1
EXHIBIT 1.1
OHIO EDISON COMPANY
________ PREFERRED SECURITIES OF
__% TRUST PREFERRED CAPITAL SECURITIES, SERIES A
OF
OHIO EDISON FINANCING TRUST
UNDERWRITING AGREEMENT
[__________, 199_]
2
_______, 199_
MORGAN STANLEY & CO. INCORPORATED
and the other Underwriters listed on Annex A hereto
C/O MORGAN STANLEY & CO. INCORPORATED
1251 AVENUE OF THE AMERICAS
New York, N.Y. 10020
Dear Sirs:
Ohio Edison Financing Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Ohio Edison Company, an
Ohio corporation, (hereinafter called the "Company"), as owner of the trust
interests represented by common securities (the "Common Securities") issued by
the Trust and as guarantor (the "Guarantor"), propose that the Trust issue an
aggregate number of _____ of its preferred securities (the "Preferred
Securities") designated as __% Trust Preferred Capital Securities representing
undivided beneficial interests in the assets of the Trust, guaranteed by the
Guarantor as to the payment of distributions, and as to payments on liquidation
or redemption, to the extent set forth in the Guarantee Agreement dated as of
_____ , 199_ (the "Guarantee") between the Guarantor and The Bank of New York,
as trustee (the "Guarantee Trustee"). The proceeds of the sale of the
Preferred Securities by the Trust are to be invested in ___% Junior
Subordinated Debentures, Series A, Due [2025] (the "Subordinated Debentures")
of the Company, to be issued pursuant to an Indenture dated as of _____, 199_
(the "Indenture") between the Company and The Bank of New York, as trustee (the
"Debenture Trustee"). The Preferred Securities shall have the designation,
preferences, rights, powers and restrictions set forth in the Trust's Amended
and Restated Trust Agreement (the "Trust Agreement"). The Preferred Securities
and the Subordinated Debentures are more fully described in the Prospectus
hereinafter referred to.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Nos. 33-_____ and
33-_____), including a prospectus relating to the Preferred Securities, the
Guarantee and the Subordinated Debentures; and will file with or
electronically transmit for filing to, the Commission a prospectus supplement
specifically relating to the terms of the Preferred Securities, the Guarantee
and the Subordinated Debentures pursuant to Rule 424 under the Securities Act
of 1933. Such registration statement has become effective. The term
"Registration Statement" means such registration statement as amended to the
date of this Agreement. The term "Basic Prospectus" means the prospectus
included in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the prospectus supplement specifically relating to the
Preferred Securities, as filed with or electronically transmitted for
filing to, the Commission pursuant to Rule 424. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Preferred Securities together with a Basic Prospectus. As used herein, the
terms "Registration Statement," "Basic Prospectus" and "preliminary prospectus"
shall include in each case the documents, if any, incorporated by reference
therein.
I.
The Company and the Trust hereby agree that the Trust sell to the
several Underwriters named on Annex A hereto, and the Underwriters, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agree to purchase from the Trust, severally
and not jointly, the number of Preferred Securities set forth on Annex A hereto
opposite their names at a purchase price of $____ per Preferred Security.
The Company agrees to issue the Subordinated Debentures to the Trust
concurrently with the issue and sale of the Preferred Securities as
contemplated herein. The Company hereby guarantees the timely
3
performance by the Trust of its obligations under Articles I and III herein.
The Trust agrees to purchase the Subordinated Debentures with the proceeds of,
and concurrently with, the issue and sale of the Preferred Securities.
As compensation to the Underwriters for their commitments hereunder,
and because the proceeds of the sale of the Preferred Securities will be loaned
by the Trust to purchase the Subordinated Debentures from the Company, the
Company hereby agrees to pay on the Closing Date to the Underwriters an amount
equal to (i) in the case of such number of Preferred Securities as are reserved
by the Underwriters for sale to institutional investors, $________per Preferred
Security and (ii) in the case of such number of Preferred Securities as are not
so reserved, $________per Preferred Security. The Underwriters shall inform
the Company in writing, not later than 12:00 noon New York time on the business
day prior to the Closing Date, of the number of Preferred Securities reserved
for sale to such institutional investors.
II.
The Company and the Trust are advised by you that the Underwriters
propose to make a public offering of their respective Preferred Securities as
soon after this Underwriting Agreement is entered into as in your judgment is
advisable. The Company and the Trust are further advised by you that the
Preferred Securities are to be offered to the public at a public offering price
of $25 per Preferred Security and to certain dealers selected by you at a price
which represents a concession not in excess of $____ per Preferred Security
under the public offering price of the Preferred Securities, and that any
Underwriter may allow, and such dealers may reallow, a concession not in excess
of $____ per Preferred Security to certain other dealers.
III.
Payment for the Preferred Securities shall be made to the Trust or its
order by certified or official bank check or checks in immediately available
funds at the office of Winthrop, Stimson, Putnam & Roberts, One Battery Park
Plaza, New York, N.Y., at 10:00 o'clock A.M., New York time, on _____ __, 199_
or at such other time on the same or such other date, not later than _____ __,
199_, as we shall mutually agree upon delivery of the certificate(s)
representing the Preferred Securities. Certificates for the Preferred
Securities shall be in definitive form and registered in such names and in such
denominations as you shall request in writing not less than two full business
days prior to the date of delivery. The time and date of such payment and
delivery are herein referred to as the Closing Date.
IV.
The joint and several obligations of the Company and the Trust and the
several obligations of the Underwriters hereunder are subject to the condition
that an appropriate order or orders of the Public Utilities Commission of Ohio
permitting the issuance and sale of the Preferred Securities as contemplated
hereby and containing no provision unacceptable to the Underwriters (it being
understood that no order known to the Underwriters and in effect on the date
hereof contains any such unacceptable provision) shall have been entered not
later than the close of business on the day when the public offering price
shall be determined and shall be in full force and effect as of the Closing
Date.
The several obligations of the Underwriters hereunder are subject to
the following further conditions:
(a)(i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, no order of the Commission
directed to the adequacy or accuracy of any document incorporated by
reference therein shall be in effect, and no proceedings for either
purpose shall be pending before or threatened by the Commission; (ii)
subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any downgrading in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization", as such term is defined
for purposes of Rule 436 (g) (2) under the Securities Act (a
"Rating"); (iii) (x) subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, no notice shall have been
given of an intended or potential downgrading of the Rating
2
4
of any of the Company's securities and (y) there shall not have
occurred any change, or any development involving a prospective
change, in the condition, financial or other, or in the earnings,
business or operations, of the Company and its subsidiaries taken as a
whole, from that set forth in the Registration Statement, that in your
judgment is material and adverse and which, in either case, makes it,
in your judgment, impracticable to market the Preferred Securities;
and (iv) you shall have received on the Closing Date certificates,
dated the Closing Date and signed by an executive officer of the
Company and an Administrative Trustee (as defined in the Trust
Agreement) of the Trust, in each case to the effect set forth
in clause (i) above, and in the case of the Company's certificate but
not the Trust's certificate, to the effect set forth in clause (ii)
above and in each case to the effect that the representations and
warranties of the Company or the Trust, as the case may be, contained
herein are true and correct as of the Closing Date and in the case of
the Company's certificate but not the Trust's certificate, to the
effect that there shall not have occurred any material adverse
changes, in the condition, financial or other, or in the earnings,
business or operations, of the Company and its subsidiaries taken as a
whole, from that set forth in the Registration Statement. In each
case, the officer or trustee signing and delivering such
certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
(b) You shall have received, on and as of the Closing Date,
the favorable opinion of Anthony J. Alexander, Esq., Senior Vice
President and General Counsel for the Company, or of such other member
or members of the bar of the State of Ohio who may be designated for
that purpose by the Company and who shall not be unsatisfactory to
your counsel, to the effect that (i) the Company was duly organized
and is validly existing under the laws of the State of Ohio, is duly
qualified to do business in the Commonwealth of Pennsylvania as a
foreign corporation, and has due corporate authority to carry on the
public utility business in which it is engaged and to own and operate
the properties owned and used by it in such business; (ii) the Trust
was duly created and is validly existing in good standing as a
business trust under the Business Trust Act (the "Delaware Act") of
the State of Delaware, and, under the Delaware Act and the Trust
Agreement, has the power and authority to own property and conduct its
business as described in the Prospectus, (iii) the summary of the
terms of the Preferred Securities and the Subordinated Debentures
contained in the Prospectus fairly describes the provisions thereof
required to be described by the registration statement form; (iv) the
Preferred Securities have been duly authorized by the Trust Agreement,
and, when issued and delivered against payment therefor as provided
herein, will be validly issued, and subject to the qualifications
set forth in such opinion, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust, not subject to any
preemptive or similar rights; the certificates for the Preferred
Securities are in due and proper form; neither the Company as holder
of the Common Securities nor any holder of outstanding shares of
capital stock of the Company is entitled to preemptive or other rights
to subscribe for the Preferred Securities; (v) the Subordinated
Debentures have been duly authorized, executed, authenticated and
delivered and constitute binding and valid obligations of the Company
in accordance with the terms thereof, subject to the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the
enforcement of creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and by an implied covenant of good
faith and fair dealing; (vi) all legally required proceedings in
connection with the authorization, issue and validity of the Preferred
Securities and the Subordinated Debentures and the sale of the
Preferred Securities by the Trust and the sale of the Subordinated
Debentures by the Company to the Trust in accordance with this
Agreement have been taken and all legally required orders, consents or
other authorizations or approvals of the Commission, of the Public
Utilities Commission of Ohio and of any other public boards or bodies
(other than in connection with or in compliance with the provisions of
the securities or Blue Sky laws of any jurisdiction, as to which such
counsel need not express an opinion) have been obtained; (vii) the
Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); the Registration
Statement has become effective under the Securities Act of 1933, as
amended (the "Act"), and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act; (viii) this Agreement has been duly authorized, executed and
delivered by the Company and the Trust and constitutes a valid and
3
5
legally binding agreement of each of the Company and the Trust, in
accordance with its terms, subject to any principles of public policy
limiting the right to enforce the indemnification provisions contained
herein and subject to general principles of equity which may limit the
availability of equitable remedies; (ix) the execution, delivery and
performance by the Company of the Trust Agreement has been duly
authorized by all necessary corporate action on the part of the
Company; the Trust Agreement has been duly executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with the
terms thereof, subject to the effect of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting the enforcement of creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
by an implied covenant of good faith and fair dealing; (x) the
Registration Statement, the Prospectus and any supplements or
amendments thereto (except for the financial statements and other
financial and statistical data therein, as to which such counsel need
not express an opinion), as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the applicable
rules and regulations of the Commission thereunder, (xi) each document
incorporated by reference in the Prospectus, as such document was
originally filed pursuant to the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act") (except for the financial
statements and other financial and statistical data therein, as to
which such counsel need not express an opinion), complied as to form
when so filed in all material respects with the requirements of the
Act or the Exchange Act pursuant to which it was filed and the
applicable rules and regulations of the Commission thereunder, (xii)
to the best knowledge of such counsel, no order directed to the
adequacy of any document incorporated by reference in the Prospectus
has been issued by the Commission, and no challenge by the Commission
has been made to the adequacy of any such document; (xiii) the
descriptions in the Registration Statement and Prospectus of
franchises, regulations, statutes, legal and governmental proceedings
and contracts and other documents are accurate as to legal matters,
and such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or
the Prospectus which are not so described (or the descriptions of
which are not incorporated by reference therein) as required, nor of
any contracts or 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 which are not so described (or
the descriptions of which are not incorporated by reference therein)
or filed as required. In rendering such opinion, such counsel may
rely as to matters of Pennsylvania law upon the opinion of Robert P.
Wushinske, Esq., Vice President, Secretary and General Counsel of the
Company's subsidiary, or of such other member or members of the bar of
the Commonwealth of Pennsylvania who may be designated for that
purpose by the Company and who shall not be unsatisfactory to your
counsel. In addition, such counsel shall state that nothing has come
to the attention of such counsel which would lead such counsel to
believe that the Registration Statement or any post-effective
amendment thereto (except for the financial and statements and other
financial and statistical data included therein, as to which such
counsel need express no opinion), at the time such Registration
Statement or any amendment became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented or modified by the filing of a document incorporated by
reference therein (except for the financial statements and other
financial and statistical data therein, as to which such counsel need
express no opinion), contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(c) You shall have received, on and as of the Closing Date,
the favorable opinion of Winthrop, Stimson, Putnam & Roberts, also
counsel for the Company and the Trust, covering the matters in (b)
above, except subdivision (xiii) thereof and stating that the Trust
will not be classified as an association taxable as a corporation for
Federal income tax purposes. In rendering such opinion, such counsel
may rely as to all matters of Ohio and Pennsylvania law upon the
opinion referred to in (b) above. In addition, such counsel shall
state that nothing has come to the attention of such counsel which
would lead such counsel to believe that the Registration Statement or
any post-effective amendment thereto
4
6
(except for the financial statements and other financial and
statistical data therein, as to which such counsel need express no
opinion), at the time such Registration Statement or any amendment
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein (except for the financial
statements and other financial and statistical data therein, as to
which such counsel need express no opinion), contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) You shall have received, on and as of the Closing Date,
the favorable opinion of Richards, Layton & Finger, Delaware
counsel to the Company and the Trust, to the effect that (i) the Trust
was duly created and is validly existing in good standing as a
business trust under the Business Trust Act (the "Delaware Act") of
the State of Delaware and under the Delaware Act and the Trust
Agreement, has the business trust power and authority to own property
and conduct its business as described in the Prospectus; (ii) the
Preferred Securities have been duly authorized by the Trust Agreement
and, when issued and delivered against payment therefor as provided
herein, will be validly issued, and subject to the qualifications set
forth in such opinion and described below, fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust, not subject to any preemptive rights; certificates for the
Preferred Securities are in due and proper form; (iii) this Agreement
has been duly authorized by the Trust; and (iv) no authorization,
approval, consent or order of any Delaware court or governmental
authority or agency is required to be obtained by the Trust solely in
connection with the issuance and sale of the Preferred Securities.
Such counsel may note that the Holders of the Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of
the State of Delaware. Such counsel may also note that the Holders of
the Preferred Securities may be obligated, pursuant to the Trust
Agreement, to (i) provide indemnity and/or security in connection with
and pay taxes or governmental charges arising from transfers or
exchanges of Preferred Security Certificates and the issuance of
replacement Preferred Security Certificates, and (ii) provide security
and indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and remedies under the Trust
Agreement.
(e) You shall have received, on and as of the Closing Date,
the favorable opinion of Simpson Thacher & Bartlett, counsel for the
Underwriters, with respect to the issue and sale of the Preferred
Securities. In rendering such opinion, such counsel may rely as to
all matters of Ohio and Pennsylvania law upon the opinion referred to
in (b) above. In addition, such counsel shall state that nothing has
come to the attention of such counsel which would lead such counsel to
believe that the Registration Statement or any post-effective
amendment thereto (except for the financial statements or other
financial data therein, as to which such counsel need express no
opinion), at the time such Registration Statement or any amendment
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein (except for the financial
statements and other financial data therein, as to which such counsel
need express no opinion), contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(f) You shall have received at the Closing a letter dated the
Closing Date, in form and substance satisfactory to you, from Arthur
Andersen LLP, independent public accountants, containing statements
and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in or
incorporated by reference in the Registration Statement or the
Prospectus.
5
7
V.
In further consideration of the agreements of the Underwriters herein
contained the Company and the Trust covenant as follows:
(a) To furnish without charge to you a signed copy of the
Registration Statement, including all exhibits filed with the
Registration Statement and with the documents incorporated by
reference therein (other than exhibits which are incorporated by
reference therein) and to each other Underwriter a copy of the
Registration Statement without exhibits and, during the period
mentioned in paragraph (c) below, as many copies of the Prospectus and
any documents incorporated by reference therein at or after the date
thereof and any amendments and supplements thereto as you may
reasonably request The terms "supplement" and "amendments" or "amend"
as used in this Agreement shall include all documents filed by the
Company and the Trust with the Commission subsequent to the date of
the Basic Prospectus, pursuant to the Exchange Act which are deemed to
be incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus or filing with the Commission any document
pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the
period referred to in paragraph (c) below, to furnish to you a copy of
each such proposed amendment, supplement or document.
(c) If, during such period (not in excess of nine months)
after the first date of the public offering of the Preferred
Securities as in the opinion of your counsel a prospectus covering the
Preferred Securities is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus
or modify the information incorporated by reference therein in order
to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus or modify such
information to comply with law, forthwith to prepare and furnish, at
its own expense, to the Underwriters and to the dealers (whose names
and addresses you will furnish to the Company) to which Preferred
Securities may have been sold by you on behalf of the Underwriters,
and to any other dealers upon request, either amendments or
supplements to the Prospectus or modifications to the documents
incorporated by reference therein, so that the statements in the
Prospectus as so amended, supplemented or modified will not, in the
light of the circumstances when such Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with
law.
(d) To endeavor to qualify the Preferred Securities for offer
and sale under the securities or Blue Sky laws of such jurisdiction as
you shall reasonably request and to pay all filings fees, expenses and
legal fees (including fees and disbursements of counsel) in connection
with such qualification and in connection with the determination of
the eligibility of the Preferred Securities as legal investments under
the laws of such jurisdictions as you may designate as well as any
filing fees payable in connection with a review of the offering of the
Preferred Securities by the National Association of Securities
Dealers, Inc.
(e) To use its best efforts to effect the listing of the
Preferred Securities on the New York Stock Exchange ("NYSE"), subject
to official notice of issuance, as soon as practicable after the date
hereof.
(f) To make available generally to the Company's security
holders as soon as practicable an earning statement covering a twelve
month period beginning after the date of this Agreement which earning
statement shall satisfy the provisions of Section 11(a) of the Act.
(g) During the period beginning on the date of this Agreement
and continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any (A) securities of the
Company or the Trust substantially similar to the Subordinated
Debentures or the
6
8
Preferred Securities or (B) other beneficial interests of the Trust,
in each case without your prior consent.
(h) In the case of the Guarantor, to issue the Guarantee
concurrently with the issue and sale of the Preferred Securities as
contemplated herein.
(i) To use the net proceeds received by it from the sale of
the Preferred Securities, in the case of the Trust, and the
Subordinated Debentures, in the case of the Company, pursuant to this
Agreement in the manner specified in the Prospectus under the caption
"Use of Proceeds".
VI.
The Company and the Trust represent and warrant to each Underwriter
that (i) each preliminary prospectus 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 Act complied when so filed in all material
respects with the Act and the applicable rules and regulations of the
Commission thereunder, and each document incorporated by reference therein
complied when originally filed in all material respects with the requirements
of the Act or the Exchange Act pursuant to which it was filed and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement and the Prospectus, as amended or supplemented or
modified by the filing of a document incorporated by reference therein, will
comply (at a time of such amendment, supplement or modification and, if
amended, supplemented or modified prior to the Closing Date, on the Closing
Date) in all material respects with the Act and the applicable rules and
regulations thereunder, and (iii) the Registration Statement, as amended or
supplemented or modified by the filing of a document incorporated by reference
therein, will not contain (at the time of such amendment, supplement or
modification and, if amended, supplemented or modified prior to the Closing
Date, on the Closing Date) any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; except
that these representations and warranties do not apply to statements or
omissions in the Registration Statement or the Prospectus, in each case as
amended, supplemented or modified, or any preliminary prospectus, based upon
information furnished to the Company and the Trust in writing by you or by any
Underwriter expressly for use therein.
The Company and the Trust agree to jointly and severally indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (if
used within the period set forth in paragraph (c) of Article V hereof and as
amended, supplemented or modified if the Company or the Trust shall have
furnished any amendments, supplements or modifications thereto) or any
preliminary Prospectus (including documents incorporated by inference therein),
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 any such untrue statement or omission or alleged untrue statement or
omission based upon information furnished in writing to the Company or the
Trust by you or by any Underwriter expressly for use therein; provided,
however, that the foregoing indemnification with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased any of the Preferred Securities, if a
copy of the Prospectus (other than documents incorporated by reference therein)
as then amended or supplemented or modified (if the Company shall have
furnished any amendments, supplements or modifications thereto) had not been
sent or given by or on behalf of such Underwriter to such person at or prior to
the written confirmation of the sale of such Preferred Securities to such
person.
The Company agrees jointly and severally to indemnify and hold
harmless the Trust from and against any and all losses, claims, damages and
liabilities whatsoever, as due from the Trust under the above paragraph of this
Article VI hereof.
7
9
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Trust, its directors, its officers who sign
the Registration Statement and any person controlling the Company and the Trust
to the same extent as the foregoing indemnity from the Company and the Trust to
each Underwriter, but only with reference to information relating to such
Underwriter furnished in writing by you or by such Underwriter expressly for
use in the Registration Statement or the Prospectus or any preliminary
prospectus.
In case 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 bc sought (the "indemnifying party") in writing and 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 action (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 a conflict of interest between them. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees and expenses of more
than one separate counsel for all such indemnified parties. Such counsel shall
be designated in writing by you in the case of parties indemnified pursuant to
the second preceding paragraph, and by the Company and the Trust in the case of
parties indemnified pursuant to the first preceding paragraph. 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.
If the indemnification provided for in this Article VI is unavailable
to an indemnified party under the second or third paragraphs hereof in respect
to any losses, claims, damages or liabilities referred to therein, then each
indemnifying party in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Company and the Trust on the
one hand and of 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, including relative
benefit. The relative fault of the Company and the Trust on the one hand and
of the Underwriters on the other 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 and the Trust or by the Underwriters and
the parties' relevant intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Trust and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Article VI were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages 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 Article VI, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Preferred Securities underwritten by it
and distributed to the public were offered to the public exceeds the amounts 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 to
contribute pursuant to this Article VI are several in the proportions which the
number of Preferred Securities set forth opposite their names in
8
10
Annex A bear to the total number of Preferred Securities so set forth in Annex
A, or in such other proportions as may be determined pursuant to Article VIII,
and not joint.
The indemnity and contribution agreements contained in this Article VI
and the representations and warranties of the Company and the Trust in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter to any person controlling any Underwriter or by or on behalf
of the Company and the Trust, any of its directors, officers or any person
controlling the Company and the Trust and (iii) acceptance of and payment for
the Preferred Securities.
VII.
This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)
(i) through (iv), such event singly or together with any other such event makes
it, in your judgment, impracticable to market the Preferred Securities.
VIII.
This Agreement shall become effective when it has been executed by the
Company, the Trust and you.
If any one or more of the Underwriters shall fail or refuse to
purchase the Preferred Securities which it or they have agreed to purchase
hereunder, and the total number of Preferred Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the total number of Preferred Securities, the other
Underwriters shall be obligated severally in the proportions which the number
of Preferred Securities set forth opposite their names in Article I bear to the
total number of Preferred Securities so set forth opposite the names of all
such nondefaulting Underwriters, or in such other proportions as you may
specify, to purchase the Preferred Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase; provided that in no
event shall the number of Preferred Securities which any Underwriter has agreed
to purchase pursuant to Article I hereof be increased pursuant to this Article
VIII by an amount in excess of one-ninth of such number of Preferred Securities
without the consent of such Underwriter. If any Underwriter or Underwriters
shall fail or refuse to purchase Preferred Securities and the total number of
Preferred Securities with respect to which such default occurs is more than
one-tenth of the total number of the Preferred Securities and arrangements
satisfactory to you and the Company and the Trust for the purchase of such
Preferred Securities are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or of the Company and the Trust except as provided in Article VI.
In any such case which does not result in such termination, either you or the
Company and the Trust shall have the right to postpone the Closing Date, but in
no event for longer than seven days in each case, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company and the
Trust to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company and the Trust shall be unable to
perform their obligations under this Agreement, the Company and the Trust will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all
9
11
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by them in connection with this Agreement or the offering
contemplated hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
10
12
This Agreement may be executed in counterparts each of which shall be
deemed to constitute an original and all of which shall be deemed to be one and
the same instrument binding on all of the parties hereto.
Very truly yours,
OHIO EDISON COMPANY
By:________________________________
Name and Title:_________________
OHIO EDISON FINANCING TRUST
By: OHIO EDISON COMPANY, Depositor
By:_____________________________
Name and
Title:___________________________
Accepted _____ __, 199_
MORGAN STANLEY & CO. INCORPORATED
and the other Underwriters listed on Annex A hereto
By: MORGAN STANLEY & CO. INCORPORATED
By: ___________________________________
Name and Title:
Acting severally on behalf of themselves and on behalf of the several
Underwriters named herein and on Annex A hereto.
11
13
ANNEX A
TO UNDERWRITING
AGREEMENT
LIST OF UNDERWRITERS
NUMBER OF
NAME SHARES
---- ---------
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
=======