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Exhibit 1(b)
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
REGISTRATION AGREEMENT
September 29, 1998
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
McDonald & Company Securities, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The Cleveland Electric Illuminating Company, an Ohio
corporation (the "Company"), proposes to issue and sell to Morgan Stanley & Co.
Incorporated and the other purchasers identified in Schedule I of the Placement
Agreement (defined below) (collectively, the "Purchasers"), on the terms set
forth in a placement agreement of even date herewith (the "Placement
Agreement"), $125,000,000 aggregate principal amount of First Mortgage Bonds,
6.86% Series Due 2008 (the "Bonds"), to be issued pursuant to the Mortgage and
Deed of Trust dated July 1, 1940, to Guaranty Trust Company of New York as
Trustee, under which The Chase Manhattan Bank is successor trustee (the
"original Indenture"), as supplemented and modified in certain respects by
indentures supplemental thereto, including the Seventy-Eighth Supplemental
Indenture to be dated as of October 1, 1998 (the "Supplemental Indenture," and
the original Indenture, as supplemented by all indentures supplemental thereto,
the "Indenture") between the Company and The Chase Manhattan Bank, a New York
banking corporation, as trustee (the "Trustee").
As an inducement to the Purchasers to enter into the Placement
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with the Purchasers for the benefit of the registered holders of
the Bonds (including, without limitation, the Purchasers) and the Exchange Bonds
(as defined below) (collectively, the "Holders"), as follows:
SECTION 1. REGISTERED EXCHANGE OFFER. The Company shall use
its best efforts to prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to an offer (the "Registered Exchange
Offer") to the Holders of Transfer Restricted Bonds (as defined in Section 6
hereof), who are not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer, to issue and deliver to such
Holders, in exchange for the Bonds, a like aggregate principal amount of debt
securities (the "Exchange Bonds") of the Company issued under the Indenture and
identical in all material respects to the Bonds (excluding the transfer
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restrictions relating to the Bonds) that would be registered under the
Securities Act. The Company shall use its best efforts to cause that Exchange
Offer Registration Statement to become effective under the Securities Act within
150 days after the date of original issue of the Bonds and shall keep the
Exchange Offer Registration Statement effective for not less than 30 days (or
longer, if required by applicable law) after the date on which notice of the
Registered Exchange Offer is mailed to the Holders (that period being called the
"Exchange Offer Registration Period").
If the Company effects the Registered Exchange Offer, the
Company will be entitled to close the Registered Exchange Offer 30 days after
the commencement thereof if the Company has accepted all the bonds validly
tendered by the 30th day after that commencement in accordance with the terms of
the Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of the Registered Exchange Offer to
enable each Holder of Transfer Restricted Bonds electing to exchange those
Transfer Restricted Bonds for Exchange Bonds (assuming that Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Bonds in the ordinary course of that Holder's business and has no
arrangement with any person to participate in the distribution of the Exchange
Bonds, and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade those Exchange Bonds
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. In connection with the Registered
Exchange Offer, the Company shall use its best efforts to consummate the
Registered Exchange Offer and shall comply with the applicable requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and other
applicable laws and regulations in connection with the Registered Exchange
Offer.
The Company acknowledges that, pursuant to current
interpretations by the Commission's staff of section 5 of the Securities Act, in
the absence of an applicable exemption therefrom, (a) each Holder that is a
broker-dealer electing to exchange Bonds, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Bonds (an "Exchanging Dealer"), is required to deliver a prospectus containing
the information set forth in Annex A hereto on the cover, in Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section, in
connection with a sale of any such Exchange Bonds received by that Exchanging
Dealer pursuant to the Registered Exchange Offer; and (b) if the Purchasers are
permitted to and elect to sell Exchange Bonds acquired in exchange for Bonds
constituting any portion of an unsold allotment, they are required to deliver a
prospectus containing the information required by Item 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with that sale.
The Company shall include in the prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Purchasers, that contains a summary statement of
the positions taken or policies made by the staff
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of the Commission with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of Exchange Bonds received by that broker-dealer in the Registered
Exchange Offer (a "Participating Broker-Dealer"), whether those positions or
policies have been publicly disseminated by the staff of the Commission or those
positions or policies, in the reasonable judgment of the Purchasers based on
advice of counsel (which may be in-house counsel), represent the prevailing
views of the staff of the Commission.
The Company shall use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit that prospectus to be lawfully
delivered by the Purchasers and all Exchanging Dealers subject to the prospectus
delivery requirements of the Securities Act and shall make that prospectus
available to the Purchasers and those Exchanging Dealers for such period of time
after the consummation of the Registered Exchange Offer as those persons must
comply with those requirements in order to resell the Exchange Bonds, but that
period shall not exceed 120 days (unless extended pursuant to Section 3 below),
and those persons are not authorized by the Company to deliver and shall not
deliver any such prospectus after the expiration of that period in connection
with the resales contemplated by this paragraph.
The Company shall make available for a period of 120 days
after the consummation of the Registered Exchange Offer a copy of the
prospectus, and any amendment or supplement thereto, forming part of the
Exchange Offer Registration Statement, to any broker-dealer for use in
connection with any resale of any Exchange Bonds. The Bonds and the Exchange
Bonds are herein collectively called the "Securities."
In connection with the Registered Exchange Offer, the Company
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date
notice thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York, which may be the Trustee or an affiliate of the Trustee;
(d) permit Holders to withdraw tendered Bonds at any time
prior to the close of business, New York time, on the last business day
on which the Registered Exchange Offer remains open; and
(e) otherwise comply in all material respects with all
applicable laws.
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As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(i) accept for exchange all the Bonds validly
tendered and not withdrawn pursuant to the Registered
Exchange Offer;
(ii) deliver, or cause to be delivered, to the
Trustee for cancellation all the Bonds so accepted for
exchange; and
(iii) issue, and cause the Trustee to authenticate
and deliver promptly to each Holder of the Bonds, Exchange
Bonds, equal in principal amount to the Bonds of that Holder
so accepted for exchange.
The Supplemental Indenture will provide that the Exchange
Bonds will not be subject to the transfer restrictions set forth in the
Supplemental Indenture.
Interest on each Exchange Bond issued pursuant to the
Registered Exchange Offer will accrue from the last interest payment date on
which interest was paid on the Bonds surrendered in exchange therefor or, if no
interest has been paid on those Bonds, from the date of original issue of those
Bonds.
Each Holder participating in the Registered Exchange Offer
will be required to represent to the Company at the time of the consummation of
the Registered Exchange Offer (a) that any Exchange Bond received by that Holder
will be acquired in the ordinary course of business; (b) that the Holder will
have no arrangement or understanding with any person to participate in the
distribution of the Bonds or the Exchange Bonds within the meaning of the
Securities Act; (c) that the Holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company or if it is an affiliate, that Holder
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable; (d) if that Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, any
distribution of the Exchange Bonds; and (v) if that Holder is a broker-dealer,
that it will receive Exchange Bonds for its own account in exchange for Bonds
that were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of those Exchange Bonds.
Notwithstanding any other provision hereof, the Company will
ensure that (a) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder; (b) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (c) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
that prospectus, at the time of issuance does not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to
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make the statements therein, in light of the circumstances under which they were
made, not misleading.
SECTION 2. SHELF REGISTRATION. If (a) the Company determines
that a Registered Exchange Offer, as contemplated by Section 1 hereof, is not
available or may not be consummated as soon as practicable after the last date
the Registered Exchange Offer is open because it would violate applicable law or
the applicable interpretations of the staff of the Commission; (b) the
Registered Exchange Offer is not consummated within 180 days after the date of
original issue of the Bonds; (c) the Purchasers so request with respect to the
Bonds not eligible to be exchanged for Exchange Bonds in the Registered Exchange
Offer and held by them following consummation of the Registered Exchange Offer;
or (d) any Holder (other than an Exchanging Dealer) is not eligible to
participate in the Registered Exchange Offer, or any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer does not
receive freely tradeable Exchange Bonds on the date of the exchange for validly
tendered (and not withdrawn) Bonds:
(i) The Company shall use all reasonable efforts to
prepare and file, as promptly as practicable, with the
Commission and thereafter to cause to be declared effective a
registration statement (the "Shelf Registration Statement"
and, together with the Exchange Offer Registration Statement,
a "Registration Statement") on an appropriate form under the
Securities Act relating to the offer and sale of the Transfer
Restricted Bonds (as defined below), by the Holders thereof
from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statement and
Rule 415 under the Securities Act (hereinafter, the "Shelf
Registration"), but no Holder (other than the Purchasers) is
entitled to have any Securities held by it covered by that
Shelf Registration Statement unless that Holder agrees in
writing to be bound by all the provisions of this Agreement
applicable to that Holder.
(ii) The Company shall use all reasonable efforts to
keep the Shelf Registration Statement continuously effective
in order to permit the prospectus included therein to be
lawfully delivered by the Holders of the relevant Securities,
until the earlier of (A) the end of the period referred to in
Rule 144(k) under the Securities Act after the original issue
date of the Bonds expires (or the end of such longer period as
may result from an extension pursuant to Section 3 below), and
(B) the date on which all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto.
(iii) Notwithstanding any other provision of this
Agreement to the contrary, the Company shall cause the Shelf
Registration Statement and the related prospectus and any
amendment or supplement thereto, as of the effective date of
the Shelf Registration Statement, amendment or supplement, (A)
to comply in all material respects with the applicable
requirements of the Securities Act and the rules and
regulations of the Commission and (B) not to contain any
untrue statement of a material fact or omit to state a
material fact required to be stated
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therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
SECTION 3. REGISTRATION PROCEDURES. In connection with any
Shelf Registration contemplated by Section 2 hereof and, to the extent
applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the
following provisions shall apply:
(a) The Company shall (i) furnish to the Purchasers, prior to
the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to
the prospectus included therein and shall not file any such
Registration Statement or amendment thereto or any prospectus or any
supplement thereto (including any document that, upon filing, would be
incorporated or deemed to he incorporated by reference therein and any
amendment to any such document other than documents required to be
filed pursuant to the Exchange Act) to which the Purchasers shall
reasonably object, except for any Registration Statement or amendment
thereto or prospectus or supplement thereto (a copy of which has been
previously furnished to the Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel))
which counsel to the Company has advised the Company in writing is
required to be filed, notwithstanding any such objection, in order to
comply with applicable law; (ii) include information substantially to
the effect set forth (A) In Annex A hereto on the cover, (B) in Annex B
hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, (C) in Annex C hereto in the "Plan of
Distribution" section, of the prospectus forming a part of the Exchange
Offer Registration Statement, and (D) include the information set forth
in Annex D hereto in the Letter of Transmittal delivered in connection
with the Registered Exchange Offer, (iii) to the extent required by law
or interpretation of the staff of the Commission, if requested by the
Purchasers, include the information required by Item 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in the
prospectus forming a part of the Exchange Offer Registration Statement;
and (iv) to the extent required by law or interpretation of the staff
of the Commission, in the case of a Shelf Registration Statement,
include the names of the Holders who propose to sell Securities
pursuant to the Shelf Registration Statement as selling security
holders.
(b) The Company shall notify promptly the Purchasers, the
Holders and any Participating Broker-Dealer from whom the Company has
received prior written notice stating that it will be a Participating
Broker-Dealer in the Registered Exchange Offer (which notice pursuant
to clauses (ii) through (v) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made) and, if requested by the Purchasers, the
Holders or any such Participating Broker-Dealer, confirm such notice in
writing:
(i) when the Registration Statement or any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective;
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(ii) of any request by the Commission for an
amendment or supplement to the Registration Statement or the
prospectus included therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceeding for that
purpose;
(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension of
the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for that purpose;
(v) of the happening of any event that requires the
Company to make changes in the Registration Statement or the
prospectus in order that the Registration Statement or the
prospectus does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading; and
(vi) of any determination by the Company that a
post-effective amendment to a Registration Statement would be
appropriate.
(c) The Company shall make every reasonable effort to prevent
the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of the
Registration Statement and shall provide prompt written notice to the
Purchasers and each Holder of the withdrawal of any such order.
(d) The Company shall furnish to each Holder of Securities
included in the Shelf Registration, without charge, at least one
conformed copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference or
exhibits thereto unless a Holder so requests in writing).
(e) The Company shall deliver to the Purchasers, and to any
other Holder that so requests, without charge, at least one conformed
copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference or
exhibits thereto, unless the Purchasers or any such Holder so request
in writing).
(f) The Company shall deliver to each Holder of Securities
included in the Shelf Registration, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
that Holder may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or an
amendment
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or supplement thereto by each of the selling Holders of the Securities
in connection with the offering and sale of the Securities covered by,
and as contemplated by, the prospectus, or any amendment or supplement
thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to each Purchaser, any
Participating Broker Dealer and any Exchanging Dealer, without charge,
as many copies of the final prospectus included in the Exchange Offer
Registration Statement and any amendment or supplement thereto as that
person or entity may reasonably request, during a period not exceeding
120 days following the consummation of the Registered Exchange Offer.
The Company consents, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by the
Purchasers, if necessary, any Participating Broker-Dealer and any
Exchanging Dealer and such other persons as may be required to deliver
a prospectus following the Registered Exchange Offer in connection with
the offering and sale of the Exchange Bonds covered by the prospectus,
or any amendment or supplement thereto, included in the Exchange Offer
Registration Statement, but no such person or entity is authorized by
the Company to deliver and no such person or entity shall deliver any
such prospectus after the expiration of the period referred to in the
immediately preceding sentence, in connection with any resale
contemplated by this paragraph.
(h) Prior to any public offering of Securities pursuant to any
Registration Statement, the Company shall use its best efforts to
register or qualify or cooperate with the Holders of the Securities
included therein and their respective counsel in connection with the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of such states of the United
States as any Holder of the Securities reasonably requests in writing
and shall do any and all other acts or things necessary or advisable to
enable that Holder to offer and sell in such jurisdictions the
Securities covered by that Registration Statement owned by that Holder,
but the Company is not required to (i) qualify generally or as a
foreign corporation to do business in any jurisdiction where it is not
then so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it
is not then so subject.
(i) The Company shall cooperate with the Holders of the
Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to any
Shelf Registration Statement free of any restrictive legend and in such
denominations (consistent with the provisions of the Indenture) and
registered in such names as the Holders may request at least two
business days prior to closing of any sale of the Securities pursuant
to such Shelf Registration Statement.
(j) If any event contemplated by paragraphs (ii) through (vi)
of Section 3(b) above occurs during the period in which the Company is
required to maintain an effective Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and any
other required document so that, as thereafter delivered to Holders of
the Bonds or purchasers of Securities, the prospectus will not contain
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
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statements therein, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Purchasers, the
Holders of the Securities and known Participating Broker-Dealer in
accordance with paragraphs (ii) through (vi) of Section 3(b) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Purchasers, the Holders of the
Securities and such Participating Broker-Dealer shall suspend use of
that prospectus until the Company has amended or supplemented the
prospectus to correct that misstatement or omission, and the period of
effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement
provided for in Section 1 above shall each be extended by the number of
days from and including the date of the giving of that notice to and
including the date when the Purchasers, the Holders of the Securities
and any known Participating Broker-Dealer shall have received that
amended or supplemented prospectus pursuant to this Section 3(j), but
the minimum time period before the Company is entitled to close the
Registered Exchange Offer will he extended only to the extent required
by the Commission. Each Purchaser, Holder and Participating
Broker-Dealer agrees that on receipt of any such notice from the
Company it will not distribute copies of the prospectus that are the
subject of that notice and will retain those copies in its files.
(k) Not later than the effective date of the applicable
Registration Statement, the Company will obtain a CUSIP number for the
Transfer Restricted Bonds or the Exchange Bonds, as the case may be, and
provide the Trustee with printed certificates for the Bonds or the
Exchange Bonds, as the case may be, in a form eligible deposit with The
Depository Trust Company.
(l) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to the security holders, (or otherwise provide in
accordance with section 11 (a) of the Securities Act) an earnings
statement satisfying the provisions of section 11 (a) of the Securities
Act, no later than 45 days after the end of the 12-month period (or 90
days, if that period is a fiscal year) that begins with the first month
of the Company's first fiscal quarter commencing after the effective
date of the Registration Statement, which statement will cover that
12-month period.
(m) The Company shall cause the supplemental indenture
pursuant to which the Exchange Bonds are to be issued to be qualified
under the Trust Indenture Act of 1939, as amended, in a timely manner
and to contain any changes that are necessary for that qualification. If
that qualification would require the appointment of a new trustee under
the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be
sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding that Holder and the distribution of
the Securities as the Company may from time to time reasonably request
for inclusion in the Shelf Registration Statement, and the Company may
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exclude from that registration the Securities of any Holder that
unreasonably fails to furnish that information within a reasonable time
after receiving that request.
(o) In the case of any Shelf Registration, the Company shall
enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other
action, if any, as the Holders of a majority of the Securities being
sold shall reasonably request in order to facilitate the disposition of
the Securities pursuant to that Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall
make available for inspection by a representative of the Holders of
Securities being sold, their counsel and an accountant retained by those
Holders, in a manner designed to permit underwriters to satisfy their
due diligence investigation under the Securities Act, all financial and
other records, pertinent corporate documents and properties of the
Company customarily inspected by underwriters in primary underwritten
offerings and shall cause the officers, directors and employees of the
Company and its subsidiaries to supply all information reasonably
requested by, and customarily supplied in connection with primary
underwritten offerings to, any such representative, attorney or
accountant in connection with that registration, but any records,
information or documents that are designated by the Company as
confidential at the time of delivery thereof shall be kept confidential
by those persons, unless (i) those records, information or documents are
in the public domain or otherwise publicly available (ii) disclosure of
those records, information or documents, is required by a court or
administrative order; or (iii) disclosure of those records, information
or documents, in the written opinion of counsel to those persons, is
otherwise required by law (including, without limitation, pursuant to
the Securities Act).
(q) In the case of any Shelf Registration, the Company, if
requested by any Holder of Securities covered thereby, shall (i) cause
its counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to the selling Holder and the
managing underwriters, if any, covering matters customarily covered in
opinions requested in underwritten offerings; (ii) cause its officers to
execute and deliver such documents and certificates and updates thereof
as may be reasonably requested by any underwriter of the applicable
Securities, and which are customarily delivered in underwritten
offerings, to evidence the continued validity of the representations and
warranties of the Company made pursuant to, and to evidence compliance
with any customary conditions contained in, an underwriting agreement;
and (iii) cause independent public accountants to provide to the selling
Holders of the applicable Securities (and any underwriter therefor) a
comfort letter in customary form and covering matters of the type
customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation
as contemplated and only if permitted, by Statement of Auditing
Standards No. 72.
(r) If a Registered Exchange Offer is to be consummated, upon
delivery of the Bonds by Holders to the Company (or to any other Person
designated by the Company) in exchange for the Exchange Bonds, the
Company shall mark, or caused to be marked, on
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the Bonds so exchanged that those Bonds are being canceled in exchange
for the Exchange Bonds, and in no event shall the Bonds be marked as
paid or otherwise satisfied.
(s) The Company shall use its best efforts to cause the
Securities covered by a Registration Statement to be rated by two
nationally recognized statistical rating organizations (as that term is
defined in Rule 436(g)(2) under the Securities Act) if so requested by
Holders of a majority in aggregate principal amount of the Securities
covered by that Registration Statement, or by the managing underwriters,
if any.
(t) If any broker-dealer registered under the Exchange Act
underwrites any Securities or participates as a member of an
underwriting syndicate or selling group or "assists in the
distribution" (within the meaning of the Conduct Rules of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
Holder of those Securities or as an underwriter, a placement or sales
agent or a broker or dealer in respect thereof, or otherwise, the
Company shall assist such broker-dealer in complying with the
requirements of those Rules and By-Laws, including by (i) if those
Rules, including Rule 2720, shall so require, engaging a "qualified
independent underwriter" (as defined in Rule 2720) to participate in
the preparation of the Registration Statement relating to those
Securities, to exercise usual standards of due diligence in respect
thereto and, if any portion of the offering contemplated by that
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Securities,
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 5
hereof; and (iii) providing such information to that broker-dealer as
may be required in order for that broker-dealer to comply with the
requirements of the Conduct Rules of the NASD.
SECTION 4. REGISTRATION EXPENSES. The Company shall pay all
fees and expenses incident to the performance of or compliance with this
Agreement by the Company including, without limitation, (a) all Commission,
stock exchange or NASD registration and filing fees; (b) all fees and expenses
incurred in connection with compliance with state securities or Blue Sky laws
(including reasonable fees and disbursements of counsel for any underwriters or
holders in connection with Blue Sky qualification of any of the Securities); (c)
all out of pocket expenses of any persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any prospectus, any amendment or supplement to either thereof, any
underwriting agreement, securities sales agreement or other document relating to
the performance of and compliance with this Agreement; (d) all rating agency
fees; and (e) the fees and disbursements of counsel for the Company and, in the
event of a Shelf Registration, reasonable fees and disbursements of one firm of
counsel designated by the Holders of a majority in principal amount of the
Securities covered thereby and of the independent public accountants of the
Company, including the expense of any special audit or "cold comfort" letter
required by or incident to that performance and compliance, but excluding fees
and expenses of counsel to the underwriters and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Securities by a Holder.
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SECTION 5. INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless each Holder of Securities, any Participating
Broker-Dealer, and each person, if any, who controls that Holder or
Participating Broker-Dealer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, that Holder or Participating Broker-Dealer, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus (as amended or supplemented if the Company
shall have furnished any amendment or supplement thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, 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 on information
relating to that Holder or Participating Broker-Dealer furnished to the Company
in writing by that Holder or Participating Broker-Dealer expressly for use
therein.
(b) Each Participating Broker-Dealer and Holder of securities,
severally and not jointly, agrees to indemnify and hold harmless the Company,
other selling Holders and participating Broker-Dealers, directors of the
Company, the officers of the Company who sign a Registration Statement and each
person, if any, who controls the Company or any selling Holder or Participating
Broker-Dealer, within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to that Holder or Participating Broker-Dealer, but only with
reference to information relating to that Holder or Participating Broker-Dealer
furnished to the Company in writing by that Holder or Participating
Broker-Dealer expressly for use in a Registration Statement, any prospectus or
any amendment or supplement to any thereof.
(c) If any proceeding (including any governmental
investigation) is instituted involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or (b) above, that person (the
"indemnified party") shall promptly notify the person against whom that
indemnity may be 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 that proceeding and
shall pay the fees and expenses of that counsel related to that proceeding. In
any such proceeding, any indemnified party may retain its own counsel, but the
fees and expenses of that counsel will be at the expense of that indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of that counsel, or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate because of actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be
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reimbursed as they are incurred. If an indemnified party includes (x) the
Purchasers or such controlling persons of the Purchasers, that firm will be
designated in writing by Morgan Stanley & Co. Incorporated; or (y) Holders of
Securities (other than the Purchasers) or controlling persons of those Holders,
that firm will be designated in writing by the Holders of a majority in
aggregate principal amount of those Securities. In all other cases, that firm
will be designated by the Company. The indemnifying party will not be liable for
any settlement of any proceeding effected without its written consent, but if
settled with that 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 that settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party has requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it will be liable for any settlement of any
proceeding effected without its written consent if (i) that settlement is
entered into more than 90 days after receipt by the indemnifying party of the
aforesaid request and (ii) the indemnifying party shall not have reimbursed the
indemnified party in accordance with that request prior to the date of that
settlement. No indemnifying party may, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by that indemnified party, unless
that settlement includes an unconditional release of that indemnified party from
all liability on claims that are the subject matter of that proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under that paragraph, in lieu of
indemnifying that indemnified party thereunder, shall contribute to the amount
paid or payable by that indemnified party as a result of those losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties, on the one hand, and the
indemnified party or parties, on the other hand in connection with the
statements or omissions that resulted in those losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by that Holder, Participating Broker-Dealer or other
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent that statement or omission. The Holders, and
Participating Broker-Dealers' respective obligations to contribute pursuant to
this Section 5 are several in proportion to the respective amount of Bonds they
have purchased, not joint.
(e) The Company, each Participating Broker-Dealer and each
Holder agree that it would not be just or equitable if contribution pursuant to
this Section 5 were determined by PRO RATA allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in subsection (d) of this Section 5. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in subsection (d) above is deemed to include, subject to the
limitations set forth above, any legal
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or other expenses reasonably incurred by that indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder of Securities is required to contribute
any amount in excess of the amount by which the total price at which the
securities were sold by that Holder pursuant to a Registration Statement exceeds
the amount of any damages that Holder has otherwise been required to pay by
reason of that untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) is entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution provisions contained in
this Section 5 will 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 Holder or Participating Broker-Dealer or any person controlling
that Holder or Participating Broker-Dealer or by or on behalf of the Company,
its officers or directors or any person controlling the Company; and (iii) the
sale of the Securities. The remedies provided for in this Section 5 are not
exclusive and do not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 6. ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES.
(a) Additional interest (the "Additional Interest") with respect to the
Securities will be assessed as follows if any of the following events occurs
(each event identified in clause (i), (ii) or (iii) below, a "Failure to
Register"):
(i) If by the 150th day after the date of the
original issue of the Bonds (that date of issue, the "Closing
Date"), neither the Exchange Offer Registration Statement nor
a Shelf Registration Statement has been filed with the
Commission;
(ii) If by the 180th day after the Closing Date, the
Registered Exchange Offer is not consummated and, if required
in lieu thereof, the Shelf Registration Statement is not
declared effective by the Commission; or
(iii) If, after the 180th day after the Closing Date,
and after either the Exchange Offer Registration Statement or
the Shelf Registration Statement is declared effective, (A)
that Registration Statement thereafter ceases to be effective
prior to completion of the Exchange Offer or the sale of all
the Transfer Restricted Bonds registered pursuant to the Shelf
Registration Statement, as the case may be; or (B) that
Registration Statement or the related prospectus ceases to be
usable in connection with resales of Transfer Restricted Bonds
during the periods specified in this Agreement (except as
permitted in paragraph (b) of this Section 6) because either
(1) any event occurs as a result of which the related
prospectus forming part of that Registration Statement would
include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein in the light of the circumstances under which they
were made not misleading, or (2) it shall be necessary to
amend that Registration Statement, or supplement the related
prospectus, to comply with the Securities Act or the Exchange
Act, or the respective rules thereunder.
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Additional Interest shall accrue on the Bonds over and above
the interest set forth in the title of the Bonds from and including the date on
which any such Failure to Register shall occur to but excluding the date on
which all such Failures to Register have been cured, at a rate of 0.50% per
annum.
(b) A Failure to Register referred to in Section 6(a)(iii) is
deemed not to be continuing in relation to a Registration Statement or the
related prospectus if (i) that Failure to Register has occurred solely as a
result of (x) the filing of a post-effective amendment to that Registration
Statement to incorporate annual audited financial information with respect to
the Company, when such post-effective amendment is not yet effective and needs
to be declared effective to permit Holders to use the related prospectus or (y)
the occurrence of other material events or developments with respect to the
Company or its Affiliates that would need to be described in that Registration
Statement or the related prospectus, and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement that
Registration Statement and related prospectus to describe those events or, in
the case of material developments that the Company determines in good faith must
remain confidential for business reasons, the Company is proceeding promptly and
in good faith to take such steps as are necessary so that those developments
need no longer remain confidential, but in any case, if any Failure to Register
(including any referred to in clause (x) or (y), above) continues for a period
in excess of 45 days, Additional Interest will be payable in accordance with the
above paragraph from the day following the last day of that 45-day period until
the date on which that Failure to Register is cured.
(c) Any Additional Interest payable will be payable on the
regular interest payment dates with respect to the Bonds, in the same manner as
the manner in which regular interest is payable. The amount of Additional
Interest for any period will be determined by multiplying the applicable
Additional Interest rate by the principal amount of the applicable Bonds,
multiplied by a fraction, the numerator of which is the number of days that
Additional Interest rate was applicable during that period (determined on the
basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360.
(d) "Transfer Restricted Bond" means each Security until (i)
the date on which that Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Bond in the Registered Exchange
Offer; (ii) following the exchange by a broker-dealer in the Registered Exchange
Offer of a Transfer Restricted Bond for an Exchange Bond, the date on which that
Exchange Bond is sold to a purchaser who receives from that broker-dealer on or
prior to the date of that sale a copy of the prospectus contained in the
Exchange Offer Registration Statement; (iii) the date on which that Security has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement: or (iv) the date on which that
Security is distributed to the public pursuant to Rule 144 under Securities Act
or is saleable pursuant to Rule 144(k) under the Securities Act.
SECTION 7. RULES 144 AND 144A. The Company shall use its best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely
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manner and, if at any time the Company is not required to file those reports, it
will, upon the request of any Holder of Transfer Restricted Bonds, make publicly
available other information so long as is necessary to permit sales of
Securities pursuant to Rules 144 and 144A. The Company covenants that it will
take such further action as any Holder of Transfer Restricted Bonds may
reasonably request, all to the extent required from time to time to enable that
Holder to sell Transfer Restricted Bonds without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). Upon request by a
Purchaser, the Company will provide a copy of this Agreement to prospective
purchasers of Bonds identified to the Company by that Purchaser. Upon the
request of any Holder of Transfer Restricted Bonds, the Company shall deliver to
that Holder a written statement as to whether it has complied with those
requirements. Notwithstanding the foregoing, nothing in this Section 7 requires
the Company to register any of its securities under the Exchange Act.
SECTION 8. UNDERWRITTEN REGISTRATIONS. If any of the Transfer
Restricted Bonds covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Bonds included in that offering, but the Managing
Underwriters must be reasonably satisfactory to the Company.
No person may participate in any underwritten registration
hereunder unless that person (a) agrees to sell that person's Transfer
Restricted Bonds on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve those
arrangements; and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of those underwriting arrangements.
SECTION 9. MISCELLANEOUS. (a) AMENDMENTS AND WAIVERS.
The provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents departures from the provisions hereof may not be given,
except by the Company and the written consent of the Holders of a majority in
principal amount of the Securities affected thereby.
(b) NOTICES. All notices and other communications provided for
or permitted hereunder must be given in writing by hand-delivery, first-class
mail, facsimile transmission, or air courier that guarantees overnight delivery:
(i) if to a Holder of Securities, at the most current
address given by that Holder to the Company in accordance with
this Section 9(b), which address initially is, with respect to
each Holder, the address of that Holder to which confirmation
of the sale of the Bonds to that Holder was first sent by the
Purchasers, with a copy in like manner to you as follows:
Morgan Stanley & Co. Incorporated
1585 Broadway
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New York, NY 10036
Facsimile: (212) 761-0359
Attention: Managing Director, Syndicate
with a copy to:
Squire, Sanders & Dempsey L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114-1304
Facsimile: (216) 479-8780
Attention: Dynda A. Thomas
(2) if to the Company, at the following address:
The Cleveland Electric Illuminating Company
c/o FirstEnergy Corp.
76 South Main Street
Akron, Ohio 44308
Facsimile: (330) 384-3772
Attention: David L. Feltner, Esq.
with a copy to:
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, NY 10004-1490
Facsimile: (212) 858-1500
Attention: John H. Byington, Jr.
All such notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by the recipient's facsimile machine operator, if
sent by facsimile transmission; and on the day delivered, if sent overnight air
courier guaranteeing next day delivery.
(c) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, entered into, nor may the Company, on or after the date hereof,
enter into, any agreement with respect to the Securities that is inconsistent
with the rights granted to the Holders herein or that otherwise conflicts with
this Agreement.
(d) SUCCESSORS AND ASSIGNS. This Agreement is binding on the
Company and its successors and assigns.
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(e) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed will constitute an original and all of which taken
together constitute one and the same agreement.
(f) GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND IS TO BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
(h) SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein is not affected or impaired thereby.
(i) SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
is required hereunder, Securities held by the Company or its affiliates will not
be counted in determining whether that consent or approval was given by the
Holders of that required percentage.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Purchasers and the Company in accordance with its terms.
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Very truly yours,
THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY
By: /s/ T.F. STRUCK, II
----------------------------
Name: T.F. Struck, II
Title: Treasurer
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
McDonald & Company Securities, Inc.
Acting severally on behalf of
themselves and the several Purchasers
By MORGAN STANLEY & CO. INCORPORATED
By: /s/ Harold J. Hendershot III
---------------------------------------
Name: Harold J. Hendershot III
Title: Vice President
S-1
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ANNEX A
Each broker-dealer that receives Exchange Bonds for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with ANY resale of such Exchange Bonds. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Bonds received in exchange for Existing Bonds where
such Existing Bonds were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 120 days after the consummation of the Exchange Offer, it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
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ANNEX B
Each broker-dealer that receives Exchange Bonds for its own
account in exchange for Bonds, that were acquired by that broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of those
Exchange Bonds. See "Plan of Distribution."
B-1
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ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Bonds for its own
account pursuant the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of those Exchange Bonds. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Bonds received in
exchange for Existing Bonds when those Existing Bonds were acquired as a result
of market making activities or other trading activities. The Company has agreed
that, for a period of 120 days after the consummation of the Exchange Offer,
they will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
______________ 199__, all dealers effecting transactions in the Exchange Bonds
may be required to deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of
Exchange Bonds by broker-dealers. Exchange Bonds received by any broker-dealer
for its own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Bonds or a
combination of those methods of resale, at market prices prevailing at the time
of resale or at prices related to those prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Bonds. Any broker-dealer that resells Exchange Bonds that were received by it
its own account pursuant to the Exchange Offer and any broker or dealer that
participates in distribution of those Exchange Bonds may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Bonds and any commission or concessions received by any
such person may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 120 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus, and any amendment or
supplement to this Prospectus, to any broker-dealer that requests those
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel
for the Holders of the Bonds) other than commissions or concessions of any
broker-dealer and will indemnify the Holders of the Securities (including any
broker-dealer) against certain liabilities, including liabilities under the
Securities Act.
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
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ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND
COPIES OF ANY AMENDMENT OR SUPPLEMENT THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Bonds. If the undersigned is a broker dealer that will receive Exchange Bonds
for its own account in exchange for Bonds that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Bonds;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
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