareholder to 31% federal income tax backup withholding
on the payment of the purchase price for the Shares. The box in Part 2 of
Substitute Form W-9 may be checked if the tendering Preferred Shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future. If the box in Part 2 is checked and the Depositary is
not provided with a TIN by the time of payment, the Depositary will withhold 31%
on all payments of the purchase price for the Shares thereafter until a TIN is
provided to the Depositary.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Managers
at their respective telephone numbers and addresses listed below. Requests for
additional copies of the Offer to Purchase and Proxy Statement, this Letter of
Transmittal and Proxy or other tender offer materials may be directed to the
Information Agent or the Dealer Managers and such copies will be furnished
promptly at Cinergy's expense. Preferred Shareholders may also contact their
local broker, dealer, commercial bank or trust company for assistance concerning
the Offer.
10. SOLICITED TENDERS. Cinergy will pay a solicitation fee of $1.50 per
Share (except that for transactions for beneficial owners equal to or exceeding
5,000 Shares, Cinergy will pay a solicitation fee of $1.25 per Share) for any
Shares tendered, accepted for payment and paid pursuant to the Offer, covered by
the Letter of Transmittal and Proxy which designates, under the heading
"Solicited Tenders", as having solicited and obtained the tender, the name of
<PAGE>
(a) any broker or dealer in securities, including a Dealer Manager in its
capacity as a dealer or broker, which is a member of any national securities
exchange or of the National Association of Securities Dealers, Inc. (the
"NASD"), (b) any foreign broker or dealer not eligible for membership in the
NASD which agrees to conform to the NASD's Rules of Fair Practice in soliciting
tenders outside the United States to the same extent as though it were an NASD
member, or (c) any bank or trust company (each of which is referred to herein as
a "Soliciting Dealer"). No such fee shall be payable to a Soliciting Dealer with
respect to the tender of Shares by a holder unless the Letter of Transmittal and
Proxy accompanying such tender designates such Soliciting Dealer. No such fee
shall be payable to a Soliciting Dealer in respect of Shares registered in the
name of such Soliciting Dealer unless such Shares are held by such Soliciting
Dealer as nominee and such Shares are being tendered for the benefit of one or
more beneficial owners identified on the Letter of Transmittal and Proxy or on
the Notice of Solicited Tenders (included in the materials provided to brokers
and dealers). No such fee shall be payable to a Soliciting Dealer with respect
to the tender of Shares by the holder of record, for the benefit of the
beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. If tendered Shares are being delivered by book-entry transfer, the
Soliciting Dealer must return a Notice of Solicited Tenders to the Depositary
within three business days after expiration of the Offer to receive a
solicitation fee. No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary, the Information Agent or the Dealer
Managers for purposes of the Offer.
11. IRREGULARITIES. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance of any tender
of Shares will be determined by Cinergy, in its sole discretion, and its
determination shall be final and binding. Cinergy reserves the absolute right to
reject any and all tenders of Shares that it determines are not in proper form
or the acceptance for payment of or payment for Shares that may, in the opinion
of Cinergy's counsel, be unlawful. Cinergy also reserves the absolute right to
waive any of the conditions to the Offer or any defect or irregularity in any
tender of Shares and Cinergy's interpretation of the terms and conditions of the
Offer (including these instructions) shall be final and binding. Unless waived,
any defects or irregularities in connection with tenders must be cured within
such time as Cinergy shall determine. None of Cinergy, the Dealer Managers, the
Depositary, the Information Agent or any other person shall be under any duty to
give notice of any defect or irregularity in tenders nor shall any of them incur
any liability for failure to give any such notice. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the Preferred
Shareholder should promptly notify the Depositary by checking the box
immediately following the Special Payment Instructions/Special Delivery
Instructions and indicating the number of Shares lost, destroyed or stolen. The
Preferred Shareholder will then be instructed as to the procedures that must be
taken in order to replace the certificate. The tender of Shares pursuant to this
Letter of Transmittal and Proxy will not be valid unless prior to the Expiration
Date (as defined in the Offer to Purchase and Proxy Statement): (a) such
procedures have been completed and a replacement certificate for the Shares has
been delivered to the Depositary or (b) a Notice of Guaranteed Delivery and
Proxy has been delivered to the Depositary. See Instruction 2.
IMPORTANT: THIS LETTER OF TRANSMITTAL AND PROXY (OR A FACSIMILE COPY
HEREOF), DULY EXECUTED, TOGETHER WITH, IF APPLICABLE, CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER, AND ALL OTHER REQUIRED DOCUMENTS MUST BE
RECEIVED BY THE DEPOSITARY, OR, IF APPLICABLE, THE NOTICE OF GUARANTEED DELIVERY
AND PROXY MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE APPLICABLE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT).
IMPORTANT TAX INFORMATION
Under federal income tax law, a Preferred Shareholder whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
either such Preferred Shareholder's correct TIN on Substitute Form W-9 below or
a properly completed Form W-8. If such Preferred Shareholder is an individual,
the TIN is his or her social security number. For businesses and other entities,
the number is the federal employer identification number. If the Depositary is
not provided with the correct TIN or properly completed Form W-8, the Preferred
Shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such Preferred Shareholder with
respect to Shares purchased pursuant to the Offer may be subject to backup
withholding. The Form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If federal income tax backup withholding applies, the Depositary is required
to withhold 31% of any payments made to the Preferred Shareholder. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of the
tax withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
PURPOSE OF SUBSTITUTE FORM W-9 AND FORM W-8
To avoid backup withholding on payments that are made to a Preferred
Shareholder with respect to Shares purchased pursuant to the Offer, the
Preferred Shareholder is required to notify the Depositary of his or her correct
TIN by completing the Substitute Form W-9 attached hereto certifying that the
TIN provided on Substitute Form W-9 is correct and that (a) the Preferred
Shareholder has not been notified by the Internal Revenue Service that he or she
is subject to federal income tax backup withholding as a result of failure to
report all interest or dividends or (b) the Internal Revenue Service has
notified the Preferred Shareholder that he or she is no longer subject to
federal income tax
<PAGE>
backup withholding. Foreign Preferred Shareholders must submit a properly
completed Form W-8 in order to avoid the applicable backup withholding;
provided, however, that backup withholding will not apply to foreign Preferred
Shareholders subject to 30% (or lower treaty rate) withholding on gross payments
received pursuant to the Offer.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Preferred Shareholder is required to give the Depositary the social
security number or employer identification number of the registered owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report.
PAYER'S NAME: THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
Part 1 -- PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY BY Employer Identification Number
SIGNING AND DATING BELOW. TIN
Name (Please Print)
Address Part 2 --
SUBSTITUTE City State Zip Code Awaiting TIN / /
Part 3 -- CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY
THAT: (1) the number shown on this form is my correct taxpayer
identification number (or a TIN has not been issued to me but I have
mailed or delivered an application to receive a TIN or intend to do so
in the near future), (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends or the IRS has notified me
Form W-9 that I am no longer subject to backup withholding and (3) all other
Department of the Treasury information provided on this form is true, correct and complete.
Internal Revenue Service SIGNATURE DATE, 1996
You must cross out item (2) above if you have been notified by the IRS
that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
IDENTIFICATION NUMBER (TIN) YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
AND CERTIFICATION PART 2 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me and either (1) I have mailed or
delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to do so in the near future. I
understand that if I do not provide a taxpayer identification number
by the time of payment, 31% of all payments of the purchase price made
to me will be withheld until I provide a number.
SIGNATURE DATE, 1996
</TABLE>
THE DEALER MANAGERS:
<TABLE>
<S> <C>
SMITH BARNEY INC. MORGAN STANLEY & CO.
388 Greenwich Street INCORPORATED
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attention: Paul S. Galant (800) 223-2440, Ext. 1965
Attention: Steve Sahara
</TABLE>
THE INFORMATION AGENT:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
Call Toll Free -- (800) 322-2885
<PAGE>
EXHIBIT 99.(a)(3)
<PAGE>
NOTICE OF GUARANTEED DELIVERY AND PROXY
FOR
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
Cumulative Preferred Stock ($100 par value):
4% Series
4 3/4% Series
7 7/8% Series
7 3/8% Series
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for shares of a series of
cumulative preferred stock of The Cincinnati Gas & Electric Company ("CG&E"), an
Ohio corporation and direct utility subsidiary of Cinergy Corp., listed above
(each a "Series of Preferred") to be tendered pursuant to the Offer (the
"Shares") are not immediately available, if the procedure for book-entry
transfer cannot be completed on a timely basis, or if time will not permit all
other documents required by the Letter of Transmittal and Proxy to be delivered
to the Depositary on or prior to the Expiration Date (as defined in the Offer to
Purchase and Proxy Statement referred to below). Such form may be delivered by
hand or transmitted by mail or by facsimile transmission, to the Depositary. See
"Terms of the Offer -- Procedure for Tendering Shares" in the Offer to Purchase
and Proxy Statement.
A SEPARATE NOTICE OF GUARANTEED DELIVERY AND PROXY MUST BE USED FOR EACH
SERIES OF PREFERRED.
THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE THE
GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND PROXY
AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN.
FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department Tender & Exchange Department
P.O. Box 11248 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
</TABLE>
BY FACSIMILE TRANSMISSION:
(212) 815-6213
INFORMATION AND CONFIRMATION BY TELEPHONE:
(800) 507-9357
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal and Proxy is required to be guaranteed by an Eligible
Institution (as defined in the Letter of Transmittal and Proxy) under the
instructions thereto, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal and Proxy.
<PAGE>
The undersigned hereby tenders to Cinergy Corp., a Delaware corporation
("Cinergy"), upon the terms and subject to the conditions set forth in the Offer
to Purchase and Proxy Statement, dated August 20, 1996 (the "Offer to Purchase
and Proxy Statement"), and the related Letter of Transmittal and Proxy (which
together constitute the "Offer"), receipt of which is hereby acknowledged, the
number of Shares listed below, pursuant to the guaranteed delivery procedure set
forth in "Terms of the Offer -- Procedure for Tendering Shares" in the Offer to
Purchase and Proxy Statement. WHILE PREFERRED SHAREHOLDERS WHO WISH TO TENDER
THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE PROPOSED
AMENDMENT TO CG&E'S AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN THE OFFER
TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER IS
CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN
ADDITION, PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES BY CASTING THEIR VOTE
AND SIGNING THE PROXY CONTAINED WITHIN THE ACCOMPANYING LETTER OF TRANSMITTAL
AND PROXY OR BY VOTING IN PERSON AT THE SPECIAL MEETING. IF THE PROPOSED
AMENDMENT IS APPROVED AND ADOPTED, CG&E WILL MAKE A SPECIAL CASH PAYMENT TO EACH
PREFERRED SHAREHOLDER WHO VOTED IN FAVOR OF THE PROPOSED AMENDMENT, PROVIDED
THAT THEIR SHARES ARE NOT TENDERED PURSUANT TO THE OFFER.
The undersigned hereby also appoints Jackson H. Randolph, James E. Rogers,
and William J. Grealis, or any of them, as proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote as
designated hereunder and in their discretion with respect to any other business
properly brought before the Special Meeting, all shares of cumulative preferred
stock of CG&E which the undersigned is entitled to vote at the Special Meeting
of Shareholders to be held on September 18, 1996, or any adjournment(s) or
postponement(s) thereof.
THIS NOTICE OF GUARANTEED DELIVERY AND PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF CG&E. THE PROXY CONTAINED HEREIN, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S).
If no direction is made, the proxy will be voted FOR Item 1.
Indicate your vote by an (X). The Board of Directors recommends voting FOR
Item 1.
ITEM 1.
To remove from the Amended Articles of Incorporation Article Fourth, Clause
6-A(b) in its entirety, which limits CG&E's ability to issue unsecured
indebtedness.
/ / FOR / / AGAINST / / ABSTAIN
Series of Preferred (check one):
Cumulative Preferred Stock ($100 par value):
<TABLE>
<S> <C>
/ / 4% Series
/ / 4 3/4% Series
/ / 7 7/8% Series
/ / 7 3/8% Series
</TABLE>
Number of Shares:
- ---------------------------------------------
Certificate Nos. (if available):
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
- ---------------------------------------------
Please check box if you plan to attend the Special Meeting. / /
<PAGE>
SIGNATURE(S) OF OWNER(S)
X_______________________________________________________________________________
X_______________________________________________________________________________
Dated: ___________________________________________________________________, 1996
Name(s): _______________________________________________________________________
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
DAYTIME Area Code and Telephone No.: ___________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5 to the Letter of Transmittal and Proxy.)
If Shares will be tendered by
book-entry transfer, Name of Tendering
Institution:
- --------------------------------------
Account No. at (check one)
/ / The Depository Trust Company
/ / Philadelphia Depository Trust
Company
- --------------------------------------
Signature(s)
- --------------------------------------
Name(s) of Record Holders(s)
(Please Print)
- --------------------------------------
Address
- --------------------------------------
Area Code and Telephone Number
<PAGE>
GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or trust company having an office or correspondent in the United States,
guarantees (a) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, (b) that such tender of Shares
complies with Rule 14e-4 and (c) to deliver to the Depositary at one of its
addresses set forth above certificate(s) for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company or Philadelphia Depository Trust Company, in each case together with
properly completed and duly executed Letter(s) of Transmittal and Proxy (or
facsimile(s) thereof), with any required signature guarantee(s) and any other
required documents, all within three New York Stock Exchange trading days after
the date hereof.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Name of Firm Authorized Signature
- --------------------------------------------- ---------------------------------------------
Address Name
- --------------------------------------------- ---------------------------------------------
City, State, Zip Code Title
- ---------------------------------------------
Area Code and
Telephone Number
Dated: , 1996
</TABLE>
DO NOT SEND STOCK CERTIFICATES WITH THIS FORM. YOUR STOCK
CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL AND PROXY.
<PAGE>
EXHIBIT 99.(a)(4)
<PAGE>
SMITH BARNEY INC. MORGAN STANLEY & CO. INCORPORATED
THE DEALER MANAGERS FOR
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
<TABLE>
<CAPTION>
CUSIP PURCHASE
TITLE OF SERIES OF PREFERRED NUMBER PRICE
- -------------------------------------------------- ----------- -----------
(PER SHARE)
<S> <C> <C>
Cumulative Preferred Stock
($100 par value)
4% Series......................................... 172070 203 $ 64.00
4 3/4% Series..................................... 172070 302 $ 80.00
7 7/8% Series..................................... 172070 864 $ 116.00
7 3/8% Series..................................... 172070 849 $ 110.00
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
August 20, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
In our capacity as Dealer Managers, we are enclosing the material listed
below relating to the invitation of Cinergy Corp., a Delaware corporation
("Cinergy"), to the holders of each series of cumulative preferred stock of The
Cincinnati Gas & Electric Company, an Ohio corporation and direct utility
subsidiary of Cinergy ("CG&E"), listed above (each a "Series of Preferred") to
tender any and all of their shares of a Series of Preferred ("Shares") for
purchase at the purchase price per Share listed above, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase and Proxy Statement, dated August 20, 1996 (the "Offer to Purchase and
Proxy Statement"), and in the Letter of Transmittal and Proxy for the Shares
tendered. As to each Series of Preferred, the Offer to Purchase and Proxy
Statement, together with the applicable Letter of Transmittal and Proxy,
constitutes the "Offer". Cinergy will purchase all Shares validly tendered and
not withdrawn, upon the terms and subject to the conditions of the Offer. The
Offer for a Series of Preferred is not conditioned upon any minimum number of
Shares of such Series of Preferred being tendered and is independent of the
Offer for any other Series of Preferred. WHILE PREFERRED SHAREHOLDERS WHO WISH
TO TENDER THEIR SHARES PURSUANT TO THE OFFER NEED NOT VOTE IN FAVOR OF THE
PROPOSED AMENDMENT TO CG&E'S AMENDED ARTICLES OF INCORPORATION, AS SET FORTH IN
THE OFFER TO PURCHASE AND PROXY STATEMENT (THE "PROPOSED AMENDMENT"), THE OFFER
IS CONDITIONED UPON THE PROPOSED AMENDMENT BEING APPROVED AND ADOPTED AT THE
SPECIAL MEETING (AS DEFINED IN THE OFFER TO PURCHASE AND PROXY STATEMENT). IN
ADDITION, PREFERRED SHAREHOLDERS HAVE THE RIGHT TO VOTE FOR THE PROPOSED
AMENDMENT REGARDLESS OF WHETHER THEY TENDER THEIR SHARES. SEE "PROPOSED
AMENDMENT AND PROXY SOLICITATION", "TERMS OF THE OFFER -- CERTAIN CONDITIONS OF
THE OFFER" AND "TERMS OF THE OFFER -- EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENTS" IN THE OFFER TO PURCHASE AND PROXY STATEMENT.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible.
<PAGE>
Cinergy will pay a solicitation fee of $1.50 per Share (except that for
transactions for beneficial owners equal to or exceeding 5,000 Shares of a
particular Series of Preferred, Cinergy will pay a solicitation fee of $1.25 per
Share) for any Shares tendered, accepted for payment and paid pursuant to the
Offer covered by a Letter of Transmittal and Proxy which designates, as having
solicited and obtained the tender, the name of (i) any broker or dealer in
securities, including the Dealer Managers in their capacity as a broker or
dealer, which is a member of any national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD"), (ii) any foreign broker or
dealer not eligible for membership in the NASD which agrees to conform to the
NASD's Rules of Fair Practice in soliciting tenders outside the United States to
the same extent as though it were an NASD member, or (iii) any bank or trust
company (each of which is referred to herein as a "Soliciting Dealer"). No such
fee shall be payable to a Soliciting Dealer with respect to the tender of Shares
by a holder unless the Letter of Transmittal and Proxy accompanying such tender
designates such Soliciting Dealer. No such fee shall be payable to a Soliciting
Dealer in respect of Shares registered in the name of such Soliciting Dealer
unless such Shares are held by such Soliciting Dealer as nominee and such Shares
are being tendered for the benefit of one or more beneficial owners identified
on the Letter of Transmittal and Proxy or on the Notice of Solicited Tenders
(included below). No such fee shall be payable to a Soliciting Dealer if such
Soliciting Dealer is required for any reason to transfer the amount of such fee
to a depositing holder (other than itself). No such fee shall be paid to a
Soliciting Dealer with respect to Shares tendered for such Soliciting Dealer's
own account. No broker, dealer, bank, trust company or fiduciary shall be deemed
to be the agent of Cinergy, the Depositary (as defined below), the Dealer
Managers or the Information Agent for purposes of the Offer.
Cinergy will also, upon request, reimburse Soliciting Dealers for reasonable
and customary handling and mailing expenses incurred by them in forwarding
materials relating to the Offer to their customers. Cinergy will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal and Proxy.
In order for a Soliciting Dealer to receive a solicitation fee, The Bank of
New York, as Depositary (the "Depositary"), must have received from such
Soliciting Dealer a properly completed and duly executed Notice of Solicited
Tenders in the form attached hereto (or facsimile thereof) within three business
days after the expiration of the Offer.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name (or in the name of your nominee), we are
enclosing the following documents:
1. The Offer to Purchase and Proxy Statement, dated August 20, 1996.
2. A separate Letter of Transmittal and Proxy for each Series of
Preferred for your use and for the information of your clients.
3. A letter to shareholders of CG&E from its Chairman of the Board and
its Vice Chairman and Chief Executive Officer.
4. A Notice of Guaranteed Delivery and Proxy to be used to accept the
Offer if the Shares and all other required documents cannot be delivered to
the Depositary by the applicable Expiration Date (as defined in the Offer to
Purchase and Proxy Statement).
5. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space for obtaining such clients' instructions with regard to
the Offer and with regard to the proxy solicitation by CG&E.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9, providing information
relating to backup federal income tax withholding.
7. A return envelope addressed to The Bank of New York, the Depositary.
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF TRANSMITTAL AND PROXY, AND
ONLY THE APPLICABLE LETTER OF TRANSMITTAL AND PROXY FOR A PARTICULAR SERIES OR A
NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO TENDER SHARES OF SUCH
SERIES OF PREFERRED.
2
<PAGE>
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR
RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO
WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR
HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to MacKenzie Partners, Inc., the Information
Agent, or to us, as Dealer Managers, at the respective addresses and telephone
numbers set forth on the back cover of the enclosed Offer to Purchase and Proxy
Statement.
Very truly yours,
Smith Barney Inc. Morgan Stanley & Co.
Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS THE AGENT OF CINERGY, CG&E, THE DEALER MANAGERS, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE
ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH
THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
3
<PAGE>
NOTICE OF SOLICITED TENDERS
List below the number of Shares tendered by each beneficial owner whose
tender you have solicited. All Shares in a Series of Preferred beneficially
owned by a beneficial owner, whether in one account or several, and in however
many capacities, must be aggregated for purposes of completing the table below.
Any questions as to what constitutes beneficial ownership should be directed to
the Depositary. If the space below is inadequate, list the Shares in a separate
signed schedule and affix the list to this Notice of Solicited Tenders. PLEASE
DO NOT COMPLETE THE SECTIONS OF THE TABLE HEADED "TO BE COMPLETED ONLY BY
DEPOSITARY".
ALL NOTICES OF SOLICITED TENDERS SHOULD BE RETURNED TO, AND ALL QUESTIONS
CONCERNING THE NOTICES OF SOLICITED TENDERS SHOULD BE DIRECTED TO, THE
DEPOSITARY. ALL NOTICES OF SOLICITED TENDERS MUST BE RECEIVED BY THE DEPOSITARY
WITHIN THREE BUSINESS DAYS AFTER THE EXPIRATION DATE.
<TABLE>
<CAPTION>
TO BE COMPLETED BY TO BE COMPLETED ONLY BY
THE SOLICITING DEALER DEPOSITARY
- ---------------------------------------------------------------------------------- -----------------------------
SERIES OF NUMBER OF SHARES NUMBER OF SHARES
BENEFICIAL OWNERS PREFERRED TENDERED ACCEPTED FEE*
- -------------------------------------------- ----------------- ----------------- ----------------- ----------
<S> <C> <C> <C> <C>
No. 1.......................................
No. 2.......................................
No. 3.......................................
No. 4.......................................
No. 5.......................................
No. 6.......................................
No. 7.......................................
No. 8.......................................
No. 9.......................................
No. 10......................................
Total.......................................
</TABLE>
- ------------------------
* $1.50 per Share (except that for transactions for beneficial owners equal to
or exceeding 5,000 Shares of a particular Series of Preferred, fee is $1.25
per Share) for any Shares tendered, accepted for payment and paid pursuant
to the Offer.
All questions as to the validity, form and eligibility (including time of
receipt) of Notices of Solicited Tenders will be determined by the Depositary,
in its sole discretion, which determination will be final and binding. Neither
the Depositary nor any other person will be under any duty to give notification
of any defects or irregularities in any Notice of Solicited Tenders or incur any
liability for failure to give such notification.
The undersigned hereby confirms that: (i) it has complied with the
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder, in connection with such
solicitation; (ii) it is entitled to such compensation for such solicitation
under the terms and conditions of the Offer; (iii) in soliciting tenders of
Shares, it has used no soliciting materials other than those furnished by
Cinergy; and (iv) if it is a foreign broker or dealer not eligible for
membership in the NASD, it has agreed to conform to the NASD's Rules of Fair
Practice in making solicitations.
<TABLE>
<S> <C>
- -------------------------------------------- --------------------------------------------
Firm Name Address (Including Zip Code)
- -------------------------------------------- --------------------------------------------
By: Area Code and Telephone Number
Title:
</TABLE>
4
<PAGE>
EXHIBIT 99.(a)(5)
<PAGE>
CINERGY CORP.
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES
OF THE FOLLOWING SERIES OF CUMULATIVE PREFERRED STOCK OF
THE CINCINNATI GAS & ELECTRIC COMPANY
<TABLE>
<CAPTION>
Outstanding Purchase Price
Title of Series of Preferred Shares (per share)
- ------------------------------------------------------- ------------- ---------------
<S> <C> <C>
Cumulative Preferred Stock
($100 par value)
4% Series.............................................. 270,000 $ 64.00
4 3/4% Series.......................................... 130,000 $ 80.00
7 7/8% Series.......................................... 800,000 $ 116.00
7 3/8% Series.......................................... 800,000 $ 110.00
</TABLE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
WEDNESDAY, SEPTEMBER 18, 1996, UNLESS THE OFFER IS EXTENDED.
August 20, 1996
To Our Clients:
Enclosed for your consideration are the Offer to Purchase and Proxy
Statement, dated August 20, 1996, and a separate Letter of Transmittal and Proxy
for each series of cumulative preferred stock listed above (each a "Series of
Preferred") of The Cincinnati Gas & Electric Company, an Ohio corporation and
direct utility subsidiary of Cinergy Corp. ("CG&E"), of which you own shares. As
to each Series of Preferred, the Offer to Purchase and Proxy Statement, together
with the applicable Letter of Transmittal and Proxy, constitutes the "Offer" of
Cinergy Corp. ("Cinergy") to purchase any and all shares of the Series of
Preferred ("Shares") at the purchase price per Share listed above, net to the
seller in cash, upon the terms and subject to the conditions of the Offer.
Cinergy will purchase all Shares validly tendered and not withdrawn, upon the
terms and subject to the conditions of the Offer. The Offer for a Series of
Preferred is not conditioned upon any minimum number of Shares of such Series of
Preferred being tendered and is independent of the Offer for any other Series of
Preferred. While Preferred Shareholders who wish to tender their Shares pursuant
to the Offer need not vote in favor of the proposed amendment to CG&E's Amended
Articles of Incorporation, as set forth in the Offer to Purchase and Proxy
Statement (the "Proposed Amendment"), the Offer is conditioned upon the Proposed
Amendment being approved and adopted at the Special Meeting (as defined in the
Offer to Purchase and Proxy Statement). In addition, Preferred Shareholders have
the right to vote for the Proposed Amendment regardless of whether they tender
their Shares. See "Proposed Amendment and Proxy Solicitation", "Terms of the
Offer -- Certain Conditions of the Offer" and "Terms of the Offer -- Extension
of Tender Period; Termination; Amendments" in the Offer to Purchase and Proxy
Statement.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. A TENDER OR A VOTE OF SUCH SHARES CAN BE MADE ONLY BY
US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. ANY LETTER OF
TRANSMITTAL AND PROXY FURNISHED TO YOU IS SOLELY FOR YOUR INFORMATION AND CANNOT
BE USED BY YOU TO TENDER OR VOTE SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender and/or vote any
or all of the Shares held by us for your account, upon the terms and subject to
the conditions set forth in the Offer.
PLEASE READ THE FOLLOWING INFORMATION CAREFULLY:
<PAGE>
(1) The Offer is for any and all Shares outstanding as of August 20,
1996. The Offer for a Series of Preferred is independent of the Offer for
any other Series of Preferred.
(2) The Offer and withdrawal rights will expire at 5:00 p.m., New York
City time, on September 18, 1996, unless the Offer is extended with respect
to a Series of Preferred. Your instructions to us should be forwarded to us
in ample time to permit us to submit a tender on your behalf by the
expiration of the Offer. If you would like to withdraw your Shares that we
have tendered, you can withdraw them so long as the Offer remains open or at
any time after the expiration of forty business days from the commencement
of the Offer if such tendered Shares have not been accepted for payment.
(3) While Preferred Shareholders who wish to tender their Shares
pursuant to the Offer need not vote in favor of the Proposed Amendment, the
Offer is conditioned upon the Proposed Amendment being approved and adopted
at the Special Meeting.
(4) Preferred Shareholders have the right to vote in favor of the
Proposed Amendment regardless of whether they tender their Shares.
(5) Any stock transfer taxes applicable to the sale of Shares to Cinergy
pursuant to the Offer will be paid by Cinergy, except as otherwise provided
in Instruction 6 of the Letter of Transmittal and Proxy.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF DIRECTORS NOR ANY OF THEIR
RESPECTIVE OFFICERS MAKES ANY RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO
WHETHER TO TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST MAKE HIS OR
HER OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER.
If you wish to have us tender and/or vote any or all of your Shares held by
us for your account upon the terms and subject to the conditions set forth in
the Offer, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An envelope
to return your instructions to us is enclosed. If you authorize tender of your
Shares, all such Shares will be tendered unless otherwise specified on the
detachable part hereof. Your instructions should be forwarded to us in ample
time to permit us to submit a tender and/or vote on your behalf by the
expiration of the Offer or the Special Meeting, as applicable.
The Offer is being made to all holders of Shares. Cinergy is not aware of
any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to a valid state statute. If Cinergy becomes aware of
any valid state statute prohibiting the making of the Offer, Cinergy will make a
good faith effort to comply with such statute. If, after such good faith effort,
Cinergy cannot comply with such statute, the Offer will not be made to, nor will
tenders be accepted from or on behalf of, holders of Shares in such state. In
those jurisdictions where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be
made on behalf of Cinergy by the Dealer Managers (as defined in the Offer) or
one or more registered brokers or dealers licensed under the laws of such
jurisdictions.
2
<PAGE>
INSTRUCTIONS
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF
THE PREFERRED STOCK OF,
AND PROXY SOLICITATION BY,
THE CINCINNATI GAS & ELECTRIC COMPANY
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase and Proxy Statement, dated August 20, 1996, and a separate Letter of
Transmittal and Proxy for each series of preferred stock of The Cincinnati Gas &
Electric Company (each a "Series of Preferred") in which the undersigned owns
shares (as to each Series of Preferred, the Offer to Purchase and Proxy
Statement, together with the applicable Letter of Transmittal and Proxy,
constitutes the "Offer") in connection with the invitation of Cinergy Corp.
("Cinergy") to the holders of each Series of Preferred to tender any and all of
their shares of a Series of Preferred ("Shares") for purchase at the purchase
price per Share listed on the front cover of the Offer to Purchase and Proxy
Statement, net to the seller in cash, upon the terms and subject to the
conditions of the Offer, and in connection with the proxy solicitation being
conducted by the Board of Directors of The Cincinnati Gas & Electric Company.
This will instruct you to tender to Cinergy the number of Shares indicated
below (or, if no number is indicated below, all Shares) which are held by you
for the account of the undersigned, upon the terms and subject to the conditions
of the Offer.
<TABLE>
<S> <C>
Series of Preferred Number of Shares to be Tendered*
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
</TABLE>
You are further instructed to vote as designated hereunder in respect of the
Proposed Amendment all shares which the undersigned is entitled to vote at the
Special Meeting:**
/ / FOR / / AGAINST / / ABSTAIN
SIGN HERE
<TABLE>
<S> <C> <C>
Signature(s): ------------------------------------------------------
Name(s):
------------------------------------------------------
Address:
------------------------------------------------------
------------------------------------------------------
Dated: , 1996
Social Security
or Taxpayer
Identification
No.: ------------------------------------------------------
</TABLE>
* By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
tendered.
** By executing and returning these Instructions, unless otherwise indicated,
it will be assumed that all Shares held by us for your account are to be
voted FOR the Proposed Amendment.
3
<PAGE>
EXHIBIT 99.(a)(6)
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell these securities. The Offer
is made only by the Offer to Purchase and Proxy Statement
and the related Letter of Transmittal and Proxy and is not
being made to (nor will tenders be accepted from) holders of
Shares in any jurisdiction in which the Offer or the
acceptance thereof would not be in compliance with the
securities laws of such jurisdiction. In those jurisdictions
where securities laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be
made on behalf of the Offeror by Smith Barney Inc. and
Morgan Stanley & Co., Incorporated or one or more registered
brokers or dealers licensed under the laws of such
jurisdiction.
Cinergy Corp.
Notice of Offer to Purchase for Cash
Any and All Outstanding Shares of the Following Series of
Cumulative Preferred Stock of
The Cincinnati Gas & Electric Company
$200,000,000
270,000 Shares, Cumulative Preferred Stock, 4% Series at a
Purchase Price of $64.00 Per Share
130,000 Shares, Cumulative Preferred Stock, 4-3/4% Series at
a Purchase Price of $80.00 Per Share
800,000 Shares, Cumulative Preferred Stock, 7-7/8% Series at
a Purchase Price of $116.00 Per Share
800,000 Shares, Cumulative Preferred Stock, 7-3/8% Series at
a Purchase Price of $110.00 Per Share
Cinergy Corp., a Delaware corporation ("Cinergy"),
invites the holders of each series of cumulative preferred
stock listed above (each a "Series of Preferred," and the
holder thereof a "Preferred Shareholder") of The Cincinnati
Gas & Electric Company, an Ohio corporation and direct
utility subsidiary of Cinergy ("CG&E"), to tender any and
all of their shares of a Series of Preferred ("Shares") for
purchase at the purchase price per Share listed above, net
to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase and Proxy
Statement and in the related Letter of Transmittal and Proxy
(which together constitutes the "Offer"). Cinergy will
purchase all Shares validly tendered and not withdrawn, upon
the terms and subject to the conditions of the Offer. See
"Terms of the Offer -- Certain Conditions of the Offer" and
"Terms of the Offer -- Extension of Tender Period;
Termination; Amendments" in the Offer to Purchase and Proxy
Statement.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00
P.M., NEW YORK CITY TIME, ON WEDNESDAY, SEPTEMBER 18, 1996,
UNLESS THE OFFER IS EXTENDED.
THE OFFER FOR A SERIES OF PREFERRED IS NOT CONDITIONED
UPON ANY MINIMUM NUMBER OF SHARES OF SUCH SERIES OF
PREFERRED BEING TENDERED AND IS INDEPENDENT OF THE OFFER FOR
ANY OTHER SERIES OF PREFERRED. THE OFFER, HOWEVER, IS
CONDITIONED UPON, AMONG OTHER THINGS, THE PROPOSED
AMENDMENT, AS DESCRIBED BELOW, BEING APPROVED AND ADOPTED AT
THE SPECIAL MEETING. SEE "TERMS OF THE OFFER -- CERTAIN
CONDITIONS OF THE OFFER" IN THE OFFER TO PURCHASE AND PROXY
STATEMENT.
Concurrently with the Offer, the Board of Directors of
CG&E is soliciting proxies for use at the Special Meeting of
Shareholders of CG&E to be held at its principal office, 139
East Fourth Street, Cincinnati, Ohio 45202, on September 18,
1996, or any adjournment or postponement of such meeting
(the "Special Meeting"). The Special Meeting is being held
to consider an amendment (the "Proposed Amendment") to
CG&E's Amended Articles of Incorporation (the "Articles")
which would remove a provision of the Articles that limits
CG&E's ability to issue unsecured debt. While Preferred
Shareholders who wish to tender their Shares pursuant to the
Offer need not vote in favor of the Proposed Amendment, the
Offer is conditioned upon the Proposed Amendment being
approved and adopted at the Special Meeting. In addition,
Preferred Shareholders have the right to vote for the
Proposed Amendment regardless of whether they tender their
Shares. If the Proposed Amendment is approved and adopted,
CG&E will make a special cash payment in the amount of $1.00
per Share to each Preferred Shareholder who voted in favor
of the Proposed Amendment, provided that such Shares have
not been tendered pursuant to the Offer. Those Preferred
Shareholders who validly tender their Shares will be
entitled only to the purchase price per Share listed above.
Any Preferred Shareholder desiring to accept the Offer
and tender all or any portion of his or her Shares should
either (i) request his or her broker, dealer, commercial
bank, trust company or nominee to effect the transaction for
him or her, or (ii) complete and sign the Letter of
Transmittal and Proxy or a facsimile thereof, in accordance
with the instructions in the Letter of Transmittal and
Proxy, mail or deliver it and any other required documents
to The Bank of New York (the "Depositary"), and deliver the
certificates for such Shares to the Depositary, along with
the Letter of Transmittal and Proxy, or tender such Shares
pursuant to the procedure for book-entry transfer set forth
in the Offer to Purchase and Proxy Statement under "Terms of
the Offer -- Procedure for Tendering Shares" prior to the
Expiration Date (set forth above). A Preferred Shareholder
whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or nominee must contact such
broker, dealer, commercial bank, trust company or nominee if
he or she desires to tender such Shares. Any Preferred
Shareholder who desires to tender Shares and whose
certificates for such Shares are not immediately available,
or who cannot comply in a timely manner with the procedure
for book-entry transfer, should tender such Shares by
following the procedures for guaranteed delivery set forth
in the Offer to Purchase and Proxy Statement under "Terms of
the Offer -- Procedure for Tendering Shares."
EACH SERIES OF PREFERRED HAS ITS OWN LETTER OF
TRANSMITTAL AND PROXY, AND ONLY THE APPLICABLE LETTER OF
TRANSMITTAL AND PROXY FOR SUCH SERIES OF PREFERRED OR A
NOTICE OF GUARANTEED DELIVERY AND PROXY MAY BE USED TO
TENDER SHARES OF SUCH SERIES OF PREFERRED.
NEITHER CINERGY, CG&E, THEIR RESPECTIVE BOARDS OF
DIRECTORS, NOR ANY OF THEIR RESPECTIVE OFFICERS MAKES ANY
RECOMMENDATION TO ANY PREFERRED SHAREHOLDER AS TO WHETHER TO
TENDER ANY OR ALL SHARES. EACH PREFERRED SHAREHOLDER MUST
MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER.
The Offer to Purchase and Proxy Statement is first
being mailed to Preferred Shareholders on or about August
20, 1996.
Each Series of Preferred is listed and traded on The
New York Stock Exchange, Inc. (the "NYSE"). On August 15,
1996, the last reported sale prices on the NYSE were $58.75
for the 4% Series of Preferred (on August 15, 1996), $71.25
for the 4-3/4% Series of Preferred (on August 14, 1996),
$108.75 for the 7-7/8% Series of Preferred (on May 31, 1996)
and $105.50 for the 7-3/8% Series of Preferred (on July 16,
1996). Preferred Shareholders are urged to obtain a current
market quotation, if available, for the Shares. On August
20, 1996, there were issued and outstanding 270,000 Shares
of the 4% Series of Preferred, 130,000 Shares of the 4-3/4%
Series of Preferred, 800,000 Shares of the 7-7/8% Series of
Preferred and 800,000 Shares of the 7-3/8% Series of
Preferred.
The Offer to Purchase and Proxy Statement and Letter of
Transmittal and Proxy contain important information which
should be read before any decision is made with respect to
the Offer.
Questions or requests for assistance or for copies of
the Offer to Purchase and Proxy Statement or the Letter of
Transmittal and Proxy for a Series of Preferred or other
tender offer or proxy solicitation materials may be directed
to MacKenzie Partners, Inc. or Smith Barney Inc. and Morgan
Stanley & Co. Incorporated at their respective addresses and
telephone numbers set forth below.
The Information Agent for the Offer is:
[MacKenzie Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Managers for the Offer are:
Smith Barney Inc. Morgan Stanley & Co.
388 Greenwich Street Incorporated
New York, New York 10013 1585 Broadway
(800) 655-4811 New York, New York 10036
Attn: Paul S. Galant (800) 223-2440, Ext. 1965
Attn: Steve Sahara
August 20, 1996
<PAGE>
EXHIBIT 99.(a)(7)
<PAGE>
[LOGO]
The Cincinnati Gas & Electric Company
139 East Fourth Street, Cincinnati, Ohio 45202
[LOGO]
August 20, 1996
Dear Shareholder:
Please find enclosed important information pertaining to the following two
items:
(i) a proposed amendment to the Amended Articles of Incorporation (the
"Articles") of The Cincinnati Gas & Electric Company ("CG&E") which will
be considered at a Special Meeting of its Shareholders; and
(ii) an offer by Cinergy Corp. to purchase the outstanding shares of CG&E's
cumulative preferred stock.
We will greatly appreciate your giving prompt attention to the enclosed material
which you are urged to read in its entirety.
The Articles presently limit CG&E's ability to issue securities representing
unsecured indebtedness, including short-term debt, to no more than 20% of the
aggregate of its capital, surplus and secured debt. This 20% restriction limits
CG&E's flexibility in planning and financing its business activities. With
flexibility and cost leadership being crucial factors to being successful in the
new competitive utility environment, CG&E ultimately may be placed at a
competitive disadvantage if this restriction is not removed from the Articles.
The proposed amendment, as set forth and explained in the enclosed Offer to
Purchase and Proxy Statement, would remove the 20% restriction.
Concurrently with CG&E's proxy solicitation, Cinergy Corp. is offering to
purchase the outstanding shares of CG&E's cumulative preferred stock. While you
need not vote in favor of the proposed amendment in order to tender your shares,
Cinergy's offer is conditioned upon the proposed amendment being approved and
adopted at the Special Meeting. In addition, you have the right to vote for the
proposed amendment regardless of whether you tender your shares. If you vote in
favor of the proposed amendment and it passes, you will be entitled to receive a
special cash payment in the amount of $1.00 per share for each share that you
vote, provided your shares have not been tendered. Instructions for tendering
your shares and information pertaining to the special cash payment are included
with the enclosed material.
It is important to your interests that all shareholders, regardless of the
number of shares owned, participate in the affairs of the Company. Even if you
plan to attend the Special Meeting, WE URGE YOU TO MARK, SIGN AND DATE THE
ENCLOSED PROXY, WHICH IS INCLUDED WITHIN THE ENCLOSED LETTER OF TRANSMITTAL AND
PROXY, AND RETURN IT PROMPTLY. By signing and returning your proxy promptly, you
are assuring that your shares will be voted.
You are cordially invited to attend the Special Meeting which will be held
at CG&E's principal office, 139 East Fourth Street, Cincinnati, Ohio, on
Wednesday, September 18, 1996 at 4:00 p.m., eastern daylight saving time.
If you have questions regarding the proposed amendment or the Special
Meeting, please call MacKenzie Partners, Inc., the Information Agent, at (800)
322-2885. Questions about Cinergy's tender offer should be direct to Smith
Barney Inc. at (800) 655-4811 or Morgan Stanley & Co. Incorporated at (800)
223-2440 Extension 1965.
Thank you for your continued interest in the Company.
Sincerely yours,
<TABLE>
<S> <C>
[/S/ JACKSON H. RANDOLPH] [/S/ JAMES E. ROGERS]
Jackson H. Randolph James E. Rogers
Chairman of the Board Vice Chairman and
Chief Executive Officer
</TABLE>
<PAGE>
EXHIBIT 99.(a)(8)
Media Contact: Steve Brash 513-287-2226 (w) 513-231-6895 (h)
Angeline Protogere 317-838-1338 (w) 317-298-3090 (h)
Investor Contact: Felicia Ramstein 513-287-6479
FOR IMMEDIATE RELEASE - AUGUST 19, 1996
CINERGY ANNOUNCES TENDER OFFER FOR CG&E PREFERRED STOCK;
CG&E SEEKS ARTICLES AMENDMENT
CINCINNATI Cinergy Corp. (NYSE:CIN) announced today that it will offer to
purchase for cash any and all outstanding shares of preferred stock of The
Cincinnati Gas & Electric Company, a wholly-owned utility subsidiary of
Cinergy. The tender offer will commence on Tuesday, August 20, 1996 and is
scheduled to expire at 5:00 p.m. EDT on Wednesday, September 18, 1996, unless
extended.
The series of preferred stock that Cinergy is offering to purchase and the
applicable purchase price are as follows:
Purchase Price
Title of Series (per share)
The Cincinnati Gas & Electric Company,
Cumulative Preferred Stock ($100 par value)
- 4% Series $64.00
- 4-3/4% Series $80.00
- 7-7/8% Series $116.00
- 7-3/8% Series $110.00
(more)
<PAGE>
Page 2. Cinergy announces tender offer
Concurrently with the offer, the board of directors of CG&E is soliciting
proxies for use at a special meeting of shareholders of CG&E to be held on
September 18, 1996. The special meeting is being held to consider an
amendment to CG&E's articles of incorporation which would remove a provision
of the articles that limits CG&E's ability to issue unsecured debt, including
short-term debt.
Cinergy's tender offer is conditioned upon, among other things, the proposed
amendment being approved and adopted at the special meeting. In addition,
preferred shareholders have the right to vote for the proposed amendment
regardless of whether they tender their shares.
If the proposed amendment is approved and adopted, CG&E will make a special
cash payment in the amount of $1.00 per share to each preferred shareholder
who voted in favor of the proposed amendment, provided that such shares are
not tendered pursuant to Cinergy's offer. Those preferred shareholders who
validly tender their shares will be entitled only to the purchase price per
share listed above.
Dealer Managers for the tender offer are Smith Barney Inc. and Morgan Stanley
& Co., Incorporated, the Information Agent is MacKenzie Partners, Inc. and the
Depositary is The Bank of New York.
###
<PAGE>
EXHIBIT 99.(b)
CONFORMED COPY
$600,000,000
CREDIT AGREEMENT
Dated as of May 6, 1996,
As Amended and Restated as of July 15, 1996
Among
CINERGY CORP.,
as Borrower,
and
THE BANKS NAMED HEREIN,
as Banks,
and
THE BANK OF NEW YORK,
CIBC INC.,
THE FIRST NATIONAL BANK OF CHICAGO,
UNION BANK OF CALIFORNIA, N.A., and
UNION BANK OF SWITZERLAND, NEW YORK BRANCH,
as Co-Agents,
and
ABN-AMRO BANK, N.V. PITTSBURGH BRANCH,
BANK OF MONTREAL,
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH,
THE CHASE MANHATTAN BANK, N.A.,
THE FUJI BANK, LIMITED,
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., CHICAGO BRANCH,
MELLON BANK, N.A.,
THE SANWA BANK, LIMITED, CHICAGO BRANCH, and
TORONTO DOMINION (TEXAS), INC.,
as Lead Managers,
and
BARCLAYS BANK PLC,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms. . . . . . . . . . . . . . . 2
1.02. Computation of Time Periods. . . . . . . . . . . . 17
1.03. Accounting Terms . . . . . . . . . . . . . . . . . 17
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Commitments and Committed Advances . . . . . . 17
2.02. Making the Committed Advances. . . . . . . . . . . 18
2.03. The Bid Advances . . . . . . . . . . . . . . . . . 20
2.04. Facility Fee; Letter of Credit Risk Participation Fee;
Other Fees . . . . . . . . . . . . . . . . . . . . 24
2.05. Optional Reduction of the Commitments; Automatic
Reduction/Termination of Acquisition Commitment. . 26
2.06. Repayment of Committed Advances; Prepayment. . . . 27
2.07. Interest on Committed Advances . . . . . . . . . . 27
2.08. Additional Interest on Eurodollar Rate Advances and
Index Rate Bid Advances. . . . . . . . . . . . . . 28
2.09. Interest Rate Determination. . . . . . . . . . . . 28
2.10. Increased Costs; Capital Adequacy. . . . . . . . . 28
2.11. Payments and Computations. . . . . . . . . . . . . 29
2.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . 30
2.13. Sharing of Payments, Etc.. . . . . . . . . . . . . 32
2.14. Funding Indemnity. . . . . . . . . . . . . . . . . 33
2.15. Extension of Termination Date. . . . . . . . . . . 34
2.16. Replacement of Lenders . . . . . . . . . . . . . . 34
ARTICLE III
LETTERS OF CREDIT
3.01. LC Bank. . . . . . . . . . . . . . . . . . . . . . 35
3.02. Letters of Credit. . . . . . . . . . . . . . . . . 35
3.03. Reimbursement on Demand. . . . . . . . . . . . . . 36
3.04. Advances for Unreimbursed LC Disbursements . . . . 36
3.05. Participation; Reimbursement of LC Bank. . . . . . 36
3.06. Obligations Absolute . . . . . . . . . . . . . . . 38
3.07. Liability of LC Bank and the Lenders . . . . . . . 38
ARTICLE IV
CONDITIONS PRECEDENT
4.01. Conditions Precedent to Effective Date . . . . . . 39
4.02. Conditions Precedent to All Extensions of Credit . 41
4.03. Certain Conditions Precedent to Extension of
Termination Date . . . . . . . . . . . . . . . . . 42
4.04. Reliance on Certificates . . . . . . . . . . . . . 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties of the Borrower . . 43
ARTICLE VI
COVENANTS OF THE BORROWER
6.01. General Affirmative Covenants of the Borrower. . . 48
6.02. Negative Covenants of the Borrower . . . . . . . . 53
ARTICLE VII
EVENTS OF DEFAULT
7.01. Events of Default. . . . . . . . . . . . . . . . . 57
ARTICLE VIII
THE ADMINISTRATIVE AGENT
8.01. Authorization and Action . . . . . . . . . . . . . 61
8.02. Administrative Agent's Reliance, Etc . . . . . . . 61
8.03. Barclays and Affiliates. . . . . . . . . . . . . . 61
8.04. Lender Credit Decision . . . . . . . . . . . . . . 62
8.05. Indemnification. . . . . . . . . . . . . . . . . . 62
8.06. Successor Administrative Agent . . . . . . . . . . 62
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . 63
9.02. Notices, Etc.. . . . . . . . . . . . . . . . . . . 63
9.03. No Waiver; Remedies. . . . . . . . . . . . . . . . 64
9.04. Costs, Expenses and Taxes; Indemnification . . . . 64
9.05. Right of Set-off . . . . . . . . . . . . . . . . . 65
9.06. Binding Effect . . . . . . . . . . . . . . . . . . 65
9.07. Assignments, New Lenders and Participations. . . . 66
9.08. No Recourse. . . . . . . . . . . . . . . . . . . . 69
9.09. Consent to Jurisdiction; Waiver of Jury Trial. . . 70
9.10. Governing Law. . . . . . . . . . . . . . . . . . . 70
9.11. Execution in Counterparts. . . . . . . . . . . . . 70
9.12. Accession of Banks Upon Amendment and Restatement. 70
Schedule I - Names, Addresses, Commitments and Commitment
Percentages of Banks
Schedule II - Guarantee Obligations
Exhibit A-1 - Form of Committed Note
Exhibit A-2 - Form of Grid Bid Note
Exhibit A-3 - Form of Individual Bid Note
Exhibit B-1 - Form of Notice of Committed Borrowing
Exhibit B-2 - Form of Bid Request
Exhibit B-3 - Form of Bid Offer
Exhibit B-4 - Form of Bid Confirmation
Exhibit C - Form of Opinion of Jerome A. Vennemann, Esq.,
Associate General Counsel of the Borrower
Exhibit D - Form of Opinion of King & Spalding, Special Counsel
to the Administrative Agent
Exhibit E - Form of Assignment and Acceptance
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 6, 1996, as amended and
restated as of July 15, 1996 (this "Agreement") by and among:
a) CINERGY CORP., a Delaware corporation (the "Borrower");
b) the banks listed on the signature pages hereof (the
"Banks") and other Lenders (as hereinafter defined) from
time to time party hereto;
c) THE BANK OF NEW YORK, CIBC INC., THE FIRST NATIONAL BANK
OF CHICAGO, UNION BANK OF CALIFORNIA, N.A., and UNION
BANK OF SWITZERLAND, NEW YORK BRANCH, as co-agents (in
such capacity, the "Co-Agents");
d) ABN-AMRO BANK, N.V. PITTSBURGH BRANCH, BANK OF MONTREAL,
BAYERISCHE LANDESBANK, CAYMAN ISLANDS BRANCH, THE CHASE
MANHATTAN BANK, N.A., THE FUJI BANK, LIMITED, THE
INDUSTRIAL BANK OF JAPAN, LIMITED, THE LONG-TERM CREDIT
BANK OF JAPAN, LTD., CHICAGO BRANCH, MELLON BANK, N.A.,
THE SANWA BANK, LIMITED, CHICAGO BRANCH, and TORONTO
DOMINION (TEXAS), INC., as lead managers (in such
capacity, the "Lead Managers"); and
e) BARCLAYS BANK PLC ("Barclays") as Administrative Agent
(in such capacity, the "Administrative Agent") for the
Lenders hereunder.
W I T N E S S E T H
WHEREAS, the Borrower, Barclays as the sole initial Lender and
Barclays as the Administrative Agent are parties to a Credit Agreement dated
as of May 6, 1996 (the "Existing Agreement"); and
WHEREAS, to facilitate the syndication of the Commitments and
the Outstanding Extensions of Credit (as defined herein) and otherwise to
simplify the Existing Agreement, such parties wish to amend and restate the
Existing Agreement; and
WHEREAS, upon its execution and delivery of this Agreement,
each party to this Agreement that is not a party to the Existing Agreement
shall become a Bank hereunder with a Commitment as set forth on Schedule I
hereto and shall acquire from Barclays a ratable portion of the Outstanding
Extensions of Credit, all as set forth in Section 9.12;
NOW, THEREFORE, the parties to this Agreement hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Absolute Rate Bid Request" means any Bid Request
requesting the Lenders to offer to make Bid Advances at an
absolute rate (as opposed to a rate composed of the Applicable
Index Rate plus (or minus) a margin).
"Accepted Bid Lender" means any Lender whose Bid Offer,
or a portion thereof, is accepted pursuant to Section
2.03(b)(iv).
"Acquisition" means the proposed acquisition by the
Borrower (indirectly through the Acquisition Vehicles) of
Capital Stock of the Target for the purposes of or in
connection with an offer or proposed offer for the Capital
Stock of the Target, whether presently or subsequently
outstanding (other than any such Capital Stock already held by
the offeror or otherwise permitted to be excluded from the
offer pursuant to the City Code on Takeovers and Mergers),
made in accordance with the requirements of the City Code on
Takeovers and Mergers.
"Acquisition Advance" means an Advance made under the
Acquisition Commitment.
"Acquisition Commitment" has the meaning specified in
Section 2.01(b).
"Acquisition Termination Date" means May 6, 1997.
"Acquisition Vehicles" means, collectively, US Holdco, UK
Holdco and Bidco; individually, an "Acquisition Vehicle."
"Advance" means a Committed Advance or a Bid Advance.
"Affected Lender" has the meaning specified in Section
2.16.
"Affiliate" means, as to any Person, any trade or
business (whether or not incorporated) which is a member of a
group of which such Person is a member and which is under
common control within the meaning of the regulations under
Section 414 of the Code.
"Applicable Index Rate" means in respect of any Index
Rate Bid Advance of a specified maturity requested pursuant to
an Index Rate Bid Request, an interest rate per annum equal to
the average (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks
in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before
the Borrowing Date for such Index Rate Bid Advance in an
amount substantially equal to such Index Rate Bid Advance and
for a period comparable to the maturity applicable to such
Index Rate Bid Advance. The Applicable Index Rate for any
Index Rate Bid Advance shall be determined by the
Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the
Reference Banks two Business Days before the Borrowing Date
for such Index Rate Bid Advance.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of
a Base Rate Advance and such Lender's Eurodollar Lending
Office in the case of a Eurodollar Rate Advance and, in the
case of a Bid Advance, the office of such Lender notified by
such Lender to the Administrative Agent as such Lender's
Applicable Lending Office with respect to such Bid Advance.
"Applicable Margin" means, for any Eurodollar Rate
Advance, the percentage per annum set forth below:
Applicable Acquisition All General
Rating Advances during Advances and
Level Stage 1 Acquisition
Advances during
Stage II
Level I 0.025% 0.20%
Level II 0.050% 0.225%
Level III 0.225% 0.35%
Level IV 0.450% 0.50%
Any change in the Applicable Margin caused by a change in the
Applicable Rating Level shall take effect at the time such
change in the Applicable Rating Level shall occur.
"Applicable Rating Level" shall be determined at any
time and from time to time on the basis of the then
applicable Reference Ratings issued or maintained by at least
two of the Rating Agencies (at least one of which shall be
either S&P or Moody's or either of their respective
successors) in accordance with the following table:
Appli- S&P Moody's Duff & Phelps Fitch
cable
Rating
Level
Level I AA-or Aa3 or AA-or higher AA-or higher
higher higher
Level II A-or A3 or A-or higher, A-or higher
higher, higher, but less than but less than
but less but less AA- AA-
than AA- than Aa3
Level III BBB-or Baa3 or BBB-or BBB-or higher,
higher, higher, higher, but but less than
but less but less less than A- A-
than A- than A3
Level IV BB+ or Ba1 or BB+ or lower BB+ or lower
lower lower (or unrated) (or unrated)
(or (or
unrated) (unrated)
In the event of a "split" rating, the Applicable Rating Level
shall be determined on the basis of the lower of the two
highest ratings then applicable; provided, that if neither
of such two highest ratings is issued by Moody's or S&P, then
the Applicable Rating Level shall be determined on the basis
of the higher of the then applicable ratings issued by
Moody's or S&P, as the case may be; provided, further that
if both Moody's and S&P shall have ceased to issue or
maintain Reference Ratings, then the Applicable Rating Level
shall be Level IV. The Applicable Rating Level shall be
redetermined as and when any change in the ratings used in
the determination thereof shall be announced by any Rating
Agency.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible Assignee,
and accepted by the Administrative Agent in substantially the
form of Exhibit E hereto.
"Assignment Effective Date " means the effective date
of any Assignment and Acceptance.
"Barclays" has the meaning specified in the caption to
this Agreement.
"Base Rate" means, for any day for which the same is to
be calculated, the higher of (a) the rate designated by
Barclays from time to time as its prime rate in the United
States of America and (b) the Federal Funds Rate for such day
plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or
changes in the rates described in clause (a) or clause (b)
above.
"Base Rate Advance" means a Committed Advance which
bears interest as provided in Section 2.07(a).
"Bid Advance" means each advance made pursuant to
Section 2.03; the aggregate amount advanced by a Lender
pursuant to Section 2.03 on each Borrowing Date for Bid
Advances shall constitute one or more Bid Advances as
specified by such Lender pursuant to Section 2.03(g).
"Bid Advance Assignee" has the meaning specified in
Section 9.07(e).
"Bid Advance Assignment" has the meaning specified in
Section 9.07(e).
"Bid Borrowing" means a borrowing consisting of simul-
taneous Bid Advances made by one or more Accepted Bid
Lenders.
"Bidco" means Avon Energy Partners PLC, and shall
include any predecessor or successor.
"Bid Confirmation" means each confirmation by the
Borrower of its acceptance of Bid Offers, which Bid
Confirmation shall be substantially in the form of Exhibit
B-4 and shall be delivered to the Administrative Agent and
the Accepted Bid Lenders.
"Bid Notes" means, collectively, the Grid Bid Notes and
the Individual Bid Notes; individually a "Bid Note".
"Bid Offer" means each offer by a Lender to make Bid
Advances pursuant to a Bid Request, which Bid Offer shall
contain the information specified in Exhibit B-3 and shall
be delivered to the Administrative Agent and the Borrower by
telephone, immediately confirmed in writing.
"Bid Request" means each request by the Borrower for the
Lenders to submit bids to make Bid Advances, which shall
contain the information in respect of such requested Bid
Advances specified in Exhibit B-2 and shall be delivered to
the Administrative Agent and the Lenders in writing, or by
telephone, immediately confirmed in writing.
"Borrower" has the meaning specified in the caption
to this Agreement.
"Borrowing" means a Committed Borrowing or a Bid
Borrowing.
"Borrowing Date" means any Business Day specified in a
Notice of Committed Borrowing or a Bid Request, as the case
may be, as a date on which the Borrower requests the Lenders
to make Advances hereunder, or such Business Day on which a
Borrowing pursuant to Section 3.04 is made.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City and,
if the applicable Business Day relates to any Eurodollar Rate
Advances or Index Rate Bid Advances, on which dealings are
carried on in Eurodollars in the London interbank market.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the
foregoing.
"Cash Account" has the meaning specified in
Section 7.01.
"CG&E" means The Cincinnati Gas & Electric Company, an
Ohio corporation and a wholly-owned Subsidiary of the
Borrower.
"Cinergy Target Obligations" means, as of any time, the
unpaid principal amount of any Indebtedness, Guarantee
Obligations or other commitments or obligations of the
Borrower (a) to indemnify or save harmless an Acquisition
Vehicle or the Target, or any other Person in connection with
the Acquisition, or (b) to provide funds to or for the
account of an Acquisition Vehicle or the Target, whether
directly or indirectly, but shall not include (x) the
Commitments, the Advances or other amounts payable under this
Agreement or the Notes, (y) customary indemnification and
contribution obligations in favor of, and obligations in
respect of the fees and expenses of, underwriters, financial
advisers and similar professionals engaged to assist the
Borrower in connection with the Acquisition, or (z)
commitments to provide to an Acquisition Vehicle the proceeds
of the Advances made hereunder to enable such Acquisition
Vehicle to consummate the Acquisition.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" has the meaning specified in Section
2.01(a).
"Commitment Percentage" means, as to any Lender as of
any date of determination, the percentage describing such
Lender's pro rata share of the Commitments set forth in the
Register from time to time.
"Committed Advance" means an advance by a Lender to the
Borrower as part of a Committed Borrowing and refers to a
Base Rate Advance or a Eurodollar Rate Advance, each of which
shall be a "Type" of Committed Advance.
"Committed Borrowing" means a borrowing consisting of
simultaneous Committed Advances of the same Type and having
the same Interest Period made by each of the Lenders pursuant
to Section 2.01.
"Committed Note" has the meaning specified in Section
2.01(c).
"Commonly Controlled Entity" means an entity, whether
or not incorporated, which is under common control with the
Borrower within the meaning of Section 4001 of ERISA or is
part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Indebtedness" means, as of the date of any
determination thereof, the principal amount then outstanding
of all Indebtedness of the applicable Person and its
Subsidiaries, determined on a consolidated basis after
elimination of inter-company items.
"Consolidated Net Worth" means, as of the date of any
determination thereof, all items that, in conformity with
GAAP, would be included under shareholders' equity on a
consolidated balance sheet of the applicable Person at such
date.
"Consolidated Total Capitalization" means, as of the
date of any determination thereof, the sum of Consolidated
Net Worth of the applicable Person at such date and
Consolidated Indebtedness of such Person at such date.
"Continuing Directors" has the meaning specified in
Section 7.01(i).
"Contractual Obligation" means any provision of any
security issued by the applicable Person or of any agreement,
instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.
"Default" means any event, which, but for the giving
of notice or lapse of time or both, would constitute an Event
of Default.
"Dissenting Lender" has the meaning specified in Section
2.15(b).
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the
Administrative Agent.
"Duff & Phelps" means Duff & Phelps, Inc. or any
successor thereto.
"Effective Date" means the date on which all of the
conditions specified in Section 4.01 hereof have been
satisfied.
"Eligible Assignee" means any bank or financial
institution reasonably acceptable to the Borrower.
"Environmental Event" means (a) the generation, storage,
disposal, removal, transportation or treatment of "Hazardous
Substances" (as defined in any applicable Environmental Laws,
and including asbestos and materials containing asbestos) on
any real property owned, occupied or operated by the Borrower
or on real property adjoining or in the vicinity of such real
property, which through soil or ground water migration could
have come to be located at or on such property owned,
occupied or operated by the Borrower or any Person for whose
conduct the Borrower is responsible (any or all of such other
property being "other affected property"); (b) the receipt
by the Borrower of any notice or claim of any violation of
any Environmental Law or of any action based upon nuisance,
negligence or other tort theory alleging liability on the
basis of improper generation, storage, disposal, removal,
transportation or treatment of Hazardous Substances on any
property owned, occupied or operated by the Borrower or on
any other affected property; or (c) the presence or release
of Hazardous Substances at or from any property owned,
occupied or operated by the Borrower or any other affected
property that has resulted in contamination or deterioration
of any portion of such property in a level of contamination
greater than the levels permitted or established by any
governmental agency having jurisdiction over the Borrower or
any of such property or other affected property.
"Environmental Law" means any and all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the
environment or the release of any materials into the
environment.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto (or, if no such office is specified, its Domestic
Lending Office) or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for
each Eurodollar Rate Advance comprising part of the same
Committed Borrowing, an interest rate per annum equal to the
average (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S.
dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Interest Period
in an amount substantially equal to such Reference Bank's
Eurodollar Rate Advance comprising part of such Committed
Borrowing and for a period equal to such Interest Period.
The Eurodollar Rate for the Interest Period for each
Eurodollar Rate Advance comprising part of the same Committed
Borrowing shall be determined by the Administrative Agent on
the basis of applicable rates furnished to and received by
the Administrative Agent from the Reference Banks two
Business Days before the first day of such Interest Period.
"Eurodollar Rate Advance" means a Committed Advance
which bears interest as provided in Section 2.07(b).
"Event of Default" has the meaning specified in Section
7.01.
"Extension Date" has the meaning specified in Section
4.03.
"Extension of Credit" means (a) the making by any Lender
of a Committed Advance, (b) the making by any Lender of any
Bid Advance, (c) the issuance of a Letter of Credit by the
LC Bank or (d) the amendment of any Letter of Credit having
the effect of extending the stated termination date thereof,
increasing the LC Outstandings, or otherwise altering any of
the material terms or conditions thereof.
"Facility Fee" has the meaning specified in Section
2.04(a).
"Federal Funds Rate" means, for any day in any period,
the rate set forth for such day opposite the caption "Federal
Funds (Effective)" in the weekly statistical release
designated as "H.15(519)", or any successor publication,
published by the Board of Governors of the Federal Reserve
System.
"Financing Documents" means this Agreement and the
Notes.
"Financing Lease" means any lease of property, real or
personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"Fitch" means Fitch's Investors Services or any
successor thereto.
"GAAP" means generally accepted accounting principles
in the United States of America in effect from time to time.
"General Advance" means an Advance made under the
General Commitment.
"General Commitment" has the meaning specified in
Section 2.01(b).
"Governmental Authority" means any nation or government,
any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Grid Bid Note" has the meaning specified in Section
2.03(f).
"Guarantee Obligation" means, as to any Person (the
"guaranteeing person"), any obligation of (a) the
guaranteeing person or (b) another Person (including, without
limitation, any bank under any letter of credit) the creation
of which the guaranteeing person has induced by issuing a
reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of
any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be
the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the
amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower
in good faith.
"Hazardous Materials" means any hazardous materials,
hazardous wastes, hazardous constituents, hazardous or toxic
substances, petroleum products (including crude oil or any
fraction thereof), defined or regulated as such in or under
any Environmental Law.
"Indebtedness" means, as to any Person, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices)
or which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under
Financing Leases, (c) all obligations of such Person in
respect of acceptances issued or created for the account of
such Person, and (d) all liabilities secured by any Lien on
any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment
thereof.
"Index Rate Bid Advance" means any Bid Advance bearing
interest at an interest rate equal to the Applicable Index
Rate plus (or minus) a margin.
"Index Rate Bid Request" means any Bid Request
requesting the Lenders to offer to make Index Rate Bid
Advances.
"Individual Bid Note" has the meaning specified in
Section 2.03(g).
"Interest Period" means, for each Committed Advance
comprising part of the same Committed Borrowing, the period
commencing on the date of such Committed Advance and ending
on the last day of the period selected by the Borrower
pursuant to the provisions below. The duration of each such
Interest Period shall be (a) in the case of a Eurodollar Rate
Advance, one, two, three or six months and (b) in the case
of a Base Rate Advance, from the Borrowing Date for such
Advance and ending on the first March 31, June 30, September
30 or December 31 to occur following such Borrowing Date, in
each case as the Borrower may select in its Notice of
Committed Borrowing; provided, however, that:
(i) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date;
(ii) Interest Periods commencing on the same date
for Committed Advances comprising part of the same
Committed Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day, provided, in the case of any Interest
Period for a Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest
Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the
next preceding Business Day.
"Investment Policies and Guidelines" means the
investment policies and guidelines of the Borrower delivered
to the Administrative Agent and each Lender, pursuant to
Section 4.01(a)(iv).
"LC Bank" means Barclays, in its capacity as issuer of
any Letter of Credit pursuant to Article III hereof.
"LC Outstandings" means, for any date of determination,
the aggregate maximum amount available to be drawn under all
Letters of Credit outstanding on such date (assuming the
satisfaction of all conditions for drawing enumerated
therein).
"Lenders" means the Banks listed on the signature pages
hereof, each other bank or financial institution that shall
become a party hereto pursuant to Section 9.07(a), and, if
and to the extent so provided in Section 3.05(d), the LC
Bank.
"Letter of Credit" means a letter of credit issued by
the LC Bank pursuant to Article III, as such letter of credit
may from time to time be amended, modified or extended in
accordance with the terms of this Agreement.
"LIBOR Reserve Percentage" of any Lender for the
Interest Period for any Eurodollar Rate Advance or for the
term of any Index Rate Bid Advance means the reserve
percentage applicable during such Interest Period or such
term (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those
days in such Interest Period or such term during which any
such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve
requirement) for such Lender with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities
having a term equal to such Interest Period or term, as the
case may be.
"Lien" means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory
or other), or preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any Financing Lease
having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"Material Adverse Effect" means a material adverse
effect on (a) the business, operations, property, condition
(financial or otherwise) or prospects of the Borrower, PSI
Energy or CG&E, in each case and its Subsidiaries taken as
a whole, (b) the ability of the Borrower to perform its
obligations under this Agreement or the Notes, or (c) the
validity or enforceability of this Agreement or any of the
Notes or the rights or remedies of the Administrative Agent
or the Lenders hereunder or thereunder.
"Material Subsidiary" means, as to any Person at any
date, any Subsidiary of such Person which, as of such date,
either has total assets in excess of $5,000,000 or total
revenues, for the preceding 12-month period, in excess of
$5,000,000, in each case, as certified by an officer of the
Borrower; provided, that, notwithstanding the foregoing, PSI
Energy, PSI Energy Argentina, Inc., CG&E, The Union Light,
Heat & Power Company and Lawrenceburg Gas Company shall be
deemed "Material Subsidiaries" of the Borrower.
"M. E. Holdings Credit Agreement" means that certain
Credit Agreement, dated as of May 6, 1996, among M. E.
Holdings, Inc., as borrower, the banks named therein, and
Barclays as administrative agent thereunder.
"Minimum Bid Amount" has the meaning specified in
Section 2.03(b)(iv)(B).
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.
"Non-Recourse Target Debt" means Indebtedness or
Guarantee Obligations of an Acquisition Vehicle and/or the
Target for which neither the Borrower nor any Subsidiary of
the Borrower (other than such Acquisition Vehicle or the
Target) has any liability.
"Notes" means, collectively, the Committed Notes and the
Bid Notes; individually, a "Note".
"Notice of Committed Borrowing" has the meaning
specified in Section 2.02(a).
"Outstanding Extensions of Credit" means, as of any day
for the determination thereof, (a) the aggregate principal
amount of all Committed Advances outstanding on such day plus
(b) the aggregate principal amount of all Bid Advances
outstanding on such day plus (c) the LC Outstandings on such
day plus (d) the aggregate amount of all Unreimbursed LC
Disbursements outstanding on such day.
"Outstanding General Extensions of Credit" means, as of
any day for the determination thereof, (a) the aggregate
principal amount of all Committed Advances made under the
General Commitment outstanding on such day plus (b) the
aggregate principal amount of all Bid Advances made under the
General Commitment outstanding on such day plus (c) the LC
Outstandings on such day plus (d) the aggregate amount of all
Unreimbursed LC Disbursements outstanding on such day.
"Parent Support Agreement" means that certain Parent
Support Agreement, dated as of May 6, 1996, between the
Borrower and M. E. Holdings, Inc., in favor of the
administrative agent and the lenders under the M. E. Holdings
Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation
under Title IV of ERISA, or any successor thereto.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture, limited liability
company or other entity, or a government or any political
subdivision, agency or instrumentality thereof.
"Plan" means an employee benefit plan maintained for
employees of the Borrower or any Affiliate and covered by
ERISA.
"PSI Energy" means PSI Energy, Inc., an Indiana
corporation and a wholly-owned Subsidiary of the Borrower.
"Rating Agencies" means, collectively, Duff & Phelps,
Fitch, Moody's and S&P; individually a "Rating Agency".
"Reference Banks" means Barclays, The Chase Manhattan
Bank, N.A. and Union Bank of Switzerland, together with such
other bank(s) as may be designated by the Administrative
Agent in consultation with the Borrower; provided, however,
that each Reference Bank shall at all times be a Lender
hereunder.
"Reference Ratings" means the ratings issued or
maintained from time to time by the Rating Agencies in
respect of the first mortgage bonds (or, if no such first
mortgage bonds exist, the senior non-credit-enhanced
long-term obligations) of PSI Energy and/or CG&E, whichever
would yield the higher (i.e. lower-rated) Applicable Rating
Level.
"Register" has the meaning specified in Section 9.07(c).
"Reportable Event" in respect of any Plan, has the
meaning specified in ERISA.
"Required Lenders" means Lenders having at least 66 2/3%
of the Commitments; provided, however, that (i) if the
Commitments shall have been terminated or (ii) for purposes
of any determination to be made under Section 7.01 after the
Acquisition Termination Date, "Required Lenders" shall mean
Lenders holding at least 66 2/3% of the then Outstanding
Extensions of Credit.
"Requirement of Law" means, as to any Person, the
certificate of incorporation and by-laws or other
organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer,
president, chief financial officer or treasurer of the
applicable Person.
"SEGBA Debt Agreement" means the Loan, Pledge and
Put/Call Agreement entered into by PSI Energy Argentina,
Inc., a wholly-owned Subsidiary of PSI Energy, as borrower
thereunder, and Perez Companc S.A.C.F.I.M.F.A., as lender
thereunder.
"Single Employer Plan" means any Plan which is covered
by Title IV of ERISA, but which is not a Multiemployer Plan.
"S&P" means Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. or any successor
thereto.
"Stage I" means the period from and including the date
of this Agreement to and including the Acquisition
Termination Date.
"Stage II" means the period from and including the day
immediately following the Acquisition Termination Date, to
and including the Termination Date.
"Subsidiary" means, as to any Person, a corporation,
partnership or other entity: (i) of which shares of stock or
other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the
time owned, directly or indirectly through one or more
intermediaries by such Person and/or (ii) the management of
which is otherwise controlled, directly or indirectly through
one or more intermediaries by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower. Notwithstanding the
foregoing, for purposes of this Agreement, an Acquisition
Vehicle and/or the Target shall be deemed to be a Subsidiary
of the Borrower (or a Subsidiary of a Subsidiary of the
Borrower) only if clause (i) of this definition is satisfied
(whether or not clause (ii) of this definition shall also be
satisfied).
"Target" means Midlands Electricity plc, a regional
electric company organized under the laws of England.
"Termination Date" means (a) May 6, 2001, or (b) the
later anniversary of the date of this Agreement to which the
term of this Agreement shall be extended pursuant to Section
2.15, or (c) such earlier date of termination in whole of the
Commitments pursuant to Section 2.05 or 7.01.
"Total Commitment" has the meaning specified in Section
2.01(b).
"Type" has the meaning specified in the definition of
"Committed Advance".
"UK Holdco" means Avon Energy Partners Holdings, a
private unlimited liability company incorporated in England,
and shall include any predecessor or successor.
"Unreimbursed LC Disbursement" means the unpaid
obligation (or, if the context so requires, the amount of
such obligation) of the Borrower to reimburse the LC Bank for
a payment made by the LC Bank under a Letter of Credit, but
shall not include any portion of such obligation that has
been repaid with the proceeds of, or converted to, Advances
hereunder.
"US Holdco" means M. E. Holdings, Inc., a Delaware
corporation, and shall include any predecessor or successor.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding."
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the financial statements
referred to in Section 5.01(d).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Commitments and Committed Advances. (a)
Each Lender severally agrees, on the terms and conditions hereinafter set
forth, to make Committed Advances to the Borrower and to participate in the
issuance of Letters of Credit (and the LC Outstandings and Unreimbursed LC
Disbursements thereunder) from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an aggregate
amount not to exceed at any time outstanding the amount set forth opposite
such Lender's name on Schedule I hereto or, if such Lender has entered into
one or more Assignment and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 9.07(c),
as such amount may be reduced pursuant to Section 2.05 (such Lender's
"Commitment").
(b) The sum of the Commitments is hereinafter referred to
as the "Total Commitment". The Total Commitment shall consist of an
"Acquisition Commitment" in an initial amount of $500,000,000 and a "General
Commitment" in an initial amount of $100,000,000, in each case as the same
may be reduced from time to time in accordance with Section 2.05 hereof, and
each Lender's Commitment shall be allocated between the Acquisition
Commitment and the General Commitment in the same proportions as the
Acquisition Commitment and the General Commitment from time to time bear to
the Total Commitment.
(c) Each Lender's Committed Advances shall be evidenced by
a promissory note of the Borrower (a "Committed Note") which Committed Note
shall be (i) payable to the order of such Lender, (ii) stated to mature on
the Termination Date, (iii) in an amount equal to such Lender's Commitment
and (iv) otherwise in the form of Exhibit A-1 hereto. Each Committed
Borrowing shall be in an aggregate amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and shall consist of
Committed Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits and
subject to the conditions set forth herein, the Borrower may borrow, repay or
prepay and reborrow Advances and request the issuance of Letters of Credit.
(d) Notwithstanding anything contained in this Agreement to
the contrary, at no time shall (i) the Outstanding Extensions of Credit
exceed the Total Commitment, (ii) the aggregate outstanding principal amount
of Acquisition Advances exceed the Acquisition Commitment or (iii) the
Outstanding General Extensions of Credit exceed the General Commitment, in
each case as in effect at such time.
SECTION 2.02. Making the Committed Advances. (a) Each
Committed Borrowing shall be made on notice given by the Borrower to the
Administrative Agent via FAX transmission in accordance with Section 9.02
hereof not later than 11:00 A.M. (New York City time) on the Business Day
that is: (i) three Business Days prior to the Borrowing Date of the proposed
Committed Borrowing, in the case of a Committed Borrowing comprised of
Eurodollar Rate Advances, or (ii) the Borrowing Date of the proposed
Committed Borrowing, in the case of a Committed Borrowing comprised of Base
Rate Advances. Each such notice of a Committed Borrowing (a "Notice of
Committed Borrowing") shall be in substantially the form of Exhibit B-1
hereto, specifying therein the requested Borrowing Date of such Committed
Borrowing, whether such Committed Borrowing is to consist of Acquisition
Advances or General Advances (or if both, the respective principal amounts of
each), the Type of Committed Advances comprising such Committed Borrowing,
aggregate amount of such Committed Borrowing, and the Interest Period to be
applicable thereto. Upon receipt of any Notice of Committed Borrowing, the
Administrative Agent shall give to each Lender prompt notice thereof by
telex, cable or telecopier, and, in the case of a proposed Committed
Borrowing comprised of Eurodollar Rate Advances, the Administrative Agent
shall promptly notify each Lender of the applicable interest rate under
Section 2.07(b). Each Lender shall, before 1:00 P.M. (New York City time) on
the Borrowing Date of such Committed Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 9.02, in same day funds, such Lender's
Commitment Percentage of such Committed Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article IV, the Administrative Agent will make such
funds available to the Borrower at the Administrative Agent's aforesaid
address.
(b) Anything in Section 2.02(a), above, to the contrary
notwithstanding,
(i) if any Lender shall notify the Administrative Agent
that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful,
or that any central bank or other Governmental Authority
asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations
hereunder to make Eurodollar Rate Advances or to fund or
maintain Eurodollar Rate Advances hereunder, the obligation
of such Lender to make, fund or maintain Eurodollar Rate
Advances shall be suspended, and, until such Lender shall
notify the Administrative Agent that the circumstances
causing such suspension no longer exist, (1) each Committed
Advance by such Lender shall be a Base Rate Advance, and (2)
the Borrower shall have the right to replace such Lender by
causing such Lender to enter into one or more Assignments and
Acceptances in respect of its entire Commitment, the Advances
held by it and all other amounts owing to it in respect
thereof with one or more banks or other financial
institutions selected by the Borrower with the consent of the
Administrative Agent (not to be unreasonably withheld),
pursuant to Section 9.07 hereof. Each Lender agrees to enter
into any such Assignments and Acceptances as may be required
by this clause (assuming the same are properly and accurately
completed);
(ii) if at any time other than a time when Barclays is
the sole Reference Bank hereunder, the Administrative Agent
shall not have been furnished timely information for
determining the Eurodollar Rate for Eurodollar Rate Advances
comprising any requested Committed Borrowing by at least one
Reference Bank (or two Reference Banks, if at such time there
shall be three or more Reference Banks), the right of the
Borrower to select Eurodollar Rate Advances for such
Committed Borrowing or any subsequent Committed Borrowing
shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist, and each Committed
Advance comprising such Committed Borrowing shall be a Base
Rate Advance; and
(iii) if Lenders having more than 50% of the
Commitments shall, at least one Business Day before the date
of any requested Committed Borrowing, notify the
Administrative Agent that the Eurodollar Rate for Eurodollar
Rate Advances comprising such Committed Borrowing will not
adequately reflect the cost to such Lenders of making or
funding their respective Eurodollar Rate Advances for such
Committed Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Committed Borrowing or any
subsequent Committed Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no
longer exist, and each Committed Advance comprising such
Committed Borrowing shall be a Base Rate Advance.
(c) Each Notice of Committed Borrowing shall be irrevocable
and binding on the Borrower. Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any Committed Borrowing
that such Lender will not make available to the Administrative Agent such
Lender's ratable portion of such Committed Borrowing, the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Committed Borrowing in accordance
with this Section 2.02 and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
ratable portion available to the Administrative Agent, such Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to Committed Advances
comprising such Committed Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount with interest as aforesaid, such amount so repaid
shall constitute such Lender's Committed Advance as part of such Committed
Borrowing for purposes of this Agreement as if made on the original date of
such Committed Borrowing.
(d) The failure of any Lender to make the Committed Advance
to be made by it as part of any Committed Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Committed
Advance on the date of such Committed Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Committed Advance
to be made by such other Lender on the date of any Committed Borrowing.
SECTION 2.03. The Bid Advances. (a) Each Lender severally
agrees that upon and subject to the terms and conditions hereof, the Borrower
may obtain Bid Advances under this Section 2.03 from time to time on any
Business Day during the period from the Effective Date until the date
occurring 30 days prior to the Termination Date (as the same may be extended
pursuant to Section 2.15 hereof) in the manner set forth in this Section
2.03.
(b) (i) The Borrower may request Bid Advances under this
Section 2.03 by delivering a Bid Request to the Administrative Agent and each
Lender not later than 11:00 A.M. (New York City time) four Business Days
prior to the proposed Borrowing Date (in the case of an Index Rate Bid
Request), and not later than 10:00 A.M. (New York City time) one Business Day
prior to the proposed Borrowing Date (in the case of an Absolute Rate Bid
Request). Each Bid Request may solicit bids for Bid Advances in an aggregate
principal amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and for not more than three alternative maturity dates for
such Bid Advances. The maturity date for each Bid Advance shall be not more
than 270 days after the Borrowing Date therefor (and in any event not after
the Termination Date). Each Bid Request shall specify whether the requested
Bid Advances are to consist of Acquisition Advances or General Advances, or
if both, the respective principal amounts of each.
(ii) In the case of an Index Rate Bid Request, any Lender
that elects, in its sole discretion, to do so, shall irrevocably offer to
make one or more Bid Advances at the Applicable Index Rate plus or minus a
margin determined by such Lender in its sole discretion for each such Bid
Advance. Any such irrevocable offer shall be made by delivering a Bid Offer
to the Borrower and the Administrative Agent before 10:30 A.M. (New York City
time) three Business Days before the proposed Borrowing Date, setting forth
the maximum and minimum amount of Bid Advances for each maturity date
proposed to be made under the Acquisition Commitment and/or the General
Commitment (but in no event in excess of the specifications of the Borrower
set forth in the relevant Bid Request), and the aggregate maximum amount for
all maturity dates, which such Lender would be willing to make (which amounts
may exceed such Lender's Commitment) and the margin above or below the
Applicable Index Rate at which such Lender is willing to make each such Bid
Advance. If the Administrative Agent in its capacity as a Lender shall, in
its sole discretion, elect to make any such offer, it shall deliver its Bid
Offer to the Borrower before 10:15 A.M. (New York City time) three Business
Days before the proposed Borrowing Date.
(iii) In the case of an Absolute Rate Bid Request, any
Lender that elects, in its sole discretion, to do so, shall irrevocably offer
to make one or more Bid Advances at a rate of interest determined by such
Lender in its sole discretion for each such Bid Advance. Any such
irrevocable offer shall be made by delivering a Bid Offer to the Borrower and
the Administrative Agent, before 9:30 A.M. (New York City time) on the
proposed Borrowing Date, setting forth the maximum and minimum amount of Bid
Advances for each maturity date proposed to be made under the Acquisition
Commitment and/or the General Commitment (but in no event in excess of the
specifications of the Borrower set forth in the relevant Bid Request), and
the aggregate maximum amount for all maturity dates, which such Lender would
be willing to make (which amounts may exceed such Lender's Commitment) and
the rate of interest at which such Lender is willing to make each such Bid
Advance. If the Administrative Agent in its capacity as a Lender shall, in
its sole discretion, elect to make any such offer, it shall deliver a Bid
Offer to the Borrower before 9:15 A.M. (New York City time) on the proposed
Borrowing Date.
(iv) The Borrower shall before 11:30 A.M. (New York City
time) three Business Days before the proposed Borrowing Date (in the case of
Bid Advances requested by an Index Rate Bid Request) and before 10:30 A.M.
(New York City time) on the proposed Borrowing Date (in the case of Bid
Advances requested by an Absolute Rate Bid Request) either, in its absolute
discretion:
(A) cancel such Bid Request by giving the
Administrative Agent and each Lender telephone notice
(promptly confirmed in writing) to that effect, or
(B) accept one or more of the offers made by any Lender
or Lenders pursuant to clause (ii) or clause (iii) above, as
the case may be, by giving telephone notice to the
Administrative Agent and each Accepted Bid Lender under such
Bid Request (immediately confirmed by delivery to the
Administrative Agent of a Bid Confirmation, with a copy of
the applicable Bid Confirmation to each Accepted Bid Lender)
of the amount of Bid Advances for each relevant maturity date
to be made by each such Lender under the Acquisition
Commitment or the General Commitment (which amount for each
such maturity date shall be equal to or less than the maximum
amount for such maturity date and commitment (Acquisition or
General) specified in the Bid Offer of such Lender and
greater than or equal to the minimum amount for such maturity
date and commitment (Acquisition or General) specified in the
Bid Offer (a "Minimum Bid Amount") of such Lender, and for
all maturity dates included in such Bid Offer shall be equal
to or less than the aggregate maximum amount specified in
such Bid Offer for all such maturity dates) and reject (by
telephone) any remaining offers made by Lenders pursuant to
clause (ii) or clause (iii) above, as the case may be;
provided, however, that (w) the Borrower may not accept
offers for Bid Advances for any maturity date, or to be made
under the Acquisition Commitment or General Commitment, in
an aggregate principal amount in excess of the maximum
principal amount requested in the related Bid Request, (x)
subject to clause (y) below, if the Borrower accepts any of
such offers, it must accept offers strictly based upon
pricing for such relevant maturity date and no other criteria
whatsoever, (y) if two or more Lenders submit offers for any
maturity date at identical pricing and the Borrower accepts
any of such offers but does not wish to (or by reason of the
limitations set forth in clause (w) of this proviso, cannot)
borrow the total amount offered by such Lenders with such
identical pricing, the Borrower shall accept offers from all
of such Lenders in amounts allocated among them pro rata
according to the amounts offered by such Lenders (or as
nearly pro rata as shall be practicable after giving effect
to the requirement set forth in clause (z) below); provided
that, if as a result of such pro rata allocation the amount
of any accepted offer with respect to any Lender shall be
less than such Lender's relevant Minimum Bid Amount, then the
Borrower may select Lenders to make the relevant Bid Advances
such that it will not be precluded from borrowing the total
amount which it wishes to borrow with respect to such Bid
Borrowing and (z) the Bid Advances made by a Lender on a
Borrowing Date for each relevant maturity date shall be in
a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
(v) If the Borrower notifies the Administrative Agent
and each Lender that a Bid Request is canceled pursuant to
clause (iv)(A) above, the Bid Advances requested thereby
shall not be made. Failure of the Borrower to give a timely
acceptance in accordance with clause (iv)(B) above shall
constitute a cancellation pursuant to such clause (iv)(A).
(vi) If the Borrower accepts pursuant to clause (iv)(B)
above one or more of the offers made by any Lender or
Lenders, each Accepted Bid Lender shall, before 12:00 Noon
(New York City time) on the Borrowing Date specified in the
Bid Request applicable thereto, make available for the
account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section
9.02, in same day funds, the amount of Bid Advances to be
made by such Lender. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article IV, the Administrative Agent
will make such funds available to the Borrower at the
Administrative Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the Borrower shall
notify each Lender of the aggregate amount of Bid Advances
advanced on such Borrowing Date and the respective maturity
dates thereof.
(c) Within the limits and on the conditions set forth in
this Section 2.03 and in Section 2.01(d), the Borrower may from time to time
borrow under this Section 2.03, repay pursuant to paragraph (d) below, and
reborrow under this Section 2.03.
(d) The Borrower shall repay to the Administrative Agent for
the account of each Lender which has made a Bid Advance (or the Bid Advance
Assignee in respect thereof, as the case may be) on the maturity date of each
Bid Advance (such maturity date being that specified by the Borrower for
repayment of such Bid Advance in the related Bid Request) the then unpaid
principal amount of such Bid Advance. Except to the extent specified
otherwise in the related Bid Request, the Borrower shall not have the right
to prepay any principal amount of any Bid Advance without the consent of the
holder or holders of such Bid Advance (which may be withheld in its or their
sole discretion).
(e) The Borrower shall pay interest on the unpaid principal
amount of each Bid Advance from the Borrowing Date to the stated maturity
date thereof, at the rate of interest determined pursuant to paragraph (b)
above (calculated on the basis specified in Section 2.11(c)), payable on the
interest payment date or dates specified by the Borrower for such Bid Advance
in the related Bid Request (which interest payment date or dates shall occur
not less than once per quarter) and as provided in the Bid Note evidencing
such Bid Advance. If all or a portion of the principal amount of or interest
on any Bid Advance shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue principal amount, and,
to the extent permitted by law, overdue interest, shall, without limiting any
rights of any Lender under this Agreement, bear interest from the date on
which such payment was due at a rate per annum which is equal to 2% plus the
rate which would otherwise be applicable to such Bid Advance until the
scheduled maturity date with respect thereto as set forth in the Bid Note
evidencing such Bid Advance, and for each day thereafter at a rate per annum
which is equal to 2% plus the Base Rate until paid in full (as well after as
before judgment), payable on demand, or, in the absence of demand, weekly on
Friday of each week.
(f) The Bid Advances made by each Lender shall be evidenced
initially by a promissory note of the Borrower dated the Effective Date,
substantially in the form of Exhibit A-2 with appropriate insertions (a "Grid
Bid Note"), payable to the order of such Lender and representing the
obligation of the Borrower to pay the unpaid principal amount of all Bid
Advances made by such Lender, with interest on the unpaid principal amount
from time to time outstanding on each Bid Advance evidenced thereby as
prescribed in Section 2.03(e). Each Lender is hereby authorized to record
the date and amount of each Bid Advance by such Lender, the maturity date
thereof, the date and amount of each payment of principal and the interest
rate with respect thereto on the schedule annexed to and constituting part of
its Grid Bid Note, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded; provided, however,
that the failure to make any such recordation or any error in any such
recordation shall not affect the obligations of the Borrower hereunder or
under any Grid Bid Note.
(g) Amounts advanced by a Lender pursuant to this Section
2.03 on a Borrowing Date which have the same maturity date and interest rate
shall be deemed to constitute one Bid Advance so long as such amounts remain
evidenced by the Grid Bid Note of such Lender; any such Lender that wishes
such amounts to constitute more than one Bid Advance and to have each such
Bid Advance evidenced by a separate promissory note payable to such Lender,
substantially in the form of Exhibit A-3 with appropriate insertions as to
Borrowing Date, principal amount and interest rate (an "Individual Bid
Note"), shall notify the Administrative Agent and the Borrower in writing or
by telephone (promptly confirmed in writing) of the respective principal
amounts of the Bid Advances (which principal amounts shall not be less than
$5,000,000 for any such Bid Advance) to be evidenced by each such Individual
Bid Note. Promptly after receipt of such notice, the Borrower shall deliver
to such Lender an Individual Bid Note payable to the order of such Lender in
the principal amount of each such Bid Advance and otherwise conforming to the
requirements of this Agreement. Upon receipt of such Individual Bid Note,
such Lender shall endorse on the Schedule attached to its relevant Grid Bid
Note the transfer of such Bid Advance from such Grid Bid Note to such
Individual Bid Note.
SECTION 2.04. Facility Fee; Letter of Credit Risk
Participation Fee; Other Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee (the
"Facility Fee") on the average daily amount of such Lender's Commitment
(whether used or unused), as allocated among the Acquisition Commitment and
General Commitment in accordance with Section 2.01(b), from the date hereof
in the case of each Bank listed on the signature pages hereto and from the
effective date specified in the Assignment and Acceptance pursuant to which
it became a Lender in the case of any other Lender, until the Termination
Date or earlier termination of such Lender's Commitment pursuant to Section
2.05, payable on the basis of the actual number of days elapsed and a year of
360 days, on the last Business Day of March, June, September and December in
each year and on the Termination Date, at the rate per annum set forth below
as determined in accordance with the Applicable Rating Level and applicable
Stage:
Applicable Acquisition General
Rating Commitment in Commitment (at
Level Stage I all times) and
Acquisition
Commitment in
Stage II
Level I 0.30% 0.100%
Level II 0.30% 0.125%
Level III 0.30% 0.175%
Level IV 0.30% 0.250%
(b) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender, ratably in accordance with their respective
Commitments, a letter of credit risk participation fee on the average daily
amount of the LC Outstandings, from the date hereof in the case of each Bank
listed on the signature pages hereto, and from the effective date specified
in the Assignment and Acceptance pursuant to which it became a Lender in the
case of any other Lender, until the Termination Date or earlier termination
of such Lender's Commitment pursuant to Section 2.05, payable on the basis of
the actual number of days elapsed and a year of 360 days, on the last
Business day of March, June, September and December in each year and on the
Termination Date, at a rate per annum equal to the Applicable Margin then
determined to be in effect for Eurodollar Rate Advances.
(c) The Borrower shall pay to the Administrative Agent, for
its own account, such other fees as have been or may from time to time be
agreed between them.
(d) Any change in the facility fee or letter of credit risk
participation fee caused by a change in the Applicable Rating Level shall
take effect at the time such change in the Applicable Rating Level shall
occur.
(e) The Borrower shall pay to the LC Bank such other fees
as the Borrower and the LC Bank shall agree to from time to time.
SECTION 2.05. Optional Reduction of the Commitments;
Automatic Reduction/Termination of Acquisition Commitment. (a) The Borrower
shall have the right, upon at least five Business Days' irrevocable notice to
the Administrative Agent, to terminate in whole or reduce ratably in part the
Commitments by either terminating in whole or in part the Total Commitment
and thereby the Acquisition Commitment and/or the General Commitment in such
proportion as the Borrower may specify in such notice; provided, that:
(i) each such partial reduction shall be in the
aggregate amount of $25,000,000 or any integral multiple of
$1,000,000 in excess thereof and shall reduce permanently the
amount then in effect of (A) the Commitments and (B) the
Total Commitment and the Acquisition Commitment and/or the
General Commitment, as specified by the Borrower;
(ii) any such reduction shall be accompanied by
prepayment of (A) with respect to any such reduction of the
Acquisition Commitment, Committed Advances outstanding under
the Acquisition Commitment or (B) with respect to any such
reduction of the General Commitment, Committed Advances
outstanding under the General Commitment and Unreimbursed LC
Disbursements, in each case together with all interest
thereon accrued to the date of such prepayment or repayment
on the amount prepaid or repaid and in the case of
prepayments of Eurodollar Rate Advances, any amount payable
to the Lenders pursuant to Section 2.14, in each case to the
extent, if any, that (X) with respect to any such reduction
of the Acquisition Commitment, the outstanding Acquisition
Advances exceed the amount of the Acquisition Commitment as
proposed to be reduced and (Y) with respect to any such
reduction of the General Commitment, the Outstanding General
Extensions of Credit exceed the amount of the General
Commitment as proposed to be reduced; and
(iii) the Borrower shall not have the right to
reduce (A) the Acquisition Commitment or the General
Commitment to an amount less than the aggregate principal
amount of all Bid Advances then outstanding under the
Acquisition Commitment or the General Commitment, as the case
may be, or (B) the General Commitment to an amount less than
the then existing LC Outstandings.
(b) On the Acquisition Termination Date, the Acquisition
Commitment shall be reduced to the aggregate amount of Acquisition Advances
outstanding on such date or, in the event no Acquisition Advances are
outstanding on such date, the Acquisition Commitment shall terminate in whole
on such date. Upon such reduction or termination, the portion of each
Lender's Commitment allocated to the Acquisition Commitment in accordance
with Section 2.01(b) shall be correspondingly reduced or terminated.
Immediately following any such automatic reduction or termination, the
Administrative Agent shall promptly provide to each Lender a revised
Schedule I, which shall reflect the Commitments of the several Lenders as
reduced pursuant to this subsection (b).
SECTION 2.06. Repayment of Committed Advances; Prepayment.
(a) The Borrower shall repay (whether with the proceeds of new Committed
Advances made simultaneously therewith or otherwise) the principal amount of
each Committed Advance made by each Lender on the earlier to occur of the
last day of the Interest Period for such Committed Advance or the Termination
Date.
(b) The Borrower may upon notice given by the Borrower to
the Administrative Agent via FAX transmission in accordance with Section 9.02
hereof not later than 11:00 A.M. (New York City time) on the Business Day
that is: (i) three Business Days prior to the proposed prepayment of
Eurodollar Rate Advances, or (ii) one Business Day prior to the proposed
prepayment of Base Rate Advances, stating the proposed date and aggregate
principal amount of the prepayment and whether such prepayment is to be
allocated to Acquisition Advances or General Advances, and if such notice is
given the Borrower shall, prepay the outstanding principal amounts of the
Committed Advances made as part of the same Committed Borrowing in whole or
ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however that (A) each
partial prepayment shall be in an aggregate principal amount not less than
$5,000,000 or any integral multiple of $1,000,000 in excess thereof and (B)
in the case of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 2.14 on the date of such prepayment.
SECTION 2.07. Interest on Committed Advances. The Borrower
shall pay interest on the unpaid principal amount of each Committed Advance
made by each Lender under the Acquisition Commitment or the General
Commitment from the date such Committed Advance is made until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advances. If such Committed Advance is a Base
Rate Advance, a rate per annum equal at all times to the Base Rate in effect
from time to time, payable on the last day of the Interest Period therefor
and on the date such Base Rate Advance shall be paid in full; provided,
however, that any amount of principal which is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, payable
on demand, at a rate per annum equal at all times to 2% per annum plus the
Base Rate in effect from time to time.
(b) Eurodollar Rate Advances. If such Committed Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during the
Interest Period for such Committed Advance to the sum of (i) the Eurodollar
Rate for such Interest Period plus (ii) the Applicable Margin for Acquisition
Advances (in Stage I or Stage II) or General Advances, as applicable, payable
on the last day of such Interest Period, and also, in the case of any
Interest Period of six months' duration, on that day of the third month of
such Interest Period which corresponds with the first day of such Interest
Period (or, if any such month does not have a corresponding day, then on the
last day of such third month); provided, however, that any amount of
principal which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest, from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the greater of (x) 2% per annum above the
Base Rate in effect from time to time and (y) 2% per annum above the rate per
annum required to be paid on such Committed Advance immediately prior to the
date on which such amount became due.
SECTION 2.08. Additional Interest on Eurodollar Rate
Advances and Index Rate Bid Advances. The Borrower shall pay to each Lender,
so long as such Lender shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance and each Index Rate Bid Advance of such Lender, from the date of such
Advance until such principal amount is paid in full, at an interest rate per
annum equal at all times to the difference obtained by subtracting (a) the
Eurodollar Rate for the Interest Period for such Eurodollar Rate Advance or
the Applicable Index Rate for the term of such Index Rate Bid Advance, as the
case may be, from (b) the rate obtained by dividing such Eurodollar Rate or
Applicable Index Rate by a percentage equal to 100% minus the LIBOR Reserve
Percentage of such Lender for such Interest Period or such term, as the case
may be, payable on each date on which interest is payable on such Advance.
Such additional interest shall be determined by such Lender and notified to
the Borrower through the Administrative Agent.
SECTION 2.09. Interest Rate Determination. (a) Each
Reference Bank agrees to furnish to the Administrative Agent timely
information for the purpose of determining each Eurodollar Rate or Applicable
Index Rate, as applicable. If any one or more of the Reference Banks shall
not furnish such timely information to the Administrative Agent for the
purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by
the remaining Reference Banks, subject, however, to Section 2.02(b)(ii)
hereof.
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.07(a) or Section 2.07(b), and
the applicable rate, if any, furnished by each Reference Bank for the purpose
of determining the applicable interest rate under Section 2.07(b).
SECTION 2.10. Increased Costs; Capital Adequacy. (a) If,
due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation after the date hereof, or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) issued or
made after the date hereof, there shall be reasonably incurred any increase
in (A) the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, or of participating in the issuance,
maintenance or funding of any Letter of Credit or any Unreimbursed LC
Disbursement, or (B) the cost to the LC Bank of issuing or maintaining any
Letter of Credit or any Unreimbursed LC Disbursement, then the Borrower shall
from time to time, upon demand by such Lender or the LC Bank, as the case may
be (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender or the LC Bank, as the
case may be, additional amounts sufficient to compensate such Lender or the
LC Bank, as the case may be, for such increased cost. A certificate as to
the amount of such increased cost and giving a reasonable explanation thereof
(to the extent permitted by law), submitted to the Borrower and the
Administrative Agent by such Lender or the LC Bank, as the case may be, shall
constitute such demand and shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender or the LC Bank determines that
(i) compliance with any law or regulation or any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or
expected to be maintained by such Lender or the LC Bank, whether directly, or
indirectly as a result of commitments of any corporation controlling such
Lender or the LC Bank (but without duplication), and (ii) the amount of such
capital is increased by or based upon (A) the existence of such Lender's or
the LC Bank's commitment to lend or issue or participate in any Letter of
Credit hereunder, or (B) the participation in or issuance or maintenance of
any Letter of Credit or Advance or (C) other similar such commitments, then,
upon demand by such Lender or the LC Bank, the Borrower shall immediately pay
to the Administrative Agent for the account of such Lender or the LC Bank
from time to time as specified by such Lender or the LC Bank additional
amounts sufficient to compensate such Lender or the LC Bank in the light of
such circumstances, to the extent that such Lender or the LC Bank reasonably
determines such increase in capital to be allocable to the transactions
contemplated hereby. A certificate as to such amounts and giving a
reasonable explanation thereof (to the extent permitted by law), submitted to
the Borrower and the Administrative Agent by such Lender or the LC Bank,
shall be conclusive and binding for all purposes, absent manifest error.
(c) The Borrower's obligations under this Section 2.10 shall
survive the repayment of all amounts owing to the Lenders, the LC Bank and
the Administrative Agent under the Financing Documents and the termination of
the Commitments.
SECTION 2.11. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than 11:00
A.M. (New York City time) on the day when due in U.S. dollars and without
offset or counterclaim to the Administrative Agent at its address referred to
in Section 9.02 in same day funds, and, in the case of a payment made to the
Administrative Agent for the account of the Lenders, such payment shall be
deemed to have been received by the Lenders upon receipt thereof by the
Administrative Agent. The Administrative Agent will promptly thereafter
cause to be distributed like funds to the Lenders entitled thereto for the
account of their respective Applicable Lending Offices, in each case to be
applied in accordance with the terms of this Agreement.
(b) The Borrower hereby authorizes the Administrative Agent,
each Lender and the LC Bank, if and to the extent payment owed to the
Administrative Agent, such Lender or the LC Bank, as the case may be, is not
made when due hereunder (or, in the case of a Lender, under the Note held by
such Lender), to charge from time to time against any or all of the
Borrower's accounts, except dedicated payroll accounts, with the
Administrative Agent, such Lender or the LC Bank, as the case may be, any
amount so due.
(c) All computations of interest based on the Base Rate
(when based on the prime rate) shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or Federal Funds Rate
(including the Base Rate when based on the Federal Funds Rate) shall be made
by the Administrative Agent, and all computations of interest pursuant to
Section 2.08 shall be made by a Lender, on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable. Each determination by the Administrative Agent (or, in the case of
Section 2.08, by a Lender) of an interest rate hereunder shall be conclusive
and binding for all purposes, absent manifest error. Interest in respect of
each Bid Advance shall be computed on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or any fee
payable or contemplated hereunder, as the case may be; provided, however, if
such extension would cause payment of interest on or principal of Eurodollar
Rate Advances or Index Rate Bid Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Lender
on such due date an amount equal to the amount then due such Lender. If and
to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to
such Lender until the date such Lender repays such amount to the
Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction or withholding for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Lender or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each
Lender, taxes imposed on its income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred
to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder or under any Note to any
Lender or the Administrative Agent, (i) the sum payable shall be increased as
may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.12)
such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the Notes (hereinafter referred
to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.12) paid by such Lender or the
Administrative Agent (as the case may be) and any liability arising therefrom
or with respect thereto (including penalties, interest and expenses, to the
extent not arising from negligence or delay on the part of such Lender or the
Administrative Agent), whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30
days from the date such Lender or the Administrative Agent (as the case may
be) makes written demand therefor. A certificate as to the amount of such
Taxes or Other Taxes paid by such Lender or the Administrative Agent (as the
case may be) and giving a reasonable explanation thereof submitted to the
Borrower (and the Administrative Agent, in the case of a Lender) shall
constitute such demand and shall be conclusive and binding for all purposes,
absent manifest error. If any Taxes or Other Taxes for which a Lender or the
Administrative Agent has received indemnification from the Borrower hereunder
shall be finally determined to have been incorrectly or illegally asserted
and are refunded to such Lender or the Administrative Agent, such Lender or
the Administrative Agent, as the case may be, shall, upon request of the
Borrower, promptly forward to the Borrower any such refunded amount.
(d) As soon as practicable following any payment of Taxes,
the Borrower will furnish to the Administrative Agent, at its address
referred to in Section 9.02, the original or a certified copy of a receipt
evidencing payment thereof.
(e) The Borrower's obligations under this Section 2.12 shall
survive the repayment of all amounts owing to the Lenders, the LC Bank and
the Administrative Agent under the Financing Documents and the termination of
the Commitments.
(f) On or before the date of the initial Borrowing
hereunder, and from time to time thereafter if requested by the Borrower or
the Administrative Agent, each Lender which is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District
of Columbia, shall deliver to the Borrower and the Administrative Agent such
certificates, documents or other evidence, as required by the Code, or
treasury regulations issued pursuant thereto, including Internal Revenue
Service Form 4224 and any other certificate or statement of exemption
required by Treasury Regulation Section 1.1441-1(a) or Section 1.1441-6(c) or
any subsequent version thereof, properly completed and duly executed by such
Lender establishing that it is (i) not subject to withholding under the Code
or (ii) totally exempt from United States of America tax under a provision of
an applicable tax treaty. Each Lender shall promptly notify the Borrower and
the Administrative Agent of any change in its Applicable Lending Office and
shall deliver to the Borrower and the Administrative Agent together with such
notice such certificates, documents or other evidence referred to in the
immediately preceding sentence. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating
that payments hereunder or under the Notes are not subject to United States
of America withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Administrative Agent shall
withhold taxes from such payments at the applicable statutory rate in the
case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States of America. Each Lender represents
and warrants that each such form supplied by it to the Administrative Agent
and the Borrower pursuant to this Section 2.12, and not superseded by another
form supplied by it, is or will be, as the case may be, complete and
accurate. Each Lender further agrees that the Borrower shall not be required
to indemnify such Lender or pay any additional amounts to such Lender in
respect of any United States Federal withholding tax pursuant to subsection
(c), above, to the extent that the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such
Lender became a Lender hereunder (or, in the case of a Participant, became a
Participant hereunder), or with respect to payments to or for the account of
a new Applicable Lending Office, the date such Lender designated such new
Applicable Lending Office with respect to such payments or the related
Advance(s).
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.12 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Borrower or to change the jurisdiction of its Applicable
Lending Office if the making of such a filing or change would avoid the need
for or reduce the amount of any such additional amounts which may thereafter
accrue and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of principal or interest in
respect of Advances owing to it or on account of any fee, expense,
indemnification or other obligation payable by the Borrower to such Lender
hereunder (other than pursuant to Sections 2.02(b)(i), 2.10, 2.12, 2.15, 2.16
and 9.07) and the ratio of the amount of such payment (a "non-pro rata
payment") to the total amount of such interest, principal, fee, expense,
indemnification or other obligation then payable to it shall exceed the ratio
of the amount of the payment substantially coincidentally received by any
other Lender on account of principal or interest, in respect of such other
Lender's Advances or such fee, expense, indemnification or other obligation
to the total amount of such interest, principal, fee, expense,
indemnification or other obligation then payable to such other Lender (a
Lender being entitled to assume, in the absence of knowledge to the contrary,
that a payment received from the Administrative Agent pursuant to Section
2.11(a) is not a non-pro rata payment), such Lender shall forthwith purchase
from each such other Lender such participation or participations in the right
of each such other Lender to receive such principal, interest, fee, expense,
indemnification or other obligation as shall be necessary to cause such
purchasing Lender to share such non-pro rata payment ratably (relative to the
amounts of such principal, interest, fee, expense, indemnification or other
obligation payable at the date of the obtaining of such non-pro rata payment
to such Lender and each such other Lender, respectively, unless the relevant
Lenders shall agree as to another basis for sharing); provided, however, that
if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (a) the amount of such Lender's
required repayment to (b) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section 2.13 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
SECTION 2.14. Funding Indemnity. The Borrower agrees to
indemnify and hold harmless the Administrative Agent and the Lenders from any
loss or expense which they or any of them may sustain or incur as a result
of:
(a) the failure of the Borrower to make a Borrowing after
having notified the Administrative Agent of its intention to do so in
accordance with Section 2.02 or 2.03 (whether by reason of the Borrower's
election not to proceed with, or the non-fulfillment of any applicable
condition precedent to, such Borrowing);
(b) the failure by the Borrower to prepay any Committed
Advance or any Bid Advance after giving notice of its intention to do so
pursuant to Section 2.06(b) or in accordance with the terms of such Bid
Advance, as the case may be;
(c) the repayment or prepayment of any Advance in whole or
in part other than (i) on the last day of the Interest Period applicable
thereto, in the case of a Eurodollar Rate Advance, (ii) in accordance with
the terms thereof, in the case of a Bid Advance; or (iii) on the date
specified in a notice given in accordance with Section 2.06(b) in the case of
a Committed Advance;
(d) the failure by the Borrower to pay the principal of or
interest on any Advance when due (whether at stated maturity, upon
acceleration or otherwise); including but not limited to any such loss or
expense arising from interest, fees or other amounts payable by the
Administrative Agent or any of the Lenders to lenders of funds obtained by
them in order to make and maintain the Advances hereunder. A certificate as
to such amounts and giving a reasonable explanation thereof (to the extent
permitted by law), submitted to the Borrower and the Administrative Agent by
the Administrative Agent or such Lender, as the case may be, shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.15. Extension of Termination Date. (a) Unless the
Commitments shall have been terminated in whole, or an Event of Default or a
Default shall have occurred and then be continuing, then at least 60 but not
more than 105 days prior to any anniversary of the date of this Agreement
(other than the Termination Date, as such may be extended from time to time
hereunder), the Borrower may request the Administrative Agent and the Lenders
to extend the Termination Date by one year. Upon receipt of such request,
each Lender shall, in its sole discretion, determine whether to consent to
such request and shall so notify the Administrative Agent and the Borrower of
its determination within 60 days of such receipt; provided, that failure by
any Lender to notify the Administrative Agent and the Borrower of its
determination with respect to such Borrower's request shall constitute denial
of such request on the part of such Lender.
(b) In the event that any Lender shall deny (or be deemed
to deny) a request for extension in accordance with subsection (a), above (a
"Dissenting Lender"), the Borrower shall have the right to replace such
Dissenting Lender in accordance with Section 2.16.
(c) So long as a request by the Borrower for extension of
the Termination Date is consented to by Lenders holding at least 51% of the
Commitments (after giving effect to any replacements of Dissenting Lenders
pursuant to Section 2.16), such extension of the Termination Date shall take
effect, as to each such consenting Lender only and not as to any Dissenting
Lender, on such anniversary of the date of this Agreement, subject to the
satisfaction of the conditions precedent set forth in Section 4.03. If such
request is not consented to by Lenders holding at least 51% of the
Commitments (after giving effect to any replacements of Dissenting Lenders
pursuant to Section 2.16), such extension of the Termination Date shall not
occur.
SECTION 2.16. Replacement of Lenders. (a) If any Lender
shall (i) become a Dissenting Lender, (ii) shall make any claim for
compensation pursuant to Section 2.10 or 2.12 hereunder or (iii) decline to
consent to any waiver or amendment of, or departure from, the terms of this
Agreement described in the first proviso to Section 9.01 (any such Lender
described in clause (i), (ii) or (iii) being herein referred to as an
"Affected Lender"), the Borrower shall have the right to replace such
Affected Lender by causing such Affected Lender to enter into one or more
Assignments and Acceptances (the terms of which shall be reasonably
acceptable to such Affected Lender) in respect of its entire Commitment, the
Advances held by it and all other amounts owing to it in respect thereof with
one or more banks or other financial institutions selected by the Borrower
with the consent of the Administrative Agent (not to be unreasonably
withheld). The effective date of any such Assignment and Acceptance shall be
such date (in the case of a Dissenting Lender, not later than the Termination
Date as then in effect) as may be selected by the Borrower and the relevant
assignee(s), and all other matters relating to such Assignment and Acceptance
shall be governed by Section 9.07 hereof. Each Lender agrees to enter into
any such Assignments and Acceptances as may be required by this subsection
(assuming the same are properly and accurately completed) in the event such
Lender becomes an Affected Lender.
(b) If the Borrower shall not arrange for a substituted bank
or banks to assume the obligations of a Dissenting Lender then: (i) the
Commitment of such Dissenting Lender shall terminate on the Termination Date
in effect immediately before the relevant extension, (ii) the Borrower shall
repay in full on such date all Advances by such Dissenting Lender and all
other amounts payable to such Dissenting Lender under this Agreement, and
(iii) such Dissenting Lender shall not be obligated to make any Advances the
maturity date of which would be later than such date. In such case each
remaining Lender's Commitment Percentage for the period of such extension
shall be changed so as to equal that percentage which such remaining Lender's
Commitment represents of the total Commitments of all remaining Lenders.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.01. LC Bank. Subject to the terms and conditions
hereof, the Borrower may from time to time request Barclays, as LC Bank, to
issue one or more Letters of Credit hereunder. Any such request by the
Borrower shall be notified to the Administrative Agent at least five Business
Days prior to the date upon which the Borrower proposes that the LC Bank
issue such Letter of Credit. At no time shall the aggregate face amount of
all Letters of Credit outstanding, when added to the aggregate principal
amount of all General Advances outstanding, exceed the General Commitment as
then in effect.
SECTION 3.02. Letters of Credit. Each Letter of Credit
shall be issued (or the stated maturity thereof extended or terms thereof
modified or amended) on not less than five Business Days' prior written
notice thereof to the Administrative Agent (which shall promptly distribute
copies thereof to the Lenders) and the LC Bank. Each such notice (a "Request
for Issuance") shall specify (a) the date (which shall be a Business Day) of
issuance of such Letter of Credit (or the date of effectiveness of such
extension, modification or amendment) and the stated expiry date thereof
(which shall be the first to occur of (i) a date no later than one year from
the date of issuance of such Letter of Credit or, in the case of an extension
of an existing Letter of Credit, one year from the expiry date then
applicable thereto, and (ii) the Termination Date), (b) the proposed stated
amount of such Letter of Credit and (c) such other information as shall
demonstrate compliance of such Letter of Credit with the requirements
specified therefor in this Agreement. Each Request for Issuance shall be
irrevocable unless modified or rescinded by the Borrower not less than two
days prior to the proposed date of issuance (or effectiveness) specified
therein. If the LC Bank shall have approved the form of such Letter of
Credit (or such extension, modification or amendment thereof), the LC Bank
shall not later than 11:00 A.M. (New York City time) on the proposed date
specified in such Request for Issuance, and upon fulfillment of the
applicable conditions precedent and the other requirements set forth herein
and as otherwise agreed to between the LC Bank and the Borrower, issue (or
extend, amend or modify) such Letter of Credit and provide notice and a copy
thereof to the Administrative Agent. The Administrative Agent shall furnish
(a) to each Lender, a copy of such notice and (b) to each Lender that may so
request, a copy of such Letter of Credit.
SECTION 3.03. Reimbursement on Demand. Subject to the
provisions of Section 3.04 hereof, the Borrower hereby agrees to pay (whether
with the proceeds of Advances made pursuant to this Agreement or otherwise)
to the LC Bank on demand (a) on and after each date on which the LC Bank
shall pay any amount under any Letter of Credit a sum equal to such amount so
paid (which sum shall constitute a demand loan from the LC Bank to the
Borrower from the date of such payment by the LC Bank until so paid by the
Borrower), plus (b) interest on any amount remaining unpaid by the Borrower
to the LC Bank under clause (a), above, from the date such amount becomes
payable on demand until payment in full, at a rate per annum which is equal
to 2% plus the then applicable Base Rate until paid in full.
SECTION 3.04. Advances for Unreimbursed LC Disbursements.
If the LC Bank shall make any payment under any Letter of Credit and if the
conditions precedent set forth in Section 4.02 of this Agreement have been
satisfied as of the date of such honor, then, each Lender's payment made to
the LC Bank pursuant to Section 3.05 hereof in respect of such Unreimbursed
LC Disbursement shall be deemed to constitute a Base Rate Advance made for
the account of the Borrower by such Lender. Each such Base Rate Advance
shall have an Interest Period ending on (a) the first March 31, June 30,
September 30 or December 31 to occur following the date such Base Rate
Advance is made, or (b) if earlier, the Termination Date.
SECTION 3.05. Participation; Reimbursement of LC Bank.
(a) Upon the issuance of any Letter of Credit by the LC Bank, the LC Bank
hereby sells and transfers to each Lender, and each Lender hereby acquires
from the LC Bank, an undivided interest and participation to the extent of
such Lender's Commitment Percentage in and to such Letter of Credit,
including the obligations of the LC Bank under and in respect thereof and the
Borrower's reimbursement and other obligations in respect thereof, whether
now existing or hereafter arising.
(b) If the LC Bank shall not have been reimbursed in full
for any payment made by the LC Bank under any Letter of Credit on the date of
such payment, the LC Bank shall promptly notify the Administrative Agent and
the Administrative Agent shall promptly notify each Lender of such
non-reimbursement and the amount thereof. Upon receipt of such notice from the
Administrative Agent, each Lender shall pay to the Administrative Agent for
the account of the LC Bank an amount equal to such Lender's Commitment
Percentage of such Unreimbursed LC Disbursement, plus interest on such amount
at a rate per annum equal to the Federal Funds Rate from the date of such
payment by the LC Bank to the date of payment to the LC Bank by such Lender.
All such payments by each Lender shall be made in United States dollars and
in same day funds not later than 3:00 P.M. (New York City time) on the later
to occur of (i) the Business Day immediately following the date of such
payment by the LC Bank and (ii) the Business Day on which such Lender shall
have received notice of such non-reimbursement; provided, however, that if
such notice is received by such Lender later than 11:00 A.M. (New York City
time) on such Business Day, such payment shall be payable on the next
Business Day. Each Lender agrees that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. If a
Lender shall have paid to the LC Bank its ratable portion of any Unreimbursed
LC Disbursement, together with all interest thereon required by the second
sentence of this subsection (b), such Lender shall be entitled to receive its
ratable share of all interest paid by the Borrower in respect of such
Unreimbursed LC Disbursement. If such Lender shall have made such payment to
the LC Bank, but without all such interest thereon required by the second
sentence of this subsection (b), such Lender shall be entitled to receive its
ratable share of the interest paid by the Borrower in respect of such
Unreimbursed LC Disbursement only from the date it shall have paid all
interest required by the second sentence of this subsection (b).
(c) The failure of any Lender to make any payment to the LC
Bank in accordance with subsection (b) above, shall not relieve any other
Lender of its obligation to make payment, but neither the LC Bank nor any
Lender shall be responsible for the failure of any other Lender to make such
payment. If any Lender shall fail to make any payment to the LC Bank in
accordance with subsection (b) above, then such Lender shall pay to the LC
Bank forthwith on demand such corresponding amount together with interest
thereon, for each day until the date such amount is repaid to the LC Bank at
the Federal Funds Rate. Nothing herein shall in any way limit, waive or
otherwise reduce any claims that any party hereto may have against any
non-performing Lender.
(d) If any Lender shall fail to make any payment to the LC
Bank in accordance with subsection (b) above, then, in addition to other
rights and remedies which the LC Bank may have, the Administrative Agent is
hereby authorized, at the request of the LC Bank, to withhold and to apply to
the payment of such amounts owing by such Lender to the LC Bank and any
related interest, that portion of any payment received by the Administrative
Agent that would otherwise be payable to such Lender. In furtherance of the
foregoing, if any Lender shall fail to make any payment to the LC Bank in
accordance with subsection (b), above, and such failure shall continue for
five Business Days following written notice of such failure from the LC Bank
to such Lender, the LC Bank may acquire, or transfer to a third party in
exchange for the sum or sums due from such Lender, such Lender's interest in
the related Unreimbursed LC Disbursement and all other rights of such Lender
hereunder in respect thereof, without, however, relieving such Lender from
any liability for damages, costs and expenses suffered by the LC Bank as a
result of such failure, and prior to such transfer, the LC Bank shall be
deemed, for purposes of Section 2.13 and Article VII hereof, to be a Lender
hereunder owed an Advance in an amount equal to the outstanding principal
amount due and payable by such Lender to the Administrative Agent for the
account of such LC Bank pursuant to Section 3.05(b), above. The purchaser of
any such interest shall be deemed to have acquired an interest senior to the
interest of such Lender and shall be entitled to receive all subsequent
payments which the LC Bank or the Administrative Agent would otherwise have
made hereunder to such Lender in respect of such interest.
SECTION 3.06. Obligations Absolute. The payment obligations
of each Lender under Section 3.05(b) and of the Borrower under Section 3.03
of this Agreement in respect of any payment under any Letter of Credit and
any Advance made under Section 3.04 shall be unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement
under all circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of any Financing
Document or any other agreement or instrument relating thereto or to such
Letter of Credit;
(b) any amendment or waiver of, or any consent to departure
from, all or any of the Financing Documents;
(c) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary, or any
transferee, of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the LC Bank, or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or by such Letter of Credit, or any unrelated
transaction;
(d) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(e) payment in good faith by the LC Bank under the Letter
of Credit issued by the LC Bank against presentation of a draft or
certificate which does not comply with the terms of such Letter of Credit; or
(f) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing.
SECTION 3.07. Liability of LC Bank and the Lenders. The
Borrower assumes all risks of the acts and omissions of any beneficiary or
transferee of any Letter of Credit. Neither the LC Bank, the Lenders nor any
of their respective officers, directors, employees, agents or Affiliates
shall be liable or responsible for (a) the use that may be made of such
Letter of Credit or any acts or omissions of any beneficiary or transferee
thereof in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should
prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by the LC Bank against presentation of documents that do
not comply with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit; or (d) any other circumstances whatsoever in making or failing to
make payment under such Letter of Credit, except that the Borrower or any
Lender shall have the right to bring suit against the LC Bank, and the LC
Bank shall be liable to the Borrower and any Lender, to the extent of any
direct, as opposed to consequential, damages suffered by the Borrower or such
Lender which the Borrower or such Lender proves were caused by the LC Bank's
wilful misconduct or gross negligence, including the LC Bank's wilful failure
to make timely payment under such Letter of Credit following the presentation
to it by the beneficiary thereof of a draft and accompanying certificate(s)
which strictly comply with the terms and conditions of such Letter of Credit.
In furtherance and not in limitation of the foregoing, the LC Bank may accept
sight drafts and accompanying certificates presented under the Letter of
Credit issued by the LC Bank that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary. Notwithstanding the foregoing, no Lender shall
be obligated to indemnify the Borrower for damages caused by the LC Bank's
wilful misconduct or gross negligence, and the obligation of the Borrower to
reimburse the Lenders hereunder shall be absolute and unconditional,
notwithstanding the gross negligence or wilful misconduct of the LC Bank.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to Effective Date. This
Agreement shall not become effective, and no Extensions of Credit shall be
made hereunder, unless all of the conditions precedent set forth in this
Section 4.01 shall have been satisfied:
(a) The Administrative Agent shall have received, with a
copy for each Bank:
(i) the certificate or articles of incorporation, as
then in effect, of the Borrower, certified by the Secretary
or an Assistant Secretary of the Borrower, and certificates
of good standing of the Borrower from its state of
incorporation, dated as of a recent date;
(ii) the by-laws, as then in effect, of the Borrower,
certified by the Secretary or an Assistant Secretary of the
Borrower on the Effective Date;
(iii) the resolutions of the Board of Directors of
the Borrower, authorizing the execution and delivery of this
Agreement and the other Financing Documents, and the
continuing performance of the Financing Documents and the
Borrowings herein provided for, certified by a Secretary or
Assistant Secretary of the Borrower;
(iv) certified copies of the Investment Policies and
Guidelines as in effect on the Effective Date, certified by
a Responsible Officer of the Borrower;
(v) certified copies of all documents evidencing other
necessary corporate action and governmental and regulatory
approvals required to be obtained by the Borrower in
connection with the execution and delivery of this Agreement
and the other Financing Documents, and the continuing
performance of the Financing Documents and the Borrowings
herein provided for, certified by the Secretary or an
Assistant Secretary of the Borrower; and
(vi) a certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true
signatures of the officers of the Borrower authorized to sign
this Agreement and the other documents and instruments
contemplated by this Agreement.
(b) The Administrative Agent shall have received a Committed
Note and a Grid Bid Note payable to the order of each Bank.
(c) The Administrative Agent shall have received favorable
opinions (with a copy for each Bank) of:
(i) Jerome A. Vennemann, Esq., Associate General
Counsel of the Borrower, in substantially the form of Exhibit
C and as to such other matters as any Bank through the
Administrative Agent may reasonably request, which opinion
may rely as to certain matters on one or more favorable
opinions of Skadden, Arps, Slate, Meagher & Flom, special
counsel to the Borrower, which opinions shall be in form and
substance acceptable to the Administrative Agent; and
(ii) King & Spalding, special counsel for the
Administrative Agent, substantially in the form of Exhibit
D hereto.
(d) The following statements shall be true and the
Administrative Agent shall have received, with a copy for each of the Banks,
a certificate of a Responsible Officer of the Borrower, dated as of the
Effective Date, stating that:
(i) the representations and warranties set forth in
Section 5.01 of this Agreement are true and correct on and
as of the Effective Date as though made on and as of such
date (except to the extent such representations and
warranties expressly relate to another date, in which case
such representations and warranties are true as of such other
date), and
(ii) no event has occurred and is continuing that
constitutes a Default or an Event of Default.
(e) The Borrower shall have paid all fees under or
referenced in Section 2.04 hereof, to the extent then due and payable.
(f) The Administrative Agent shall have received such other
approvals, opinions or documents as any Bank through the Administrative Agent
may reasonably request.
SECTION 4.02. Conditions Precedent to All Extensions of
Credit. The several obligations of the Lenders to make any Extension of
Credit and of the LC Bank to issue any Letter of Credit hereunder are
subject to the satisfaction of the following conditions precedent:
(a) If such Extension of Credit consists of Acquisition
Advances made during Stage I, the following statements shall be true on the
date such Acquisition Advances are made (and the giving of the applicable
Notice of Committed Borrowing or Bid Request shall constitute a
representation and warranty by the Borrower that such statements are true on
the date such Acquisition Advances are made):
(i) The representations and warranties of the
Borrower contained in Section 5.01(a) ( but only with
respect to the Borrower, PSI Energy and CG&E and
without regard to clause (iv) thereof) and Sections
5.01(b), (c), (j) and (l) are true and correct in all
material respects on and as of the date such
Acquisition Advances are made, before and after giving
effect to the making of such Acquisition Advances and
the application of the proceeds thereof, as though made
on and as of such date;
(ii) There shall not have occurred, with respect
to the Borrower, any of the events described in
Section 7.01(f) on and as of the date such Acquisition
Advances are made, and no such event would result from
the making of such Acquisition Advances or the
application of the proceeds thereof; and
(iii) After giving effect to the making of
such Acquisition Advances and the application of the
proceeds thereof: (1) the Outstanding Extensions of
Credit do not exceed the Total Commitment, (2) the
aggregate outstanding principal amount of Acquisition
Advances does not exceed the Acquisition Commitment and
(3) the Outstanding General Extensions of Credit do
not exceed the General Commitment, all as determined on
the date such Acquisition Advances are made.
(b) If such Extension of Credit consists of General
Advances, or of the issuance of a Letter of Credit or of Acquisition Advances
made during Stage II:
(i) If such Extension of Credit consists of Acquisition
Advances made during Stage II, the Administrative Agent shall
have previously received from the Borrower, with a copy for
each Bank, certified copies of all documents evidencing
governmental and regulatory approvals required to be obtained
by the Borrower in connection with the acquisition of the
Capital Stock of the Target proposed to be purchased with the
proceeds of such Acquisition Advances;
(ii) The following statements shall be true on the date
such Extension of Credit is made (and the giving of the
applicable Notice of Committed Borrowing or Bid Request and
the issuance by the LC Bank of any Letter of Credit at the
request of the Borrower shall constitute a representation and
warranty by the Borrower that such statements are true on the
date such Extension of Credit is made):
(A) The representations and warranties of the
Borrower contained in Section 5.01 are true and correct
in all material respects on and as of the date such
Extension of Credit is made, before and after giving
effect to such Extension of Credit and to the
application of the proceeds thereof, as though made on
and as of such date (except to the extent such
representations and warranties expressly relate to
another date, in which case such representations and
warranties are true as of such other date);
(B) No event has occurred and is continuing, or
would result from such Extension of Credit or the
application of the proceeds thereof, which constitutes
an Event of Default or a Default; and
(C) After giving effect to such Extension of
Credit and the application of the proceeds thereof: (1)
the Outstanding Extensions of Credit do not exceed the
Total Commitment, (2) the aggregate outstanding
principal amount of Acquisition Advances does not
exceed the Acquisition Commitment and (3) the
Outstanding General Extensions of Credit do not exceed
the General Commitment, all as determined on the date
such Extension of Credit is made; and
(iii) The Administrative Agent shall have received
such other approvals, opinions or documents as the
Administrative Agent may reasonably request.
SECTION 4.03. Certain Conditions Precedent to Extension of
Termination Date. In the event that Lenders holding at least 51% of the
Commitments (after giving effect to any replacements of Dissenting Lenders
pursuant to Section 2.16) shall agree to extend the Termination Date in the
manner set forth in Section 2.15, such extension shall take effect only upon
the satisfaction of the following conditions precedent, together with such
other conditions precedent as such Lenders may reasonably require in
connection with such extension (and the effectiveness of such extension shall
be deemed a representation and warranty by the Borrower that on and as of the
date such extension takes effect (the "Extension Date") such conditions
precedent and all such other conditions precedent have been satisfied):
(a) The representations and warranties of the Borrower
contained in Section 5.01 are true and correct in all material respects on
and as of the Extension Date, as though made on and as of such date (except
to the extent such representations and warranties expressly relate to another
date, in which case such representations and warranties are true as of such
other date);
(b) On the Extension Date, no event has occurred and is
continuing, which constitutes an Event of Default or a Default; and
(c) The Administrative Agent shall have received such
documents, opinions or other materials in connections with such extension as
any Lender through the Administrative Agent may reasonably request.
SECTION 4.04. Reliance on Certificates. The Administrative
Agent and the Lenders shall be entitled to rely conclusively upon the
certificates delivered from time to time by officers of the Borrower as to
the names, incumbency, authority and signatures of the respective persons
named therein until such time as the Administrative Agent may receive a
replacement certificate, in form acceptable to the Administrative Agent, from
an officer of such Person identified to the Administrative Agent as having
authority to deliver such certificate, setting forth the names and true
signatures of the officers and other representatives of such Person
thereafter authorized to act on behalf of such Person.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Each of the Borrower and its Subsidiaries (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the corporate power and authority,
and the legal right, to own and operate its property, to lease the property
it operates as lessee and to conduct the business in which it is currently
engaged, (iii) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except any such jurisdiction where the failure to so qualify
could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (iv) is in compliance with all Requirements of Law except
to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) The Borrower has the corporate power and authority, and
the legal right, to make, deliver and perform this Agreement and the Notes
and to borrow hereunder and has taken all necessary corporate action to
authorize the borrowings on the terms and conditions of this Agreement and
the Notes and to authorize the execution, delivery and performance of this
Agreement and the Notes. No consent or authorization of, filing with or
other act by or in respect of, any Governmental Authority or any other Person
is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this
Agreement or the Notes, except for consents, authorizations or filings which
have been obtained or made, as the case may be, and are in full force and
effect. This Agreement has been, and each Note will be, duly executed and
delivered on behalf of the Borrower. This Agreement constitutes, and each
Note when executed and delivered will constitute, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
(c) The execution, delivery and performance of this
Agreement and the Notes, the borrowings and other Extensions of Credit
hereunder and the use of the proceeds thereof (i) will not violate any
Requirement of Law or Contractual Obligation of the Borrower or of any of its
Subsidiaries, except for such violations, if any, as would not result in a
Material Adverse Effect, and (ii) will not result in, or require, the
creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation. Without limitation of the foregoing, no shares of Capital Stock
of the Target have been or will be acquired by or on behalf of the Borrower,
without the Borrower having duly obtained or accomplished all consents or
authorizations of, filings with or other acts by or in respect of, any
Governmental Authority or other Person required in connection with such
acquisition.
(d) (i) The consolidated balance sheets of the Borrower and
its consolidated Subsidiaries and of PSI Energy, CG&E and
their respective consolidated Subsidiaries, each as at
December 31, 1995 and March 31, 1996 and the related
consolidated statements of income and of cash flows for the
fiscal year and three-month period ended on such dates,
copies of which have heretofore been furnished to the
Administrative Agent and each Bank, are complete and correct
and present fairly the consolidated financial condition of
each such Person and its consolidated Subsidiaries as of such
dates, and the consolidated results of their operations and
their consolidated cash flows for the fiscal year and three-month
period then ended.
(ii) The consolidated balance sheets of the Borrower,
PSI Energy, CG&E and their respective consolidated
Subsidiaries, and the related consolidated statements of
income and cash flows, each most recently delivered pursuant
to Section 6.01(a) are complete and correct and present
fairly the consolidated financial condition and the
consolidated results of operations and consolidated cash
flows of such Persons and their respective consolidated
Subsidiaries as at and for the periods ended on the dates
therein indicated.
(iii) All such financial statements referred to in
subsection (i) and subsection (ii), above, including the
related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the
periods involved (except as approved by Arthur Andersen & Co.
or a Responsible Officer, as the case may be, and as
disclosed therein). Except as set forth on Schedule II,
neither the Borrower nor any of its consolidated Subsidiaries
had, at the date of the most recent balance sheet referred
to above, any material Guarantee Obligation, contingent
liability or liability for taxes, or any long-term lease or
unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing
statements or in the notes thereto.
(iv) During the period from March 31, 1996 to and
including the date of this Agreement there has been no sale,
transfer or other disposition by the Borrower or any of its
consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of
any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated
financial condition of the Borrower and its consolidated
Subsidiaries at March 31, 1996.
(e) Since March 31, 1996, (i) there has been no development
or event, which has had or could reasonably be expected to have a Material
Adverse Effect and (ii) no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of
the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries,
except for any duly authorized and declared regular quarterly dividends.
(f) Except as set forth in the financial statements referred
to in Section 5.01(d), no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower or any of its consolidated Subsidiaries, threatened
by or against such Persons or against any of its or their respective
properties or revenues which could reasonably be expected to have a Material
Adverse Effect. There is no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority pending or, to the knowledge
of the Borrower or any of its consolidated Subsidiaries, threatened by or
against such Persons or against any of its or their respective properties or
revenues with respect to this Agreement or the Notes or the transactions
contemplated hereby, except for such investigations, if any, by Governmental
Authorities as are customarily undertaken in connection with tender offers
such as that contemplated by the Acquisition.
(g) Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No (i) Default or (ii) Event of Default has occurred and is continuing.
(h) The Borrower has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to all its other property, and none of such property is subject to any
Lien except as permitted by Section 6.02(a).
(i) Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns which, to the knowledge of the Borrower,
are required to be filed and has paid all taxes shown to be due and payable
on said returns or on any assessments made against it or any of its property
and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any such taxes, fees or
other charges the amount or validity of which are currently being contested
in good faith by appropriate proceedings and with respect to which reserves
in conformity with GAAP have been provided on the books of the Borrower or
its Subsidiaries, as the case may be); no tax Lien has been filed, and, to
the knowledge of the Borrower, no claim is being asserted, with respect to
any such tax, fee or other charge.
(j) No part of the proceeds of any Advances (including the
Acquisition Advances) will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now
and from time to time hereafter in effect or for any purpose which violates
the provisions of the Regulations of such Board of Governors. If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said
Regulation U.
(k) Each Plan is in compliance with all of the applicable
material provisions of ERISA and each Plan intended to be qualified under
Section 401(a) of the Code is so qualified. No Plan has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA
or Section 412 of the Code) whether or not waived. Neither the Borrower nor
any ERISA Affiliate: (i) has incurred or expects to incur any liability under
Title IV of ERISA, with respect to any Plan, which could give rise to a lien
in favor of the PBGC, other than liability for the payment of premiums, all
of which have been timely paid when due in accordance with Section 4007 of
ERISA, (ii) has incurred or expects to incur any withdrawal liability, with
the meaning of Section 4201 of ERISA, (iii) is subject to any lien under
Section 412(n) of the Code or Sections 302(f) or 4068 of ERISA or arising out
of any action brought under Sections 4070 or 4301 of ERISA, or (iv) is
required to provide security to a Plan under Section 401(a)(29) of the Code.
The PBGC has not instituted proceedings to terminate any Plan or to appoint
a trustee or administrator of any such Plan and no circumstances exist that
constitute grounds under Section 4042 of ERISA to commence any such
proceedings.
(l) The Borrower is not an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. Except as set forth in Section
5.01(m), the Borrower is not subject to regulation under any Federal or State
statute or regulation which limits its ability to incur Indebtedness.
(m) The Borrower is a registered "holding company" within
the meaning of the Public Utility Holding Company Act of 1935.
(n) To the best knowledge of the Borrower, each of the
representations and warranties set forth in clauses (i) through (v) of this
paragraph is true and correct with respect to each parcel of real property
owned or operated by the Borrower or its Subsidiaries (the "Properties"),
except to the extent that the facts and circumstances giving rise to any such
failure to be so true and correct could not reasonably be expected to have a
Material Adverse Effect:
(i) The Properties do not contain, and have not
previously contained, in, on, or under, including, without
limitation, the soil and groundwater thereunder, any
Hazardous Materials in concentrations which violate
Environmental Laws.
(ii) The Properties and all operations and facilities
at the Properties are in compliance with all Environmental
Laws, and there is no Hazardous Materials contamination or
violation of any Environmental Law which could interfere with
the continued operation of any of the Properties or impair
the fair saleable value of any thereof.
(iii) Neither the Borrower nor any of its
Subsidiaries has received any complaint, notice of violation,
alleged violation, investigation or advisory action or of
potential liability or of potential responsibility regarding
environmental protection matters or permit compliance with
regard to the Properties, nor is the Borrower aware that any
Governmental Authority is contemplating delivering to the
Borrower or any of its Subsidiaries any such notice.
(iv) Hazardous Materials have not been generated,
treated, stored or disposed of at, on or under any of the
Properties, nor have any Hazardous Materials been transferred
from the Properties to any other location.
(v) There are no governmental or administrative actions
or judicial proceedings pending or contemplated under any
Environmental Laws to which the Borrower or, to the
Borrower's knowledge, any of its Subsidiaries is or will be
named as a party with respect to the Properties, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties.
(o) The Borrower will use the Letters of Credit and the
proceeds of the Advances hereunder only in the manner and subject in all
respects to the limitations set forth in Section 6.01(k).
(p) No exhibit, schedule, report or other written
information provided by or on behalf of the Borrower or its agents to the
Administrative Agent or the Lenders in connection with the negotiation,
execution and closing of, or pursuant to, this Agreement and the other
Financing Documents, including any prospectus, prospectus supplement or
disclosure statement, knowingly contained when made any material misstatement
of fact or knowingly omitted to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances
under which they were made, and any projections and forecasts contained in
such materials were prepared in good faith on the basis of reasonable
assumptions.
(q) Neither the Borrower nor any of its Subsidiaries (other
than such Acquisition Vehicle or the Target if either of them shall become a
Subsidiary) has or will have any liability for any Indebtedness or Guarantee
Obligations of an Acquisition Vehicle or the Target other than such, if any,
as are included in the Cinergy Target Obligations.
ARTICLE VI
COVENANTS OF THE BORROWER
SECTION 6.01. General Affirmative Covenants of the Borrower.
So long as this Agreement shall remain in effect, any Note shall remain
unpaid, any Letter of Credit shall remain outstanding or any Lender shall
have any Commitment hereunder, the Borrower will, and (except in the case of
delivery of financial information, reports and notices) shall cause each of
its Subsidiaries to, unless the Required Lenders shall otherwise consent in
writing:
(a) Reporting Requirements. Furnish to each Lender (it
being understood that to the extent that the Borrower's reports on Form 10-Q
or Form 10-K set forth the information called for in subsection (i) or (ii),
respectively, the delivery of such reports shall be deemed to satisfy the
requirements of such subsections):
(i) as soon as available and in any event within 60
days after the end of each of the first three quarters of
each fiscal year of the Borrower, the consolidated balance
sheets of the Borrower, PSI Energy, CG&E and their respective
consolidated Subsidiaries, in each case as of the end of such
quarter and the related unaudited consolidated statements of
income, changes in common equity and cash flows for such
quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative
form the figures for the previous year (except that, in the
case of the unaudited consolidated balance sheets, comparison
is between the figures as of the fiscal quarter then ended
versus the figures as of the immediately preceding fiscal
year-end), certified by a Responsible Officer of the Borrower
as having been prepared in accordance with GAAP consistent
with those applied in the preparation of the financial
statements referred to in Section 5.01(d), and, in the event
that any Event of Default or Default has occurred and is
continuing, a statement of a Responsible Officer of the
Borrower as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;
(ii) as soon as available and in any event within 105
days after the end of each fiscal year of the Borrower, a
copy of the consolidated balance sheets of the Borrower, PSI
Energy, CG&E and their respective consolidated Subsidiaries,
in each case as at the end of such year and the related
consolidated statements of income, changes in common equity
and cash flows for such year, certified by Arthur Andersen
& Co. or another "Big Six" firm of independent certified
public accountants as having been prepared in accordance with
GAAP, and setting forth in each case in comparative form the
figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification
arising out of the scope of the audit, and, in the event that
any Event of Default or Default has occurred and is
continuing, a statement of the Treasurer or an Assistant
Treasurer of the Borrower as to the nature thereof and the
action which the Borrower proposes to take with respect
thereto;
(iii) within five days after the same are filed,
copies of all reports on Form 8-K (or any successor form)
which the Borrower or any of its consolidated Subsidiaries
may file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(iv) as soon as possible and in any event within five
days after obtaining knowledge of the occurrence of any Event
of Default or Default, continuing on the date of such
statement, the statement of the Treasurer or an Assistant
Treasurer of the Borrower setting forth details of such Event
of Default or Default and the action which the Borrower
proposes to take with respect thereto;
(v) promptly after becoming aware thereof, notice as
to any Reportable Event occurring in respect of any Plan
maintained for the benefit of employees of the Borrower;
(vi) promptly after becoming aware thereof, notice as
to any development or event which could reasonably be
expected to have a Material Adverse Effect;
(vii) promptly after becoming aware thereof, notice
as to each decrease or increase in the Reference Ratings of
any of the Rating Agencies;
(viii) to the extent not otherwise to be disclosed
by the Borrower in a report on Form 10-K, Form 10-Q or Form
8-K to be filed with the Securities and Exchange Commission,
promptly after becoming aware thereof, notice as to any
action, suit or proceeding at law or in equity or by or
before any governmental instrumentality or other agency
which, if adversely determined, would have a Material Adverse
Effect;
(ix) to the extent not otherwise to be disclosed by the
Borrower in a report on Form 10-K, Form 10-Q or Form 8-K to
be filed with the Securities and Exchange Commission, as soon
as possible and in any event within five days after
occurrence of any material Environmental Event, a certificate
of an appropriate officer of the Borrower setting forth the
details of such material Environmental Event and the action
that the Borrower proposes to take with respect thereto;
(x) to the extent not previously delivered, within ten
Business Days of the making of any Acquisition Advances, or,
in the event any such documents are not received by the
Borrower from the relevant Governmental Authority within such
period, within five Business Days of the receipt thereof by
the Borrower, certified copies of all documents evidencing
governmental and regulatory approvals required to have been
obtained by the Borrower in connection with the acquisition
of the Capital Stock of the Target proposed to be purchased
with the proceeds of such Acquisition Advances;
(xi) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any
of its consolidated Subsidiaries as any Lender may from time
to time reasonably request.
(b) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and orders (including,
without limitation, such relating to taxes and ERISA), noncompliance with
which would have a Material Adverse Effect or in any way affect the
Borrower's ability to perform its obligations hereunder except laws, rules,
regulations and orders being contested in good faith and by proper
proceedings.
(c) Environmental Laws. (i) Comply with, and insure
compliance by all tenants and subtenants, if any, with, all Environmental
Laws and obtain and comply with and maintain, and insure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws, except to
the extent that failure to do so could not be reasonably expected to have a
Material Adverse Effect;
(ii) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other
actions required under Environmental Laws and promptly comply
with all lawful orders and directives of all Governmental
Authorities respecting Environmental Laws, except to the
extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a Material Adverse
Effect; and
(iii) Defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective
employees, agents, officers and directors, from and against
any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to, the violation of or
noncompliance with any Environmental Laws applicable to the
real property owned or operated by the Borrower or any of its
Subsidiaries, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation
and laboratory fees, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party
seeking indemnification therefor.
(d) Preservation of Corporate Existence, Etc. Continue to
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as
otherwise permitted pursuant to Section 6.02(b); comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect; and with respect to any investments made by or on
behalf of the Borrower (other than any such investment or series of related
investments the aggregate amount of which is less than $5,000,000) ensure
that each such investment complies with the Investment Policies and
Guidelines and has been approved by the Board of Directors of the Borrower.
(e) Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case
may be, all its obligations of whatever nature, except where the amount or
validity thereof (i) is currently being contested in good faith by
appropriate proceedings and reserves in conformity with (and to the extent
required by) GAAP with respect thereto have been provided on the books of the
Borrower or its Subsidiaries, as the case may be, and (ii) is at or below the
minimum aggregate amounts set forth in Section 7.01(e)(i).
(f) Judgments, Etc. Pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges levied or imposed upon the Borrower or
upon the income, profits or property of the Borrower, (ii) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Borrower and (iii) all final judgments for the
payment of money in excess of $10,000,000 in the aggregate rendered against
the Borrower; provided, however, that the Borrower shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge, claim or judgment whose amount, applicability or validity is being
contested in good faith by appropriate procedures and reserves in conformity
with GAAP with respect thereto have been provided on the books of the
Borrower.
(g) Maintenance of Property; Insurance. Except as
provided in Section 6.02(b), keep all property useful and necessary in its
business in good working order and condition (ordinary wear and tear
excepted); maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least
such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to each
Lender, upon written request, full information as to the insurance carried.
(h) Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities; and
permit representatives of the Administrative Agent or any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
(i) Compliance with Investment Policies and Guidelines.
Comply with the Investment Policies and Guidelines in all material respects
and not effect any material amendment, change or modification to the
Investment Policies and Guidelines.
(j) Investment Policies and Guidelines. As soon as
possible thereafter and in any event within five days thereof, notify the
Administrative Agent of any change in the Investment Policies and Guidelines.
(k) Use of Proceeds. The Letters of Credit and the
proceeds of the Advances hereunder shall be used by the Borrower only in
accordance with all applicable laws. In addition:
(i) The Letters of Credit and the proceeds of the
General Advances shall be used by the Borrower for general
corporate purposes, including (i) equity investments in
energy-related projects made in accordance with the
Borrower's Investment Policies and Guidelines (except as
otherwise provided pursuant to Section 6.01(d)) and/or
(ii) unsecured short-term direct loans to its electric
utility or gas utility Subsidiaries.
(ii) The proceeds of the Acquisition Advances shall be
used by the Borrower solely to finance or refinance all or
a portion of the Acquisition and costs related thereto and
not to provide operating funds to the Target. The proceeds
of each Acquisition Advance (other than an Acquisition
Advance made to re-finance directly or indirectly, one or
more Acquisition Advances previously made) shall be applied
within one month of the applicable Borrowing Date by the
Borrower or an Acquisition Vehicle to finance or re-finance
the purchase of Capital Stock of the Target or to pay other
costs of the Acquisition, and any such proceeds not so
applied shall be promptly prepaid in accordance with Section
2.06(b).
(l) Further Assurances. As from time to time specified by
counsel for the Administrative Agent, at the cost and expense of the
Borrower, execute and deliver to the Administrative Agent all such documents
and instruments and do all such other acts and things as may be reasonably
required to enable the Administrative Agent and/or the Lenders to exercise
and enforce their rights under this Agreement and the Notes; and record and
file and re-record and re-file all such documents and instruments, at such
time or times, in such manner and at such place or places, all as may be
necessary to validate, preserve and protect the position of the
Administrative Agent and/or the Lenders under this Agreement or the Notes.
Notwithstanding any provision contained in this Agreement to the contrary,
this covenant shall survive the termination of this Agreement and the payment
of the obligations and liabilities of the Borrower hereunder.
SECTION 6.02. Negative Covenants of the Borrower. So long
as this Agreement shall remain in effect, any Note shall remain unpaid, any
Letter of Credit shall remain outstanding or any Lender shall have any
Commitment hereunder, the Borrower will not (and shall not permit any of its
Subsidiaries to) without the prior written consent of the Required Lenders,
directly or indirectly (provided, that the provisions of paragraph (a),
below, shall not apply, except as set forth therein, to CG&E, PSI Energy,
South Construction Company, a wholly-owned Subsidiary of PSI Energy, The
Union Light, Heat & Power Company, Lawrenceburg Gas Company or, whether or
not constituting Subsidiaries, any Acquisition Vehicle or Target, and the
provisions of paragraphs (c) and (d) below, shall apply only to the
Borrower):
(a) Liens, Etc. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(i) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained
on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;
(ii) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a
period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(iii) pledges or deposits in connection with
workers' compensation, unemployment insurance and other
social security legislation;
(iv) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(v) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from
the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(vi) Liens securing any obligations of the Borrower or
its Subsidiaries under the SEGBA Debt Agreement;
(vii) Liens on assets of any Subsidiary created to
secure Indebtedness owing by such Subsidiary to the Borrower
or to any other Subsidiary;
(viii) Liens arising in connection with Financing
Leases in an aggregate amount not to exceed $250,000,000
(determined in accordance with GAAP and in the same manner
as the calculation of capitalized leases in a balance sheet
of the Borrower);
(ix) Purchase money Liens on assets hereafter
acquired by the Borrower or any Subsidiary and Liens on
assets existing at the time of the acquisition thereof by the
Borrower or any Subsidiary; provided, that such Liens shall
be confined solely to the assets so acquired;
(x) Liens resulting from legal proceedings being
contested in good faith by appropriate proceedings by the
Borrower or a Subsidiary and as to which the Borrower or such
Subsidiary, as the case may be, shall have set aside on its
books appropriate reserves in accordance with (and to the
extent required by) GAAP;
(xi) Liens (not otherwise permitted hereunder) which
secure obligations (as to the Borrower and all Subsidiaries)
in an aggregate amount at any time outstanding not in excess
of $20,000,000; and
(xii) Extensions, renewals or replacements of Liens
permitted by the foregoing clauses (vi), (viii) and (ix);
provided, that the principal amount of Indebtedness secured
thereby shall not, at the time of such extension, renewal or
replacement, exceed the principal amount of Indebtedness so
secured and that such extension, renewal or replacement shall
be limited to all or a part of the property which secured the
Lien so extended, renewed or replaced;
provided that, the Borrower shall not create, incur, assume or suffer to
exist any Lien upon any of the Capital Stock of PSI Energy or CG&E owned
directly or indirectly by the Borrower which is not otherwise allowed to be
pledged hereunder.
(b) Sale or other Disposition of Assets. Convey, sell,
lease, assign, transfer or otherwise dispose of any material portion of its
property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, except:
(i) obsolete or worn out property disposed of in the
ordinary course of business;
(ii) the sale of inventory in the ordinary course of
business;
(iii) the sale or discount without recourse of
accounts receivable arising in the ordinary course of
business in connection with the compromise or collection
thereof;
(iv) as permitted by Section 6.02(e)(ii);
(v) if an Acquisition Vehicle or the Target becomes a
Subsidiary of the Borrower, as required by the terms of any
Non-Recourse Target Debt;
(vi) any other property, business or assets, so
long as the aggregate book value of all such property,
business or assets so conveyed, sold, leased, assigned,
transferred or otherwise disposed of pursuant to this clause
(vi) in any 12 month period does not exceed 10% of the
Consolidated Net Worth of the Borrower;
provided that, the Borrower shall not convey, sell, lease, assign, transfer
or otherwise dispose of any of the Capital Stock of PSI Energy or CG&E held
by it.
(c) Consolidated Net Worth. Permit Consolidated Net Worth
of the Borrower at any time to be less than $2,000,000,000.
(d) Ratio of Consolidated Indebtedness to Consolidated Total
Capitalization. Permit, at any time, the ratio of (i) Consolidated
Indebtedness of the Borrower (exclusive of Non-Recourse Target Debt to the
extent, if any, included therein) plus Cinergy Target Obligations at such
time to (ii) Consolidated Total Capitalization of the Borrower (exclusive of
Non-Recourse Target Debt to the extent, if any, included therein) at such
time, to exceed .65 to 1.00.
(e) Fundamental Change. Merge, consolidate or amalgamate,
or liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose
of, all or substantially all of its property, business or assets, or make any
material (in the context of the overall business operations of the Borrower
or such Subsidiary, as the case may be) change in its present method of
conducting business, except that:
(i) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation)
or with or into any one or more wholly owned Subsidiaries of
the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving
corporation);
(ii) any wholly owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or
any other wholly owned Subsidiary of the Borrower; and
(iii) an Acquisition Vehicle may merge with or into
the Target;
provided that, in any such case, after giving effect thereto no Default or
Event of Default shall have occurred or be in existence.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Note when due in accordance with the terms thereof and
hereof; or the Borrower shall fail to pay any interest on any
Note or any other amount payable hereunder, within five days
after such interest or other amount becomes due in accordance
with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made
by the Borrower herein or which is contained in any
certificate, document or financial or other statement
furnished at any time under or in connection with this
Agreement shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 6.02; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this
Agreement (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue
unremedied for a period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest on any
Indebtedness (aggregating, in the case of PSI Energy or CG&E,
more than $25,000,000 in principal amount, and in the case
of the Borrower and its Subsidiaries (other than PSI Energy
or CG&E), $10,000,000 in principal amount and excluding in
any event Indebtedness arising under the M. E. Holdings
Credit Agreement) or in the payment of any Guarantee
Obligation(s) (aggregating, in the case of PSI Energy or
CG&E, more than $25,000,000, and in the case of the Borrower
and its Subsidiaries (other than PSI Energy or CG&E),
$10,000,000 and excluding in any event Guarantee Obligations
arising under the Parent Support Agreement), beyond the
period of grace, if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained
in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such
Guarantee Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
(f) (i) The Borrower or any of its Material
Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for
it or for all or any substantial part of its assets, or the
Borrower or any of its Material Subsidiaries shall make a
general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower or any of
its Material Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such
adjudication or appointment; or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any
of its Material Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower
or any of its Material Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its
Material Subsidiaries shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts
as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or
a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the
insolvency or reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be
expected to subject the Borrower or any of its Subsidiaries
to any tax, penalty or other liabilities in the aggregate
material in relation to the business, operations, property
or financial or other condition of the Borrower and its
Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered
against (i) the Borrower or any of its Subsidiaries (other
than PSI Energy or CG&E) involving in the aggregate a
liability (not paid or fully covered by insurance) of
$10,000,000 or more or (ii) PSI Energy or CG&E involving in
the aggregate a liability (not paid or fully covered by
insurance) of $25,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof;
or
(i) (i) Any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) shall either (A) acquire beneficial
ownership of more than 50% of any outstanding class of common
stock of the Borrower having ordinary voting power in the
election of directors of the Borrower or (B) obtain the power
(whether or not exercised) to elect a majority of the
Borrower's directors or (ii) the Board of Directors of the
Borrower shall not consist of a majority of Continuing
Directors. "Continuing Directors" shall mean the directors
of the Borrower on the Effective Date and each other director
of the Borrower, if such other director's nomination for
election to the Board of Directors of the Borrower is
recommended by a majority of the then Continuing Directors;
THEN, AND IN ANY SUCH CASE, the Administrative Agent shall at the request, or
may with the consent, of the Required Lenders, upon notice to the Borrower
(i) declare the Commitments (or the portions thereof comprising the
Acquisition Commitment and the General Commitment) and the obligation of each
Lender to make Acquisition Advances and/or General Advances and to
participate in any as-yet unissued Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, and/or (ii) declare the Notes,
all interest thereon and all other amounts payable or to become payable
thereunder or under this Agreement by the Borrower, whether matured or
unmatured, fixed, liquidated, contingent or otherwise (including all interest
thereon) to be immediately due and payable, whereupon the same shall
immediately become due and payable without demand, presentment, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that:
(A) in the event of an actual or deemed entry of an
order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (1) the Commitments and the
obligation of each Lender to make Advances and of each Lender
to participate in as-yet unissued Letters of Credit shall
automatically be terminated in their entirety and (2) the
Notes, all such interest and all other amounts payable or to
become payable thereunder or under this Agreement by the
Borrower, whether matured or unmatured, fixed, liquidated,
contingent or otherwise (including all interest thereon)
shall immediately become due and payable without demand,
presentment, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower; and
(B) except as described in the immediately preceding
clause (A), during Stage I, the Administrative Agent and the
Banks shall not be entitled to terminate the Acquisition
Commitment and the obligation of each Lender to make
Acquisition Advances without the consent of the Borrower.
Notwithstanding anything to the contrary contained herein, no notice given
or declaration made by the Administrative Agent pursuant to this Section 7.01
shall affect (i) the obligation of the LC Bank to make any payment under any
Letter of Credit in accordance with the terms of such Letter of Credit or
(ii) the obligations of each Lender in respect of each such Letter of Credit;
provided, however, that upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent shall at the request, or may with
the consent, of the Required Lenders, upon notice to the Borrower, require
the Borrower to deposit with the Administrative Agent an amount in the cash
account (the "Cash Account") described below equal to the then current LC
Outstandings. Such Cash Account shall at all times be free and clear of all
rights or claims of third parties. The Cash Account shall be maintained with
the Administrative Agent in the name of, and under the sole dominion and
control of, the Administrative Agent, and amounts deposited in the Cash
Account shall bear interest at a rate equal to the rate generally offered by
Barclays for deposits equal to the amount deposited by the Borrower in the
Cash Account pursuant to this Section 7.01, for a term to be agreed to
between the Borrower and the Administrative Agent. If any drawings then
outstanding or thereafter made are not reimbursed in full immediately upon
demand or, in the case of subsequent drawings, upon being made, then, in any
such event, the Administrative Agent may apply the amounts then on deposit in
the Cash Account, in such priority as the Administrative Agent shall elect,
toward the payment in full of any or all of the Borrower's obligations
hereunder as and when such obligations shall become due and payable. Upon
payment in full, after the termination of the Letters of Credit, of all such
obligations, the Administrative Agent will repay to the Borrower any cash
then on deposit in the Cash Account.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Authorization and Action. Each Lender and the
LC Bank hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders (or, in the case of certain matters arising under
Article IX, the Lenders described therein) and such instructions shall be
binding upon all Lenders and all holders of Notes; provided, however, that
the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary
to this Agreement or applicable law. The Administrative Agent agrees to give
to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 8.02. Administrative Agent's Reliance, Etc. Neither
the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement, except for its or their
own gross negligence or wilful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent: (a) may treat the
payee of any Note as the holder thereof until it receives written notice of
the assignment or transfer thereof signed by such payee and in form
satisfactory to the Administrative Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with the Financing
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of the
Financing Documents by the Borrower or to inspect the property (including the
books and records) of the Borrower; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the Notes or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telegram, cable, telex or FAX) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 8.03. Barclays and Affiliates. With respect to its
Commitment, the Advances made by it and, the Notes issued to it, Barclays has
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though Barclays were not the Administrative Agent; and
the term Lender or Lenders shall, unless otherwise expressly indicated,
include Barclays in its individual capacity. Barclays and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower or any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Barclays were not the
Administrative Agent and without any duty to account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on the financial
statements referred to in Section 5.01(d)(i) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement.
SECTION 8.05. Indemnification. The Lenders agree to
indemnify at any time the Administrative Agent (to the extent not reimbursed
by the Borrower), ratably according to their respective Commitment Percentage
(and if an indemnified item (as defined below) is incurred at any time after
the termination of the Commitments and such indemnified item is incurred, in
the opinion of the Administrative Agent, solely for the benefit of the
Lenders having Advances outstanding to each of them at such time, then
ratably according to the respective principal amounts of Advances outstanding
to each of them at the date of payment by the Administrative Agent of such
indemnified item or, if not yet paid, at the date of the assertion of the
indemnified item), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (each of the foregoing being
an "indemnified item") which may be imposed on, incurred by, or asserted
against the Administrative Agent in any way relating to or arising out of
this Agreement or any action taken or omitted by the Administrative Agent
under this Agreement; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or wilful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share (ratably in
accordance with the first sentence of this Section 8.05) of any out-of-pocket
expenses (including counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Administrative
Agent is not reimbursed for such expenses by the Borrower.
SECTION 8.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving 30 days prior written
notice thereof to the Lenders and the Borrower and may be removed at any time
with cause by the Required Lenders. Upon any such resignation or removal of
the Administrative Agent, the Required Lenders shall have the right to
appoint a successor Administrative Agent reasonably acceptable to the
Borrower. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and accepted by the Borrower, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation or the Required Lenders' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall
be a Lender. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of
this Article VIII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes, nor consent to any departure by
the Borrower therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that subject to the provisions of
Section 2.16, no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Article IV; provided, however, that conditions
specified in Section 4.02, insofar as they relate to any Bid Advances, may be
waived by the Lender or Lenders proposing to make such Bid Advances,
(b) increase the Commitments, the Total Commitment, the Acquisition
Commitment or the General Commitment or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, any Advance or any
Unreimbursed LC Disbursements, fees or other amounts payable hereunder,
(d) postpone any date fixed for any payment of principal of, or interest on,
any Advance or any Unreimbursed LC Disbursements, fees or other amounts
payable hereunder, (e) change any Lender's Commitment Percentage (except in
the manner provided for herein) or the aggregate unpaid principal amount of
any Advances held by, or the number of, Lenders which shall be required for
the Lenders or any of them to take any action hereunder or (f) amend this
Section 9.01; and provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent or the LC
Bank, as the case may be, in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent or the
LC Bank under this Agreement or any Note.
SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including FAX
transmission) and (except when particular means are specified) mailed, faxed
or delivered, if to the Borrower, at its address at 139 East Fourth Street,
Cincinnati, Ohio 45202, Attention: Treasurer, telecopy: (513) 287-2749; if to
any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any Lender other than a Bank, at its Domestic
Lending Office specified in the Assignment and Acceptance pursuant to which
it became a Lender; if to the LC Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; and if to the
Administrative Agent, at its address at 222 Broadway, New York, New York
10038, Attention: Utility Group, 11th Floor, telecopy: (212) 412-6709 (with
a copy to Client Services Unit, 12th Floor, telecopy (212) 412-1098 or 1099,
at the same address); or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed or FAXed, be effective when
deposited in the mails or transmitted, respectively, except that notices and
communications to the Administrative Agent pursuant to Articles II, III or IX
shall not be effective until received by the Administrative Agent. Without
limitation of the foregoing, the Administrative Agent shall be fully
protected in acting upon any notice or instruction received by it by
telephone or by FAX transmission so long as the Administrative Agent
reasonably believes such notice or instruction to be genuine, but any such
notice or instruction shall be promptly confirmed in writing.
SECTION 9.03. No Waiver; Remedies. No failure on the part
of any Lender or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 9.04. Costs, Expenses and Taxes; Indemnification.
(a) The Borrower agrees to pay on demand all costs and expenses in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Agreement, the Notes and the other
documents to be delivered hereunder and thereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under this
Agreement and of the LC Bank with respect to the execution, delivery,
administration, modification and amendment of any Letters of Credit to be
issued by it hereunder, and to reimburse and hold harmless the Lenders, the
LC Bank and the Administrative Agent for and against all of their reasonable
costs and expenses arising in connection with the enforcement or preservation
of rights under (whether in litigation, by negotiation or otherwise) this
Agreement, the Letters of Credit and the Notes or in connection with the
transactions contemplated hereby and thereby, including but not limited to
the reasonable fees and expenses of counsel to the Administrative Agent, each
Lender and the LC Bank and all stamp taxes, recording taxes and fees and
filing taxes and fees which may be payable in respect thereof.
(b) The Borrower shall further indemnify, reimburse and hold
harmless the Lenders, the LC Bank, the Administrative Agent and their
respective officers, directors, employees, professional advisors and
affiliates (each, an "Indemnified Party") from and against any and all
claims, damages, losses, costs and liabilities (including but not limited to
the reasonable fees and expenses of counsel to each such Indemnified Party)
which any of them may incur or which may be claimed against any of them by
any person or entity or in any investigative, administrative or judicial
proceeding (whether or not such Indemnified Party shall be designated a party
thereto) as a result of, in connection with, or otherwise arising from the
Commitments, the Advances, the Letters of Credit, the Acquisition or any
actual or proposed use of the proceeds of the Advances hereunder; provided,
that, no Indemnified Party shall have the right to be indemnified hereunder
for such Indemnified Party's own gross negligence or willful misconduct.
(c) The Borrower's obligations under this Section shall be
in addition to (and shall not be deemed to supersede) the indemnification
obligations of the Borrower under that certain Commitment Letter, dated as of
April 18, 1996, among the Borrower, Barclays and The BZW Division of
Barclays, which indemnification obligations shall survive the execution and
delivery of this Agreement and the Notes. The Borrower's obligations under
this Section shall survive the repayment of all amounts owing to the Lenders,
the LC Bank and the Administrative Agent under the Financing Documents and
the termination of the Commitments. If and to the extent that the
obligations of the Borrower under this Section are unenforceable for any
reason, the Borrower agrees to make the maximum contribution to the payment
and satisfaction thereof which is permissible under applicable law.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent specified by Section 7.01 to authorize
the Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 7.01 each Lender and the LC Bank is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final), except in dedicated payroll accounts, at any time held
and other indebtedness at any time owing by such Lender or the LC Bank to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement
and the Notes held by such Lender or the LC Bank, irrespective of whether or
not such Lender or the LC Bank shall have made any demand under this
Agreement or such Notes and although such obligations may be unmatured. Each
Lender and the LC Bank agrees promptly to notify the Borrower after any such
set-off and application made by such Lender or the LC Bank; provided that,
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Lender or the LC Bank under this Section
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which such Lender or the LC Bank may have.
SECTION 9.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been
notified by each Bank that such Bank has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative
Agent, the LC Bank and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its
rights or obligations hereunder or any interest herein without the prior
written consent of the Lenders.
SECTION 9.07. Assignments, New Lenders and Participations.
(a) Each Lender may (i) assign to one or more Lenders or their affiliates or
(ii) with the consent of the Borrower (which consent shall not be
unreasonably withheld or delayed and shall not be required while any Event of
Default shall have occurred and be continuing) and the Administrative Agent
(which may be granted or withheld in the sole discretion of the
Administrative Agent), assign to one or more banks or other entities other
than Lenders and their affiliates, all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment, the Committed Advances owing to it and the Notes
held by it); provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement, (ii) the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 and
shall be an integral multiple of $500,000 in excess thereof, unless the
Assignee shall, prior to such assignment, already be a Lender hereunder,
(iii) if the assigning Lender has retained a Commitment hereunder, such
assigning Lender's Commitment, after giving effect to such assignment, shall
be in an amount not less than $5,000,000, and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with any Notes subject to such assignment (which the Administrative
Agent promptly shall return to the Borrower following the Administrative
Agent's receipt thereof) and a processing and recordation fee of $2,500
payable by the assigning Lender and/or the assignee Lender (or, in the case
of a replacement of a Lender pursuant to Section 2.02(b)(i) or Section 2.16,
payable by the Borrower) with respect to the administration and processing of
the assignments of rights and obligations of the assigning Lender to the
assignee Lender hereunder. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least three Business Days after
the execution thereof, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights
(other than pursuant to Sections 2.10, 2.12(e) and 9.04, which rights shall
survive the execution and delivery of such Assignment and Acceptance) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto, except as to Sections 2.10, 2.12(e) and
9.04).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows:
(i) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other instrument or document furnished
pursuant hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies
of the most recent financial statements referred to in Section 5.01(d) and/or
Section 6.01(a)(i) and (ii) and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Administrative Agent, such assigning Lender or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed by it as a
Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance and Bid
Advance Assignment delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment of,
and principal amount of the Advances owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee consented to by the Borrower
together with any Notes subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit E hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent new Notes to the order of
such assignee in an amount equal to the aggregate amount of the Commitments
assigned to such assignee and new Notes to the assigning Lender in an amount
equal to the aggregate amount of the Commitments retained by the assigning
Lender. Such new Notes shall be dated the date of such Assignment and
Acceptance and shall otherwise be in substantially the forms of Exhibits A-1
and A-2 hereto. Notwithstanding the surrender of the Notes by the assigning
Lender, the amounts accrued under such surrendered Notes shall remain payable
by the Borrower. The assigning Lender and the assignee shall directly
between themselves make all appropriate adjustments in payments under this
Agreement and the Notes for periods prior to the effective date of the
Assignment and Acceptance.
(e) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time assign to
one or more Lenders or other banks or financial institutions ("Bid Advance
Assignees") any Bid Advance owing to such Lender, pursuant to a "Bid Advance
Assignment" executed by the assignor Lender and the Bid Advance Assignee.
Upon such execution, from and after the date of such Bid Advance Assignment,
the Bid Advance Assignee shall, to the extent of the assignment provided for
in such Bid Advance Assignment, be deemed to have the same rights and
benefits of payment and enforcement with respect to such Bid Advance and the
same rights of set-off pursuant to Section 9.05 and obligation to share
pursuant to Section 2.13 as it would have had if it were a Lender hereunder;
provided, that unless such Bid Advance Assignment shall otherwise specify and
a copy of such Bid Advance Assignment shall have been delivered to the
Administrative Agent for its acceptance and recording in the Register, the
assignor thereunder shall act as collection agent for the Bid Advance
Assignee thereunder, and the Administrative Agent shall pay all amounts
received from the Borrower which are allocable to the assigned Bid Advance
directly to such assignor without any further liability to such Bid Advance
Assignee. A Bid Advance Assignee under a Bid Advance Assignment shall not,
by virtue of such Bid Advance Assignment, become a party to this Agreement or
have any rights to consent to or refrain from consenting to any amendment,
waiver or other modification of any provision of this Agreement or any
related document; provided, that (i) the assignor under such Bid Advance
Assignment and such Bid Advance Assignee may, in their discretion, agree
between themselves upon the manner in which such assignor will exercise its
rights under this Agreement and any related document, and (ii) if a copy of
such Bid Advance Assignment shall have been delivered to the Administrative
Agent for its acceptance and recording in the Register, neither the principal
amount of, the interest rate on, nor the maturity date of any Bid Advance
assigned to the Bid Advance Assignee thereunder will be modified without the
written consent of such Bid Advance Assignee. If a Bid Advance Assignee has
caused a Bid Advance Assignment to be recorded in the Register, such Bid
Advance Assignee may thereafter, in the ordinary course of its business and
in accordance with applicable law, further assign such Bid Advance to any
Eligible Assignee, to any affiliate or Subsidiary of such Bid Advance
Assignee or to any other bank or financial institution that has total assets
in excess of $1,000,000,000 and that in the ordinary course of its business
extends credit similar to the Bid Advances, and the foregoing provisions of
this paragraph (e) shall apply, mutatis mutandis, to any such assignment by
a Bid Advance Assignee. Except in accordance with the preceding sentence,
Bid Advances may not be further assigned by a Bid Advance Assignee, subject
to any legal or regulatory requirement that the Bid Advance Assignee's assets
must remain under its control.
(f) Each Lender may sell participations to one or more banks
or other entities ("Participants") in or to all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or
a portion of its Commitment and the Advances owing to it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender shall remain the
holder of its Notes for all purposes of this Agreement, (iv) the Borrower,
the Administrative Agent, the LC Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and (v) the holder of any such
participation, other than an affiliate of such Lender, shall not be entitled
to require such Lender to take or omit to take any action hereunder, except
action (A) extending the time for payment of interest on, or the final
maturity of any portion of the principal amount of, the Advances,
Unreimbursed LC Disbursements or the Notes, (B) increasing such Lender's
Commitment or reducing the rate of interest payable on the Advances,
Unreimbursed LC Disbursements or the Notes, (C) forgiving the payment of
interest on or principal of the Advances, Unreimbursed LC Disbursements or
the Notes or (D) reducing the Facility Fee or letter of credit risk
participation fee referred to in Section 2.04 hereof. The Borrower agrees
that if amounts outstanding under this Agreement and the Notes are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement and any Note to the same extent as if the amount
of its participating interest were owing directly to it as a Lender under
this Agreement or any Note; provided, that such right of set-off shall be
subject to the obligation of such Participant to share with the Lenders, and
the Lenders agree to share with such Participant, as provided in Section
2.13. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.10, 2.12, 2.14 and 9.04 with respect to its
participation interest in the Commitments and the Advances outstanding from
time to time.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any confidential information
(except any such disclosure as may be required by law) relating to the
Borrower, received by it from such Lender.
(h) Anything in this Section 9.07 to the contrary
notwithstanding, any Lender may assign and pledge all or any portion of its
Commitment and the Advances owing to it to any Federal Reserve Bank (and its
transferees) as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the applicable
Lender from its obligations hereunder.
SECTION 9.08. No Recourse. No recourse shall be had for the
payment of any obligation or any claim arising out of or relating to this
Agreement against any incorporator, stockholder, affiliate, officer or
director of the Borrower or any partner or employee thereof. The provisions
of this Section 9.08 shall be binding on the parties hereto and their
respective successors and assigns, and shall survive the termination of this
Agreement.
SECTION 9.09. Consent to Jurisdiction; Waiver of Jury Trial.
(a) To the fullest extent permitted by law, the Borrower hereby irrevocably
(i) submits to the non-exclusive jurisdiction of any New York State or
Federal court sitting in New York City and any appellate court from any
thereof in any action or proceeding arising out of or relating to this
Agreement, and (ii) agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or in
such Federal court. The Borrower hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Borrower also irrevocably
consents, to the fullest extent permitted by law, to the service of any and
all process in any such action or proceeding by the mailing by certified mail
of a copy of such process to the Borrower at its address specified in Section
9.02. The Borrower agrees, to the fullest extent permitted by law, that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
(b) THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE, OR
ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.
SECTION 9.10. Governing Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
SECTION 9.11. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
SECTION 9.12. Accession of Banks Upon Amendment and
Restatement. (a) By its execution and delivery of this Agreement and upon
the Effective Date, each Bank listed in the signature pages to this Agreement
(other than Barclays) shall be deemed to have entered into an Assignment and
Acceptance with Barclays on the terms set forth in Section 9.07 and Exhibit
E hereto, pursuant to which such Bank shall be deemed to have acquired from
Barclays (and Barclays shall be deemed to have transferred to such Bank) a
Commitment equal to the amount set forth for such Bank on Schedule I to this
Agreement, together with its ratable portion (based on such Bank's Commitment
Percentage) of the Outstanding Extensions of Credit (other than outstanding
Bid Advances) as determined on the Effective Date. By its execution and
delivery of this Agreement, the Borrower consents to all such assignments,
acquisitions and transfers. No recordation fees shall be payable pursuant to
Section 9.07(a) in connection with the foregoing.
(b) On the Effective Date, each such Bank shall pay to the
Administrative Agent at its address referred to in Section 9.02, in same day
funds and for the account of Barclays, an amount equal to such Bank's
Commitment Percentage of the aggregate principal amount of Committed Advances
and Unreimbursed LC Disbursements outstanding on the Effective Date. All
unpaid Facility Fees and Letter of Credit Risk Participation Fees accrued to
the Effective Date, and all unpaid interest on Committed Advances and
Unreimbursed LC Disbursements accrued to the Effective Date, shall remain the
property of (and be paid by the Borrower to) Barclays, and all such amounts
accrued thereafter shall be allocated among the Banks (including Barclays)
ratably in accordance with their respective Commitment Percentages, as
provided in this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written,
CINERGY CORP.
By /s/ William L. Sheafer
Title: Treasurer
BARCLAYS BANK PLC,
as Administrative Agent
By /s/ Salvatore Esposito
Title: Director
THE BANK OF NEW YORK,
as Co-Agent
By /s/ Nathan S. Howard
Title: Vice President
CIBC INC.,
as Co-Agent
By /s/ P. Saggau
Title: Director
THE FIRST NATIONAL BANK OF
CHICAGO,
as Co-Agent
By /s/ Richard Waldman
Title: Authorized Agent
UNION BANK OF CALIFORNIA, N.A.,
as Co-Agent
By /s/ John M. Edmonston
Title: Senior Vice President
UNION BANK OF SWITZERLAND,
NEW YORK BRANCH,
as Co-Agent
By /s/ Karen Roth
Title: Assistant Vice President
By /s/ Paul R. Morrison
Title: Vice President
ABN-AMRO BANK, N.V. PITTSBURGH BRANCH
By: ABN-AMRO North America, Inc., as
agent, as Lead Manager
By /s/ Mark R. Lasek
Title: Vice President
By /s/ David D. Bryant
Title: Vice President
BANK OF MONTREAL,
as Lead Manager
By /s/ Greg Watland
Title: Director
BAYERISCHE LANDESBANK,
CAYMAN ISLANDS BRANCH,
as Lead Manager
By /s/ Wilfried Freudenberger
Title: Executive Vice President and
General Manager
By /s/ Peter Obermann
Title: Senior Vice President
Manager Lending Division
THE CHASE MANHATTAN BANK, N.A.,
as Lead Manager
By /s/ Thomas L. Casey
Title: Vice President
THE FUJI BANK, LIMITED,
as Lead Manager
By /s/ Peter L. Chinnici
Title: Joint General Manager
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Lead Manager
By /s/ Hiroaki Nakamura
Title: Joint General Manager
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., CHICAGO BRANCH,
as Lead Manager
By /s/ Brady S. Sadek
Title: Vice President & Deputy General
Manager
MELLON BANK, N.A.,
as Lead Manager
By /s/ Jacquelyn A. Peters
Title: Vice President
THE SANWA BANK, LIMITED, CHICAGO
BRANCH,
as Lead Manager
By /s/ James Byrnes
Title: Vice President
TORONTO DOMINION (TEXAS), INC.,
as Lead Manager
By /s/ Frederic B. Hawley
Title: Vice President
BANK ONE, COLUMBUS, NA
By /s/ Wendy C. Mayhew
Title: Vice President
THE BANK OF NOVA SCOTIA
By /s/ F. C. H. Ashby
Title: Senior Manager Loan Operations
CITIBANK, N.A.
By /s/ Scott Deghetto
Title: Attorney
CREDIT LYONNAIS CHICAGO BRANCH
By /s/ Sandra E. Horwitz
Title: First Vice President
Branch Manager
KEYBANK NATIONAL ASSOCIATION
By /s/ Wayne K. Guessford
Title: Vice President
PNC BANK, OHIO, NATIONAL ASSOCIATION
By /s/ David F. Knuth
Title: Vice President
THE YASUDA TRUST AND BANKING
COMPANY, LIMITED, NEW YORK BRANCH
By /s/ R. M. Laudenschlager
Title: Senior Vice President
<PAGE>
SCHEDULE I
Names, Addresses, Commitments and Commitment Percentages of Banks
General
Eurodollar Commitment
Lending (Subtotal of
Bank Name Domestic Lending Office Office Commitment)
ABN-AMRO Bank, 1 PPG Place Same as $4,166,666.67
N.V. Pittsburgh Suite 2950 Domestic
Branch Pittsburgh, PA 15222-5400 Lending
Attn: Loan Operations Office
Tel: (412) 566-2250
Fax: (412) 566-2266
Bank One, 100 East Broad Street Same as $2,500,000.00
Columbus,NA Columbus, OH 43271-7087 Domestic
Attn: Diane Wafe Lending
Tel: (614) 248-8754 Office
Fax: (614) 248-8800
Bank of 115 S. LaSalle Street, Same as $4,166,666.67
Montreal Floor 11W Domestic
Chicago, IL 60603 Lending
Attn: Angela Corbett Office
Tel: (312) 750-4363
Fax: (312) 750-3798
The Bank of One Wall Street Same as $5,833,333.33
New York New York, NY 10286 Domestic
Attn: Energy Division Lending
Tel: (212)635-7535 Office
Fax: (212) 635-7923
The Bank of 600 Peachtree Street NE Same as $2,500,000.00
Nova Scotia Atlanta, GA 30308 Domestic
Attn: Vicky Gibson Lending
Tel: (404) 877-1557 Office
Fax: (404) 888-8998
Barclays Bank 222 Broadway, 12th Floor Same as $11,666,666.67
PLC, New York, New York 10038 Domestic
New York Branch Attn: Dawn Matthews Lending
Tel: (212) 412-5028 Office
Fax: (212) 412-1098
Bayerische 560 Lexington Avenue Same as $4,166,666.67
Landesbank, 17th Floor Domestic
Cayman Islands New York, NY 10022 Lending
Branch Attn: Patricia Sanchez Office
Tel: (212) 310-9810
Fax: (212) 310-9930
The Chase 1 Chase Manhattan Plaza Same as $4,166,666.67
Manhattan New York, New York 10081 Domestic
Bank, N.A. Attn: Dee Marin Lending
Tel: (212) 552-0602 Office
Fax: (212) 552-
CIBC Inc. 2 Paces West Same as $5,833,333.33
2727 Paces Ferry Road, Domestic
Suite 1200 Lending
Atlanta, Georgia 30339 Office
Attn: Clare Coyne
Tel: (404) 319-4826
Fax: (404) 319-4950
Citibank, 399 Park Avenue, 4th Floor Same as $2,500,000.00
N.A. New York, New York 10043 Domestic
Attn: Utilities Lending
Department Office
Tel: (212) 559-4218
Fax: (212) 793-6130
Credit Lyonnais 227 West Monroe, Suite 3800 Same as $2,500,000.00
Chicago Branch Chicago, IL 60606 Domestic
Attn: Julie Kanak Lending
Tel: (312) 220-7302 Office
Fax: (312) 641-0527
The First One First National Plaza Same as $5,833,333.33
National Bank Suite 0364 Domestic
of Chicago Chicago, Illinois 60670 Lending
Attn: Lynn Pozsgay Office
Tel: (312) 732-8705
Fax: (312) 732-4840
The Fuji Bank, 225 West Wacker Drive Same as $4,166,666.67
Limited Suite 2000 Domestic
Chicago, IL 60606 Lending
Attn: Vir Gulang Office
Tel: (312) 621-3385
Fax: (312) 621-0539
The Industrial 227 W. Monroe Street Same as $4,166,666.67
Bank of Japan, Suite 2600 Domestic
Limited Chicago, IL 60606 Lending
Attn: Jennifer Buchhaas Office
Tel: (312) 855-8444
Fax: (312) 855-8200
KeyBank 525 Vine Street, 6th Floor Same as $2,500,000.00
National Cincinnati, OH 45202 Eurodollar
Association Attn: Wayne Guessford Lending
Tel: (513) 762-8204 Office
Fax: (513) 762-8222
The Long-Term 190 S. LaSalle Street, Same as $4,166,666.67
Credit Bank of Suite 800 Domestic
Japan, Ltd., Chicago, IL 60603 Lending
Chicago Branch Attn: Sonia Lazaric Office
Tel: (312) 704-5476
Fax: (312) 704-8717
Mellon Bank, Three Mellon Bank Center, Same as $4,166,666.67
N.A. Rm. 2303 Domestic
Pittsburgh, PA 15259 Lending
Attn: Suzanne B. Cooke Office
Tel: (412) 234-1870
Fax: (412) 236-2027
PNC Bank, Ohio, 201 E. Fifth Street, Same as $2,500,000.00
National 26th Floor Domestic
Association Cincinnati, Ohio 45202 Lending
Attn: David F. Knuth Office
Tel: (513) 651-8675
Fax: (513) 651-8952
The Sanwa Bank 10 South Wacker Drive, Same as $4,166,666.67
Limited, 31st Floor Domestic
Chicago Branch Chicago, IL 60606 Lending
Attn: Dina Tucci-Albro Office
Tel: (312) 368-3049
Fax: (312) 346-6677
Toronto 909 Fannin Street Same as $4,166,666.67
Dominion Houston, TX 77010 Domestic
(Texas), Inc. Tel: (713)653-8281 Lending
Fax: (713) 951-9921 Office
Union Bank of 445 South Figueroa Street Same as $5,833,333.33
California, Los Angeles, CA 90071 Domestic
N.A. Attn: John Edmonston Lending
Tel: (213) 236-5809 Office
Fax: (213) 236-4096
Union Bank of Union Bank of Switzerland Same as $5,833,333.33
Switzerland, New York Branch Domestic
New York Branch 299 Park Avenue Lending
New York, NY 10171 Office
Attn: David Mikula/
Karen Roth
Tel: (212) 821-6872/5082
Fax: (212) 821-3878
The Yasuda 666 Fifth Avenue Same as $2,500,000.00
Trust and New York, New York 10103 Domestic
Banking Company, Attn: Nicholas Pullen Lending
Limited, New Tel: (212) 373-5720 Office
York Branch Fax: (212) 373-5796
<PAGE>
SCHEDULE 1-CONTINUED
Acquisition
Commitment
General (subtotal of Acquisition
Bank Name Commitment % Commitment) Commitment % Commitment
ABN-AMRO Bank, 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
N.V. Pittsburgh
Branch
Bank One, 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Columbus, NA
Bank of Montreal 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
The Bank of New 5.833333333% $29,166,666.67 5.833333333% $35,000,000.00
York
The Bank of Nova 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Scotia
Barclays Bank PLC, 11.666666667% $58,333,333.33 11.666666667% $70,000,000.00
New York Branch
Bayerische 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Landesbank,
Cayman Islands
Branch
The Chase 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Manhattan
Bank, N.A.
CIBC Inc. 5.833333333% $29,166,666.67 5.833333333% $35,000,000.00
Citibank, N.A. 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Credit Lyonnais 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Chicago Branch
The First 5.833333333% $29,166,666.67 5.833333333% $35,000,000.00
National Bank of
Chicago
The Fuji Bank, 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Limited
The Industrial 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Bank of Japan,
Limited
KeyBank National 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Association
The Long-Term 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Credit Bank of
Japan, Ltd.,
Chicago Branch
Mellon Bank, N.A. 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
PNC Bank, Ohio, 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
National
Association
The Sanwa Bank 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
Limited, Chicago
Branch
Toronto Dominion 4.166666667% $20,833,333.33 4.166666667% $25,000,000.00
(Texas), Inc.
Union Bank of 5.833333333% $29,166,666.67 5.833333333% $35,000,000.00
California, N.A.
Union Bank of 5.833333333% $29,166,666.67 5.833333333% $35,000,000.00
Switzerland, New
York Branch
The Yasuda Trust 2.500000000% $12,500,000.00 2.500000000% $15,000,000.00
Banking Company,
Limited, New York
Branch
<PAGE>
SCHEDULE 1-CONTINUATION
Bank Name Commitment%
ABN-AMRO Bank, 4.166666667%
N.V. Pittsburgh
Branch
Bank One, 2.500000000%
Columbus, NA
Bank of Montreal 4.166666667%
The Bank of New 5.833333333%
York
The Bank of Nova 2.500000000%
Scotia
Barclays Bank 11.666666667%
PLC, New York
Branch
Bayerische 4.166666667%
Landesbank,
Cayman Islands
Branch
The Chase 4.166666667%
Manhattan Bank,
N.A.
CIBC Inc. 5.833333333%
Citibank, N.A. 2.500000000%
Credit Lyonnais 2.500000000%
Chicago Branch
The First 5.833333333%
National Bank of
Chicago
The Fuji Bank, 4.166666667%
Limited
The Industrial 4.166666667%
Bank of Japan,
Limited
KeyBank National 2.500000000%
Association
The Long-Term 4.166666667%
Credit Bank of
Japan, Ltd.,
Chicago Branch
Mellon Bank, N.A. 4.166666667%
PNC Bank, Ohio, 2.500000000%
National
Association
The Sanwa Bank, 4.166666667%
Limited, Chicago
Branch
Toronto Dominion 4.166666667%
(Texas), Inc.
Union Bank of 5.833333333%
California, N.A.
Union Bank of 5.833333333%
Switzerland, New
York Branch
The Yasuda Trust 2.500000000%
and Banking Company,
Limited, New York
Branch
<PAGE>
SCHEDULE II
Guarantee Obligations, etc.
(i) Capital call in connection with Cincinnati Equity Fund Ltd. for an amount
up to $6,666,666.67; and
(ii) Miscellaneous equity funding commitments to projects not exceeding $3.5
million in the aggregate.
<PAGE>
EXHIBIT A-1
FORM OF COMMITTED NOTE
U.S.$ Dated: July 15, 1996
FOR VALUE RECEIVED, the undersigned, CINERGY CORP., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below):
(a) the principal amount of each Committed Advance (as defined below)
made by the Lender to the Borrower pursuant to the Credit Agreement on the
maturity date of such Committed Advance, as provided for in the Credit Agreement
and as may be set forth in the schedule annexed hereto and made a part hereof or
on a continuation thereof which shall be attached hereto and made a part hereof
(the "Grid"), and (b) on the Termination Date (as defined in the Credit
Agreement), the aggregate unpaid principal amount of all Committed Advances made
by the Lender to the Borrower pursuant to Section 2.01 of the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
each Committed Advance from the date of such Committed Advance until such
principal amount is paid in full, at such interest rates, and payable at such
times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Barclays Bank PLC, as Administrative Agent, at 222
Broadway, New York, New York 10038, in same day funds. Each Committed Advance
made by the Lender to the Borrower pursuant to the Credit Agreement, and all
payments made on account of principal thereof, shall be recorded by the Lender
and, prior to any transfer hereof, endorsed on the Grid, which endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed;
provided, however, that the failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Committed Advance.
This Promissory Note is one of the Committed Notes referred to in, and
is entitled to the benefits of the Credit Agreement, dated as of May 6, 1996, as
Amended and Restated as of July 15, 1996 (as so amended and restated, and as the
same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among the Borrower, the Lender and certain other banks and
other financial institutions parties thereto, the Co-Agents, the Lead Managers,
and Barclays Bank PLC, as Administrative Agent for the Lender and such other
banks and financial institutions. The Credit Agreement, among other things, (i)
provides for the making of advances (the "Committed Advances") by the Lender to
the Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first mentioned above, the indebtedness of
the Borrower resulting from each such Committed Advance being evidenced by this
Promissory Note, and (ii) contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
CINERGY CORP.
By__________________________________
Title:
<PAGE>
ADVANCES, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount Amount
of of Type of Amount of
Commit- Acquisi- Com- Matu- Inter- Prinicpal Notation
ment tion mitted rity est Paid Unpaid Made
Date Advance Advance Advance Date Paid or Prepaid Principal By
<PAGE>
EXHIBIT A-2
FORM OF GRID BID NOTE
U.S.$ Dated: July 15, 1996
FOR VALUE RECEIVED, the undersigned, CINERGY CORP., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") the principal amount of (a) Dollars
($ ), or, if less, (b) the aggregate unpaid principal amount of each
Bid Advance which is (i) made by the Lender to the Borrower pursuant to Section
2.03 of the Credit Agreement, dated as of May 6, 1996, as Amended and Restated
as of July 1, 1996 (as so amended and restated, and as the same may be further
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; the terms defined therein being used herein as therein defined),
among the Borrower, the Lender and certain other banks and other financial
institutions parties thereto, the Co-Agents, the Lead Managers, and Barclays
Bank PLC, as Administrative Agent for the Lender and such other banks and
financial institutions, and (ii) not evidenced by an Individual Bid Note
executed and delivered by the Borrower pursuant to Section 2.03(g) of the Credit
Agreement. The principal amount of each Bid Advance evidenced hereby shall be
payable on the maturity date therefor determined in accordance with Section
2.03(b) of the Credit Agreement and as may be set forth in the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof (the "Grid").
The Borrower further promises to pay interest on the unpaid principal
amount of each Bid Advance evidenced hereby, and, to the extent permitted by
law, overdue interest in respect thereof, until payment in full of the principal
amount thereof and accrued interest thereon, at the rate per annum determined in
accordance with Section 2.03(e) of the Credit Agreement. Interest on each Bid
Advance evidenced hereby shall be payable on the date or dates determined in
accordance with Section 2.03(e) of the Credit Agreement and as may be set forth
in respect of such Bid Advance on the Grid. Bid Advances evidenced by this
Promissory Note may not be prepaid. The final maturity date of this Promissory
Note is the Termination Date (as defined in the Credit Agreement).
Both principal and interest are payable in lawful money of the United
States of America to Barclays Bank PLC, as Administrative Agent, at 222
Broadway, New York, New York 10038, in same day funds, free and clear of and
without any deduction, with respect to the payee named above, for any and all
present and future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto.
The holder of this Promissory Note is authorized to endorse on the Grid
the date, amount, interest rate, interest payment dates and maturity date in
respect of each Bid Advance made pursuant to Section 2.03 of the Credit
Agreement, each payment of principal with respect thereto and any transfer of
such Bid Advance from this Promissory Note to an Individual Bid Note delivered
to the Lender pursuant to Section 2.03(g) of the Credit Agreement, which
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed; provided, however, that the failure to make any such
endorsement or any error in such endorsement shall not affect the obligations of
the Borrower in respect of such Bid Advance.
This Promissory Note is one of the Grid Bid Notes referred to in the
Credit Agreement and is entitled to the benefits thereof. The Credit Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
CINERGY CORP.
By
Title:
<PAGE>
SCHEDULE OF BID ADVANCES
Amount of Amount of
General Acquisi- Inter- Date of
Commit- Commit- Pay- Matu- Pay Transfer to
Date of ment ment Interest ment rity ment Individual
Advance Advance Advance Rate Dates Dates Date Bid Note
<PAGE>
EXHIBIT A-3
FORM OF INDIVIDUAL BID NOTE
U.S.$ Dated: ________, 199_
FOR VALUE RECEIVED, the undersigned, CINERGY CORP., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referred to below), on , 19 , the
principal amount of Dollars ($ ).
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: % per annum (calculated on the basis of a year of ___
days for the actual number of days elapsed).
Interest Payment Date or Dates:
If all or a portion of the principal amount of or interest on this Promissory
Note shall not be paid when due (whether at stated maturity, by acceleration or
otherwise), such overdue principal amount, and, to the extent permitted by law,
overdue interest, shall bear interest at the rate determined in accordance with
Section 2.03(e) of the Credit Agreement. This Promissory Note may not be
prepaid.
Both principal and interest are payable in lawful money of the United
States of America to Barclays Bank PLC, as Administrative Agent, at 222
Broadway, New York, New York 10038, in same day funds, free and clear of and
without any deduction, with respect to the payee named above, for any and all
present and future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto. The records of Barclays Bank PLC shall
constitute prima facie evidence of the accuracy of the information contained in
such records relating to amounts due or payments made hereunder.
This Promissory Note is one of the Individual Bid Notes referred to in,
and is entitled to the benefits of, the Credit Agreement, dated as of May 6,
1996, as Amended and Restated as of July 15, 1996 (as so amended and restated,
and as the same may be further amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"; the terms defined therein being used
herein as therein defined), among the Borrower, the Lender and certain other
banks and financial institutions parties thereto, the Co-Agents, the Lead
Managers, and Barclays Bank PLC, as Administrative Agent for the Lender and such
other banks and financial institutions. The Credit Agreement, among other
things, contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
CINERGY CORP.
By
Title:
<PAGE>
EXHIBIT B-1
FORM OF NOTICE OF COMMITTED BORROWING
Barclays Bank PLC, as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
222 Broadway
New York, New York 10038
[Date]
Attention: Utilities Group, 11th Floor
(FAX: (212) 412-6709)
Client Services Unit, 12th Floor
(FAX: (212) 412-4090)
Ladies and Gentlemen:
The undersigned, Cinergy Corp., refers to the Credit Agreement, dated
as of May 6, 1996, as Amended and Restated as of July 15, 1996 (as so amended
and restated, and as the same may be further amended, supplemented or otherwise
modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the undersigned, certain Lenders
parties thereto, the Co-Agents, the Lead Managers, and Barclays Bank PLC, as
Administrative Agent for said Lenders, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement, that the undersigned hereby
requests a Committed Borrowing under the Credit Agreement to be comprised of
Advances, and in that connection sets forth below the information relating to
such Committed Borrowing (the "Proposed Committed Borrowing") as required by
Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Committed Borrowing is
, 19__.
(ii) The Type of Advances comprising the Proposed Committed
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Committed Borrowing is
$_________ , consisting of $__________ of Acquisition Advances and
$__________ of General Advances.
[(iv) The Interest Period for each Eurodollar Advance made as part of
the Proposed Committed Borrowing is [ months].]
Very truly yours,
CINERGY CORP.
By________________________
Title:
<PAGE>
EXHIBIT B-2
FORM OF BID REQUEST
___________, 199_
Barclays Bank PLC, as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
222 Broadway
New York, New York 10038
Attention: Utilities Group, 11th Floor
(FAX: (212) 412-6709)
Client Services Unit, 12th Floor
(FAX: (212) 412-4090)
Each Lender under the Credit Agreement at its
Domestic Lending Office
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 6, 1996, as
Amended and Restated as of July 15, 1996 (as so amended and restated, and as the
same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the undersigned, the Banks named therein,
the Co-Agents, the Lead Managers, and Barclays Bank PLC, as Administrative Agent
for the Lenders. Terms defined in the Credit Agreement are used herein as
therein defined.
This is an [Index Rate] [Absolute Rate] Bid Request pursuant to Section
2.03(b) of the Credit Agreement requesting quotes for the following Bid
Advances:
Aggregate Principal Amount $_______ $_______ $______
Acquisition Advances/
General Advances _______ _______ _______
Bid Advance Date _______ _______ _______
[Interest Period] _______ _______ _______
Maturity Date _______ _______ _______
Interest Payment Dates _______ _______ _______
Very truly yours,
CINERGY CORP.
By_________________________
Title:
<PAGE>
EXHIBIT B-3
FORM OF BID OFFER
______________, 19__
Barclays Bank PLC, as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
222 Broadway
New York, New York 10038
Attention: Utilities Group, 11th Floor
(FAX: (212) 412-6709)
Client Services Unit, 12th Floor
(FAX: (212) 412-4090)
Cinergy Corp.
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 6, 1996, as
Amended and Restated as of July 15, 1996 (as so amended and restated, and as the
same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Cinergy Corp., the Lenders named therein,
the Co-Agents, the Lead Managers, and Barclays Bank PLC, as Administrative
Agent. Terms defined in the Credit Agreement are used herein as therein
defined.
In accordance with Section 2.03(b) of the Credit Agreement, the
undersigned Lender offers to make Bid Advances thereunder in the following
amounts with the following maturity dates:
Bid Advance Date: ________________, 19__
Aggregate Maximum Amount: $_________________
Maturity Date 1 ___: Maturity Date 2 ___: Maturity Date 3 ___:
Maximum Amount $____ Maximum Amount $____ Maximum Amount $____
Minimum Amount $____ Minimum Amount $_____ Minimum Amount $____
Rate ___ Amount $ ____ Rate ___ Amount $ ____ Rate___ Amount $____
Rate1___Amount $____ Rate1 ___ Amount $ ____ Rate___ Amount $____
Acquisition/General Acquisition/General Acquisition/General
Very truly yours,
[NAME OF BIDDING LENDER]
By: _______________________________
Name:
Title:
Telephone No.:
Fax No.:
<PAGE>
EXHIBIT B-4
FORM OF BID CONFIRMATION
________________, 19__
Barclays Bank PLC, as Administrative Agent
for the Lenders parties
to the Credit Agreement
referred to below
222 Broadway
New York, New York 10038
[Name and Address of Accepted Bid Lender]
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 6,
1996, as Amended and Restated as of July 15, 1996 (as so amended and restated,
and as the same may be further amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the undersigned, the Banks named
therein, the Co-Agents, the Lead Managers, and Barclays Bank PLC, as
Administrative Agent. Terms defined in the Credit Agreement are used herein as
therein defined.
In accordance with Section 2.03(b) of the Credit Agreement, the
undersigned accepts and confirms the offers by Lender to whom this Bid
Confirmation is addressed to make Bid Advances to the undersigned on
_____________, 19__, (the "Bid Advance Date"), as follows:
Maturity Date 1 ___: Maturity Date 2 ___: Maturity Date 3 ___:
Amount $____ Amount $_____ Amount $___
Rate ___ Amount $ ____ Rate ___ Amount $ ____ Rate___ Amount $____
Acquisition/General Acquisition/General Acquisition/General
Very truly yours,
CINERGY CORP.
By_________________________
Title:
<PAGE>
EXHIBIT C
FORM OF OPINION OF JEROME A. VENNEMANN, ESQ.,
ASSOCIATE GENERAL COUNSEL OF THE BORROWER
July 15, 1996
The Lenders
from time to time parties
to the Credit Agreement
referred to below
Barclays Bank PLC, as Administrative Agent
222 Broadway
New York, New York 10038
Cinergy Corp.
Ladies and Gentlemen:
I have acted as counsel to Cinergy Corp., a Delaware corporation
(the "Company"), in connection with the preparation, execution and delivery of
the Credit Agreement, dated as of May 6, 1996, as Amended and Restated as of
July 15, 1996 (the "Credit Agreement"), among the Company, the Lenders from time
to time parties thereto (the "Lenders"), the Co-Agents named therein, the Lead
Managers named therein, and Barclays Bank PLC, as Administrative Agent (in such
capacity, the "Administrative Agent").
This opinion is furnished to you pursuant to Section 4.01(c)(i)
of the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
In connection with this opinion, I have examined copies of each
of (a) the Credit Agreement and the Notes (collectively, the "Loan Documents")
and (b) such corporate documents and records of the Company and certificates of
public officials and officers of the Company, and such other documents as I have
deemed necessary or appropriate for the purposes of rendering the opinions
herein set forth. In such examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals and
the conformity to authentic, original documents of all documents submitted to me
as certified, conformed or photostatic copies.
As to various questions of fact relevant to the opinions expressed
herein, I have relied upon, and assume the accuracy of, certificates of public
officials and the representations and warranties contained in the Loan Documents
and certificates and written statements and other information of or from
responsible officers of the Company. I have further assumed that the Credit
Agreement has been duly executed and delivered by each Lender and the
Administrative Agent, and constitutes the legal, valid and binding obligation of
each such party, enforceable against such party in accordance with its terms.
I am a member of the bar of the State of Indiana, and I express
no opinion as to the laws of any jurisdiction other than the laws of the State
of Indiana, the General Corporation Law of the State of Delaware, the
corporation and public utility regulatory laws of the State of Ohio to the
extent applicable to CG&E and the federal laws of the United States of America.
As used herein, the term "Requirements of Law" means the laws of the State of
Indiana, the General Corporation Law of the State of Delaware, the General
Corporation Law and laws relating to utilities and utility holding companies of
the State of Ohio and the laws, rules and regulations of the United States of
America.
With respect to my opinion set forth in paragraph 3 below, I
have relied, with your permission, on the opinion of Skadden, Arps, Slate,
Meagher & Flom of even date herewith, a copy of which is attached hereto as
Exhibit A, to the effect that each of the Loan Documents is in a form which is
enforceable under the laws of the State of New York, subject to the
qualifications therein stated.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that:
1. The Company (a) is duly organized and validly existing
under the laws of the State of Delaware, (b) has the corporate power and
authority,and the legal right, to own and operate its property, to lease the
property which it operates as lessee and to conduct the business in which it is
currently engaged and in which it proposes to be engaged after the date hereof,
(c) is duly qualified as a foreign corporation and is in good standing under the
laws of each jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification, except any such
jurisdiction where the failure to so qualify could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law, except to the extent that the failure
to comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
2. The Company has the corporate power and authority, and the
legal right, to make, deliver and perform each of the Loan Documents and to
borrow under the Credit Agreement. The Company has taken all necessary
corporate action, as applicable, to authorize the borrowings on the terms and
conditions of the Credit Agreement and the Notes, and to authorize the
execution, delivery and performance of the Loan Documents. Each of the Loan
Documents has been duly executed and delivered on behalf of the Company.
3. Each of the Loan Documents constitutes the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
4. The execution, delivery and performance of the Loan Documents,
the borrowings thereunder and the use of the proceeds thereof will not violate
any Requirement of Law or, to the best of my knowledge, any Contractual
Obligations of the Company and will not result in, or require, the creation or
imposition of any Lien on any of its properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.
5. No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority or, to the best of my knowledge, any
other Person is required in connection with execution, delivery, performance,
validity or enforceability of any of the Loan Documents, except for consents or
filings which have been obtained or made, as the case may be, on or before the
date hereof and which are in full force and effect.
6. To the best of my knowledge, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or
threatened by or against the Company or against any of its properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated thereby or (b) which litigation, investigation or
proceeding, other than as previously disclosed by the Company in its Annual
Report on Form 10-K for the fiscal year ended December 31, 1995, or its
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996, if
adversely determined, would have a Material Adverse Effect.
7. To the best of my knowledge, the Company is not in default
under or with respect to any Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect.
8. The Company is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended. The Company is not subject to regulation under
any federal or state statute or regulation which limits its ability to incur
Indebtedness, other than the Public Utility Holding Company Act of 1935, as
amended (the "1935 Act").
9. The Company is a registered "holding company" within the
meaning of the 1935 Act.
10. Except as disclosed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, or its Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1996, there is no material
legal or contractual restriction on the ability of PSI Energy or CG&E to declare
and pay cash dividends to the Company, except such limitations as are imposed on
PSI Energy by I.C. 23-1-28-3, which limitations are applicable to all Indiana
business corporations, and as are imposed on CG&E by Ohio Rev. Code Sec.
1701.33, which limitations are applicable to all Ohio business corporations.
The opinions expressed herein are subject to the following
qualifications:
(a) My opinion set forth in paragraph 3, above, is subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and to general principles
of equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law).
(b) Such opinion is further subject to applicable laws that
limit the enforceability of provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for its own
action or inaction in circumstances involving such party's gross negligence, bad
faith or similar conduct.
(c) I express no opinion herein as to (i) the availability of
specific performance or other equitable remedies or (ii) the enforceability of
waivers by parties of their respective rights and remedies under law.
This opinion has been rendered solely for your benefit in
connection with the Credit Agreement and the transactions contemplated thereby
and may not be used, circulated, quoted, relied upon or otherwise referred to by
any other person (other than your respective counsel, auditors and any
regulatory agency having jurisdiction over you or as otherwise required pursuant
to legal process or other requirements of law) for any other purpose without my
prior written consent.
Very truly yours,
[Jerome A. Vennemann, Esq.]
<PAGE>
EXHIBIT D
FORM OF OPINION OF KING & SPALDING,
SPECIAL COUNSEL TO THE ADMINISTRATIVE AGENT
July 15, 1996
The Lenders
from time to time parties
to the Credit Agreement
referred to below
Barclays Bank PLC,
as Administrative Agent
222 Broadway
New York, New York 10038
Cinergy Corp.
Ladies and Gentlemen:
We have acted as special counsel to the Administrative Agent in
connection with the preparation, execution and delivery of the Credit Agreement,
dated as of May 6, 1996, as Amended and Restated as of July 15, 1996 (the
"Credit Agreement"), among Cinergy Corp., as borrower (the "Borrower"), the
Banks parties thereto (the "Banks"), the Co-Agents named therein, the Lead
Managers named therein, and Barclays Bank PLC, as Administrative Agent (in such
capacity, the "Administrative Agent").
This opinion is furnished to you pursuant to Section 4.01(c)(ii)
of the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
In connection with this opinion, we have examined counterparts
of the Credit Agreement executed by the Borrower, the Banks and the
Administrative Agent, together with the other documents furnished to the
Administrative Agent pursuant to Section 4.01 of the Credit Agreement,
including, without limitation, the opinion of Jerome A. Vennemann, Esq.,
Associate General Counsel to the Borrower, delivered to the Administrative Agent
pursuant to Section 4.01(c)(i) of the Credit Agreement (the "Opinion").
Our engagement as special counsel has been limited to the
specific matters as to which we were consulted. We have no direct knowledge of
the day-to-day affairs of the Borrower and have not reviewed generally its
business affairs. In our examination of the documents referred to above, we
have assumed the due authority of the parties executing such documents, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to authentic, original documents of all
documents submitted to us as certified, conformed or photostatic copies. We
have relied, as to factual matters, on the documents we have examined and, as to
matters addressed by the Opinion, on the Opinion. We have assumed that the
Credit Agreement has been duly executed and delivered by each Bank and the
Administrative Agent, and constitutes the legal, valid and binding obligation of
each such party, enforceable against such party in accordance with its terms.
Our opinions expressed below are limited to the law of the State
of New York and we do not express any opinions concerning any other law.
Based upon the foregoing, and subject to the limitations,
qualifications and assumptions set forth herein, we are of the opinion that:
1. The Credit Agreement constitutes, and each of the Notes,
when executed and delivered for value received will constitute, the legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.
2. The Opinion and the other documents delivered to the
Administrative Agent pursuant to Section 4.01 of the Credit Agreement are
substantially responsive to the requirements of the corresponding paragraphs of
Section 4.01 of the Credit Agreement pursuant to which the same have been
delivered.
The opinions expressed herein are subject to the following
qualifications:
(a) Our opinion set forth in paragraph 1, above, is subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and to general principles
of equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law).
(b) Such opinion is further subject to applicable laws that
limit the enforceability of provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for its own
action or inaction in circumstances involving such party's gross negligence, bad
faith orsimilar conduct.
(c) We express no opinion herein as to (i) the availability of
specific performance or other equitable remedies or (ii) the enforceability of
waivers by parties of their respective rights and remedies under law.
This opinion has been rendered solely for your benefit in connection
with the Credit Agreement and the transactions contemplated thereby and may not
be used, circulated, quoted, relied upon or otherwise referred to by any other
person (other than your respective counsel, auditors and any regulatory agency
having jurisdiction over you or as otherwise required pursuant to legal process
or other requirements of law) for any other purpose without our prior written
consent.
Very truly yours,
KING & SPALDING
PKS:MEO
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated , 199
Reference is made to the Credit Agreement dated as of May 6,
1996, as Amended and Restated as of July 15, 1996 (as so amended and restated,
and as the same may be further amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among Cinergy Corp., a Delaware
corporation (the "Borrower"), the Lenders (as defined in the Credit Agreement),
the Co-Agents named therein, the Lead Managers named therein, and Barclays Bank
PLC, as Administrative Agent for the Banks (the "Administrative Agent"). Terms
defined in the Credit Agreement are used herein with the same meaning.
(the "Assignor") and
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
without recourse except as set forth herein, and the Assignee hereby purchases
and assumes from the Assignor, that interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the date hereof (other
than in respect of Bid Advances and Bid Notes) which represents the percentage
interest specified on Schedule 1 hereto of all outstanding rights and
obligations under the Credit Agreement (other than in respect of Bid Advances
and Bid Notes), including, without limitation, such interest in the Assignor's
Commitment, the Committed Advances owing to the Assignor, and the Committed
Note[s] held by the Assignor. After giving effect to such sale and assignment,
the Assignee's Commitment and the amount of the Committed Advances owing to the
Assignee will be as set forth in Section 2 of Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
(iv) confirms that it has received the consent of the Borrower (if required) to
the assignment contemplated herein; and (v) attaches the Committed Note[s]
referred to in paragraph 1 above and requests that the Administrative Agent
exchange such Committed Note[s] for a new Committed Note payable to the order of
the Assignee in an amount equal to the Commitment assumed by the Assignee
pursuant hereto or new Committed Notes payable to the order of the Assignee in
an amount equal to the Commitment assumed by the Assignee pursuant hereto and
the Assignor in an amount equal to the Commitment retained by the Assignor under
the Credit Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 5.01(d) and/or Section 6.01(a)(i) and (ii) thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; [and] (v) specifies as
its Domestic Lending Office (and address for notices) and Eurodollar Lending
Office the offices set forth beneath its name on the signature pages hereof [and
(vi) attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and the Notes or such other
documents as are necessary to indicate that all such payments are subject to
such rates at a rate reduced by an applicable tax treaty].
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of
this Assignment and Acceptance (the "Effective Date") shall be the date of
acceptance thereof by the Administrative Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent,
as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its rights
(except as otherwise provided in Section 9.07 of the Credit Agreement) and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement and the Committed Notes in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Committed Notes for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[NAME OF ASSIGNOR]
By
Title:
[NAME OF ASSIGNEE]
By
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this day
of , 19
BARCLAYS BANK PLC,
as Administrative Agent
By
Title:
<PAGE>
Schedule 1
to
Assignment and Acceptance
Dated , 19
Section 1.
Percentage Interest: _____%
Section 2.
Assignee's Commitment: $[ ]
Aggregate Outstanding Principal
Amount of Committed
Advances owing to
the Assignee: $[ ]
A Committed Note payable to the order of the Assignee
Dated: , 19
Principal amount:
A Committed Note payable to the order of the Assignor
Dated: , 19
Principal amount:
Section 3.
Effective Date: , 19
<PAGE>
EXHIBIT 99.(c)
[Letterhead of Taft, Stettinius & Hollister]
August 19, 1996
Cinergy Corp.
The Cincinnati Gas & Electric Company
139 East Fourth Street
Cincinnati, OH 45202
Re: Offer to Purchase and Proxy Statement
Dear Sirs:
You have requested our opinion concerning the description
(contained in the Offer to Purchase defined below) of the federal
income tax consequences of (i) the sale by holders of
certain shares of cumulative preferred stock ("Shares") of The
Cincinnati Gas & Electric Company ("CG&E") to Cinergy Corp. in
response to an Offer to Purchase and Proxy Statement dated
August 20, 1996 ("Offer to Purchase"), and (ii) the receipt of
cash payments in connection with a proposed amendment to CG&E's
Amended Articles of Incorporation.
In connection with rendering this opinion, we have reviewed
the Offer to Purchase and those of the documents referred to
therein which we deemed appropriate. We have assumed the
genuineness of all such documents and have assumed that all
transactions described therein will be carried out as
contemplated.
Subject to the foregoing, it is our opinion that the summary
entitled "Certain Federal Income Tax Consequences" contained in
the Offer to Purchase correctly describes the principal
United States federal income tax consequences of sales of Shares
pursuant to the Offer to Purchase and the receipt of Cash
Payments (as defined in the Offer to Purchase) in connection with
the approval and adoption of the Proposed Amendment described in
the Offer to Purchase.
Very truly yours,
/s/ TAFT, STETTINIUS & HOLLISTER
<PAGE>
