Exhibit 1
ROCHESTER GAS AND ELECTRIC CORPORATION
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
To the Representative named in
Schedule I hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
1. Introductory. Rochester Gas and Electric Corporation, a New York
corporation ("Company"), proposes to issue and sell the First Mortgage Bonds
identified in Schedule I hereto ("Bonds"), to be issued under and secured by the
General Mortgage dated September 1, 1918, between the Company and Bankers Trust
Company, as Trustee ("Trustee"), as heretofore amended and supplemented by
supplemental indentures and as to be further amended and supplemented by an
additional supplemental indenture providing for the creation of the Bonds (such
General Mortgage as so amended and supplemented and as to be so amended and
supplemented being hereinafter called the "Indenture"), and hereby agrees with
the several underwriters named in Schedule II hereto ("Underwriters"), who are
being represented by the representatives of the Underwriters named in Schedule I
hereto ("Representatives"), as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-52690), including a prospectus,
relating to the Bonds has been filed with the Securities and Exchange
Commission ("Commission") and has become effective. Such registration
statement, as it may have been amended prior to the date hereof, is
hereinafter referred to as the "Registration Statement," and the prospectus
included in such Registration Statement, as supplemented to reflect the
terms of the Bonds and the offering thereof by a prospectus supplement to
be filed with the Commission pursuant to and in accordance with Rule 424(b)
("Rule 424(b)") under the Securities Act of 1933, as amended ("Act"),
including all material incorporated by reference therein, but excluding any
prospectus supplement relating to an offering of securities other than the
Bonds, is hereinafter referred to as the "Prospectus."
(b) On its effective date, the Registration Statement conformed in all
respects to the applicable requirements of the Act, the Trust Indenture Act
of 1939 ("Trust Indenture Act") and the rules and regulations of the
Commission ("Rules and Regulations") and did not include 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 not
misleading, and on the date hereof the Prospectus conforms in all respects
to the applicable requirements of the Act, the Trust Indenture Act and the
Rules and Regulations, and the Prospectus does not include 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 not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter specifically for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of New York, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is not required to be qualified
to transact business in any jurisdiction other than the state of New York.
(d) This Agreement has been duly authorized, executed and delivered by
the Company.
(e) The Bonds, when delivered pursuant to this Agreement, will have
been duly authorized, executed, authenticated, issued and delivered and the
bonds when delivered will constitute valid and legally binding obligations
of the Company entitled to the benefits and security provided by the
Indenture.
(f) The Indenture (which term, for the purposes of this paragraph as of
the date of the execution hereof, shall exclude the supplemental indenture
providing for the creation of the Bonds) has been duly authorized,
executed, and delivered by the Company, has been duly qualified under the
Trust Indenture Act, and constitutes a valid and binding instrument
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting enforcement
of creditors' rights or the security provided by the Indenture and to
general equity principles, and except as limited by the Atomic Energy Act
of 1954 and regulations thereunder relating to the Company's interest in
atomic energy facilities.
(g) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture and
the Bonds will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company that is material to the Company,
or any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture and the Bonds, except such as have
already been obtained or as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Bonds.
(h) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the
properties of the Company is subject that are required to be described in
the Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus or to be
filed or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as required.
(i) Each preliminary prospectus used in connection with the offering of
the Bonds filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
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(j) The Company is not and, after giving effect to the offering and
sale of the Bonds and the application of the proceeds thereof as described
in the Prospectus, will not be required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(k) The Company has arranged for the issuance of the Financial
Guarantee Insurance Policy ("Policy") referred to in Schedule I.
3. Purchase, Sale and Delivery of Bonds. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at the purchase price set forth in Schedule I hereto, the
respective principal amounts of Bonds set forth opposite the names of the
Underwriters in Schedule II hereto. The Company will deliver the Bonds to the
Representatives for the accounts of the Underwriters against payment of the
purchase price by Federal or other funds immediately available to the Company,
at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York
10004, at the time and date set forth in Schedule I hereto, or at such other
time and date as the Representatives and the Company determine, such time and
date being herein referred to as the "Closing Date." The Bonds so to be
delivered will be in definitive fully registered form, in such denominations and
registered in such names as the Representatives request and will be made
available for checking and packaging at the office of Bankers Trust Company, One
Bankers Trust Plaza, New York, New York, at least twenty-four hours prior to the
Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Bonds for sale to the public as set forth in
the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with the
several Underwriters that:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b) not later than the second business
day following the execution and delivery of this Agreement.
(b) Prior to the termination of the offering of the Bonds, the Company
will advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without the consent of the
Representatives. The Company will also advise the Representatives promptly
of the institution by the Commission of any stop order proceedings in
respect of the Registration Statement and will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as
soon as possible the withdrawal thereof.
(c) If at any time when a prospectus relating to the Bonds is required
to be delivered under the Act, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact, or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend or supplement the Prospectus to comply with the Act, the Company
promptly will prepare and file with the Commission an amendment or
supplement which
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will correct such statement or omission or an amendment which will effect
such compliance. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) For a period of at least eighteen months after the date of this
Agreement, the Company will file with the Commission, within the times
required by the Rules and Regulations, annual reports on Form 10-K and
quarterly reports on Form 10-Q containing all information required by the
Rules and Regulations or will otherwise make generally available to its
security holders as promptly as practicable an earnings statement which
will satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement (one of which will be signed and will include all
exhibits), any preliminary prospectus used in connection with the offering
of the Bonds, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as the
Representatives request.
(f) The Company will arrange for the qualification of the Bonds for
sale and the determination of their eligibility for investment under the
laws of such jurisdictions as the Representatives designate and will
continue such qualifications in effect as long as required for the
distribution.
(g) During the period of five years hereafter, the Company will furnish
to the Representatives, and upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report for such year; and the Company will furnish to
the Representatives (i) as soon as available, a copy of each report or
definitive proxy statement of the Company filed with the Commission under
the Securities Exchange Act of 1934, as amended, or mailed to security
holders generally and (ii) from time to time, such other information
concerning the Company as the Representatives may reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, including all expenses incurred in
connection with qualification of the Bonds for sale and determination of
their eligibility for investment under the laws of such jurisdictions as
the Representatives designate and the printing of memoranda relating
thereto, any fees charged by investment rating agencies for rating the
Bonds, the cost of printing or other reproduction of this Agreement and any
related documents and all expenses incurred in distributing to the
Underwriters any preliminary prospectuses used in connection with the
offering of the Bonds.
(i) During the period from the date of this Agreement to and including
the earlier of (i) the termination of trading restrictions on the Bonds, as
notified to the Company by the Representatives, or (ii) the third business
day after the Closing Date, the Company will not offer, sell, contract to
sell or otherwise dispose of any of its debt securities (other than the
Bonds), except pursuant to prior or concurrent contractual commitments
which have been disclosed to the Representatives prior to the execution
hereof and except for borrowings under the Company's revolving credit
agreements and lines of credit, the private placement of securities and
issuances of commercial paper,
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without the prior written consent of the Representatives, which consent
shall not be unreasonably withheld.
6. Conditions to the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Bonds will be subject to
the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of Company officers made pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to each of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company
or the Representatives, shall be contemplated by the Commission.
(b) Subsequent to the date hereof, there shall not have occurred (i)
any change, or any development involving a prospective change, in or
affecting particularly the business or properties of the Company which, in
the judgment of a majority in interest of the Underwriters including the
Representatives, materially impairs the investment quality of the Bonds;
(ii) any downgrading in the rating of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of possible
downgrading, of such rating); (iii) any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters, including
the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Bonds.
(c) The Representatives shall have received an opinion, dated the
Closing Date, of Nixon Peabody LLP, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of New York,
with authorized and outstanding capital stock as set forth in the
Prospectus, and with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus.
(ii) The Bonds have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company entitled to the benefits and
security provided by the Indenture.
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(iii) The Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a valid and binding instrument
enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting enforcement of creditors' rights or the security provided by
the Indenture and to general equity principles, and except as limited
by the Atomic Energy Act of 1954 and regulations thereunder relating to
the Company's interest in atomic energy facilities; the Indenture
creates the lien it purports to create upon the interest of the Company
in the property, real and personal, intended to be subjected to the
lien of the Indenture; and the Indenture has been duly recorded or
filed for recordation as a mortgage of real estate and recorded or
filed as a security interest in personal property and fixtures in each
place in which any of the properties or assets of the Company subject
to the lien of the Indenture are situated and in which such recording
or filing is required to protect and preserve the lien of the Indenture
(except the supplemental indenture providing for the creation of the
Bonds has been recorded in the Office of the Clerk of the County of
Monroe, New York, only, and arrangements have been made for its prompt
recording in the Offices of the Clerks of the other counties in the
State of New York in which such recording is required); and all taxes
and recording fees required to be paid as of the date hereof with
respect to the execution, recording or filing of the Indenture and the
issuance of the Bonds have been paid.
(iv) The Company has good and indefeasible title in fee simple to
substantially all of its bondable real property (except that no opinion
need be given with respect to leasehold interests, easements, riparian
rights, flowage rights, and property of a similar character) and good
and valid title to all other property and assets owned by the Company
(including such leasehold interests) and intended to be subject to the
lien of the Indenture (except such as have been disposed of in
accordance with the provisions of the Indenture) and in both cases free
and clear of all liens, charges and encumbrances, except the lien of
the Indenture and liens or charges of the character of "excepted
encumbrances" as defined in Section 1.02 of the Indenture and except
the lien of one or more mortgages identified in such opinion, which
lien is subject and subordinate in all respects to the lien of the
Indenture; and the descriptions of all such properties and assets
contained in the Indenture are adequate for the purposes of the
Indenture.
(v) The franchises, permits and licenses of the Company included
in the properties subject to the lien of the Indenture are valid and
are adequate to give the Company the nonexclusive right to carry on its
business in the locations and substantially in the manner in which it
is now being conducted.
(vi) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under
the Act, and the Registration Statement, as of its effective
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date, the Prospectus, as of the date of this Agreement, and any
amendment or supplement thereto, as of its respective date, complied as
to form in all material respects with the requirements of the Act, the
Trust Indenture Act and the Rules and Regulations; although such
counsel has not independently verified the accuracy or completeness of
information contained in the Registration Statement or Prospectus or
any amendment or supplement thereto, such counsel has no reason to
believe that either the Registration Statement, as of its effective
date, or the Prospectus, as of the date of this Agreement, or any such
amendment or supplement, as of such respective dates, contained any
untrue statement of material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; the descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel does not know of any
legal or governmental proceedings required to be described in the
Prospectus which are not described as required, nor of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) All regulatory consents, authorizations, approvals and
filings required by Federal law or the laws of the State of New York
for the authorization, issuance, sale and delivery of the Bonds by the
Company to the Underwriters have been obtained or made; provided,
however, that no opinion need be given concerning the qualification of
the Bonds for sale under the Blue Sky law of the State of New York.
In rendering the foregoing opinion, Nixon Peabody LLP may rely, as to matters of
fact, upon certificates and written statements of officers and employees of, and
accountants for, the Company and of officers of the Trustee.
(d) The Representatives shall have received from Sullivan & Cromwell,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Company, the validity of the Bonds, the
Registration Statement, the Prospectus, and other related matters as such
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(e) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are true and
correct, that the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
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Registration Statement or any part thereof has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission, and
that, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change in the financial position
or results of operations of the Company except as set forth or contemplated in
the Prospectus.
(f) On or prior to the day following the date of this Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of PricewaterhouseCoopers LLP, confirming that they are independent
public accountants within the meaning of the Act and the Rules and Regulations,
and stating in effect that (i) in their opinion, the financial statements and
schedules audited by them and incorporated by reference in the prospectus
relating to the Bonds contained in the Registration Statement, as amended as of
the date of such letter, comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; (ii) they have made a review of any unaudited financial
statements incorporated by reference in such prospectus in accordance with
standards established by the American Institute of Certified Public Accountants;
(iii) on the basis of the review referred to in (ii) above, a reading of the
latest available interim financial statements of the Company, inquiries of
officials of the Company responsible for financial and accounting matters and
other specified procedures (not constituting an audit in accordance with
generally accepted auditing standards), nothing came to their attention that
caused them to believe that (A) the unaudited financial statements incorporated
by reference in such prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
applicable published Rules and Regulations thereunder or require any material
modifications in order for them to be in conformity with generally accepted
accounting principles, (B) if unaudited financial information for a twelve-month
period is included in such prospectus, such financial information is not derived
from unaudited financial statements that are stated on a basis substantially
consistent with that of the audited financial statements included in such
prospectus, or (C) at the date of the latest available balance sheet read by
such accountants, there was any change in the capital stock, short-term
indebtedness or long-term debt of the Company, any decrease in the amount of
current assets over current liabilities or any decrease in shareholders' equity
or total capitalization, as compared with amounts shown on the latest balance
sheet included in such prospectus, except in all cases set forth in this clause
(C) for changes, increases or decreases which such prospectus discloses have
occurred or may occur, or which are described in such letter; and (iv) they have
compared certain dollar amounts, percentages and other financial information
derived from the general accounting records of the Company contained or
incorporated by reference in such prospectus and specified by the
Representatives (in each case to the extent that such dollar amounts,
percentages and other financial information are derived from the general
accounting records of the Company subject to the internal controls of the
Company's accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such letter,
and have found such dollar amounts, percentages and other financial information
to be in agreement with such results, except as otherwise specified in such
letter.
(g) The Representatives shall have received a letter, dated the Closing
Date, of PricewaterhouseCoopers LLP, which reconfirms the matters set forth in
their letter delivered pursuant to subsection (f) of this Section and states in
effect that (i) in their
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opinion, any financial statements or schedules audited by them and included in
the Prospectus and not covered by their letter delivered pursuant to subsection
(f) of this Section comply as to form in all material respects with the
applicable accounting requirements of the Act and the applicable published Rules
and Regulations; (ii) they have made a review of any unaudited financial
statements included in the Prospectus and not covered by their letter delivered
pursuant to subsection (f) of this Section in accordance with standards
established by the American Institute of Certified Public Accountants; (iii) on
the basis of the review referred to in (ii) above, a reading of the latest
available interim financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that caused them to
believe that (A) the unaudited financial statements, if any, included in the
Prospectus and not covered by their letter delivered pursuant to subsection (f)
of this Section do not comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations or require any material modifications in order for them to be in
conformity with generally accepted accounting principles, (B) if unaudited
financial information for a twelve-month period is included in the Prospectus,
such financial information is not derived from unaudited financial statements
that are stated on a basis substantially consistent with that of the audited
financial statements included in the Prospectus, (C) the unaudited capsule
information, if any, included in the Prospectus does not agree with the amounts
set forth in the unaudited consolidated financial data from which it was
derived, or (D) at the date of the latest available balance sheet read by such
accountants, there was any change in the capital stock, short-term indebtedness
or long-term debt of the Company, any decrease in the amount of current assets
over current liabilities or any decrease in shareholders' equity or total
capitalization, as compared with amounts shown on the latest balance sheet
included in the Prospectus, except in all cases set forth in this clause (D) for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and (iv) they have compared
certain dollar amounts, percentages and other financial information derived from
the general accounting records of the Company contained or incorporated by
reference in the Prospectus and specified by the Representatives (in each case
to the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the Company
subject to the internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and other
procedures specified in such letter, and have found such dollar amounts,
percentages and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(h) Prior to the Closing Date, the Underwriters shall have received
evidence that the Bonds have received ratings of Aaa from Moody's Investors
Service, Inc. and AAA from Standard & Poor's Ratings Services.
(i) At the Closing Date, the Policy shall have been duly authorized,
executed and delivered by the insurer named in Schedule I ("Insurer") to the
insurance trustee named therein and shall be in full force and effect, and the
Underwriters shall have received an opinion of counsel for the Insurer, dated
the Closing Date, and a certificate of an officer of the Insurer, dated the
Closing Date, in each case covering such matters as the Underwriters may
reasonably request.
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The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request.
7. Indemnification. (a) The Company will indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter or such controlling person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any preliminary prospectus used in connection with the offering of
the Bonds, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
specifically for use therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any preliminary prospectus or any preliminary prospectus supplement
used in connection with the offering of the Bonds, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein; and will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; 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. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party
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similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such proceeding,
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of 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 parties and the indemnified party and the representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other 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 the Underwriters on the other in connection with
the statements or omissions which 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 the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Bonds underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Bonds hereunder and the aggregate principal
amount of Bonds which such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the aggregate principal amount of all
the Bonds, the Representatives may make
11
arrangements satisfactory to the Company for the purchase of such Bonds by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the principal amount of Bonds that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters so default and
the aggregate principal amount of Bonds with respect to which such default or
defaults occur is more than the above principal amount of Bonds and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Bonds by other persons are not made within thirty-six hours after such default,
this Agreement will terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except as provided in Section 9. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter or the Company or any of its officers or directors or any
controlling person, and will survive delivery of and payment for the Bonds. If
this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Bonds by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect. If the purchase of the Bonds by
the Underwriters is not consummated for any reason other than solely because of
the termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (iii), (iv) or (v) of Section 6(b), the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Bonds.
10. Notices. All communications hereunder will be in writing, and, if
sent to the Underwriters, will be mailed, delivered or sent by recognized
overnight courier to the Representatives at their addresses set forth in
Schedule I hereto, or, if sent to the Company, will be mailed, delivered or sent
by recognized overnight courier to it both at 89 East Avenue, Rochester, New
York 14649, Attention: Treasurer and Nixon Peabody LLP, Clinton Square, Post
Office Box 31051, Rochester, New York, 14603-1051, Attention: Roger W. Byrd,
Esq.; provided, however, that any notice to an Underwriter pursuant to Section 7
will be mailed, delivered or sent by recognized overnight courier to such
Underwriter at its address as provided to the Company by the Representatives.
11. Successors. This Underwriting Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 7, and
no other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives will be binding upon all the
Underwriters. In the event that no Underwriters are named in Schedule II hereto,
the term "Underwriters" shall be deemed for all purposes of this Agreement to be
the Underwriter or Underwriters named as Representatives in
12
Schedule I hereto, the principal amount of the Bonds to be purchased by any such
Underwriter shall be the amount set forth opposite its name in Schedule I hereto
and all references to the "Representatives" shall be deemed to be the
Underwriter or Underwriters named in such Schedule I.
13. Governing Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such executed counterparts shall together
constitute one and the same Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
ROCHESTER GAS AND ELECTRIC
CORPORATION
By /s/Mark Keogh
---------------------------------
Name: Mark Keogh
Title: Vice President and Treasurer
13
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of the
date set forth in Schedule I hereto.
MORGAN STANLEY & CO. INCORPORATED
Acting on its behalf and as
Representative of the several Underwriters
named in Schedule II hereto.
By:/s/Harold J. Hendershot
-------------------------------------
Name: Harold J. Hendershot
Title: Executive Director
14
SCHEDULE I
Name and address of Representative of the Underwriters (and principal amount of
Bonds to be purchased by each if no Schedule II is attached):
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Title of Bonds: First Mortgage 6.65% Bonds, Due 2032, Series UU
Aggregate principal amount: $125,000,000
Denominations: $25 and integral multiples thereof
Interest rate: 6.65% per annum, commencing June 20, 2002
Supplemental Indenture dated as of: June 15, 2002
Interest payment dates: March 15, June 15, September 15 and December 15,
commencing September 15, 2002
Maturity date: June 15, 2032
Purchase price: 96.85%
Price to Public: 100.00%
Selling Concession: 2.00% ($0.50 per $25.00 principal amount)
Reallowance: 1.00% ($0.25 per $25.00 principal amount)
Redemption Provisions: not subject to redemption at the option of the Company
until June 20, 2007; thereafter subject to redemption at
the option of the Company at 100.00% of the principal
amount.
Date of Underwriting Agreement: June 6, 2002
Time and date of delivery and payment ("Closing Date"):
Time: 10 a.m., New York time
Date: June 20, 2002
Financial Guaranty Insurance Policy:
Insurer: Ambac Assurance Corporation
Date of Policy: June 20, 2002
SCHEDULE II
Underwriter Principal Amount
----------- ----------------
Morgan Stanley & Co. Incorporated $36,362,500
Salomon Smith Barney Inc. 36,350,000
UBS Warburg LLC 36,350,000
A.G. Edwards & Sons, Inc. 625,000
Bear, Stearns & Co. Inc. 625,000
CIBC World Markets Corp. 625,000
Dain Rauscher Wessels 625,000
Deutsche Bank Securities Inc. 625,000
H&R Block Financial Advisors, Inc. 625,000
HSBC Securities (USA) Inc. 625,000
Legg Mason Wood Walker, Inc. 625,000
Prudential Securities Incorporated 625,000
Quick and Reilly 625,000
Charles Schwab & Co., Inc. 625,000
TD Waterhouse Investor Services, Inc. 625,000
U.S. Bancorp Piper Jaffray Inc. 625,000
Wells Fargo Van Kasper, LLC 625,000
Advest Inc. 312,500
Robert W. Baird & Co. Incorporated 312,500
Banc One Capital Markets, Inc. 312,500
BB&T Capital Markets, a Division of Scott & Stringfellow 312,500
William Blair & Co. 312,500
Davenport & Company LLC 312,500
D.A. Davidson & Co. 312,500
Fahnestock & Co. Inc. 312,500
Fifth Third Securities, Inc. 312,500
J.J.B. Hilliard, W.L. Lyons, Inc. 312,500
Janney Montgomery Scott LLC 312,500
C.L. King & Associates, Inc. 312,500
McDonald Investments Inc., a KeyCorp Company 312,500
McGinn, Smith & Co., Inc. 312,500
Mesirow Financial, Inc. 312,500
Morgan Keegan & Company, LLC 312,500
Parker/Hunter Incorporated 312,500
Pershing/ a Division of Donaldson, Lufkin & Jenrette 312,500
Raymond James & Associates, Inc. 312,500
Ryan, Beck & Co. LLC 312,500
Southwest Securities, Inc. 312,500
Stifel, Nicolaus & Company Incorporated 312,500
SunTrust Capital Markets, Inc. 312,500
-------------
Total.............................................. $125,000,000