CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
First Mortgage Bonds, Medium-Term Note Series
DISTRIBUTION AGREEMENT
June 1, 1995
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
FIRST CHICAGO CAPITAL MARKETS, INC.
One First National Plaza
Chicago, Illinois 60670
MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Central Illinois Public Service Company, an Illinois corporation (the
"Company"), confirms its agreement with Smith Barney Inc., First Chicago
Capital Markets, Inc. and Morgan Stanley & Co. Incorporated (and any other
agent who becomes a party hereto as specified in Section 1(a)) (each referred
to as an "Agent" and collectively referred to as the "Agents") with respect to
the issue and sale by the Company of its First Mortgage Bonds, Medium-Term
Note Series described herein (the "Bonds"). The Bonds will be issued under
the Indenture of Mortgage or Deed of Trust dated October 1, 1941, executed by
the Company to Bank of America Illinois, Chicago, Illinois, as trustee (the
"Trustee") and Robert J. Donahue, co-trustee (collectively, the "Trustees"),
as previously supplemented and amended by supplemental trust indentures and as
to be further supplemented and amended by a supplemental trust indenture
relating to each series of Bonds (such Indenture of Mortgage or Deed of Trust
as so supplemented and amended and as to be so supplemented and amended is
referred to as the "Indenture"). Each series of Bonds shall have the maturity
date or dates, interest rate or rates, and, if any, optional and mandatory
redemption provisions and other terms set forth in the Prospectus referred to
below as it may be amended or supplemented from time to time. Each series of
Bonds will be issued, and the terms and rights thereof established, from time
to time by the Company in accordance with the Indenture. As of the date
hereof, the Company has authorized the issuance and sale of up to $50,000,000
aggregate principal amount of Bonds through the Agents pursuant to the terms
of this Agreement (subject to the Company establishing the terms of such Bonds
or required by the Indenture). It is understood, however, that the Company
may from time to time authorize the issuance of additional Bonds and that such
additional Bonds may be sold through or to the Agents pursuant to the terms of
this Agreement, all as though the issuance of such Bonds were authorized as of
the date hereof.
This Agreement provides both for the sale of Bonds by the Company
directly to purchasers, in which case the Agents will act as agents of the
Company in soliciting Bond purchases, and (as may from time to time be agreed
to by the Company and the applicable Agent) to an Agent as principal for
resale to purchasers.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 33-56063) for the
registration of debt securities and preferred stock, including the Bonds,
under the Securities Act of 1933, as amended (the "1933 Act"), and the
offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the SEC under the 1933 Act (the "1933 Act Regulations").
Such registration statement has been declared effective by the SEC. Such
registration statement (and any further registration statements which may be
filed by the Company for the purpose of registering additional Bonds and in
connection with which this Agreement is included or incorporated by reference
as an exhibit) and the prospectus constituting a part thereof, and any
prospectus supplements relating to the Bonds (including supplements filed
pursuant to Rule 424(b)(3) of the 1933 Act Regulations), including all
documents incorporated therein by reference, as from time to time amended or
supplemented by the filing of documents pursuant to the Securities Exchange
Act of 1934 (the "1934 Act") or the 1933 Act or otherwise, are referred to
herein as the "Registration Statement" and the "Prospectus", respectively,
except that if any revised prospectus shall be provided to the Agents by the
Company for use in connection with the offering of the Bonds which is not
required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act
Regulations, the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to each Agent for such use.
SECTION 1. Appointment as Agents.
(a) Appointment of Agents. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell
Bonds directly on its own behalf, the Company hereby appoints the Agents as
its agents for the purpose of soliciting purchases of the Bonds from the
Company by others and agrees that, except as otherwise contemplated herein,
whenever the Company determines to sell Bonds directly to an Agent as
principal for resale to others, it will enter into a Terms Agreement
(hereafter defined) relating to such sale in accordance with the provisions of
Section 3(b) hereof. Upon notice to the Company, the Agents are authorized to
appoint sub-agents or to engage the services of any other broker or dealer in
connection with the offer or sale of the Bonds. The Company agrees that,
during the period the Agents are acting as the Company's agents hereunder, the
Company will not contract or solicit potential investors introduced to it by
an Agent to purchase the Bonds. The Company may appoint, upon prompt written
notice to the Agents, additional persons to serve as Agents hereunder, but
only if each such additional person agrees to be bound by all of the terms of
this Agreement as an Agent. Any such person shall become an Agent hereunder
by executing an acceptance in the form of Exhibit C hereto.
(b) Reasonable Efforts Solicitations; Right to Reject Offers. Upon
receipt of instructions from the Company, each Agent will use its reasonable
efforts to solicit purchases of such principal amount of the Bonds as the
Company and such Agent shall agree upon from time to time during the term of
this Agreement, it being understood that the Company shall not approve the
solicitation of purchases of Bonds in excess of the lower of the amount that
shall be authorized by the Company from time to time or the principal amount
of Bonds registered pursuant to the Registration Statement and the amount
authorized by the Illinois Commerce Commission ("ICC"). The Agents will have
no responsibility for maintaining records with respect to the aggregate
principal amount of Bonds sold, or of otherwise monitoring the availability of
Bonds for sale under the Registration Statement. Each Agent will communicate
to the Company, orally or in writing, each offer to purchase Bonds, other than
those offers rejected by such Agent. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Bonds, as
a whole or in part, and any such rejection shall not be deemed a breach of
such Agent's agreement contained herein. The Company may accept or reject any
proposed purchase of the Bonds, in whole or in part.
(c) Solicitations as Agent; Purchases as Principal. In soliciting
purchases of the Bonds on behalf of the Company, the Agents shall act solely
as agents for the Company and not as principal. Each Agent shall make
reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Bonds has been solicited by such Agent and
accepted by the Company. The Agents shall not have any liability to the
Company if any such purchase is not consummated for any reason. The Agents
shall not have any obligation to purchase Bonds from the Company as principal,
but each Agent may agree from time to time to purchase Bonds as principal.
Any such purchase of Bonds by an Agent as principal shall be made pursuant to
a Terms Agreement in accordance with Section 3(b) hereof.
(d) Reliance. The Company and each Agent agree that any Bonds the
placement of which such Agent arranges shall be placed by such Agent, and any
Bonds purchased by such Agent shall be purchased, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Bonds (whether through an Agent as agent or to an Agent as
principal), as of the date of each delivery of Bonds (whether through such
Agent as agent or to the Agent as principal) (the date of each such delivery
to an Agent as principal being hereafter referred to as a "Settlement Date"),
and as of any time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates of Bonds or similar changes) or
there is filed with the SEC any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K relating exclusively to
the issuance of debt securities or preferred stock under the Registration
Statement, unless the Agents shall otherwise specify) (each of the times
referenced above being referred to herein as a "Representation Date") as
follows:
(i) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act. There are no
contracts or documents of the Company that are required to be filed as
exhibits to the Registration Statement or any documents incorporated by
reference therein by the 1933 Act, the 1933 Act Regulations, the 1934
Act or the rules and regulations of the SEC thereunder (the "1934 Act
Regulations") which have not been so filed. No order preventing or
suspending the use of the Prospectus or the Registration Statement has
been issued by the SEC. The Registration Statement complied, at the
date of this Agreement, and as of the applicable Representation Date
will comply, in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the Trust Indenture Act of 1939,
as amended (the "1939 Act") and the rules and regulations of the SEC
thereunder. The Registration Statement, at the date of this Agreement
did not, and at each time thereafter at which any amendment to the
Registration Statement becomes effective or any Annual Report on Form
10-K is filed by the Company with the SEC and as of each Representation
Date 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. The
Prospectus, as of the date of this Agreement complies, and as of each
Representation Date will comply, in all material respects with the 1933
Act and the 1933 Act Regulations, and the Prospectus, as of the date of
this Agreement does not, and as of each Representation Date will not,
contain any untrue statement of a material fact or omit to state any
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. The Company makes no representations
or warranties in this subsection as to (A) that part of the
Registration Statement which shall constitute the Statements of
Eligibility (Forms T-1 and T-2) under the 1939 Act of
the Trustees or (B) the information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of the Agents specifically for use in the Registration
Statement or Prospectus or (C) the information in the Prospectus dated
May 31, 1995 under the caption "Book-Entry System" and in the
Prospectus Supplement dated June 1, 1995 under the caption "Description
of First Mortgage Bonds, Medium-Term Note Series -- Book-Entry Notes".
(ii) Incorporated Documents. The documents incorporated by
reference in the Prospectus as of the date of this Agreement, when they
were filed with the SEC, conformed in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations, and none of
such 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, in light of the circumstances
under which they were made, not misleading; and any further documents
so filed and incorporated by reference subsequent to the date hereof,
when they are filed with the SEC, will conform in all material respects
to the requirements of the 1934 Act and the 1934 Act Regulations and
will not contain an untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided that the Company makes no
representations or warranties as to (A) that part of the Registration
Statement which shall constitute the Statements of Eligibility
(Forms T-1 and T-2) under the 1939 Act of the Trustees or (B) the
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Agents
specifically for use in the Registration Statement or Prospectus or
(C) the information in the Prospectus dated May 31, 1995 under the
caption "Book-Entry System" and in the Prospectus Supplement dated
June 1, 1995 under the caption "Description of First Mortgage Bonds,
Medium-Term Note Series -- Book-Entry Notes".
(iii) Financial Statements and Accountants. The financial
statements of the Company filed as part of or incorporated by reference
in the Registration Statement and Prospectus fairly present the
financial condition of the Company as of the dates indicated and the
results of its operations and cash flows for the periods therein
specified; and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, except as otherwise indicated therein. Arthur
Andersen LLP, who have certified or examined certain financial
statements incorporated by reference in the Registration Statement, are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Due Incorporation and Qualification. The Company has been
incorporated and is validly existing as a corporation and is in good
standing under the laws of the State of Illinois, with due corporate
authority to own and operate the properties now used by it and to carry
on its business as now being carried on by it, as described in the
Prospectus; and the Company is not required by the nature of its
business to be licensed or qualified as a foreign corporation in any
other state or jurisdiction; and except as set forth in the Prospectus,
the Company has all material licenses and approvals required to conduct
its business. The Company has no majority-owned subsidiaries (within
the meaning of Rule 1-02(m) of Regulation S-X (17 CFR Part 210) with
total assets or total liabilities in excess of $100,000.
(v) Authorization and Validity of the Bonds and the Indenture.
On or prior to the applicable date of each delivery of Bonds (whether
through an Agent as agent or pursuant to a Terms Agreement), the
Indenture and the Bonds will be duly authorized by the Company. The
Indenture has been duly qualified under the 1939 Act. When duly
executed and delivered by the Company, assuming due authorization,
execution and delivery of the Indenture by the Trustees, and when the
Bonds have been duly executed, authenticated, issued and delivered as
contemplated by this Agreement and by the Indenture, the Indenture and
the Bonds will constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms, except as
enforcement of provisions of the Indenture may be limited by the
laws of the State of Illinois affecting the remedies for the
enforcement of the security provided for in the Indenture or limited
by bankruptcy, insolvency or other applicable laws affecting the
enforcement of creditors' rights generally and except for the
availability of equitable remedies.
(vi) Material Changes. Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) the Company has not
sustained any loss or interference material to the Company with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, (B) the Company has not incurred
any liabilities or obligations, direct or contingent, or entered into
any transactions, not in the ordinary course of business, that are
material to the Company, and (C) there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company,
or any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or
other), business, net worth or results of operations of the Company.
(vii) Legal Proceedings. Except as set forth in the
Prospectus, there is not pending or, to the knowledge of the Company,
threatened, any action, suit or proceeding, to which the Company is a
party, before or by any court or governmental agency or body, that
might result in any material adverse change in the condition (financial
or other), business, net worth or results of operations of the Company,
or might materially and adversely affect the properties or assets of
the Company.
(viii) No Defaults; Regulatory Approvals. The execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any contract, indenture, mortgage, deed
of trust, loan or note agreement, lease or other agreement or
instrument to which the Company is a party or by which it is bound and
that is material to the Company or to which any material property of
the Company is subject, the Company's Restated Articles of
Incorporation, as amended, or by-laws, or any order, rule or regulation
of any court or governmental agency or
body having jurisdiction over the Company and that is material to the
Company or any of its material properties; the ICC has issued its final
orders (the "ICC Order") authorizing the issuance and sale of not to
exceed $49,000,000 principal amount of the Bonds through December 31,
1996, the ICC Order is in full force and effect, and no other consent,
approval, authorization or order of any court or governmental agency or
body is required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance or sale of the Bonds
(as so limited) by the Company hereunder, except such as may be
required under state securities laws and except for the approval of the
ICC as described above, and the Company has full power and lawful
authority to authorize, issue and sell the Bonds (as so limited) on the
terms and conditions herein set forth.
(ix) ICC Application. The written information contained in any
application filed by the Company with the ICC in connection with the
Company's request for authorization of the transactions contemplated
hereby and the information contained in the certificates and the other
documents delivered by the Company in connection therewith is true,
correct and complete in all material respects.
(x) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(xi) Title to Property. Substantially all of the permanent,
fixed properties of the Company are owned in fee simple or are held
under valid leases, in each case subject only to (A) the liens of
current mortgages (including the lien of the Indenture), (B) "permitted
encumbrances and liens" as defined in the Indenture and (C) such minor
imperfections of titles and encumbrances, if any, that are not
substantial in amount, do not materially detract from the value or
marketability of the properties subject thereto and do not materially
impair the Company's operations.
(xii) Investment Company. The Company is not an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
(xiii) Environmental Compliance. Except as set forth in the
Prospectus, the Company (A) is in compliance with any and all
applicable federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its business and (C) is in compliance with all terms and conditions of
any such permit, license or approval, except as to clauses (A), (B) and
(C) where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company.
(b) Additional Certifications. Any certificate signed by any director
or officer of the Company and delivered to the Agents or to counsel for the
Agents in connection with an offering of Bonds or the sale of Bonds to an
Agent as principal shall be deemed a representation and warranty by the
Company to the Agents as to the matters covered thereby on the date of such
certificate and at each Representation Date subsequent thereto.
SECTION 3. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, each Agent agrees, as an agent of the Company, to use its
reasonable efforts to solicit offers to purchase the Bonds upon the terms and
conditions set forth herein and in the Prospectus.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Bonds through an Agent, as agent, commencing
at any time for any period of time or permanently. Upon receipt of
instructions from the Company, such Agent will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised such
Agent that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Bond sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto. The Agents shall not have any liability to
the Company in the event any such agency purchase is not consummated for any
reason. If the Company shall default on its obligation to deliver Bonds to a
purchaser whose offer was accepted, the Company shall (i) hold the applicable
Agent harmless against any loss, claim or damage arising from or as a result
of such default by the Company and (ii) notwithstanding such default, pay to
the applicable agent any commission to which it would be entitled in
connection with such sale.
The purchase price, interest rate or rates, maturity date or dates,
redemption provisions and other terms of the Bonds shall be agreed upon by the
Company and the Agents and set forth in a pricing supplement to be prepared
following each acceptance by the Company of an offer for the purchase of Bonds
(a "Pricing Supplement"). Except as may be otherwise provided in such
supplement to the Prospectus, the Bonds will be issued in denominations of
$100,000 or any larger amount that is an integral multiple of $1,000. All
Bonds sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed to by the Company and such Agent.
(b) Purchases as Principal. Each sale of Bonds to an Agent as
principal shall be made in accordance with the terms contained herein and
(unless the Company and such Agent shall otherwise agree) pursuant to a
separate agreement that will provide for the sale of such Bonds to, and the
purchase and reoffering thereof by, such Agent. Each such separate agreement
(which may be an oral agreement) between such Agent and the Company is herein
referred to as a "Terms Agreement". Unless the context otherwise requires,
each reference contained herein to "this Agreement" shall be deemed to include
any applicable Terms Agreement between the Company and the applicable Agent.
Each such Terms Agreement, whether oral or in writing, shall be with respect
to such information (as applicable) as is specified in Exhibit A hereto. An
Agent's commitment to purchase Bonds as principal pursuant to any Terms
Agreement or otherwise shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Bonds to be purchased by such Agent
pursuant thereto, the price to be paid to the Company for such Bonds (which,
if not so specified in a Terms Agreement, shall be at a discount equivalent to
the applicable commission set forth in Schedule A hereto), the time and place
of delivery of and payment for such Bonds, any provisions relating to rights
of, and default by purchasers acting together with such Agent in the
reoffering of the Bonds, and such other provisions (including further terms of
the Bonds) as may be mutually agreed upon. Each Agent may utilize a selling
or dealer group in connection with the resale of the Bonds purchased. An
Agent may reallow any portion of the commission payable pursuant hereto to
dealers or purchasers in connection with the offer and sale of any Bonds.
Such Terms Agreement shall also specify the requirements, if any, for the
officer's certificate, opinions of consel and comfort letter pursuant to
Sections 7(b), 7(c) and 7(d) hereof.
(c) Administrative Procedures. Administrative procedures with respect
to the sale of Bonds shall be as set forth in the Administrative Procedures
attached hereto as Exhibit B as they may be amended from time to time by
written agreement between Agents and the Company (the "Procedures"). The
Agents and the Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the SEC for filing of any supplement to
the Prospectus or any document to be filed pursuant to the 1934 Act that will
be incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the SEC with respect to the Registration Statement or the
Prospectus (including, in each case, any document incorporated by reference
therein), (iv) of any request by the SEC for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (v) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Bonds, any amendment
to the Registration Statement or any amendment or supplement to the Prospectus
(other than an amendment or supplement providing solely for a change in the
interest rates of Bonds), whether by the filing of documents pursuant to the
1934 Act, the 1933 Act or otherwise, and will furnish the Agents with copies
of any such amendment or supplement or other documents proposed to be filed or
prepared a reasonable time in advance of such proposed filing or preparation,
as the case may be, and will not file any such amendment or supplement or
other documents in a form to which the Agents or counsel for the Agents shall
reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to the Agents as many signed and conformed copies of the
Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company will furnish to the Agents as many copies of
the Prospectus (as amended or supplemented) as the Agents shall reasonably
request so long as the Agents are required to deliver a Prospectus in
connection with sales or solicitations of offers to purchase the Bonds.
(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Bonds to be sold through or to any Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Bonds in a form
previously approved by such Agent and will file such Pricing Supplement
pursuant to Rule 424(b)(3) under the 1933 Act not later than the close of
business of the SEC on the fifth business day after the date on which such
Pricing Supplement is first used.
(e) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (1) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which
it is necessary, in the reasonable opinion of counsel for the Agents or
counsel for the Company, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, or if it shall be
necessary, in the reasonable opinion of either such counsel, to amend or
supplement the Registration Statement or the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations, immediate
notice shall be given, and confirmed in writing, to the Agents to cease the
solicitation of offers to purchase the Bonds in the Agents' capacity as agents
and to cease sales of any Bonds the Agents may then own as principal pursuant
to a Terms Agreement, and the Company will promptly prepare and file with the
SEC such amendment or supplement, whether by filing documents pursuant to the
1934 Act, the 1933 Act or otherwise, as may be necessary to correct such
untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the
Prospectus to be amended or supplemented to include or incorporate by
reference financial information with respect thereto and corresponding
information for the comparable period of the preceding fiscal year, as well as
such other information and explanations as shall be necessary for an
understanding thereof or as shall be required by the 1933 Act or the 1933 Act
Regulations.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (1) of this Section, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company
for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of
such financial statements or as shall be required by the 1933 Act or the 1933
Act Regulations.
(h) Earnings Statements. The Company will make generally available to
its security holders as soon as practicable, but not later than 90 days after
the close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 under the 1933 Act) covering each
twelve month period beginning, in each case, not later than the first day of
the Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale of
Bonds.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Bonds for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents may designate, and will maintain such
qualifications in effect for as long as may be required for the distribution
of the Bonds; provided that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified. The Company will file
such statements and reports as may be required by the laws of each
jurisdiction in which the Bonds have been qualified as above provided. The
Company will promptly advise the Agents of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Bonds
for sale in any such state or jurisdiction or the initiating or threatening of
any proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. If required pursuant to the terms of a Terms
Agreement, between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without the
applicable Agent's prior consent, offer or sell, or enter into any agreement
to sell, any debt securities of the Company (other than the Bonds that are to
be sold pursuant to such Terms Agreement and commercial paper in the ordinary
course of business).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Bonds in their capacity as agents pursuant to
a request from the Company and (ii) the Agents shall not then hold any Bonds
as principal purchased pursuant to a Terms Agreement, to the time the Company
shall determine that solicitation of purchases of the Bonds should be resumed
or shall subsequently enter into a new Terms Agreement with any or all of the
Agents.
(m) Condition to Agency Transactions. Any person who has agreed to
purchase Bonds as the result of an offer to purchase solicited by an Agent
shall have the right to refuse to purchase and pay for such Bonds if, on the
related settlement date fixed pursuant to the Procedures, (i) there has been,
since the date on which such person agreed to purchase the Bonds (the "Trade
Date"), or since the respective date as of which information is given in the
Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company whether or not arising in the ordinary course of
business, or (ii) there shall have occurred any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect
of which is such as to make it, in the judgment of such person, impracticable
or inadvisable to purchase the Bonds, or (iii) trading in any securities of
the Company or CIPSCO Incorporated has been suspended by the SEC or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices
for securities have been required, by either of said exchanges or by order of
the SEC or any other governmental authority, or if a banking moratorium shall
have been declared by either federal or New York authorities, or (iv) the
rating assigned by any nationally recognized securities rating agency to any
debt securities of the Company as of the Trade Date shall have been lowered
since that date or if any such rating agency shall have publicly announced
that it has under surveillance or review, with possible negative implications,
its rating of any debt securities of the Company, or (v) any condition set
forth in Section 5(d) shall not have been satisfied.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase the Bonds as
agent of the Company, the obligations of any purchasers of the Bonds sold
through each Agent as agent, and any obligation of an Agent to purchase Bonds
pursuant to a Terms Agreement or otherwise will be subject to the accuracy of
the representations and warranties on the part of the Company herein and to
the accuracy of the statements of the Company's officers made in any
certificate furnished pursuant to the provisions hereof, to the performance
and observance by the Company of all its covenants and agreements herein
contained and to the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Jones, Day, Reavis & Pogue. The opinion of
Jones, Day, Reavis & Pogue, counsel to the Company, to the effect that:
(i) The Company is a duly organized and validly existing
corporation and is in good standing under the laws of the State of
Illinois with corporate power and authority to own and operate the
properties now owned by it and to conduct the business now being
conducted by it as described in the Prospectus.
(ii) The Indenture as in effect and as amended and supplemented
through the date hereof has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding instrument
of the Company enforceable in accordance with its terms, and the
Indenture has been qualified under the 1939 Act.
(iii) The Bonds of each series, when duly executed,
authenticated, issued and delivered pursuant to this Agreement and the
Indenture, as supplemented by an indenture supplemental thereto
applicable to such series in substantially the form filed as an exhibit
to the Registration Statement (a "Supplemental Indenture") which
Supplemental Indenture has been (i) duly authorized by a
resolution of the Board of Directors or Executive Committee
thereof of the Company which resolution establishes the terms and
conditions of such series of Bonds, (ii) duly executed and
delivered by the Company and the Trustees and (iii) duly filed for
record as required by law, and upon receipt by the Company of the
consideration for such series of Bonds, will be duly authorized by all
necessary corporate action on the part of the Company and will
constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms and the terms of the
Indenture and such Supplemental Indenture, entitled to the security and
benefits of the Indenture and such Supplemental Indenture and secured
equally and ratably with all other bonds issued under the Indenture
except as to differences between series permitted by the Indenture and
not affecting the rank of the lien thereof.
(iv) This Agreement has been duly authorized, executed and
delivered by the Company, and each Terms Agreement has been duly
authorized by the Company, and assuming that this Agreement has been,
and each Terms Agreement will be, duly and validly authorized, executed
and delivered by each Agent who is a party thereto, this Agreement is,
and each Terms Agreement when duly executed and delivered by the
Company will be, a valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability of
the indemnification or contribution provisions thereof may be limited
by applicable securities laws.
(v) An order or orders have been entered by the ICC permitting
the issuance and sale of not to exceed $49,000,000 aggregate principal
amount of Bonds through December 31, 1996, as contemplated by this
Agreement or any applicable Terms Agreement and, to the best knowledge
of such counsel, are still in full force and effect, and no further
authorization or consent of any public body or board is legally
required for the issuance and sale by the Company of the Bonds as
contemplated by this Agreement, or any applicable Terms Agreement
except as may be required by state securities laws. The approval
of the SEC under the Public Utility Holding Company Act of 1935 is not
required in connection with the issuance and sale of the Bonds by the
Company.
(vi) The consummation of the transactions contemplated in this
Agreement or any applicable Terms Agreement and the fulfillment of the
terms of this Agreement or any applicable Terms Agreement and
compliance by the Company with all the terms and provisions of the
Indenture will not result in a breach of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument known to such counsel to which
the Company is a party or by which it is bound, or the Restated
Articles of Incorporation, or by-laws of the Company or, to the best of
such counsel's knowledge, any order, rule or regulation applicable to
the Company of any court or of any federal or state regulatory body or
administrative agency or other governmental body having jurisdiction
over the Company or its property.
(vii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
Such opinion also shall state that such counsel have participated
in the preparation of the Registration Statement and the Prospectus;
that from time to time they have participated in conferences with
representatives of the Company, its other counsel, its independent
accountants who examined certain of the financial statements of the
Company included or incorporated in the Registration Statement and the
Prospectus, and representatives and counsel for the Agents concerning
the information contained in the Registration Statement and the
Prospectus and the proposed responses to various items in Form S-3, and
that they have participated in prior financings of the Company. Such
opinion shall state that based thereupon such counsel are of the
opinion that the Registration Statement and the Prospectus,
except for the operating statistics, financial statements
and schedules and other financial and statistical data contained
or incorporated by reference in the Registration Statement
and the Prospectus, except for the information referred
to under the caption "Legal Opinions" as having been included
in the Prospectus on the authority of Sorling, Northrup, Hanna,
Cullen and Cochran, Ltd., as experts, except for information in the
Prospectus under the captions "Book-Entry System" and "Description of
First Mortgage Bonds, Medium-Term Note Series-- Book-Entry Notes" and
except as to the Trustees' Statement of Eligibility on Forms T-1 and T-
2, as to which such counsel need express no opinion, at the time the
Registration Statement became effective under the Act, complied as to
form in all material respects with the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the SEC
thereunder; and that such counsel do not know of any legal or govern-
mental proceedings required to be described in the Prospectus that are
not described as required, or of any contracts or other documents of
a character required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
that are not described and filed or incorporated therein by reference
as permitted by the rules and regulations under the 1933 Act as
required. For purposes of this paragraph, such counsel may assume
the adequacy of the written information supplied by the Agents for
use in the Registration Statement or the Prospectus.
Such opinion also shall state that the statements in the
Prospectus which are stated therein to have been made on authority of
such counsel have been reviewed by such counsel and, as to matters of
law and legal conclusions, are correct; and that the statements
contained in the Prospectus under the captions "Description of First
Mortgage Bonds, Medium-Term Note Series" and "Description of Debt
Securities", insofar as they purport to summarize the provisions of the
documents referred to therein, present fair summaries of such
provisions.
Such opinion also shall state that the Registration Statement has
become effective under the 1933 Act, any prospectus supplement to the
Prospectus required to be filed pursuant to Rule 424 under the 1933 Act
has been filed with the SEC, and to the best knowledge of such counsel
no stop order suspending the effectiveness of the Registration State-
ment has been issued and no proceedings for that purpose are pending or
threatened by the SEC.
Such opinion also shall state that while such counsel have not
independently verified and are not passing upon, and do not assume any
responsibility for, the accuracy, completeness, or fairness (except as
set forth in the second preceding paragraph above) of the information
contained in the Registration Statement and the Prospectus, including
any document incorporated or deemed to be incorporated therein by ref-
erence, based upon the participation and discussions described above,
however, no facts have come to the attention of such counsel that cause
them to believe that the Registration Statement (except for the
operating statistics, financial statements, financial schedules and
other financial and statistical data contained or incorporated by ref-
erence in the Registration Statement and the Prospectus, except for the
information referred to under the caption "Legal Opinions" as having
been included in the Prospectus on the authority of Sorling, Northrup,
Hanna, Cullen and Cochran, Ltd., as experts, except for information in
the Prospectus under the captions "Book-Entry System" and "Description
of First Mortgage Bonds, Medium-Term Note Series-- Book-Entry Notes"
and except for the Trustees' Statements of Eligibility on Form T-1
and T-2, as to which such counsel need express no opinion), at the time
it became effective, and if an amendment to the Registration Statement
or an Annual Report on Form 10-K has been filed by the Company with the
SEC subsequent to the effectiveness of the Registration Statement,
then at the time such amendment became effective or at the time of the
most recent such filing, and at the date hereof, or (if such
opinion is being delivered in connection with a Terms Agreement
pursuant to Section 3(b) hereof) at the date of any Terms
Agreement and at the Settlement Date with respect thereto, as the
case may be, contains or contained any untrue statement of a
material fact or omits or omitted to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading, or that the Prospectus (with
the foregoing exceptions) as amended or supplemented as of the date of
this Agreement, or (if such opinion is being delivered in connection
with a Terms Agreement pursuant to Section 3(b) hereof) at the date of
any Terms Agreement and at the Settlement Date with respect thereto, as
the case may be, contains or contained any untrue statement of a
material fact or omits or omitted to state a material fact required to
be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
For purposes of such opinion, such counsel need express no opinion
with respect to the requirements of any state securities or "blue sky"
laws. Furthermore, such opinion in paragraph (iii) may assume (but ex-
press no opinion thereon) that the Company has title to the properties
purported to be owned by it and which are, by the terms of the
Indenture, subject to the lien of the Indenture and that the liens or
security interests created, or intended or purported to be created, by
the Indenture have been perfected and are prior to all other liens
except for "permitted encumbrances" and "prepaid liens" as defined in
the Indenture.
With respect to the opinions expressed in paragraphs (ii), (iii)
and (iv) above, (a) such counsel need express no opinion as to the
availability of specific performance or other equitable remedies,
(b) such opinions shall be subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights from time to time in effect, (c) federal bankruptcy
laws may affect the validity of the lien of the Indenture with respect
to proceeds, products, rents, issues or profits of the property subject
to such lien realized, and additional property acquired, within 90 days
prior to and after commencement of a case under such laws and (d)
enforcement of the provisions of the Indenture may be limited by the
laws of Illinois affecting the remedies for the enforcement of the
security provided for in the Indenture.
In rendering the opinion expressed in paragraph (i) above, such
counsel may state that they have reviewed and relied on the opinion of
Sorling, Northrup, Hanna, Cullen and Cochran, Ltd. as to the validity
and sufficiency of the franchises, licenses and permits of the Company,
and shall state that they and the Agents are justified in relying on
such opinion.
(2) Opinion of Sorling, Northrup, Hanna, Cullen & Cochran, Ltd.
The opinion of Sorling, Northrup, Hanna, Cullen and Cochran, Ltd.,
counsel to the Company, covering the matters set forth in subsection
5(a)(1)(i) of this Section and such other matters incident to the
transactions contemplated hereby as the Agents may reasonably request,
and also to the effect that:
(i) The statements in the Prospectus which are stated therein to
have been made on the authority of such counsel have been reviewed by
such counsel and, as to matters of law and legal conclusions, are
correct.
(ii) The Company has good and sufficient title to all or
substantially all the permanent fixed properties and the material
franchises, permits and licenses now owned by it, including those
described or referred to in the Prospectus, except as may be otherwise
indicated therein, subject to the lien of the Indenture and to
permitted encumbrances and liens, as defined in the Indenture, and no
notice has been given to the Company by any governmental authority of
any proceeding to condemn, purchase or otherwise acquire any material
properties of the Company and, so far as such counsel knows, no such
proceeding is contemplated.
(iii) The Indenture of Mortgage or Deed of Trust dated Oct-
ober 1, 1941, executed by the Company to Bank of America Illinois and
an individual trustee, as supplemented and amended as of the date here-
of, has been duly filed for recording and recorded in each county in
Illinois in which any permanent fixed property described in and
conveyed by the Indenture and now owned by the Company is located, and
constitutes a legally valid and direct enforceable first mortgage lien
(except as federal bankruptcy laws may affect the validity of the lien
of the Indenture with respect to proceeds, products, rents, issues or
profits of the property subject to such lien realized and additional
property acquired within 90 days prior to and after the commencement of
a case under such laws and except as enforcement of provisions thereof
may be limited by the laws of the State of Illinois affecting the
remedies for the enforcement of the security provided for in the
Indenture, which laws do not, in the opinion of such counsel, make such
remedies inadequate for realization of the benefits of such security,
or limited by bankruptcy or insolvency laws or other applicable laws
affecting the enforcement of creditors' rights generally or by general
principles of equity) upon substantially all of the Company's fixed
properties and franchises used or useful in its public utility business
free from all prior or equal ranking liens, charges or encumbrances,
subject only to permitted encumbrances and liens, as defined in the
Indenture, and to the provisions contained in the Indenture for the
release, or substitution and release, of property from the lien
thereof.
(iv) Substantially all physical properties and franchises used or
useful in the Company's public utility businesses (other than those of
the character not subject to the lien of the Indenture) and now owned
by the Company are subject to the lien of the Indenture, subject only
to permitted encumbrances and liens, as defined in the Indenture, and
to the provisions contained in the Indenture for the release, or
substitution and release, of property from the lien thereof. All
physical properties and franchises used or useful in the Company's
public utility business (other than those of the character not subject
to the lien of the Indenture) hereafter acquired by the Company and
situated in counties in Illinois in which the Indenture shall be of
record will, upon such acquisition, become subject to the lien of the
Indenture, subject, however, to such encumbrances and liens as are
permitted thereby.
(v) Except as otherwise set forth in the Prospectus, the Company
has such valid franchises, certificates of convenience and necessity,
operating rights, licenses, permits, consents, approvals, authoriza-
tions and/or orders of governmental bodies, political subdivisions or
regulatory authorities then obtainable, free from unduly burdensome
restrictions, as are necessary for the acquisition, construction,
ownership, maintenance and operation of the properties now owned by it
and the conduct of the business now carried on by it as described in
the Registration Statement and Prospectus, with minor exceptions which,
in the opinion of such counsel, do not interfere with the practical
operation of the Company's business, and, to the best of the knowledge
of such counsel, the Company is not in default or violation thereof in
any material respect and is carrying on its business in substantial
compliance therewith and with all applicable federal, state and other
laws and regulations which are material to the Company.
In rendering the opinions expressed in paragraphs (ii) and (iii)
of this Section, counsel may rely upon prior opinions furnished by
Nafziger & Otten as to matters of titles to properties acquired by the
Company prior to May 14, 1980 and as to filings or recordings of the
Indenture prior to May 14, 1980, provided that such opinion shall state
that such counsel believe that they and the Agents are justified in
relying on such prior opinions of Nafziger & Otten.
(3) Opinion of Counsel to the Agents. The opinion of Gardner,
Carton & Douglas, counsel to the Agents, covering such matters with
respect to the incorporation of the Company, the validity of Bonds, the
Registration Statement, the Prospectus and other related matters as the
Agents may reasonably request, and Gardner, Carton & Douglas shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters. In rendering their opinion,
Gardner, Carton & Douglas may rely upon the opinion of Jones, Day,
Reavis & Pogue referred to above as to all matters enumerated in
Section 5(a)(i)(v) hereof, provided that such opinion shall state
that said counsel believe that they and the Agents are justified in
relying on the opinion of Jones, Day, Reavis & Pogue.
(4) In rendering the opinions contemplated by subsections
5(a)(1), 5(a)(2) and 5(a)(3) of this Section, counsel may rely upon
certificates of state officials as to the Company's good standing and
upon certificates of officers of the Company as to matters of fact
relevant to such opinions. In giving such opinions, counsel may assume
(i) that the signatures on all documents examined by them are genuine,
(ii) the adequacy of the written information supplied by the Agents for
use in the Registration Statement or the Prospectus and (iii) if the
foregoing opinion of counsel is to be delivered on any date other than
a Settlement Date, the conditions set forth in Section 4(d) hereof have
been satisfied.
(b) Officer's Certificate. At the date hereof the Agents shall have
received a certificate of the President, a Vice President or the Treasurer of
the Company and dated as of the date hereof, to the effect that to the best of
his knowledge based on reasonable investigation:
(1) The representations and warranties of the Company in this
Agreement are true and correct with the same force and effect as though
expressly made at and as of the date of such certificate, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
date of such certificate.
(2) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or is pending or is threatened by the SEC,
under the 1933 Act.
(3) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, except as
contemplated in the Prospectus and except for payment of principal and
interest on the outstanding debt securities of the Company or the pay-
ment or declaration of or provision for distributions on the outstand-
ing capital stock of the Company, (i) the Company has not sustained
any loss or interference material to the Company with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, (ii) the Company has not incurred any material
liabilities or obligations, direct or contingent, and has not entered
into any material transaction not in the ordinary course of business,
(iii) there has not been any material change in the capital stock or
long-term debt of the Company or any material adverse change in the
condition (financial or other) of the Company, and (iv) no material
legal or governmental proceeding, domestic or foreign, affecting the
Company or the transactions contemplated by this Agreement has been
instituted or threatened.
(4) The ICC Order approving the issuance and sale of not to
exceed $49,000,000 aggregate principal amount of the Bonds through
December 31, 1996 on the terms and in the manner contemplated by this
Agreement and the Prospectus remains in full force and effect.
(c) Comfort Letter. On the date hereof, the Agents shall have
received a letter from Arthur Andersen LLP dated as of the date hereof
and inform and substance satisfactory to the Agents, to the effect
that:
(i) They are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the 1933 Act
Regulations.
(ii) In their opinion, the financial statements and supporting
schedules of the Company examined by them and included or incorporated
by reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations with respect to registration
statements on Form S-3 and the 1934 Act and the 1934 Act Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest available
interim financial statements of the Company, a reading of the minute
books of the Company since the end of the most recent fiscal year with
respect to which an audit report has been issued, inquiries of and
discussions with certain officials of the Company responsible for
financial and accounting matters with respect to the unaudited
financial statements included in the Registration Statement and
Prospectus and the latest available interim unaudited financial
statements of the Company, and such other inquiries and procedures
as may be specified in such letter, and on the
basis of such inquiries and procedures nothing came to their attention
that caused them to believe that: (A) the unaudited financial
statements of the Company included in the Registration Statement and
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act
Regulations or were not fairly presented in conformity with generally
accepted accounting principles in the United States applied on a basis
substantially consistent with that of the audited financial statements
included therein, or (B) 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 any increase in long-term debt of the Company or any decrease
in the net assets of the Company, in each case as compared with the
amounts shown on the most recent balance sheet of the Company included
in the Registration Statement and Prospectus or, during the period from
the date of such balance sheet to a specified date not more than five
days prior to the date of such letter, there were any decreases, as
compared with the corresponding period in the preceding year, in
revenues or net income of the Company, except in each such case as set
forth in or contemplated by the Registration Statement and Prospectus
or except for such exceptions enumerate in such letter as shall have
been agreed to by the Agents and the Company.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement and
the Prospectus, and the limited procedures referred to in clause (iii)
above, they have carried out certain other specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference
in the Registration Statement and Prospectus and which are specified by
the Agents, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial
and other records of the Company identified in such letter.
(d) Indenture Documents. On or prior to a Settlement Date and on or
prior to each other date that Bonds are to be delivered by the Company for
sale hereunder, all certificates, opinions and other documents required to be
delivered under the Indenture to the Trustee in connection with such Bonds
shall have been delivered and the Company shall have furnished to the Agents a
certificate to such effect in such form and executed by such officers of the
Company as shall be satisfactory to such Agents.
(e) Other Documents. On the date hereof and on each Settlement Date
with respect to any applicable Terms Agreement, counsel to the Agents shall
have been furnished with such documents and opinions as such counsel may
reasonably require for the purpose of enabling such counsel to pass upon the
issuance and sale of Bonds as herein contemplated and related proceedings, or
in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of Bonds as herein contemplated shall be satisfactory in
form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the applicable Agent, any applicable Terms Agreement) may be
terminated by the Agents by notice to the Company at any time and any such
termination shall be without liability of any party to any other party, except
that the covenant regarding provision of an earnings statement set forth in
Section 4(h) hereof, the provisions concerning payment of expenses under
Section 9 hereof, the indemnity and contribution agreement set forth in
Section 8 hereof, the provisions concerning the representations, warranties
and agreements to survive delivery of Section 10 hereof and the provisions set
forth in Section 14 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Bonds Sold through the Agents.
Delivery of Bonds sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. If a purchaser shall fail either to
accept delivery of or to make payment for a Bond on the date fixed for
settlement, the applicable Agent shall promptly notify the Company and deliver
the Bond to the Company, and, if such Agent has theretofore paid the Company
for such Bond, the Company will promptly return such funds to such Agent. If
such failure occurred for any reason other than default by such Agent in the
performance of its obligations hereunder, the Company will reimburse such
Agent on an equitable basis for its loss of the use of the funds for the
period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with the Agents that:
(a) Reaffirmation of Representations and Warranties. Each acceptance
by the Company of an offer for the purchase of Bonds, and each delivery of
Bonds to the applicable Agent pursuant to a Terms Agreement, shall be deemed
to be an affirmation that the representations and warranties of the Company
contained in this Agreement and in any certificate theretofore delivered to
the Agents pursuant hereto are true and correct at the time of such acceptance
or sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to the purchaser
or its agent, or to the Agents, of the Bond or Bonds relating to such
acceptance or sale, as the case may be, as though made at and as of each such
time (and it is understood that such representations and warranties shall
relate to the Registration Statement and Prospectus as amended and
supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of Bonds or similar changes, and, unless the Agents shall
otherwise specify, other than by an amendment or supplement that relates
exclusively to an offering of debt securities other than the Bonds or
preferred stock) or there is filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K
relating exclusively to the issuance of debt securities or preferred stock
under the Registration Statement, unless the Agents shall otherwise specify),
the Company shall furnish or cause to be furnished to the Agents forthwith a
certificate dated the date of filing with the SEC of such supplement or
document, or the date of effectiveness of such amendment, as the case may be,
in form satisfactory to the Agents to the effect that the statements contained
in the certificate referred to in Section 5(b) hereof that was last furnished
to the Agents are true and correct at the time of such amendment, supplement,
or filing, as the case may be, as though made at and as of such time (except
that such statements shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to such time) or, in lieu of
such certificate, a certificate of the same tenor as the certificate referred
to in said Section 5(b), modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
delivery of such certificate. If the Company sells Bonds to an Agent pursuant
to a Terms Agreement and if required by such Terms Agreement, the Company
shall furnish or cause to be furnished to the Agents a certificate dated the
Settlement Date for such sale stating that, except as set forth on
contemplated in the Prospectus as of the date of such Terms Agreement, the
statements in clauses (1), (2), (3) and (4) of Section 5(b) herof are true and
correct.
(c) Subsequent Delivery of Legal Opinions. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of the Bonds or similar changes or solely for the inclusion of
additional financial information, and, unless the Agents shall otherwise
specify, other than by an amendment or supplement that relates exclusively to
an offering of debt securities other than the Bonds or preferred stock) or
there is filed with the SEC any document incorporated by reference into the
Prospectus (other than any Current Report on Form 8-K or Quarterly Report on
Form 10-Q, unless the Agent shall otherwise specify), or (if required pursuant
to the terms of a Terms Agreement) the Company sells Bonds to an Agent
pursuant to a Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to the Agents and to counsel to the Agents the written
opinions of Jones, Day, Reavis & Pogue and Sorling, Northrup, Hanna, Cullen
and Cochran, Ltd., counsel to the Company, or other counsel satisfactory to
the Agents dated the date of filing with the SEC of such supplement or
document, the date of effectiveness of such amendment, or the date of such
sale, as the case may be, in form and substance satisfactory to the Agents, of
the same tenor as the opinions referred to in Sections 5(a)(1) and 5(a)(2)
hereof, but modified, as necessary, to relate to the filing of the
supplemental indenture, and the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such opinion; or, in lieu
of such opinions, counsel last furnishing each such opinion to the Agents
shall furnish the Agents with a letter to the effect that the Agents may rely
on such last opinion to the same extent as though it was dated the date of
such letter authorizing reliance (except that statements in such last opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter authorizing
reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus that contains
additional financial information or (if required pursuant to the terms of a
Terms Agreement) the Company sells Bonds to an Agent pursuant to a Terms
Agreement, the Company shall cause Arthur Andersen LLP forthwith to furnish
the Agents a letter, dated the date of filing such supplement or document with
the SEC or the date of effectiveness of such amendment, or the date of such
sale, as the case may be, in form satisfactory to the Agents, of the same
tenor as the portions of the letter referred to in clauses (i) and (ii) of
Section 5(c) hereof but modified to relate to the Registration Statement and
Prospectus, as amended and supplemented to the date of such letter, and of the
same general tenor as the portions of the letter referred to in clauses (iii)
and (iv) of said Section 5(c) with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Company; provided that if the Registration Statement
or the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Arthur Andersen LLP may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless any other information included therein of an
accounting, financial or statistical nature is of such a nature that, in the
reasonable judgment of the Agents, such letter should cover such other
information.
(e) Suspension of Obligations. The Company shall not be required to
comply with the provisions of subsections (a), (b), (c) and (d) of this
Section during any period from the time the Agents shall have suspended
solicitations of purchases of the Bonds in their capacity as agents pursuant
to a request from the Company to the time the Company shall determine that
solicitation of purchases of the Bonds should be resumed or shall subsequently
enter into a new Terms Agreement with any or all of the Agents.
SECTION 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Agent and
each person, if any, who controls such Agent within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Agent or
any such controlling person in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), 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 or liabilities are
caused by (i) any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Agent furnished
to the Company in writing by such Agent expressly for use therein or
(ii) statements in or omissions from that part of the Registration Statement
which shall constitute the Trustees' Statements of Eligibility on Forms T-1
and T-2.
(b) Each Agent 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 either Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from the Company to
such Agent, but only with reference to information relating to such Agent
furnished to the Company in writing by such Agent expressly for use in the
Registration Statement, the Prospectus or any amendments or supplements
thereto.
(c) If any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing, but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section. The indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent
the indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to 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
be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect to the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
the Agents, in the case of parties indemnified pursuant to paragraph (b) of
this Section, and by the Company, in the case of parties indemnified pursuant
to paragraph (a) of this Section. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or (b) of
this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Agents on
the other hand from the offering of the Bonds or (ii) if the allocation
provided by clause (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 (i) above but also the relative fault of the Company on
the one hand and of the Agents on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each Agent on
the other hand in connection with the offering of the Bonds shall be deemed to
be in the same respective proportions as the net proceeds from the offering of
the Bonds (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by such Agent to the date of
such liability bears to the total sales price from the sale of the Bonds sold
to or through such Agent to the date of such liability. The relative fault of
the Company on the one hand and of the Agents 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 by the
Agents and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and the Agents agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Agents were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) of this Section.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Agent shall be required
to contribute any amount in excess of the amount by which the total sales
price of the Bonds sold to or through such Agent exceeds the amount of any
damages that such Agent 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 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in
this Section 8 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.
SECTION 9. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements
thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Bonds,
including any fees and expenses relating to the use of book-entry bonds;
(d) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred from time to time in connection with the transactions contemplated
hereby;
(f) The qualification of the Bonds under state securities laws in
accordance with the provisions of Section 4(i) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky
Memorandum and any Legal Investment Survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Agents of the Prospectus and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the
Bonds;
(h) The preparation, printing, reproducing and delivery to the Agents
of copies of the Indenture and all supplements and amendments thereto;
(i) Any fees charged by rating agencies for the rating of the Bonds;
(j) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(k) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company;
(l) The cost of preparing, and providing any CUSIP or other
identification numbers for, the Bonds;
(m) The fees and expenses of any book-entry depositary and any
nominees thereof in connection with the Bonds; and
(n) The fees and expenses, if any, incurred in connection with any
filing with or approval by the ICC in connection with the issuance of the
Bonds.
SECTION 10. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of any Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Bonds.
SECTION 11. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
Terms Agreement) may be terminated for any reason, at any time by either the
Company or an Agent upon the giving of 30 days' written notice of such
termination to the other party hereto.
(b) Termination of a Terms Agreement. The applicable Agent may
terminate any Terms Agreement, immediately upon notice to the Company, at any
time prior to the Settlement Date relating thereto (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of
which information is given in the Registration Statement, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, whether or not arising in the
ordinary course of business, or (ii) if there shall have occurred any material
adverse change in the financial markets in the United States or any outbreak
or escalation of hostilities or other national or international calamity or
crisis the effect of which is such as to make it, in the judgment of such
Agent, impracticable to market the Bonds or enforce contracts for the sale of
the Bonds, or (iii) if trading in any securities of the Company or CIPSCO
Incorporated has been suspended by the SEC or a national securities exchange,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the SEC or any other
governmental authority, or if a banking moratorium shall have been declared by
either federal or New York authorities, or (iv) if the rating assigned by any
nationally recognized securities rating agency to any debt securities of the
Company as of the date of any applicable Terms Agreement shall have been
lowered since that date or if any such rating agency shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company, or (v) if
there shall have come to the applicable Agent's attention any facts that would
cause such Agent to believe that the Prospectus, at the time it was required
to be delivered to a purchaser ofBonds, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances existing at the time of
such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) each Agent shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(a) hereof, (ii) if at the time of termination (a) each Agent shall
own any Bonds purchased pursuant to a Terms Agreement with the intention of
reselling them or (b) an offer to purchase any of the Bonds has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Bond or Bonds relating thereto has not occurred, the covenants set forth in
Sections 4 and 7 hereof shall remain in effect until such Bonds are so resold
or delivered, as the case may be, and (iii) the covenant set forth in Section
4(h) hereof, the provisions of Section 5 hereof, the indemnity and
contribution agreements set forth in Section 8 hereof, and the provisions of
Sections 9, 10 and 14 hereof shall remain in effect.
SECTION 12. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail
or by telex, telecopier or telegram, and any such notice shall be effective
when received at the address specified below:
If to the Company:
Central Illinois Public Service Company
607 East Adams Street
Springfield, Illinois 62739
Attention: Treasurer
If to Smith Barney Inc.:
Smith Barney Inc.
390 Greenwich Street - 4th Floor
New York, New York 10013
Attention: MTN Product Management/Origination - Mark R. Meyer
If to Morgan Stanley & Co. Incorporated:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas, 4th Floor
New York, New York 10020
Attention: Manager - Continuously Offered Products
with a copy to:
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas, 28th Floor
New York, New York 10020
Attention: Peter Cooper - Investment Banking Information Center
If to First Chicago Capital Markets, Inc.:
First Chicago Capital Markets, Inc.
One First National Plaza, Suite 0030
Chicago, Illinois 60670
Attention: FCCM Credit Officer
with a copy to:
First Chicago Capital Markets, Inc.
153 West 51st Street, Suite 4000
New York, New York 10019
Attention: Linda A. Dawson - Transaction Management Department
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 12.
SECTION 13. Governing Law.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of
Illinois applicable to agreements made and to be performed in the State of
Illinois.
SECTION 14. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to
in Section 8 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the parties hereto and
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Bonds shall be deemed to be a
successor by reason merely of such purchase.
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
By: ____________________________________
Name:
Title:
Accepted:
SMITH BARNEY INC.
By: _____________________________
Name:
Title:
FIRST CHICAGO CAPITAL MARKETS, INC.
By: _____________________________
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: _____________________________
Name:
Title:
EXHIBIT A
The following terms, if applicable, shall be agreed to by the applicable
Agent and the Company pursuant to each Terms Agreement:
Principal Amount: $_________
Interest Rate:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Stand-Off Period (if any):
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b)
of the Distribution Agreement.
Legal Opinion pursuant to Section 7(c) of the
Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
EXHIBIT C
ACCEPTANCE OF TERMS OF DISTRIBUTION AGREEMENT
[NAME OF AGENT]
Pursuant to Section 1(a) of the Distribution Agreement (the "Agreement")
dated June 1, 1995 among Central Illinois Public Service Company and the Agents
named therein, Central Illinois Public Service Company hereby appoints
to serve as an Agent under the Agreement,
subject to the terms and conditions stated therein, which terms and conditions
are incorporated herein by reference.
Please acknowledge your acceptance of such appointment and your agreement
to be bound by all the terms of the Agreement by signing and returning this
letter to the Company.
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
By: ________________________________________
Accepted as of the _____ day of ______,199_.
______________________
[AGENT]
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of
each Bond equal to the principal amount of such Bond multiplied by the
appropriate percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
From 1 year but less than 18 months. . . . . .150
From 18 months but less than 2 years . . . . .200
From 2 years but less than 3 years . . . . . .250
From 3 years but less than 4 years . . . . . .350
From 4 years but less than 5 years . . . . . .450
From 5 years but less than 6 years . . . . . .500
From 6 years but less than 7 years . . . . . .550
From 7 years but less than 10 years. . . . . .600
From 10 years but less than 15 years . . . . .625
From 15 years but less than 20 years . . . . .700
From 20 years to and including 30 years. . . .750
More than 30 years . . . . . . . . . . . . . *
* Commission on Bonds with maturities of more than 30 years shall be agreed
to by the Company and the applicable Agent at the time of such
transaction.
EXHIBIT B
ADMINISTRATIVE PROCEDURES FOR
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
FIRST MORTGAGE BONDS, MEDIUM-TERM NOTE SERIES
(Dated as of June 1, 1995)
First Mortgage Bonds, Medium-Term Note Series (the "Bonds") in the
aggregate principal amount of up to $50,000,000 are to be offered on a
continuing basis by Central Illinois Public Service Company (the "Company")
through Smith Barney Inc., First Chicago Capital Markets, Inc. and Morgan
Stanley & Co. Incorporated who, as agents (each an "Agent," and, collectively,
the "Agents"), have agreed to use their best efforts to solicit offers to
purchase the Bonds from the Company. The Agents may also purchase Bonds as
principal for resale.
The Bonds are being sold pursuant to a Distribution Agreement between
the Company and the Agents, dated June 1, 1995 (the "Distribution Agreement").
The Bonds will be issued pursuant to an Indenture of Mortgage or Deed of Trust
dated October 1, 1941, executed by the Company to Bank of America Illinois,
Chicago, Illinois, as Trustee and an individual trustee, as previously
supplemented and amended by supplemental trust indentures and as to be further
supplemented and amended by a supplemental trust indenture relating to each
series of Bonds (the "Indenture"). A Registration Statement (the
"Registration Statement," which term shall include any additional registration
statements filed in connection with the Bonds as provided in the introductory
paragraphs of the Distribution Agreement) with respect to the Bonds has been
filed with the Securities and Exchange Commission (the "Commission"). The
most recent basic Prospectus included in the Registration Statement, as
supplemented with respect to the Bonds, is herein referred to as the
"Prospectus Supplement". The most recent supplement to the Prospectus with
respect to the specific terms of the Bonds is herein referred to as the
"Pricing Supplement."
The Bonds will either be issued (a) in book-entry form and represented
by one or more fully registered Bonds (each, a "Book-Entry Bond") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded
in the book-entry system maintained by DTC, or (b) in certificated form
delivered to the purchaser thereof or a person designated by such purchaser.
Except in the limited circumstances described in the Prospectus, owners of
beneficial interests in Bonds issued in book-entry form will not be entitled
to physical delivery of Bonds in certificated form equal in principal amount
to their respective beneficial interests.
General procedures relating to the issuance of all Bonds are set forth
in Part I hereof. Additionally, Bonds issued in book-entry form will be
issued in accordance with the procedures set forth in Part II hereof and Bonds
issued in certificated form will be issued in accordance with the procedures
set forth in Part III hereof. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Indenture or
the Bonds, as the case may be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/
Authentication:
Each Bond will be dated by the Trustee as of
the Interest Payment Date thereof to which
interest was paid next preceding the date of
issue, unless (a) issued on an Interest
Payment Date thereof to which interest was
paid, in which event it shall be dated as of
the date of issue, or (b) issued prior to the
occurrence of the first Interest Payment Date
thereof to which interest was paid, in which
event it shall be dated the Original Issue
Date. The Original Issue Date shall remain
the same for all Bonds subsequently issued
upon transfer, exchange or substitution of an
original Bond regardless of their dates of
authentication.
Maturities:
Each Bond will mature on a date selected by
the purchaser and agreed to by the Company
which is not less than one year nor more than
forty years from its Original Issue Date.
Registration:
Bonds will be issued only in fully registered
form.
Calculation of Interest:
Interest (including payments for partial
periods) will be calculated and paid on the
basis of a 360-day year of twelve 30-day
months.
Acceptance and Rejection
of Offers:
The Company shall have the sole right to
accept offers to purchase Bonds from the
Company and may reject any such offer in whole
or in part. Each Agent shall communicate to
the Company, orally or in writing, each
reasonable offer to purchase Bonds from the
Company received by it. Each Agent shall have
the right, in its discretion reasonably
exercised, without notice to the Company, to
reject any offer to purchase Bonds through it
in whole or in part.
Preparation of Pricing
Supplement:
If any offer to purchase a Bond is accepted by
the Company, the Company, with the approval of
the Agent which presented such offer (the
"Presenting Agent"), will prepare a Pricing
Supplement reflecting the terms of such Bond
and file a Pricing Supplement relating to the
Bonds and the plan of distribution thereof
(the "Supplemented Prospectus"), with the
Commission in accordance with Rule 424 under
the Act. The Presenting Agent will cause a
stickered Supplemented Prospectus to be
delivered to the purchaser of the Bond.
The Company shall have delivered a completed
Pricing Supplement, via next day mail or
telecopy to arrive no later than 11 AM on the
Business Day following the trade date, to the
Presenting Agent at the following locations:
Smith Barney Inc. at the following address:
Smith Barney Inc., 390 Greenwich Street - 4th
Floor, New York, New York 10013, Attention:
MTN Product Management/Origination - Mark R.
Meyer, Telephone: (212) 723-5123, Telecopy:
(212) 723-8854, also, a copy to: Smith Barney
Inc., 388 Greenwich Street - 34th Floor, New
York, New York 10013, Attention: Legal
Compliance - Adrienne Garofalo, Telephone
(212) 816-7594, Telecopy (212) 816-7912; to
Morgan Stanley & Co. Incorporated at the
following address: Morgan Stanley & Co.
Incorporated, 1221 Avenue of the Americas, 4th
Floor, New York, New York 10020, Attn.:
Medium-Term Note Trading Desk, Carlos Cabrera,
Telephone: (212) 296-5830, Telecopier: (212)
764-7490; and to First Chicago Capital
Markets, Inc. at the following address: One
First National Plaza, Suite 0307, Chicago,
Illinois 60670, Attn.: Operations Manager,
Medium-Term Notes.
In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Supplemented Prospectuses prior
to their use. Outdated Pricing Supplements,
and the Supplemented Prospectuses to which
they are attached (other than those retained
for files) will be destroyed.
Settlement:
The receipt of immediately available funds by
the Company in payment for a Bond and the
authentication and delivery of such Bond
shall, with respect to such Bond, constitute
"settlement." Offers accepted by the Company
will be settled on the date that is three
Business Days after the date of the acceptance
of the offer, or at such later time as the
purchaser, the Trustee and the Company shall
agree, pursuant to the timetable for
settlement set forth in Parts II and III
hereof under the caption "Settlement
Procedures" with respect to Book-Entry Bonds
and Certificated Bonds, respectively. If
procedures A and B of the applicable
Settlement Procedures with respect to a
particular offer are not completed on or
before the time set forth under the applicable
"Settlement Procedures Timetable," such offer
shall not be settled until the Business Day
following the completion of settlement
procedures A and B or such later date as the
purchaser and the Company shall agree.
In the event of a purchase of Bonds by any
Agent as principal, appropriate settlement
details will be as agreed between the Agent
and the Company pursuant to the applicable
Terms Agreement.
Suspension of Solicitation;
Amendment or Supplement:
The Company may instruct the Agents to suspend
solicitation of purchases at any time. Upon
receipt of such instructions the Agents will
forthwith suspend solicitation of offers to
purchase from the Company until such time as
the Company has advised them that solicitation
of offers to purchase may be resumed. If the
Company decides to amend the Registration
Statement (including incorporating any
documents by reference therein) or supplement
any of such documents, it will promptly
furnish the Agents and their counsel with
copies of the amendment (including any
document proposed to be incorporated by
reference therein) or supplement. One copy of
such filed document, along with a copy of the
cover letter sent to the Commission, will be
delivered or mailed to the Agents at the
following respective addresses: Smith Barney
Inc., 390 Greenwich Street - 4th Floor, New
York, New York 10013, Attention: MTN Product
Management/ Origination - Mark R. Meyer,;
Morgan Stanley & Co. Incorporated, 1221 Avenue
of the Americas, 4th Floor, New York, New York
10020, Attention: Manager - Continously
Offered Products, with a copy to Morgan
Stanley & Co. Incorporated, 1251 Avenue of the
Americas, 28th Floor, New York, New York
10020, Attention: Peter Cooper - Investment Banking
Information Center; and First Chicago
Capital Markets, Inc., One First National
Plaza, Suite 0030, Chicago, Illinois 60670,
Attn.: FCCM Credit Officer, with a copy to
First Chicago Capital Markets, Inc., 153 West
51st Street, Suite 4000, New York, New York
10019, Attention: Linda A. Dawson -
Transaction Management Department.
In the event that at the time the solicitation
of offers to purchase from the Company is
suspended there shall be any orders
outstanding which have not been settled, the
Company will promptly advise the Agents and
the Trustee whether such orders may be settled
and whether copies of the Prospectus as
theretofore amended and/or supplemented as in
effect at the time of the suspension may be
delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event
that the Company determines that such orders
may not be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus:
A copy of the most recent Prospectus,
Prospectus Supplement and Pricing Supplement
must accompany or precede the earlier of (a)
the written confirmation of a sale sent to a
customer or the agent of such Customer, and
(b) the delivery of Bonds to a customer or the
agent of such customer.
Authenticity of
Signatures:
The Agents will have no obligations or
liability to the Company or the Trustee in
respect of the authenticity of the signature
of any officer, employee or agent of the
Company or the Trustee on any Bond.
Documents Incorporated by
Reference:
The Company shall supply the Agents with an
adequate supply of all documents incorporated
by reference in the Registration Statement.
Business Day:
"Business Day" means any day, other than a
Saturday or Sunday, on which banks in the City
of New York, are not required or authorized by
law to close.
PART II: PROCEDURES FOR BONDS ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Bonds issued in book-entry form for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter
of Representation from the Company and the Trustee to DTC, dated June 1, 1995,
and a Medium-Term Note Certificate Agreement, dated December 29, 1988, between
the Trustee and DTC (the"Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance:
All Bonds issued in book-entry form having the
same Original Issue Date, interest rate, and
Stated Maturity will be represented initially
by a single global security in fully
registered form without coupons (each, a
"Book-Entry Bond").
Each Book-Entry Bond will be dated and issued
as of the date of its authentication by the
Trustee. Each Book-Entry Bond will bear an
interest Accrual Date, which will be (a) with
respect to an original Book-Entry Bond (or any
portion thereof), its Original Issue Date and
(b) with respect to any Book-Entry Bond (or
portion thereof) issued subsequently upon
exchange of a Book-Entry Bond or in lieu of a
destroyed, lost or stolen Book-Entry Bond, the
most recent Interest Payment Date to which interest
has been paid or duly provided for on the
predecessor Book-Entry Bond or Bonds (or if no
such payment or provision has been made, the
Original Issue Date of the predecessor
Book-Entry Bond or Bonds), regardless of the
date of authentication of such subsequently
issued Book-Entry Bond. No Book-Entry Bond
shall represent any Bond issued in
certificated form.
Identification:
The Company has arranged with the CUSIP
Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for
the reservation of approximately 900 CUSIP
numbers which have been reserved for and
relating to Book-Entry Bonds and the Company
has delivered to the Trustee and DTC a written
list of such CUSIP numbers. The Trustee will
assign CUSIP numbers to Book-Entry Bonds as
described below under Settlement Procedure B.
DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the
Trustee has assigned to Book-Entry Bonds.
The Trustee will notify the Company at any
time when fewer than 50 of the reserved CUSIP
numbers remain unassigned to Book-Entry Bonds,
and, if it deems necessary, the Company will
reserve additional CUSIP numbers for
assignment to Book-Entry Bonds. Upon
obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional
numbers to the Trustee and DTC.
Registration:
Each Book-Entry Bond will be registered in the
name of Cede & Co., as nominee for DTC, on the
register maintained by the Trustee under the
Indenture. The beneficial owner of a Bond
issued in book-entry form (i.e., an owner of a
beneficial interest in a Book-Entry Bond) (or
one or more indirect participants in DTC
designated by such owner) will designate one
or more participants in DTC (with respect to
such Bond issued in book-entry form, the
"Participants") to act as agent for such
beneficial owner in connection with the
book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance
with instructions provided by such
Participants, a credit balance with respect to
such Bond issued in book-entry form in the
account of such Participants. The ownership
interest of such beneficial owner in such Bond
issued in book-entry form will be recorded
through the records of such Participants or
through the separate records of such
Participants and one or more indirect
participants in DTC.
Transfers:
Transfers of a Book-Entry Bond will be
accomplished by book entries made by DTC and,
in turn, by Participants (and in certain
cases, one or more indirect participants in
DTC) acting on behalf of beneficial
transferors and transferees of such Book-Entry
Bond.
Exchanges:
The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or
more Book-Entry Bonds Outstanding on such date
that represent Book-Entry Bonds having the
same terms (other than Original Issue Dates)
and for which interest has been paid to the
same date; (b) a date, occurring at least 30
days after such written notice is delivered
and at least 30 days before the next Interest
Payment Date for the related Bonds issued in
book-entry form, on which such Book-Entry
Bonds shall be exchanged for a single
replacement Book-Entry Bond; and (c) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Book-Entry Bond.
Upon receipt of such a notice, DTC will send
to its participants (including the Trustee) a
written reorganization notice to the effect
that such exchange will occur on such date.
Prior to the specified exchange date, the
Trustee will deliver to the CUSIP Service
Bureau written notice setting forth such
exchange date and the new CUSIP number and
stating that, as of such exchange date, the
CUSIP numbers of the Book-Entry Bonds to be
exchanged will no longer be valid. On the
specified exchange date, the Trustee will
exchange such Book-Entry Bonds for a single
Book-Entry Bond bearing the new CUSIP numbers
and the CUSIP number of the exchanged
Book-Entry Bonds will, in accordance with
CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned.
Denominations:
Bonds issued in book-entry form will be issued
in denominations of $100,000 and any larger
denomination which is an integral multiple of
$1,000.
Interest:
General. Interest on each Bond issued in
book-entry form will accrue from the Original
Issue Date of the Book-Entry Bond representing
such Bond. Each payment of interest on a Bond
issued in book-entry form will include
interest accrued through the day preceding, as
the case may be, the Interest Payment Date or
Maturity. Interest payable at Maturity of a
Bond issued in book-entry form will be payable
to the Person to whom the principal of such
Bond is payable. DTC will arrange for each
pending deposit message described under
Settlement Procedure C below to be transmitted
to Standard & Poor's, which will use the
information in the message to include certain
terms of the related Book-Entry Bond in the
appropriate daily bond report published by
Standard & Poor's.
Regular Record Dates. The Regular Record Date
with respect to any Interest Payment Date
shall be the 15th day of the month immediately
preceding the month in which an Interest
Payment Date occurs.
Interest Payment Dates. Interest payments
will be made on each Interest Payment Date
commencing with the first Interest Payment
Date following the Original Issue Date to the
holders on the Record Date preceding such
Interest Payment Date.
Interest payments on Bonds issued in
book-entry form will be made semiannually on
the dates specified in the Pricing Supplement
and at Maturity unless such day is not a
Business Day, in which case such payment will
be made on the next Business Day.
Payments of Principal
and Interest:
Payment of Interest Only. Promptly after each
Regular Record Date, the Trustee will deliver
to the Company and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Book-Entry Bond on
the following Interest Payment Date (other
than an Interest Payment Date coinciding with
Maturity) and the total of such amounts. DTC
will confirm the amount payable on each Book-
Entry Bond on such Interest Payment Date by reference to
the daily bond reports published by Standard &
Poor's Corporation. On such Interest Payment
Date, the Company will pay to the Trustee, and
the Trustee in turn will pay to DTC, such
total amount of interest due (other than at
Maturity), at the times and in the manner set
forth below under "Manner of Payment."
Payments at Maturity. On or about the first
Business Day of each month in which principal
and/or interest is to be paid, the Trustee
will deliver to the Company and DTC a written
list of principal, interest and premium, if
any, to be paid on each Book-Entry Bond
maturing either at stated maturity or on a Redemption
Date in the following month. The Trustee, the
Company and DTC will confirm the amounts of
such principal and interest payments with
respect to a Book-Entry Bond on or about the
fifth Business Day preceding the Maturity of
such Book-Entry Bond. At such Maturity, the
Company will pay to the Trustee, and the
Trustee in turn will pay to DTC, the principal
amount of such Bond, together with interest
and premium, if any, due at such maturity, at
the times and in the manner set forth below
under "Manner of Payment." If any Maturity of
a Book-Entry Bond is not a Business Day, the
payment due on such day shall be made on the
next succeeding Business Day and no interest
shall accrue on such payment for the period
from and after such Maturity. Promptly after
payment to DTC of the principal, interest
and premium, if any, due at the Maturity of
such Book-Entry Bond, the Trustee will cancel
such Book-Entry Bond and deliver it to the
Company with an appropriate debit advice. On
the first Business Day of each month, the
Trustee will deliver to the Company a written
statement indicating the total principal
amount of Outstanding Book-Entry Bonds as of
the immediately preceding Business Day.
Manner of Payment. The total amount of any
principal, premium, if any, and interest due
on Book-Entry Bonds on any Interest Payment
Date or at Maturity shall be transferred by
the Company to the Trustee to an account
designated by the Trustee in funds available
for use by the Trustee as of 9:30 a.m., New
York City time, on such date. The Company
will confirm such instructions in writing to
the Trustee. Prior to 10:00 a.m., New York
City time, on such date or as soon as possible
thereafter, the Trustee will pay (but only
from funds withdrawn from such account) by
separate wire transfer (using Fedwire message
entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified
by DTC, in funds available for immediate use
by DTC, each payment of interest, principal
and premium, if any, due on a Book-Entry Bond
on such date. Thereafter on such date, DTC
will pay, in accordance with its SDFS
operating procedures then in effect, such
amounts in funds available for immediate use
to the respective Participants in whose names
such Bonds are recorded in the book-entry
system maintained by DTC. Neither the Company
nor the Trustee shall have any responsibility
or liability for the payment by DTC of the
principal of, or interest on, the Book-Entry
Bond to such Participants.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld
from any interest payment on a Bond will be
determined and withheld by the Participant,
indirect participant in DTC or other Person
responsible for forwarding payments and
materials directly to the beneficial owner of
such Bond.
Settlement Procedures:
Settlement Procedures with regard to each Bond
in book-entry form sold by each Agent as agent
of the Company, will be as follows:
A. The Presenting Agent will advise the
Company by telephone (confirm by facsimile)
of the following Settlement information:
1. Taxpayer identification number of
the purchaser.
2. Principal amount of the Bond.
3. Terms:
a) interest rate
b) interest payment dates
4. Price to public of the Bond.
5. Trade date.
6. Settlement Date (Original Issue
Date).
7. Maturity.
8. Net proceeds to the Company.
9. Agent's commission
B. The Company will advise the Trustee by
electronic transmission of the above
settlement information received from the
Presenting Agent with respect to the
Book-Entry Bond representing such Bond
and the name of the Agent, and the
Trustee will assign a CUSIP number to
such Bond.
C. The Trustee will communicate to DTC
through DTC's Participant Terminal
System, a pending deposit message
specifying the following settlement
information, which will route such
relevant information to the Presenting
Agent, Standard & Poor's Corporation and
Interactive Data Corporation:
1. The information set forth in
Settlement Procedure A.
2. Identification numbers of the
participant accounts maintained by
DTC on behalf of the Trustee and
the Agent.
3. Initial Interest Payment Date for
such Bond, number of days by which
such date succeeds the related
record dated for DTC purposes and,
if then calculable, the amount of
interest payable on such Interest
Payment Date (which amount shall
have been confirmed by the
Trustee).
4. CUSIP number of the Book-Entry Bond
representing such Bond.
5. Whether such Book-Entry Bond
represents any other Bonds issued
or to be issued in book-entry form.
D. The Board of Directors of the Company or
the Executive Committee thereof shall
approve the final terms of the Bonds and
the Company and the Trustee will execute
an appropriate Supplemental Indenture
which the Company will file for record.
E. The Trustee will complete a Book-Entry
Bond representing such Bond in a form
that has been approved by the Company,
the Agents and the Trustee.
F. The Trustee will authenticate the Book-
Entry Bond representing such Bond.
G. DTC will credit such Bond to the
participant account of the Trustee
maintained by DTC.
H. The Trustee will enter an SDFS deliver
order through DTC's Participating
Terminal System instructing DTC (i) to
debit such Bond to the Trustee's
participant account and credit such Bond
to the participant account of the
Presenting Agent maintained by DTC and
(ii) to debit the settlement account of
the Presenting Agent and credit the
settlement account of the Trustee
maintained by DTC, in an amount equal to
the price of such Bond less such Agent's
commission. Any entry of such a deliver
order shall be deemed to constitute a
representation and warranty by the
Trustee to DTC that (i) the Book-Entry
Bond representing such Bond has been
issued and authenticated and (ii) the
Trustee is holding such Book-Entry Bond
pursuant to the Medium Term Note
Certificate Agreement between the Trustee
and DTC.
I. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Bond to the Presenting Agent's
participant account and credit such Bond
to the participant account of the
Participants maintained by DTC and (ii)
to debit the settlement accounts of such
Participants and credit the settlement
account of the Presenting Agent
maintained by DTC, in an amount equal to
the initial public offering price of such
Bond.
J. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures H and I will be
settled in accordance with SDFS operating
procedures in effect on the Settlement
Date.
K. Upon receipt of such funds, the Trustee
will credit to an account of the Company
identified to the Trustee funds available
for immediate use in the amount
transferred to the Trustee in accordance
with Settlement Procedure H.
L. The Trustee will send a copy of each
Book-Entry Bond to the Company together
with a statement setting forth the
principal amount of Bonds outstanding in
accordance with the Indenture.
M. The Agent will confirm the purchase of
such Bond to the purchaser either by
transmitting to the Participant with
respect to such Bond a confirmation order
through DTC's Participant Terminal System
or by mailing a written confirmation to
such purchaser.
Settlement Procedures
Timetable:
For order of Bonds accepted by the Company,
Settlement Procedures "A" through "M" set
forth above shall be completed as soon as
possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
A-B 11:00 a.m. on the trade date
C 2:00 p.m. on the trade date
D No later than the Business Day before
Settlement Date
E 3:00 p.m. on the Business Day before
Settlement Date
F No later than 2:00 p.m. on the day prior
to the Settlement Date
G 10:00 a.m. on the Settlement Date
H-I No later than 2:00 p.m. on the day prior
to the Settlement Date
J 4:45 p.m. on the Settlement Date
K-M 5:00 p.m. on the Settlement Date
Settlement Procedures A, B and C may, if
necessary, be completed at any time prior to
the specified times on the first Business Day
after the sale date. Settlement Procedure J
is subject to extension in accordance with any
extension of Fedwire closing deadlines and in
the other events specified in the SDFS
operating procedures in effect on the
Settlement Date.
If settlement of a Bond issued in book entry
form is rescheduled or canceled, the Trustee
will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to
such effect by no later than 2:00 p.m., New
York City time, on the Business Day
immediately preceding the scheduled Settlement
Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Bond issued
in book-entry form pursuant to Settlement
Procedure H; the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as
soon as practicable a withdrawal message
instructing DTC to debit such Bond to the
participant account of the Trustee maintained at DTC.
DTC will process the withdrawal message, provided
that such participant account contains a
principal amount of the Book-Entry Bond
representing such Bond that is at least equal
to the principal amount to be debited. If
withdrawal messages are processed with respect
to all the Bonds represented by a Book-Entry
Bond, the Trustee will mark such Book-Entry
Bond "cancelled", make appropriate entries in
its records and send such cancelled Book-Entry
Bond to the Company. The CUSIP number assigned
to such Book-Entry Bond shall, in accordance with
CUSIP Service Bureau procedures, be cancelled and
not immediately reassigned. If withdrawal messages
are processed with respect to a portion of the
Bonds represented by a Book-Entry Bond, the
Trustee will exchange such Book-Entry Bond for
two Book-Entry Bonds, one of which shall
represent the Book-Entry Bonds for which
withdrawal messages are processed and shall be
cancelled immediately after issuance, and the
other of which shall represent the other Bonds
previously represented by the surrendered
Book-Entry Bond and shall bear the CUSIP
number of the surrendered Book-Entry Bond.
If the purchase price for any Book-Entry Bond
is not timely paid to the Participants with
respect to such Bond by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in
turn, the related Agent may enter SDFS deliver
orders through DTC's Participant Terminal
System reversing the orders entered pursuant
to Settlement Procedures H and I,
respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have
occurred for any reason other than default by
the applicable Agent to perform its
obligations hereunder or under the
Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for
its loss of the use of funds during the period
when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-Entry
Bond, DTC may take any actions in accordance
with its SDFS operating procedures then in
effect. In the event of a failure to settle
with respect to a Bond that was to have been
represented by a Book-Entry Bond also
representing other Bonds, the Trustee will
provide, in accordance with Settlement
Procedures E and F, for the authentication and
issuance of a Book-Entry Bond representing
such remaining Bonds and will make appropriate
entries in its records.
PART III: PROCEDURES FOR BONDS ISSUED
IN CERTIFICATED FORM
Denominations:
The Bonds will be issued in denominations of
$100,000 and integral multiples of $1,000 in
excess thereof.
Interest:
Each Bond will bear interest in accordance
with its terms. Interest will begin to accrue
on the Original Issue Date of a Bond for the
first interest period and on the most recent
interest payment date to which interest has
been paid for all subsequent interest periods.
Each payment of interest shall include
interest accrued to, but excluding, the date
of such payment.
Interest payments will be made semiannually on
the dates specified in the Pricing Supplement
and at maturity. However, the first payment
of interest on any Bond issued between a
Record Date and an Interest Payment Date will
be made on the Interest Payment Date following
the next succeeding Record Date. The Record
Date for any payment of interest shall be the
15th day of the month immediately preceding
the month on which an Interest Payment Date
occurs. Interest at maturity will be payable
to the person to whom the principal is
payable.
Nothing herein should be deemed to require the
Trustee to risk or expend its own funds in
connection with any payment to the Company, or
the Agents, or DTC, or any Bondholder, it
being understood by all parties that payments
made by the Trustee shall be made solely to
the extent that funds are provided to the
Trustee for such purpose.
Payments of Principal
and Interest:
Principal of and interest on the Bonds, will
be payable in Chicago, Illinois or New York,
New York and interest is payable, at the
option of the Company, by check mailed to the
registered owners of the Bonds. Any payment
of principal or interest required to be made
on an Interest Payment Date or at maturity of
a Bond which is not a Business Day (as defined
below) need not be made on such day, but may
be made on the next succeeding Business Day
with the same force and effect as if made on
the Interest Payment Date or at maturity, as
the case may be, and no interest shall accrue
for the period from and after such Interest
Payment Date or maturity.
The Trustee will provide to the Company in
each month prior to a month in which any Bond
or Bonds mature, a list of the principal and
interest to be paid on Bonds maturing in the
next succeeding month. The Trustee will be
responsible for withholding taxes on interest
paid as required by applicable law, but shall
be relieved from any such responsibility if it
acts in good faith and in reliance upon an
opinion of counsel.
Bonds presented to the Trustee at maturity for
payment will be cancelled and held by the
Trustee.
Settlement Procedures:
Settlement Procedures with regard to each
Bond purchased through any Agent, as agent,
shall be as follows:
A. The Presenting Agent will advise the
Company by telephone of the following
Settlement information with regard to
each Bond:
1. Exact name in which the Bond is to
be registered (the "Registered
Owner").
2. Exact address or addresses of the
Registered Owner for delivery,
notices and payments of principal
and interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal amount of the Bond.
5. Denomination of the Bond.
6. Terms:
a) interest rate
b) interest payment dates
7. Price to public of the Bond.
8. Settlement date (Original Issue
Date).
9. Maturity Date.
10. Net proceeds to the Company.
11. Agent's Commission.
B. The Company shall provide to the Trustee
the above Settlement information received
from the Agents and shall cause the
Trustee to issue, authenticate and
deliver Bonds. The Company also shall
provide to the Trustee and/or Agents a
copy of the applicable Pricing
Supplement.
C. The Board of Directors of the Company or
the Executive Committee thereof
shall approve the final terms
of the Bonds and the Company and the
Trustee will execute an appropriate
Supplemental Indenture which the Company
will file for record.
D. With respect to each trade, the Trustee
will deliver the Bonds to the Presenting
Agent at the following applicable
address: Smith Barney Inc., 390
Greenwich Street - 3rd Floor, New York,
New York 10013, Attention: Syndicate
Operations - James Steiner; in the case
of Morgan Stanley & Co. Incorporated to
Bank of New York, Dealer Clearance
Department, 1 Wall Street, 3rd Floor,
Window 3B, New York, New York 10005,
Attention: For the Account of Morgan
Stanley & Co. Incorporated; or in the
case of First Chicago Capital Markets,
Inc., to Bankers Trust, 16 Wall Street,
5th Floor, Window 51, New York, New York
10015, Attention: Jim Murrary. The
Trustee will keep a copy of such Bond.
The Presenting Agent will acknowledge
receipt of the Bond through a broker's
receipt and will keep a copy of such
Bond. Delivery of the Bond will be made
only against such acknowledgment of
receipt. Upon determination that the
Bond has been authorized, delivered and
completed as aforementioned, the
Presenting Agent will wire the net
proceeds of the Bond after deduction of
its applicable commission to the Company
pursuant to standard wire instructions
given by the Company.
E. The Presenting Agent will deliver the
Bond (with confirmations), as well as a
copy of the Prospectus and any applicable
Prospectus Supplement or Supplements
received from the Trustee to the
purchaser against payment in immediately
available funds.
F. The Trustee will send a copy of such Bond
to the Company.
Settlement Procedures
Timetable:
For offers accepted by the Company, Settlement
Procedures "A" through "F" set forth above
shall be completed on or before the respective
times set forth below:
Settlement
Procedure Time
A-B 3:00 P.M. on the fifth Business Day prior
to settlement
C No later than Business Day prior to
settlement
D 2:15 P.M. on day of settlement
E 3:00 P.M. on day of settlement
F 5:00 P.M. on day of settlement
Failure to Settle:
In the event that a purchaser of a Bond from
the Company shall either fail to accept
delivery of or make payment for a Bond on the
date fixed for settlement, the Presenting
Agent will forthwith notify the Trustee and
the Company by telephone, confirmed in
writing, and return the Bond to the Trustee.
The Trustee, upon receipt of the Bond from the
Agent, will immediately advise the Company and
the Company will promptly arrange to credit
the account of the Presenting Agent in an
amount of immediately available funds equal to
the amount previously paid by such Agent in
settlement for the Bond. Such credits will be
made on the settlement date if possible, and
in any event not later than the Business Day
following the settlement date; provided that
the Company has received notice on the same
day. If such failure shall have occurred for
any reason other than failure by such Agent to
perform its obligations hereunder or under the
Distribution Agreement, the Company will
reimburse such Agent on an equitable basis for
its loss of the use of funds during the period
when the funds were credited to the account of
the Company. Immediately upon receipt of the
Bond in respect of which the failure occurred,
the Trustee will cancel and destroy the Bond,
make appropriate entries in its records to
reflect the fact that the Bond was never
issued, and accordingly notify in writing the
Company.