ORANGE AND ROCKLAND UTILITIES, INC.
UNDERWRITING AGREEMENT BASIC PROVISIONS
May 31, 2000
Orange and Rockland Utilities, Inc. (the "Company") may from time to
time enter into one or more underwriting agreements that provide for the sale of
certain of its securities (the "Designated Securities"). The basic provisions
set forth herein may be incorporated by reference in any such underwriting
agreement relating to a particular issue of Designated Securities (an
"Underwriting Agreement"). The Underwriting Agreement, including the provisions
incorporated therein by reference, is herein referred to as "this Agreement."
Unless otherwise defined herein, terms defined in the Underwriting Agreement are
used herein as defined therein.
The terms and rights of any particular issue of Designated
Securities shall be as specified in the Underwriting Agreement relating thereto
and (i) if the Designated Securities are equity securities, in or pursuant to
the provisions of the Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), or (ii) if the Designated Securities are debt
securities, in or pursuant to the indenture (the "Indenture") identified in the
Underwriting Agreement. An Underwriting Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted.
I. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
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(a) A registration statement in respect of the Designated Securities
has been filed with the Securities and Exchange Commission (the "Commission");
the registration statement has been declared effective by the Commission; and no
stop order suspending the effectiveness of the registration statement has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission. The Company proposes to file pursuant to Rule 424 under the
Securities Act of 1933 (the "Act") a prospectus supplement specifically relating
to the Designated Securities and has previously advised the Underwriters of all
information to be set forth therein. The term "Registration Statement" means the
registration statement as amended to the date of this Agreement. The term "Basic
Prospectus" means the prospectus included in the Registration Statement. The
term "Prospectus" means the Basic Prospectus together with the prospectus
supplement specifically relating to the Designated Securities, as first filed
with the Commission pursuant to Rule 424. The term "Preliminary Prospectus"
means a preliminary prospectus supplement specifically relating to the
Designated Securities together with the Basic Prospectus. As used herein, the
terms "Registration Statement", "Basic Prospectus", "Prospectus" and
"Preliminary Prospectus" shall include in each case the material, if any,
incorporated by reference therein.
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(b) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, and none of
the documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when said further documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder and will 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 not misleading.
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Act and, if the Designated Securities are debt securities,
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission under the Act and, if applicable, the
Trust Indenture Act; and the Registration Statement and the Prospectus do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as to
the Prospectus and any amendment or supplement thereto, and the Prospectus, as
it may be amended or supplemented pursuant to Section 4 hereof, as of the Time
of Delivery will 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 not misleading; provided, however, that this representation
and warranty shall not apply to: (i) any statements or omissions made in
reliance upon and in conformity with any information specified in the
Underwriting Agreement as furnished by or on behalf of the Underwriters for use
in the Prospectus for the Designated Securities ("Underwriter Information"),
and, if the Designated Securities are debt securities, (ii) any Form T-1
Statement of Eligibility and Qualification included as an exhibit to the
Registration Statement.
(d) Except as set forth or contemplated in the Prospectus, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there has not been any material adverse change, on a
consolidated basis, in the capital stock, short-term debt or long-term debt of
the Company, or in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole.
(e) The Company has been duly formed and is validly existing and in
good standing under the laws of the State of New York. The Company has full
power and authority to conduct its business and, except as described in the
Registration Statement and Prospectus, possesses all material licenses and
approvals necessary for the conduct of its business.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; and except as set forth or contemplated in the Prospectus, there
are no outstanding rights (including, without limitation, pre-emptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company, or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company, any such
convertible or exchangeable securities or any such rights, warrants or options.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles, and except as rights of indemnification and contribution
hereunder may be limited by law or principles of public policy.
(h) If the Designated Securities are debt securities, the Indenture has
been duly authorized by the Company and qualified under the Trust Indenture Act
and, at the Time of Delivery (as defined in Section 3 hereof), will constitute a
valid and legally binding instrument, enforceable in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or effecting creditors' rights and to
general equity principles.
(i) If the Designated Securities are debt securities, the Designated
Securities have been duly authorized, and when executed by the Company,
authenticated in accordance with the Indenture and issued and delivered pursuant
to this Agreement, will constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture, enforceable in accordance
with their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The Designated Securities
and the Indenture conform to the descriptions thereof in the Prospectus.
(j) If the Designated Securities are equity securities, the Designated
Securities have been duly authorized, and, when delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will have been duly
issued and will be fully paid and non-assessable and will conform to the
descriptions thereof in the Prospectus.
(k) The issue and sale of the Designated Securities and the compliance
by the Company with all of the provisions of the Designated Securities, the
Indenture (if applicable), and this Agreement and the consummation of the
transaction herein and therein contemplated, will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company is a party or by
which it is bound or to which any of the property of the Company is subject, the
Certificate of Incorporation or the Company's by-laws, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties. No consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Designated Securities
or the consummation by the Company of the other transactions contemplated by
this Agreement or the Indenture (if applicable) except such as have been, or
will have been prior to the Time of Delivery, obtained under the Act, the Trust
Indenture Act (if applicable) and the New York State Public Service Law, and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Securities by the Underwriters.
(l) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party, or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(m) The consolidated financial statements of the Company and its
subsidiaries set forth in the Registration Statement and Prospectus fairly
present the financial condition of the Company and its subsidiaries as of the
dates indicated and the results of operations and changes in cash flows for the
periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein).
2. Upon the execution of the Underwriting Agreement applicable to any
Designated Securities, the several Underwriters propose to offer such Designated
Securities for sale upon the terms and conditions set forth in the Prospectus.
3. One or more Global Securities (as defined in the Indenture specified in
the Underwriting Agreement) for the Designated Securities in the aggregate
principal amount of the Designated Securities shall be registered in the name of
Cede & Co. and delivered to The Depository Trust Company with instructions to
credit the Designated Securities to the account of, or as otherwise instructed
by, the Representative against payment by the Representative of the purchase
price therefor in the amount, the funds and manner specified in the Underwriting
Agreement, at the place, time and date specified in the Underwriting Agreement
or at such other place, time and date as the Representative and the Company may
agree in writing, said time and date being herein referred to as the "Time of
Delivery" for said Designated Securities.
4. The Company agrees with each of the Underwriters of the Designated
Securities:
(a) To prepare the Prospectus specifically relating to the Designated
Securities in a form approved by the Representative and to file the Prospectus
pursuant to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the date of this Agreement; after
the date of this Agreement and prior to the Time of Delivery for the Designated
Securities, to make no amendment or supplement to the Registration Statement or
Prospectus to which the Representative shall reasonably object in writing
promptly after reasonable notice thereof; to file timely all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Designated Securities, and during
the same period to advise the Representative, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed, or mailed for filing, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Designated Securities, of the suspension of the
qualification of the Designated Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose or of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order preventing
or suspending the use of any prospectus relating to the Designated Securities or
suspending any such qualification, to use promptly the Company's best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Designated Securities for
offering and sale under the securities laws of such jurisdictions as the
Representative may request and to comply with those laws so as to permit the
continuance of sales and dealings therein in those jurisdictions for as long as
may be necessary to complete the distribution of the Designated Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To deliver to the Representative three signed copies of the
Registration Statement, and each amendment thereto, including exhibits thereto
and documents incorporated by reference therein, and to furnish to the
Underwriters copies of the Prospectus, and each amendment or supplement thereto,
in such quantities as the Representative may from time to time reasonably
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Designated Securities and if at that
time any event shall have occurred as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made when the Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during the same
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, to notify the Representative and upon its request
to file the document and to prepare and furnish without charge to the
Underwriters and to any dealer in securities as many copies as the
Representative may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus that will correct the statement or omission or
effect compliance;
(d) To make generally available to the Company's security holders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158); and
(e) During the period beginning on the date of this Agreement and
continuing to and including the earlier of (i) the termination of trading
restrictions for the Designated Securities, as notified to the Company by the
Representative, or (ii) the Time of Delivery for the Designated Securities, not
to offer, sell, contract to sell or otherwise dispose of any securities of the
Company that are substantially similar to the Designated Securities, without the
prior written consent of the Representative, other than securities issued (i)
upon conversions of the Company's outstanding securities in accordance with
their terms, or (ii) in connection with the Company's employee stock or dividend
reinvestment plans.
5. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's accountants in connection with the registration of
the Designated Securities under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
preliminary prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of typing, printing or producing this Agreement, any
Indenture, any Blue Sky and legal investment memoranda and any other documents
in connection with the offering, purchase, sale and delivery of the Designated
Securities; (iii) all expenses in connection with the qualification of the
Designated Securities for offering and sale under state securities laws as
provided in Section 4(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and any legal investment survey; (iv) any fees charged by
securities rating services for rating the Designated Securities; (v) the cost of
preparing the Designated Securities; (vi) all expenses in connection with the
listing of the Designated Securities on any stock exchange or with the National
Association of Securities Dealers Automated Quotation System; and (vii) all
other costs and expenses incident to the performance of the Company's
obligations hereunder that are not otherwise specifically provided for in this
Section 5. It is understood, however, that, except as provided in this Section
5, or in Section 7 and Section 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Designated Securities by them, and any advertising expenses
connected with any offers they may make.
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6. The obligations of the Underwriters under this Agreement shall be
subject, in the discretion of the Underwriters, to the condition that all
representations and warranties and other statements of the Company herein are,
at and as of the Time of Delivery for the Designated Securities, true and
correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for filing by the
rules and regulations under the Act and in accordance with Section 4(a) hereof;
no stop order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose shall
have been instituted or threatened by the Commission; and all requests for
additional information on the part of the Commission since the date on which the
Registration Statement became effective shall have been complied with to the
reasonable satisfaction of the Representative.
(b) Dewey Ballantine LLP, counsel for the Underwriters, shall have
furnished to the Underwriters such opinion or opinions, dated the Time of
Delivery for the Designated Securities, with respect to the Designated
Securities, the Registration Statement, the Prospectus and such other related
matters as the Representative may reasonably request.
(c) The General Counsel or Deputy General Counsel of the Company shall
have furnished to the Underwriters his written opinion, dated the Time of
Delivery for the Designated Securities, in form and substance satisfactory to
the Representative, to the effect that:
(i) The Company has been duly formed and is validly existing and in
good standing under the laws of the State of New York and has full power
and authority to conduct its business and, except as described in the
Registration Statement or in the Prospectus as then amended or
supplemented, to the best of his knowledge possesses all material licenses
and approvals necessary for the conduct of its business;
(ii) The Company has authorized equity capitalization as
set forth, or incorporated by reference, in the Prospectus;
(iii) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles, and except as rights of indemnification and contribution
hereunder may be limited by law or principles of public policy;
(iv) If the Designated Securities are debt securities, the Indenture
has been duly authorized, executed and delivered by the Company and
qualified under the Trust Indenture Act and constitutes a valid and
legally binding instrument, enforceable against the Company in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(v) If the Designated Securities are debt securities, the Designated
Securities have been duly authorized, executed, issued and delivered by
the Company, and assuming due authentication in accordance with the
Indenture, constitute valid and legally binding obligations of the Company
entitled to the benefits of the Indenture and enforceable in accordance
with their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(vi) If the Designated Securities are equity securities, the Designated
Securities have been duly authorized, and, when delivered to and paid for
by the Underwriters in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable;
(vii) The issue and sale of the Designated Securities and the compliance
by the Company with all of the provisions of the Designated Securities, the
Indenture (if applicable) and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under,
any statute, agreement or instrument known to him to which the Company is a
party or by which it is bound or to which any of the property of the Company is
subject, the Certificate of Incorporation or the Company's by-laws, or any
order, rule or regulation known to him of any court, governmental agency or body
having jurisdiction over the Company or any of its properties;
(viii) Except as set forth in (xii) below, no consent, approval,
authorization, order, registration or qualification of or with any court,
governmental agency or body is required for the issue and sale by the
Company of the Designated Securities or the consummation by the Company of
the other transactions contemplated by this Agreement or the Indenture (if
applicable), except such as have been obtained under the Act, the Trust
Indenture Act (if applicable) and the New York State Public Service Law,
and such consents, approvals, authorizations, registrations or
qualifications, as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Designated
Securities by the Underwriters;
(ix) The Registration Statement (exclusive of any Form T-1, as to which
he need express no opinion or belief) and the Prospectus (other than the
financial statements and related schedules therein, as to which he need
express no opinion or belief) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder;
and the documents incorporated by reference in the Prospectus at the Time
of Delivery (other than the financial statements and related schedules
therein, as to which he need express no opinion or belief) when they were
filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder;
(x) He has no reason to believe that (A) the Registration Statement as
of the time it became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (B)
the Prospectus as of the date thereof contained, or as of the Time of
Delivery contains, an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they
were made, not misleading; and
(xi) The statements contained in the Prospectus as amended or
supplemented under the captions specified in the Underwriting Agreement, insofar
as said statements constitute a summary of the documents referred to therein,
are accurate and fairly present the information required to be shown; to the
best of his knowledge, there are no legal or governmental proceedings pending,
or contemplated by governmental authorities, to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, in any such case, are required by the Act or
the Exchange Act or the rules and regulations thereunder to be described in the
Prospectus or the documents incorporated by reference therein that are not
described as so required; and he does not know of any contracts or documents of
a character required to be described in the Registration Statement or Prospectus
(or required to be filed under the Exchange Act if upon filing they would be
incorporated, in whole or in part, by reference therein) or to be filed as
exhibits to the Registration Statement that are not described and filed as
required;
(xii) Consolidated Edison, Inc. is either exempt from the provisions of the
Public Utility Holding Company Act of 1935 except Section 9(a)(2) thereof or all
approvals thereunder required for the issuance and sale of the Designated
Securities have been obtained thereunder.
(d) At 10:00 a.m., New York City time, at the Time of Delivery for the
Designated Securities, PricewaterhouseCoopers LLP shall have furnished to the
Representative a letter, dated the Time of Delivery, substantially to the effect
set forth in Annex I hereto, and as to such other matters as the Representative
may reasonably request and in form and substance satisfactory to the
Representative;
(e) Since the respective dates as of which information is given in the
Prospectus there shall not have been any material adverse change in the capital
stock or long-term debt of the Company, or in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries (taken as a whole), other than as set forth or
contemplated in the Prospectus as of the date of this Agreement, the effect of
which in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus;
(f) Subsequent to the date of this Agreement, (i) no downgrading or
withdrawal shall have occurred in the rating accorded any securities of the
Company by Moody's Investors Service Inc., Standard & Poor's Ratings Group or
Fitch Investor Services, and (ii) neither Moody's Investors Service Inc.,
Standard & Poor's Rating Group nor Fitch Investor Services shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of the securities of the Company;
(g) Subsequent to the date of this Agreement there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the declaration of a war
directly involving the United States of America, or the occurrence of any other
national calamity, or the outbreak or escalation of any conflict involving the
armed forces of the United States of America, if the effect of any such event
specified in this Section 6(g) in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner contemplated in the
Prospectus; and
(h) The Company shall have furnished or caused to be furnished to the
Representative at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representative as to the accuracy of the representations and warranties of the
Company herein at and as of the Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to the
Time of Delivery, and as to the matters set forth in subsections (a) (the
statement that no stop order has been "threatened" by the Commission may be
qualified by the phrase "to the best of our knowledge," (e) and (f) (item (ii)
may be qualified by the phrase "to the best of our knowledge") of this Section
6.
(i) The Designated Securities shall have been approved for listing on
the stock exchanges, if any, specified in the Underwriting Agreement.
7. (a) The Company will indemnify each Underwriter and hold it harmless
against any losses, claims, damages or liabilities, joint or several, to which
any Underwriter may become subject, under the Act or otherwise, insofar as the
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue or allegedly untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by the Underwriter in connection with investigating or defending any
such action or claims, promptly as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or allegedly untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement, the Prospectus,
or any amendment or supplement thereto, in reliance upon and in conformity with
Underwriter Information.
(b) Each Underwriter will indemnify the Company and hold it harmless
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as the losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or allegedly untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that said untrue statement
or allegedly untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus or any
amendment or supplement thereto, in reliance upon and in conformity with
Underwriter Information; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) of this Section 7 of notice of the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under said subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party other than under said subsection. In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to the indemnified
party, and, after notice from the indemnifying party to the indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not
be liable to the indemnified party under said subsection for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by
the indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of its
counsel shall be at the expense of the indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
contrary, (ii) the indemnifying party has failed within a reasonable time to
retain counsel reasonably satisfactory to the indemnified party or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would, in the reasonable judgment of the indemnified
party, be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceeding, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
indemnified parties, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Underwriters and control
persons of Underwriters entitled to indemnification under subsection (e) of this
Section 7 shall be designated in writing by the Representative and any such
separate firm for the Company, its Directors and officers and control persons,
if any, of the Company shall be designated in writing by the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent (which consent shall not be unreasonably
withheld).
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold an indemnified party harmless under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of said losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which said loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to the amount paid or payable by the indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company on the one hand and Underwriters of the
Designated Securities on the other in connection with the statements or
omissions that resulted in said losses, claims, damages or liabilities (or
actions in respect thereof), 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 shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or allegedly untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (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 above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by the indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Designated Securities underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that said Underwriter has otherwise been required to pay
by reason of said untrue or allegedly untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of the fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to the Designated Securities and not joint. The foregoing provisions regarding
contribution shall apply except as otherwise required by applicable law.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and Director of the Company and to each person,
if any, who controls the Company within the meaning of the Act.
8. If, at the Time of Delivery, any one or more of the Underwriters shall
default in its obligation to purchase any of the Designated Securities, and the
aggregate principal amount or aggregate number of shares (as the case may be) of
the Designated Securities set forth opposite the name or names of the defaulting
Underwriter or Underwriters in Schedule I to the Underwriting Agreement is not
more than one-tenth of the aggregate principal amount or aggregate number of
shares (as the case may be) of the Designated Securities, the other Underwriters
shall be obligated severally in the proportions that the principal amount or
number of shares (as the case may be) of Designated Securities set forth
opposite their respective names in Schedule I to the Underwriting Agreement
bears to the aggregate principal amount or aggregate number of shares (as the
case may be) of Designated Securities set forth opposite the names of all the
non-defaulting Underwriters, or in such other proportions as the Underwriters
may agree, to purchase the Designated Securities as to which the defaulting
Underwriter or Underwriters so defaulted on that date; provided that in no event
shall the principal amount or number of shares (as the case may be) of
Designated Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of the aggregate principal amount or aggregate number of shares (as
the case may be) of Designated Securities without the written consent of that
Underwriter. If any Underwriter or Underwriters shall default in its or their
obligation to purchase Designated Securities and the aggregate principal amount
or aggregate number of shares (as the case may be) of Designated Securities set
forth opposite the name or names of the defaulting Underwriter or Underwriters
in Schedule I to the Underwriting Agreement is more than one-tenth of the
aggregate principal amount or aggregate number of shares (as the case may be) of
Designated Securities, and arrangements satisfactory to the Underwriters and the
Company for the purchase of said Designated Securities are not made within 36
hours after the default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company, except as provided in
Sections 5 and 7 hereof. In any such case, either the Underwriters or the
Company shall have the right to postpone the Time of Delivery, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this Section 8 shall not
relieve any defaulting Underwriter from liability in respect of any default of
said Underwriter under this Agreement.
<PAGE>
9. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any control person of any Underwriter, or the Company, or
any officer or Director or control person of the Company, and shall survive
delivery of and payment for the Designated Securities and any termination of
this Agreement.
10. If any condition specified in Section 6 of this Agreement shall not
have been fulfilled when and as required to be fulfilled thereunder, then this
Agreement may be terminated by the Representative upon notice to the Company.
11. If this Agreement shall be terminated pursuant to Section 8 hereof,
the Company shall not then be under any liability to any Underwriter with
respect to the Designated Securities except as provided in Section 5 and Section
7 hereof; but, if for any other reason Designated Securities are not delivered
by or on behalf of the Company as provided herein, the Company will reimburse
the Underwriters for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Designated Securities.
Unless the cause for non-delivery shall be a matter within the reasonable
control of the Company, the Company shall be under no further liability to any
Underwriter with respect to the Designated Securities except as provided in
Section 5 and Section 7 hereof.
12. In all dealings under this Agreement, the Company shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representative.
13. All statements, requests, notices and agreements under this Agreement
shall be in writing, or, if promptly confirmed in writing, by telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted, and if to the Underwriters shall
be sufficient in all respects if delivered or sent by registered mail to the
Representative at the address specified for the Representative in the
Underwriting Agreement; and if to the Company shall be sufficient in all
respects if delivered or sent by registered mail to the address of the Company
set forth in the Registration Statement, Attention: Secretary.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 7 and
9 hereof, the officers and Directors of the Company and each person, if any, who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Designated Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein the term
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
16. This Agreement shall be construed in accordance with the laws of the
State of New York.
17. This Agreement may be executed by any one or more of the parties
hereto and thereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
ANNEX I
Pursuant to Section 6 (d) of the Underwriting Agreement, PricewaterhouseCoopers
LLP shall furnish a letter to the Representative to the effect that:
(i) they are independent accountants with respect to the Company within the
meaning of the Act and the rules and regulations adopted by the Securities
and Exchange Commission;
(ii) in their opinion, the consolidated financial statements audited by them
and incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting requirements
of the Act and the Exchange Act and the rules and regulations adopted by
the Securities and Exchange Commission with respect to registration
statements on Form S-3;
(iii) on the basis of a reading of the latest available unaudited consolidated
financial statements of the Company and the minute books of the Company,
and inquiries of certain officials of the Company who have responsibility
for financial and accounting matters (it being understood that the
foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards, and they would not necessarily
reveal matters of significance with respect to the comments made in such
letter, and accordingly that PricewaterhouseCoopers LLP makes no
representation as to the sufficiency of such procedures for the
Underwriters' purposes), nothing has come to their attention which caused
them to believe that (A) the unaudited consolidated financial statements
incorporated by reference in the Registration Statement, or from which
information set forth in the Registration Statement was taken, do not
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to the Form 10-Q and the
rules and regulations adopted by the Securities and Exchange Commission,
or any material modifications should be made to the unaudited consolidated
financial statements for them to be in conformity with generally accepted
accounting principles, (B) for the twelve month period ended the date of
the latest available financial statements of the Company, there were any
decreases in operating revenues less fuel, purchased power and gas
purchased for resale, operating income or net income for common stock as
compared with the comparable prior period, except in all instances for
decreases that the Registration Statement discloses have occurred or may
occur, or decreases which are specified in such letter, identifying the
same and specifying the amount thereof or (C) at a specified date not more
than five days prior to the date of such letter, there was any change in
the capital stock or long-term debt of the Company, or decrease in its
common shareholders' equity, in each case as compared with amounts shown
in the most recent consolidated balance sheet incorporated by reference in
the Registration Statement, except in all instances for changes or
decreases that the Registration Statement discloses have occurred or may
occur, for payment of maturing installments of long-term debt and for the
declaration of quarterly dividends or for the acquisition of long-term
debt for sinking fund purposes, or for changes or decreases which are
described in such letter, identifying the same and specifying the amount
thereof; and
(iv) they have compared the dollar amounts (or percentages or ratios derived
from such dollar amounts) and other financial information included or
incorporated by reference in the Registration Statement as reasonably
requested by the Underwriters (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
accounting records of the Company subject to the internal controls of the
Company's accounting system or are derived directly from such records by
analysis or computation) with the accounting records of the Company, and
have found such dollar amounts, percentages and other financial
information to be in agreement with such records, except as otherwise
specified in such letter.
