SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 25, 1998
NIAGARA MOHAWK POWER CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-2987 15-0265555
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification Number)
300 Erie Boulevard, West
Syracuse, NY 13202
(Address of principal executive offices)
Registrant's telephone number,
including area code: (315) 474-1511
<PAGE>
Item 7. Financial Statements and Exhibits
Niagara Mohawk Power Corporation is filing herewith the following exhibits:
(c) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- - ------- -----------
1 Underwriting Agreement, dated June 25, 1998, among Niagara
Mohawk Power Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Smith Barney Inc., Wasserstein Perella
Securities, Inc. and CIBC Oppenheimer Corp.
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
NIAGARA MOHAWK POWER
CORPORATION
By: /s/ Kapua A. Rice
------------------------------------
Name: Kapua A. Rice
Title: Corporate Secretary
Dated: July 2, 1998
-3-
================================================================================
NIAGARA MOHAWK POWER CORPORATION
COMMON STOCK ($1.00 PAR VALUE)
UNDERWRITING AGREEMENT
Dated as of June 25, 1998
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
Wasserstein Perella Securities, Inc.
CIBC Oppenheimer Corp.
================================================================================
<PAGE>
June 25, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
WASSERSTEIN PERELLA SECURITIES, INC.
CIBC OPPENHEIMER CORP.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Niagara Mohawk Power Corporation, a New York corporation (the
"Company"), proposes to issue and sell 22,399,248 shares (the "Shares") of its
common stock, par value $1.00 per share (the "Common Stock"), to Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("Merrill"), Smith Barney Inc. ("Smith Barney"),
Wasserstein Perella Securities, Inc. ("Wasserstein") and CIBC Oppenheimer Corp.
("Oppenheimer" and together with DLJ, Merrill, Smith Barney and Wasserstein, the
"Underwriters"). DLJ shall act as the representative of the several
Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Securities Act"), a registration statement on Form S-3, including a prospectus,
relating to the Shares. Such registration statement, including all exhibits
thereto and documents incorporated by reference therein at the date hereof
pursuant to Item 12 of Form S-3 under the Securities Act, is hereinafter
referred to as the "Registration Statement." The Company has filed with, or
transmitted for filing to, the Commission, pursuant to Rule 424 under the
Securities Act, a preliminary prospectus supplement dated June 1, 1998 (the
"Preliminary Prospectus Supplement") to the base prospectus (the "Base
Prospectus") included in the Registration Statement (such Preliminary Prospectus
Supplement relating to the Shares in the form so filed or transmitted, together
with the Base Prospectus dated June 1, 1998 and the documents incorporated
therein by reference pursuant to Item 12 of Form S-3 under the Securities Act,
is hereinafter referred to as the "Preliminary Prospectus"). The Company has
filed with, or transmitted for filing to, or shall
<PAGE>
promptly hereafter file with or transmit for filing with the Commission,
pursuant to Rule 424 under the Securities Act, a prospectus supplement dated
June 25, 1998 to the Base Prospectus (such prospectus supplement relating to the
Shares in the form so filed or transmitted, together with the Base Prospectus
dated June 1, 1998 and the documents incorporated therein by reference pursuant
to Item 12 of Form S-3 under the Securities Act, is hereinafter referred to as
the "Prospectus"). The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Registration Statement and the Base Prospectus (pursuant to Item 12 of Form S-3
under the Securities Act) that are filed subsequent to the date of the
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and prior to the
completion of the offering of the Shares.
2. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to its terms and
conditions, the Company agrees to issue and sell, and each Underwriter agrees,
severally and not jointly, to purchase from the Company at a price per Share of
$14.125 (the "Purchase Price") the number of Shares set forth opposite the name
of such Underwriter in Schedule I hereto.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the execution and delivery of this Agreement as in
your judgment is advisable and (ii) initially to offer the Shares upon the terms
set forth in the Prospectus.
4. Delivery and Payment. The Shares to be purchased by the Underwriters
shall be represented by definitive certificates and shall be issued in such
amounts and registered in such names as DLJ on behalf of the Underwriters shall
request no later than two business days prior to the Closing Date. Delivery of
the Shares to be purchased by the Underwriters shall be made to DLJ through the
facilities of The Depository Trust Company ("DTC") for the respective accounts
of the several Underwriters against payment by the several Underwriters through
DLJ to the Company of the Purchase Price therefore by wire transfer of Federal
or other funds immediately available in New York City. The certificates
representing the Shares to be purchased by the Underwriters shall be made
available for inspection, checking and packaging not later than 9:30 A.M., New
York City time, on the business day prior to the Closing Date at the office of
DTC or its designated custodian (the "Designated Office") in New York, New York.
The time and date of delivery and payment for the Shares shall be 9:00 A.M., New
York City time, on June 30, 1998 or such other time on the same or such other
date as DLJ and the Company shall agree in writing. The time and date of
delivery of the Shares are hereinafter referred to as the "Closing Date".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at the
offices of Sidley & Austin, 875 Third Avenue, New York, New York 10022, or such
other place as DLJ and the Company shall agree in writing, and the Shares shall
be delivered at the Designated Office in New York, New York, all on the Closing
Date.
-2-
<PAGE>
5. Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will cause the Prospectus to be filed or mailed for
filing pursuant to Rule 424 under the Securities Act and will promptly notify
you of such filing or mailing, and you hereby consent to such filing or mailing.
During the period for which a prospectus relating to the Shares is required to
be delivered under the Securities Act, the Company will advise you promptly and,
if requested by you, confirm such advice in writing, (i) when any amendment to
the Registration Statement has been declared effective or has become effective
or any further supplement to the Prospectus has been filed, (ii) when any
subsequent supplement to the Base Prospectus has been filed or mailed for
filing, (iii) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Base Prospectus or
for additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes and (v) of
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, the Company will use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act or any other applicable
securities law, any event occurs as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
shall be necessary at any time to amend or supplement the Prospectus to comply
with the Securities Act or the Exchange Act or the respective rules thereunder,
the Company will promptly notify DLJ and will promptly prepare and file with the
Commission, subject to paragraph (h) of this Section 4, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance.
(c) The Company will make generally available to its security holders
(within the meaning of Rule 158 under the Securities Act) as soon as practicable
an earnings statement of the Company covering a period of at least twelve months
after the date of the Prospectus filed pursuant to Rule 424 under the Securities
Act, which will satisfy the provisions of Section 11(a) of the Securities Act
(including, at the Company's option, Rule 158 thereunder).
(d) The Company will furnish to you and each Underwriter designated by
you such number of copies of the Registration Statement and the Prospectus as so
filed and of each amendment to it, including all exhibits filed therewith and
all exhibits incorporated therein by reference, as you may reasonably request.
-3-
<PAGE>
(e) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation, in any
jurisdiction in which it is not now so subject.
(f) For three years following the date hereof, the Company will furnish
(or cause to be furnished) to DLJ as soon as available copies of (i) all reports
or other communications furnished to stockholders of the Company and (ii) all
reports and financial statements filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(g) During the period beginning from the date of this Agreement and
continuing to and including the earlier of (i) the termination of trading
restrictions on the Shares, as notified to the Company by DLJ or (ii) the
ninetieth day after the Closing Date for the Shares, the Company will not offer,
sell or otherwise dispose of any shares of Common Stock of the Company (except
(A) shares of Common Stock issuable upon exercise of options to purchase shares
of Common Stock of the Company that are outstanding on the Closing Date, (B)
under the MRA (as hereinafter defined), (C) under the Company's Dividend
Reinvestment and Stock Purchase Plan or Employee Savings Fund Plans or (D) under
prior contractual commitments which have been disclosed to you), without the
prior written consent of DLJ, which consent shall not be unreasonably withheld.
(h) The Company will not file any amendment to the Registration
Statement or any amendment or supplement to the Base Prospectus (other than any
prospectus supplement relating to the offering of securities registered under
the Registration Statement other than the Shares and permitted by subsection (g)
of this Section 4, or any document required to be filed under the Exchange Act
which upon filing is deemed to be incorporated by reference in the Registration
Statement or the Base Prospectus) to which you shall object in writing or which
shall be disapproved in writing by counsel for the Underwriters. The Company
will furnish to you prior to the filing thereof a copy of any such prospectus
supplement and any document which upon filing is deemed to be incorporated by
reference in the Registration Statement or the Base Prospectus.
(i) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
-4-
<PAGE>
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay or
cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), the Preliminary Prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers as provided herein, (ii) the
preparation, printing (including, without limitation, word processing and
duplicating costs) and delivery of this Agreement and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection with the offering of the Shares (including in each case any
disbursements of counsel for the Underwriters relating to such printing and
delivery), (iii) all costs and expenses related to the issuance, transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states and reasonable costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi)
furnishing such copies of the Registration Statement, the Preliminary Prospectus
and the Prospectus and all amendments and supplements thereto as may be
requested for use in connection with the offering or sale of the Shares by the
Underwriters or by dealers to whom the Shares may be sold, (vii) the cost of
printing certificates representing the Shares, (viii) all fees and expenses in
connection with approval of the Shares by the DTC for "book-entry" transfer, and
(ix) all other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in this
Section.
(k) To apply the net proceeds from the sale of the Shares to be sold
hereunder for the purposes set forth in the Registration Statement and the
Prospectus (and any supplements or amendments thereto).
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the best knowledge of the
Company, threatened by the Commission.
-5-
<PAGE>
(b) (i) The Registration Statement does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and (iii) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) shall not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to the Underwriters furnished to the Company in writing by the
Underwriters expressly for use therein. The Company and the Underwriters
acknowledge for all purposes under this Agreement (including this paragraph,
Section 6(c) hereof, Section 7(a) hereof and Section 7(b) hereof) that the
statements with respect to price and discount and the last paragraph on the
cover page of the Prospectus and the second and sixth paragraphs under the table
in the section entitled "Underwriting" in the Prospectus constitute the only
information furnished to the Company by or on behalf of any Underwriter
expressly for use in the Registration Statement or the Prospectus and that the
Underwriters shall not be deemed to have provided any other information (and
therefore are not responsible for any statements or omissions) pertaining to any
arrangement or agreement with respect to any party other than the Underwriters
or any party to an arrangement or agreement with the Underwriters.
(c) The Preliminary Prospectus relating to the Shares filed pursuant to
Rule 424 under the Securities Act, complied as to form when so filed in all
material respects with the Securities Act, and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in such Preliminary Prospectus based upon information
relating to the Underwriters furnished to the Company in writing by the
Underwriters expressly for use therein.
(d) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its business and to own,
lease and operate its properties as described in the Prospectus, and each is
duly qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under, this Agreement and to
consummate the transactions contemplated
-6-
<PAGE>
hereby and thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Shares as provided herein and therein.
(f) This Agreement has been duly authorized and validly executed by the
Company and (assuming the due execution and delivery hereof by the Underwriters)
is the legally valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforceability thereof
may be limited (i) by the effect of bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors, (ii) by the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before which any
proceeding therefor may be brought and (iii) to the extent that rights to
indemnification and contribution thereunder may be limited by federal or state
securities laws or public policy relating thereto.
(g) The Company is authorized to issue and sell up to $1,160,000,000 of
its securities, which may include Common Stock, under the Registration
Statement. The issuance and sale of the Shares will not cause the Company to
exceed the limitations as to the aggregate amount of its securities that may be
issued and sold under the Registration Statement.
(h) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.
(i) The Shares represent securities that are otherwise deliverable to
the independent power producers pursuant to the terms and conditions of the
Master Restructuring Agreement dated July 9, 1997, as amended (the "MRA"), and
the Company has entered into an agreement with such persons permitting it to
offer and sell the Shares hereunder.
(j) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(k) The Shares when issued will be admitted for trading on the New York
Stock Exchange.
(l) The execution, delivery and performance of this Agreement by the
Company, the issuance and sale of the Shares, the compliance by the Company with
all the provisions hereof and the consummation of the transactions contemplated
hereby will not (i) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company or any
bond, debenture, note, indenture, loan agreement, mortgage, lease or any other
evidence of
-7-
<PAGE>
indebtedness or any other agreement or instrument filed as an exhibit to the
Company's Registration Statement or 1997 annual report on Form 10-K, (ii)
violate or conflict with any applicable law, statute, rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property, (iii) result in the imposition or creation of (or the obligation to
create or impose) a lien, encumbrance or security interest under any agreement
or instrument filed as an exhibit to the Company's Registration Statement or
1997 annual report on Form 10-K, or (iv) result in the suspension, termination
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of any such
Authorization, except in all cases as would not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
(m) No consent, waiver, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency or other person is required
for the execution, delivery and performance by the Company of this Agreement,
the issuance and sale of the Shares, and the consummation of the transactions
contemplated hereby, except (i) such as have been obtained and made under the
Securities Act and such as are expected to be obtained from the New York Public
Service Commission (the "PSC") on or prior to the Closing Date, or have been
obtained as described in the Prospectus, (ii) such as are required under state
securities or Blue Sky laws and regulations, and (iii) such as to which the
failure to be obtained or made would not reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect.
(n) There is no legal or administrative proceeding, statute, rule or
regulation, contract or document concerning the Company or any of its
subsidiaries of a character required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement that is not so described or filed as required.
(o) To the Company's knowledge, each of the Company and its
subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization") of, and has made
all filings with and notices to, all federal and state governmental or
regulatory authorities and self-regulatory organizations, as are necessary to
conduct its business substantially as described in the Prospectus, subject in
each case to such qualifications as may be set forth in the Prospectus, except
where the failure to have any such Authorization or to make any such filing or
notice would not reasonably be expected to have a Material Adverse Effect.
(p) Except as otherwise set forth in the Prospectus or such as are not
material to the business, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, at the Closing Date, the Company
has good and marketable title, free and clear of all liens, claims, encumbrances
and restrictions, except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement and the Prospectus
as being owned by it. At the Closing Date, all leases to which the Company is a
party will be valid and binding, no default will
-8-
<PAGE>
have occurred or be continuing thereunder, and the Company enjoys peaceful and
undisturbed possession under all such leases to which it is a party as lessee
with such exceptions as would not reasonably be expected to have a Material
Adverse Effect.
(q) Except as otherwise set forth in the Prospectus and subject to such
qualifications as may be set forth therein, neither the Company nor any of its
subsidiaries has violated any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the rules and regulations
promulgated thereunder, which in each case would reasonably be expected to
result in a Material Adverse Effect. Except as otherwise set forth in the
Prospectus, to the knowledge of the Company, the Company and its subsidiaries
are in compliance with all applicable existing federal, state and foreign laws
(including statutes and the common law) and regulations relating to protection
of human health or the environment or imposing liability or standards of conduct
concerning any Hazardous Material ("Environmental Laws"), except for such
instances of noncompliance which, either singly or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The term "Hazardous
Material" means (i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (ii)
any "hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl and (v) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(r) There is (i) no significant unfair labor practice complaint pending
against the Company or any of its subsidiaries or, to the best knowledge of the
Company, threatened against the Company or its subsidiaries before the National
Labor Relations Board or any state or local labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
its subsidiaries or, to the best knowledge of the Company, threatened against
them and (ii) no significant strike, labor dispute, slowdown or stoppage pending
against the Company or its subsidiaries or, to the best knowledge of the
Company, threatened against them except for such actions specified in clause (i)
or (ii) above, which, either individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(s) Price Waterhouse LLP are independent public accountants with
respect to the Company as required by the Securities Act.
(t) The financial statements, together with related schedules and notes
forming part of the Registration Statement and the Prospectus (and any amendment
or supplement thereto), comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act, present fairly the
financial position, results of operations and changes in financial position of
the Company on the basis stated in the Registration Statement and the Prospectus
at the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied
-9-
<PAGE>
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto) are, in
all material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company. The pro
forma financial data included in the Registration Statement and the Prospectus
have been prepared on a basis consistent with such historical statements, except
for the pro forma adjustments specified therein, and give effect to the
assumptions made on a reasonable basis and present fairly the transactions
reflected thereby as indicated in the Registration Statement and Prospectus and
comply in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of these statements.
(u) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus, there has not occurred
any material adverse change or any development involving a prospective material
adverse change in the business, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(v) The Company is presently exempt from the provisions of the Public
Utility Holding Company Act of 1935, as amended, that would require it to
register thereunder.
(w) There are no holders of securities of the Company who, by reason of
the execution of this Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated thereby, have the right to request
or demand that the Company register under the Securities Act, in the
Registration Statement, securities held by them who have not waived such right.
(x) Each certificate signed by any officer of the Company and delivered
to the Underwriters or counsel for the Underwriters pursuant to this Agreement
shall be deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
7. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or the
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to
-10-
<PAGE>
the Underwriters furnished in writing to the Company by or on behalf of the
Underwriters expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to the Preliminary Prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus (as then
amended or supplemented, provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages
and liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in such Prospectus and such Prospectus was required by law to
be delivered at or prior to the written confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, to the same extent as the foregoing indemnity from the Company to each
Underwriter but only with reference to information relating to the Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or the Preliminary
Prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the
-11-
<PAGE>
indemnifying party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
DLJ, in the case of parties indemnified pursuant to Section 7(a), and by the
Company, in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall not be liable for any settlement of any such action
effected without its written consent but the indemnifying party shall indemnify
and hold harmless the indemnified party from and against any and all losses,
claims, damages, liabilities and judgments by reason of any settlement of any
action effected with the indemnifying party's written consent. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the indemnified
party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
-12-
<PAGE>
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7(d) are several in proportion to the
respective principal amount of Shares purchased by each of the Underwriters
hereunder and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Shares under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall remain effective on the date of
the execution and delivery of this Agreement, and on the Closing Date no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or shall be
pending before or, to the Company's knowledge, contemplated by the Commission.
(c) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any material adverse change or any development
involving a prospective material adverse change in the business, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not
-13-
<PAGE>
have been any change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries shall
have incurred any liability or obligation, direct or contingent, not in the
ordinary course of business, which is material and adverse and makes it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
(d) The Underwriters shall have received on the Closing Date a
certificate dated the Closing Date, signed by William E. Davis and William F.
Edwards, in their capacities as the Chief Executive Officer and Chief Financial
Officer of the Company, confirming the matters set forth in Sections 8(a), 8(b),
8(c) and 8(h) and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied by the Company on or prior to the Closing Date.
(e) The Underwriters shall have received on the Closing Date opinions
and letters (satisfactory to the Underwriters and counsel for the Underwriters),
dated the Closing Date, of Sullivan & Cromwell, special counsel for the Company,
Swidler & Berlin, regulatory counsel for the Company, Winston & Strawn,
regulatory counsel for the Company, Bryan Cave LLP, special tax counsel for the
Company, and Paul Kaleta, Esq., the Company's Vice President-Law & General
Counsel, substantially in the form of Exhibits 1A, 1B, 1C, 1D and 1E hereto,
respectively.
(f) The Underwriters shall have received on the Closing Date an
opinion, dated the Closing Date, of Sidley & Austin, counsel for the
Underwriters, substantially in the form of Exhibit 2 hereto.
(g) The Underwriters shall have received a letter dated on and as of
the Closing Date, in form and substance satisfactory to the Underwriters, from
Price Waterhouse LLP, independent public accountants, with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus in the form and substance of the
letter delivered to the Underwriters by Price Waterhouse LLP on the date of this
Agreement.
(h) The PSC shall have issued a written order or orders (the "PSC
Orders") approving the Company's PowerChoice Settlement Agreement (the
"PowerChoice Agreement"), including the issuance by the Company of the Shares
pursuant to the Master Restructuring Agreement dated July 9, 1997, as amended
(the "MRA"); the PSC Orders shall remain in full force and effect; the PSC shall
not have publicly indicated its intention to modify, amend or otherwise change
the PSC Orders in any material respect; no party or entity with legal standing
shall have entered a notice of appeal, or otherwise publicly indicated it
intention to appeal, the PSC Orders; no judicial or administrative proceeding
shall have been instituted that challenges the validity of, or otherwise seeks
to modify, amend, stay or enjoin the effectiveness of, the PSC Orders if (with
respect to any of the events in this and the two immediately preceding clauses),
in the reasonable judgment of the Underwriters, such event makes it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus; and all conditions precedent to the effectiveness of the
PowerChoice Agreement and
-14-
<PAGE>
the MRA shall have been satisfied or waived and the transactions contemplated by
the MRA shall have closed (or shall close concurrently with the Closing
hereunder).
(i) The Shares shall have been approved for listing on the New York
Stock Exchange, and written evidence thereof shall have been delivered to the
Underwriters.
(j) The offering and sale of the Company's series A through G senior
notes and senior discount notes that are issued pursuant to an indenture, dated
as of June 30, 1998 between the Company and IBJ Schroder Bank & Trust Company,
as trustee, shall have been consummated.
(k) The Company shall not have failed on or prior to the Closing Date
to perform or comply in any material respect with any of the agreements herein
contained and required hereunder to be performed or complied with by the Company
on or prior to the Closing Date.
9. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon its execution by and of the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Underwriters by written notice to the Company if any of the
following has occurred: (i) since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any material adverse
change or development involving a prospective material adverse change in the
business, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in the Underwriters' good faith judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (ii) any outbreak or escalation of hostilities involving the
United States or other national or international calamity or crisis involving
the United States or change in economic conditions or in the financial markets
of the United States that, in the Underwriters' good faith judgment, is material
and adverse and would, in the Underwriters' good faith judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities or other instruments on the New York Stock Exchange or limitation on
prices for securities or other instruments generally on such exchange, or (iv)
the declaration of a banking moratorium by either federal or New York State
authorities.
If, on the Closing Date, any one or more of the Underwriters shall fail
or refuse to purchase the Shares which it has or they have agreed to purchase
hereunder on such date and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Shares to be purchased on such date by all
Underwriters, each non-defaulting Underwriter shall be obligated severally, in
the proportion which the number of Shares set forth opposite its name in
Schedule I bears to the total number of Shares which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Shares which such defaulting Underwriter or
-15-
<PAGE>
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Shares and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either the
Underwriters or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to Niagara
Mohawk Power Corporation, 300 Erie Boulevard West, Syracuse, New York 13202,
Attention: General Counsel and (ii) if to the Underwriters, c/o Donaldson,
Lufkin & Jenrette Securities Corporation, 140 Broadway, New York, New York
10005, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, the officers or directors of the
Company or any person controlling the Company, (ii) acceptance of the Shares and
payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company to comply with any of the
terms or to fulfill any of the conditions of this Agreement or if for any reason
the Shares are not delivered by or on behalf of the Company as provided herein,
the Company agrees to reimburse the Underwriters for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(j) hereof.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who
-16-
<PAGE>
sign the Registration Statement and their respective successors and assigns, all
as and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include a purchaser of any of the Shares from
any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York without regard to the conflict of laws provisions
thereof.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
-17-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
NIAGARA MOHAWK POWER CORPORATION
By: /s/ Arthur W. Roos
------------------------------------
Name: Arthur W. Roos
Title: Vice President and Treasurer
Acknowledged and accepted on the date
first described herein.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Jane Sadowsky
----------------------------
Name: Jane Sadowsky
Title: Senior Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Richard A. Vaccari
-----------------------------
Name: Richard A. Vaccari
Title: Managing Director
SMITH BARNEY INC.
By: /s/ Paul T. Addison
------------------------------
Name: Paul T. Addison
Title: Managing Director
-18-
<PAGE>
WASSERSTEIN PERELLA SECURITIES, INC.
By: /s/ Kenneth A. Buckfire
------------------------------
Name: Kenneth A. Buckfire
Title: Managing Director
CIBC OPPENHEIMER CORP.
By: /s/ J. Garth Klimchuk
------------------------------
Name: J. Garth Klimchuk
Title: Executive Director
-19-
<PAGE>
SCHEDULE I
Number of
Shares
Underwriters to be Purchased
Donaldson, Lufkin & Jenrette Securities 7,839,736
Corporation
Merrill Lynch, Pierce, Fenner & Smith 4,479,850
Incorporated
Smith Barney Inc. 4,479,850
Wasserstein Perella Securities, Inc. 4,479,850
CIBC Oppenheimer Corp. 1,119,962
---------
Total 22,399,248
