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MEDIUM-TERM NOTES, SERIES B
Up to U.S. $75,000,000
Maturities from One Year to Thirty Years
AMENDED AND RESTATED
PLACEMENT AGENCY AGREEMENT
among
CONNECTICUT NATURAL GAS CORPORATION,
as Issuer,
and
PAINEWEBBER INCORPORATED
and
A.G. EDWARDS & SONS, INC.,
as Agents.
Dated August 13, 1997
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CONNECTICUT NATURAL GAS CORPORATION
U.S. $75,000,000
Medium-Term Notes, Series B
with Maturities from One Year
to Thirty Years from Date of Issue
Amended and Restated
Placement Agency Agreement
--------------------------
New York, New York
August 13, 1997
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Dear Sirs:
Connecticut Natural Gas Corporation, a Connecticut
corporation (the "Issuer"), confirms its agreement with you, with
respect to the issue and sale by the Issuer of its Medium-Term
Notes, Series B (the "Notes"). This Amended and Restated
Placement Agency Agreement (the "Agreement") amends and restates
the Placement Agency Agreement dated June 14, 1994 among the
Issuer, Smith Barney Inc. and A.G. Edwards & Sons, Inc. pursuant
to which $ 20,000,000 in aggregate principal amount of the Notes
is currently outstanding. The Notes may be sold by the Issuer in
an aggregate principal amount at any time outstanding of up to
$75,000,000. It is understood, however, that the Issuer may from
time to time authorize the issuance of additional Notes and that
such additional Notes may be sold through or to the Agents
pursuant to the terms of the Agreement, all as though the
issuance of such Notes were authorized as of the date hereof.
The Notes will be offered without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in
reliance upon the exemption therefrom provided by Section 4(2) of
the Securities Act including in reliance upon the exemption
therefrom provided by Regulation D promulgated thereunder
("Regulation D") and without qualification of an indenture under
the Trust Indenture Act of 1939 (the "Trust Indenture Act"), in
reliance upon the exemption therefrom provided by Section 304(b)
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thereof. Notes may be resold or otherwise transferred by the
holders thereof only if they are registered under the Securities
Act or if an exemption (including the exemption afforded by Rule
144A ("Rule 144A") of the rules and regulations promulgated under
the Securities Act (the "Rules and Regulations")) from the
registration requirements of the Securities Act is available.
The Notes will be issued under an Issuing and Paying Agency
Agreement dated as of June 14, 1994 (as amended by the First
Amendment thereto dated as of August 13, 1997, the "Issuing and
Paying Agency Agreement"), between the Issuer and State Street
Bank and Trust Company, as successor to Shawmut Bank Connecticut,
National Association, as issuing and paying agent (the "Issuing
and Paying Agent"). All Notes having a common issue date,
maturity date, interest rate and otherwise identical terms are
referred to herein as a "Tranche". The Notes will be issued, and
the terms thereof established, in accordance with the Issuing and
Paying Agency Agreement and, in the case of Notes sold pursuant
to Section 2(a), the Medium-Term Notes Administrative Procedures
attached hereto as Exhibit A (the "Procedures"). The Procedures
set forth in Exhibit A shall remain in effect with respect to
sales solicited by Agents until changed by the Issuer and the
applicable Agent or Agents and the Issuing and Paying Agent. For
the purposes of this Agreement: the term "Agents" shall refer to
any of you acting solely in the capacity as agent for the Issuer
pursuant to Section 2(a) and not as principal; the term
"Purchaser" shall refer to any of you acting solely as principal
pursuant to Section 2(b) and not as agent; and the term "you"
shall refer to any of the firms which are addressees named above,
acting in both such capacities or in either such capacity.
1. REPRESENTATIONS AND WARRANTIES. The Issuer
represents and warrants to each of you as of the date hereof, and
shall be deemed to represent and warrant to each of you at and as
of each time the Issuer gives a notice requesting any of you to
solicit offers as Agent, at and as of each acceptance of an offer
by the Issuer, at and as of the date of each Terms Agreement (as
defined in Section 2(b)), and upon the delivery to the purchaser
(or its agent) pursuant to such offer or to any Purchaser of any
Note pursuant to such Terms Agreement and as of any time that the
Offering Memorandum (as defined below) shall be amended or
supplemented, as the case may be, that:
(a) The Offering Memorandum, as defined below, does
not contain 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; PROVIDED, HOWEVER, that the
foregoing representations and warranties shall not apply to
statements in the Offering Memorandum made in reliance upon
and in conformity with information furnished to the Issuer
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in writing by any of you, or on behalf of any of you which
has been furnished by a person authorized to do so,
specifically for use therein; provided, however, that the
information set forth in Schedule III hereto constitutes the
only information furnished to the Issuer by or on behalf of
the Agents expressly for use in the Offering Memorandum (or
any amendment or supplement thereto). As used in this
Agreement, the term "Offering Memorandum" means the
confidential offering memorandum dated the same date as this
Agreement relating to the Notes, as it may be amended or
supplemented from time to time, including any documents
incorporated by reference therein and any quarterly,
semiannual or annual report of the Issuer delivered to any
of you for delivery together with the Offering Memorandum,
which amendment or supplement may be in the form of a
separate document that does not state that it is a
supplement to the Offering Memorandum, and any reference to
the terms "amend", "amendment" or "supplement" with respect
to the Offering Memorandum shall refer to and include the
filing with the Securities and Exchange Commission (the
"Commission") of any documents incorporated by reference
into the Offering Memorandum after the date hereof.
(b) The financial statements of the Issuer included or
incorporated by reference in, or as an exhibit, attachment
or appendix to, the Offering Memorandum present fairly the
financial position of the Issuer as of the dates indicated
and the results of its operations for the periods specified,
and, except as disclosed in the Offering Memorandum, the
audited financial statements of the Issuer therein have been
prepared in accordance with generally accepted accounting
principles in the United States consistently applied and any
interim financial statements therein have been prepared on a
basis substantially consistent with that of the audited
year-end financial statements, except as otherwise required
or permitted by generally accepted accounting principles for
interim periods in the United States.
(c) Since the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set
forth therein, (i) there has been no material adverse
change, or to the knowledge of the Issuer any development
involving a prospective change, in the financial condition,
earnings, results of operations, business or business
prospects or properties of the Issuer and its subsidiaries
considered as a single enterprise, whether or not arising in
the ordinary course of business and (ii) no rating of any of
the debt securities of the Issuer has been lowered by
Moody's Investors Service, Inc., or Standard & Poor's
Ratings Group (each a "Rating Agency"), nor has there been
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any public announcement that any Rating Agency has under
surveillance or review its rating of any such debt
securities (other than an announcement with positive
implications of a possible upgrading, and no implication of
a possible downgrading, of such rating).
(d) The Issuer and each of its subsidiaries have been
duly incorporated and are validly existing as corporations
in good standing under the laws of the State of Connecticut;
the Issuer has full power, authority and legal right to
execute and deliver this Agreement and the Issuing and
Paying Agency Agreement, to issue the Notes, and to perform
its obligations under this Agreement, the Issuing and Paying
Agency Agreement and the Notes; the execution and delivery
of this Agreement, the Issuing and Paying Agency Agreement
and the Notes have been duly authorized by all necessary
corporate action on the part of the Issuer; each Note, when
completed, executed, authenticated and delivered in
accordance with the Issuing and Paying Agency Agreement
against payment of the consideration therefor will
constitute a legal, valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with
the terms of such Note, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the
enforcement of creditors' rights generally or by general
equity principles, and will entitle its holder to the
benefits of the Issuing and Paying Agency Agreement; and the
Issuing and Paying Agency Agreement conforms and each Note
will conform in all material respects to the descriptions
thereof in the Offering Memorandum.
(e) The execution and delivery of this Agreement and
the Issuing and Paying Agency Agreement, the issuance of any
Note and the consummation of the transactions contemplated
hereunder or thereunder will not conflict with, constitute a
breach of, constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance
(in each case material to the Issuer and its subsidiaries
considered as a single enterprise) upon any property or
assets of the Issuer or any of the Issuer's subsidiaries
pursuant to, the charter or by-laws of the Issuer or any of
the Issuer's subsidiaries, or any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Issuer or any of the Issuer's subsidiaries is a
party or to which any of the property or assets of the
Issuer or any of the Issuer's subsidiaries is subject. No
such action will result in any violation, material to the
Issuer and its subsidiaries considered as a single
enterprise or to the power, authority or ability of the
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Issuer to perform its obligations under this Agreement, the
Issuing and Paying Agency Agreement and the Notes, of the
provisions of any law, decree, regulation, order or judgment
of any court, arbitrator, government, governmental authority
or agency to which the Issuer or any of the Issuer's
subsidiaries or any of their respective properties or assets
is subject.
(f) Since the respective dates as of which information
is given in the Offering Memorandum, except as otherwise set
forth therein, (i) there are no legal or governmental
actions, suits or proceedings before or by any court or
governmental agency or body of any jurisdiction now pending
or, to the knowledge of the Issuer, threatened against the
Issuer or any of the Issuer's subsidiaries or to which any
property of the Issuer or any of the Issuer's subsidiaries
is the subject, other than such actions, suits or
proceedings which in each case will not have a material
adverse effect on the financial condition, earnings, results
of operations, business or business prospects or properties
of the Issuer and its subsidiaries considered as a single
enterprise or the ability of the Issuer to perform its
obligations under this Agreement, the Issuing and Paying
Agent Agreement and the Notes and (ii) there are no such
actions, suits or proceedings pending or, to the knowledge
of the Issuer, threatened, relating to the Notes, their
offering or the Offering Memorandum.
(g) No approval, authorization, consent or other order
of, or any filing with, any government, governmental or
other administrative agency or body is required in
connection with the execution and delivery by the Issuer of
this Agreement and the Issuing and Paying Agency Agreement,
the solicitation of offers to purchase Notes, the issuance
of any Note or the performance by the Issuer of any of its
obligations hereunder or thereunder, except such as may be
required under the blue sky laws of any jurisdiction in
connection with the issue and sale of the Notes. All neces-
sary approvals, if any, have been obtained from the
Connecticut Department of Public Utility Control to
authorize the issuance and sale of the Notes and such
approvals, if any, remain in full force and effect on the
date hereof.
(h) This Agreement and the Issuing and Paying Agency
Agreement have been duly executed and delivered by the
Issuer and constitute the legal, valid and binding
agreements of the Issuer, and are enforceable against the
Issuer in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency,
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reorganization, moratorium or other laws relating to or
affecting creditors' rights generally or by general equity
principles.
(i) The Notes satisfy the requirements set forth in
paragraph (d)(3) of Rule 144A.
(j) Neither the Issuer nor any affiliate (which, for
purposes of this Agreement, shall have the meaning given in
Rule 501(b) of Regulation D of the Rules and Regulations) of
the Issuer has directly or indirectly, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in
respect of, any of the Notes or any other security (as
defined in the Securities Act) which is or will be
integrated with any sale of the Notes in a manner that would
require the registration of the Notes under the Securities
Act or (ii) engaged in any form of general solicitation or
general advertising (within the meaning of Rule 502(c) of
Regulation D of the Rules and Regulations) in connection
with the offering of the Notes.
(k) Neither the registration of the Notes under the
Securities Act nor the qualification of the Issuing and
Paying Agency Agreement under the Trust Indenture Act is
required for the offer and sale of the Notes in the manner
contemplated by the Offering Memorandum and this Agreement.
(l) The Issuer and its subsidiaries have statutory
authority, franchises, permits, easements and consents free
from unduly burdensome restrictions and adequate for the
conduct of the respective businesses in which they are
engaged.
(m) The Issuer is a subsidiary of CTG Resources, Inc.,
a Connecticut corporation ("CTG"), and is exempt from any
provisions imposed upon it as a "subsidiary company" of a
"holding company" under the Public Utility Holding Company
Act of 1935, as amended, except Section 9(a)(2) thereof.
(n) The Issuer is not subject to regulation by the
Federal Energy Regulatory Commission ("FERC") under the
Natural Gas Act, except with respect to certain interstate
sales for resale as to which the Issuer has a blanket
certificate of public convenience and authority from FERC.
(o) All of the issued shares of capital stock of the
Issuer have been duly and validly authorized and issued, and
are fully paid and nonassessable and are owned by CTG. All
of the issued shares of capital stock of each subsidiary of
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the Issuer are owned by the Issuer free and clear of all
liens, encumbrances, equities or claims.
(p) Except as set forth or arising out of facts
disclosed in the Offering Memorandum or incorporated by
reference therein, neither the Issuer nor its subsidiaries
to the best of its knowledge (a) is in violation of any
laws, ordinances, governmental rules and regulations to
which it is subject or (b) has failed to obtain any
licenses, permits, franchises or other governmental
authorizations, necessary to the ownership of its property
or to the conduct of its business, which violation or such
failure to obtain could reasonably be expected to materially
adversely affect the business, business prospects, profits,
properties or condition (financial or otherwise) of the
Issuer and its subsidiaries considered as one enterprise.
(q) Neither the Issuer nor any of its subsidiaries has
sustained since the date of the latest audited financial
statements included or incorporated by reference in the
Offering Memorandum any material loss or interference with
its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering
Memorandum as amended or supplemented.
(r) Each Note will be an unconditional and direct debt
obligation of the Issuer and will rank PARI PASSU with other
unsecured and unsubordinated existing and future obligations
of the Issuer.
(s) The Issuer is not required to register as an
"investment company" under the Investment Company Act of
1940, as amended and will not be required to so register as
a result of the transactions contemplated herein.
(t) No labor dispute with the employees of the Issuer
or its subsidiaries exists or, to the knowledge of the
Issuer, is imminent that could reasonably be expected to
result in any material adverse change in the condition,
financial or otherwise, earnings, results of operations,
properties, business affairs or business prospects of the
Issuer and its subsidiaries considered as a single
enterprise; and the Issuer is not aware of any existing or
imminent labor disturbance by the employees of any of its
principal suppliers, manufacturers or contractors that could
reasonably be expected to result in any material adverse
change in the financial condition, earnings, results of
operations, business or business prospects or properties of
8
the Issuer and its subsidiaries considered as a single
enterprise.
(u) (i) Neither the Issuer nor any of its
subsidiaries is in violation of any federal, state, local or
foreign laws or regulations relating to pollution or
protection of human health, the environment (including,
without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively,
"Materials of Environmental Concern") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), except such violations
which, singly or in the aggregate, could not reasonably be
expected to have a material adverse effect on the financial
condition, earnings, results of operations, business or
business prospects or properties of the Issuer and its
subsidiaries considered as a single enterprise, and (ii) to
the best of the Issuer's knowledge, there are no events or
circumstances that could form the basis of an order for
clean-up or remediation, or any action, suit or proceeding
by any private property or governmental body or agency,
against or affecting the Issuer or any of its subsidiaries
relating to any Materials of Environmental Concern or the
violation of any Environmental Law, which, singly or in the
aggregate, could not reasonably be expected to have a
material adverse effect on the financial condition,
earnings, results of operations, business or business
prospects or properties of the Issuer and its subsidiaries
considered as a single enterprise.
(v) The Issuer and its subsidiaries have filed all
federal, state and local tax returns that are required to be
filed or have duly requested extensions thereof and have
paid all taxes required to be paid by any of them and any
related assessments, fines or penalties, except for any such
tax, assessment, fine or penalty that is being contested in
good faith and by appropriate proceedings; and adequate
charges, accruals and reserves have been provided for in the
financial statements of the Issuer in respect of all
federal, state or local taxes for all periods as to which
the tax liability of the Issuer or any of its subsidiaries
has not been finally determined or remains open to
examination by applicable taxing authorities, except such
failures to file, pay or reserve as would not, singly or in
the aggregate, have a material adverse effect on the
financial condition, earnings, results of operations,
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business or business prospects or properties of the Issuer
and its subsidiaries considered as a single enterprise.
2. APPOINTMENT OF AGENTS; SOLICITATION BY THE AGENTS
OF OFFERS TO PURCHASE; SALES OF NOTES TO A PURCHASER.
(a) (i) Subject to the terms and conditions set forth herein,
the Issuer hereby appoints and authorizes each of the Agents to
act as its agent to solicit offers for the Purchase of Notes from
the Issuer.
(ii) On the basis of the representations and
warranties, and subject to the terms and conditions, set forth
herein, each Agent agrees, severally and not jointly, as agent of
the Issuer, to use its reasonable efforts to solicit offers to
purchase Notes from the Issuer upon the terms and conditions
described in the Offering Memorandum and in the Procedures. In
soliciting offers as agents, each Agent is acting individually,
and not jointly, solely as agent of the Issuer and not as
principal. Each Agent shall use its reasonable efforts to assist
the Issuer in obtaining performance by each purchaser whose offer
to purchase Notes has been solicited by such Agent and accepted
by the Issuer, but such Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity
of any purchaser and shall not have any liability to the Issuer
in the event any such purchase is not consummated for any reason;
PROVIDED that the foregoing shall not operate to release any
Agent from any liability it may otherwise have as a result of its
failure to perform its obligations under this Agreement. Except
as provided in Section 2(b), under no circumstances will any
Agent be obligated to purchase any Notes for its own account. It
is understood and agreed, however, that any Agent may purchase
Notes for its own account as Purchaser pursuant to Section 2(b)
or otherwise as may be agreed or permitted by the Issuer and such
Agent.
(iii) The Issuer reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for
any period of time or permanently, the solicitation of offers to
purchase Notes. Within one business day of receipt of
instructions to that effect from the Issuer, each Agent will
forthwith suspend solicitation of offers to purchase Notes from
the Issuer until such time as the Issuer has advised it that such
solicitation may be resumed.
(iv) The Issuer agrees to pay each Agent a commission,
upon closing, with respect to each sale of Notes by the Issuer as
a result of a solicitation made by such Agent, including any sale
for the account of any affiliate of the Agent, in an amount equal
to that percentage of the aggregate principal amount of the Notes
sold by the Issuer specified on Schedule I hereto for Notes with
10
the relevant term. Such commission shall be payable as specified
in the Procedures.
(v) Subject to the provisions of this Section 2(a) and
to the Procedures, offers for the purchase of Notes may be
solicited by the Agents, as agents for the Issuer, at such time
and in such amounts as the Agents and the Issuer deem advisable.
The Issuer may from time to time offer Notes for sale otherwise
than through an Agent (but subject to Section 4(a)(v)); PROVIDED,
HOWEVER, that so long as this Agreement shall be in effect the
Issuer shall not solicit or accept offers to purchase Notes
through any agent other than an Agent without giving the Agents
prior notice of such appointment and appointing such agent as an
additional Agent hereunder on the same terms and conditions as
provided herein for the Agents. Each such additional Agent shall
execute this Agreement and shall become an Agent for all purposes
hereof.
(vi) Each Agent may, in the exercise of its reasonable
discretion, reject any offer to purchase Notes received by it as
agent of the Issuer and not communicate such offer to the Issuer.
Each Agent shall communicate to the Issuer, orally or in writing,
each such offer that it does not reject and, if such Agent or any
of its affiliates shall be the offeror, shall advise the Issuer
of that fact. The Issuer shall have full discretion to reject
any offer to purchase Notes in whole or, if permitted by the
terms of such offer, in part.
(vii) If the Issuer shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, or, in
the event that the Notes are to be issued in book-entry form, to
deliver a book-entry Note to The Depository Trust Company or such
other depository as may be mutually agreed upon by the parties
hereto, the Issuer shall hold each of you harmless against any
loss, claim or damage arising from or as a result of such default
by the Issuer (except to the extent that such default by the
Issuer shall result from the failure of you yourself to perform
your obligations hereunder).
(b) (i) Subject to the terms and conditions stated
herein, whenever the Issuer and any one (or more) of you
determine that the Issuer shall sell Notes directly to any one
(or more) of you as the Purchaser, each such sale of Notes shall
be made in accordance with the terms of this Agreement and,
unless specifically waived by the Purchaser, a supplemental
agreement relating thereto between the Issuer and the Purchaser.
Each such supplemental agreement (which shall be substantially in
the form of Exhibit B) is herein referred to as a "Terms
Agreement". A Purchaser's commitment to purchase Notes pursuant
to any Terms Agreement shall be deemed to have been made on the
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basis of the representations and warranties of the Issuer
contained herein or therein (if any) and shall be subject to the
terms and conditions set forth herein and in such Terms
Agreement. Each Terms Agreement shall describe the Notes to be
purchased by the Purchaser pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the
Issuer for such Notes specified by reference to the principal
amount of the Notes and the discount to the Purchaser from the
principal amount thereof, the rate at which interest will be paid
on such Notes, the date of issuance of such Notes (the "Closing
Date"), the place of delivery of the Notes and payment therefor,
the method of payment, any modification of, or addition to, the
requirements for the delivery of the opinions of counsel set
forth in Section 6(a)(ii), the certificates from the Issuer or
its officers and the letter from the Issuer's independent public
accountants, and such other terms and conditions as may be
specified therein from time to time. The discount to the
Purchaser with respect to any Notes sold pursuant to this Section
2(b) shall be equal to that percentage of the principal amount
thereof specified in Schedule I hereto for Notes with the
relevant term, unless a higher percentage is specified in the
applicable Terms Agreement.
(ii) The settlement details for Notes sold to a
Purchaser pursuant to any Terms Agreement shall be agreed to
between the Issuer and such Purchaser in the respective Terms
Agreement. If there is no such Terms Agreement, the settlement
details specified in the Procedures shall apply with the
Purchaser filling the roles specified therein of the Agent and
the beneficial owner.
(iii) Nothing contained in this Agreement shall obligate
an Agent to enter into a Terms Agreement with the Issuer or to
otherwise agree to purchase Notes for its own account
3. OFFERING AND SALE OF NOTES. Each party hereto
agrees to perform the respective duties and obligations
specifically provided to be performed by it in the Procedures.
4. AGREEMENTS. (a) The Issuer agrees with each of
you that:
(i) If reasonably necessary to set forth information
that is material to an investment in a Note and not
otherwise contained in the Offering Memorandum, the Issuer
shall prepare a supplement to the Offering Memorandum with
respect to such Note. The Issuer will give each of you
advance notice of its intention to prepare any additional
offering memorandum with respect to the Notes or any
amendment or supplement to the Offering Memorandum (other
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than a Terms Agreement), and will furnish each of you with
copies of any such additional offering memorandum or any
such amendment or supplement proposed to be prepared a
reasonable time in advance of such preparation, and will not
prepare any additional offering memorandum or make any
amendment or supplement to the Offering Memorandum in a form
to which either of you or counsel for the Agents shall
reasonably object. Furthermore, if the Issuer is subject to
the reporting requirements of the Exchange Act, the Issuer
will furnish each Agent with copies of any documents filed
by it with the Commission as soon as possible after such
filing.
(ii) The Issuer shall furnish to each of you such
information and documents relating to the business,
operations and affairs of the Issuer, the Offering Mem-
orandum and any amendments thereof or supplements thereto,
the Issuing and Paying Agency Agreement, the Notes, this
Agreement, any Terms Agreement, the Procedures and the
performance by the parties hereto of their respective
obligations hereunder and thereunder as you may from time to
time and at any time prior to the termination of this
Agreement reasonably request in connection with soliciting
offers to purchase Notes. The Issuer shall notify each of
you promptly (1) if at any time any event occurs which
constitutes (or after notice or lapse of time or both would
constitute) a default or an event of default under the
Notes, the Issuing and Paying Agency Agreement or this
Agreement or (2) of any material adverse change, or to the
knowledge of the Issuer any development involving a
prospective change, in the financial condition, earnings,
results of operations, business or business prospects or
properties of the Issuer and its subsidiaries considered as
a single enterprise.
(iii) The Issuer shall, whether or not any sale of Notes
is consummated, (1) pay all expenses incident to the
performance of its obligations under this Agreement and any
Terms Agreement, including the fees and disbursements of its
accountants and counsel, the cost of printing or other
production and delivery of the Offering Memorandum, all
amendments thereof and supplements thereto, the Issuing and
Paying Agency Agreement, this Agreement, any Terms Agreement
and all other documents relating to the offering of Notes
pursuant hereto and thereto, the cost of preparing,
printing, packaging and delivering the Notes, the fees and
disbursements of the Issuing and Paying Agent and any paying
or other agents under the Issuing and Paying Agency
Agreement and the fees of any agency that rates the Notes,
(2) reimburse each of you on a quarterly basis for all
13
reasonable out-of-pocket expenses incurred by you in
connection with this Agreement and the transactions
contemplated hereby and (3) pay the reasonable fees and
expenses of Jones, Day, Reavis & Pogue incurred in
connection with this Agreement and the transactions
contemplated hereby.
(iv) Each time that the Offering Memorandum is amended
or supplemented (other than solely (1) to provide updated
financial information, (2) to specify additional or revised
terms of the Notes, (3) as a result of the incorporation by
reference of a document filed by the Issuer with the
Securities and Exchange Commission and/or (4) to revise the
plan of distribution), the Issuer shall deliver or cause to
be delivered promptly to each of you an officer's
certificate and an opinion of counsel for the Issuer, dated
the date of such amendment or of such supplement, in form
reasonably satisfactory to each of you, of the same tenor as
the certificate and opinion referred to in Sections 5(a)(ii)
and (iii) but modified to relate to the Offering Memorandum,
this Agreement and the Issuing and Paying Agency Agreement
as then in effect. At the request of either Agent, the
Issuer shall furnish to each of you an officer's certificate
and an opinion of counsel for the Issuer, each dated not
more than five days prior to the date of delivery and in a
form reasonably satisfactory to each of you, of the same
tenor as the certificate and opinion referred to in Sections
5(a)(ii) and (iii) but modified to relate to the Offering
Memorandum, this Agreement and the Issuing and Paying Agency
Agreement as then in effect. At the request of either
Agent, the Issuer shall furnish to you a letter of the
independent accountants for the Issuer of the same tenor as
the letter referred to in Section 5(a)(v), but modified to
relate to the most recent annual and quarterly financial
statements of the Issuer included in the Offering Memorandum
as then in effect pursuant to Section 4(a)(ix).
(v) Unless otherwise specified in any Terms Agreement,
the Issuer shall not, without the prior consent of the
Purchaser thereunder, issue or announce the proposed
issuance of any of its debt securities (including Notes),
which are denominated in the same currency as, and have
similar maturities, similar interest rates and other terms
(including in respect of the method of computing interest)
substantially similar to those of, the Notes being purchased
pursuant to such Terms Agreement, during the period
commencing on the date on which the Issuer accepts an offer
to purchase any Note in accordance with such Terms Agreement
and terminating on the Closing Date for the sale of such
Note.
14
(vi) The Issuer shall deliver to each of you, from time
to time, as many copies of the Offering Memorandum and of
any amendment or supplement that has been prepared with
respect thereto, and as many copies of any financial
statements and other periodic reports that the Issuer may
furnish generally to holders of its debt securities, as each
of you may reasonably request.
(vii) Except as otherwise provided in Section 4(b), if at
any time during the term of this Agreement the Issuer has
been advised that any event shall have occurred or condition
exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Agents or counsel for
the Company, to further amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not
include an untrue statement of material fact or omit to
state a material fact necessary in order to make the
statements therein not misleading in the light of the
circumstances existing at the time the Offering Memorandum
is delivered to a purchaser, immediate telephone notice
shall be given by the Issuer, and confirmed in writing, to
each of you to cease the solicitation of offers to purchase
the Notes in each of your capacity as agent and to promptly
prepare and deliver to each of you such amendment or
supplement (in form and substance satisfactory to counsel
for the Agents) as may be necessary to correct such untrue
statement or omission.
(viii) The Issuer shall furnish to each of you in written
form all interim financial statement information updating
the financial statement information included in, or as an
exhibit, attachment or appendix to, the Offering Memorandum
promptly upon publication of such interim information and,
within 45 days of the end of each such interim period, cause
the Offering Memorandum to be supplemented to include such
financial information and corresponding information for the
comparable period of the preceding fiscal year and financial
information showing year-to-date results for such current
fiscal year together with comparative prior information for
the preceding fiscal year, as well as such other information
and explanations as shall be necessary for an understanding
of such financial information, which supplement may be in
the form of a separate quarterly or semiannual report or
report attached to the Offering Memorandum.
(ix) The Issuer shall furnish to each of you the audited
consolidated financial statements updating the audited
consolidated financial statements and the financial
information included in the Offering Memorandum for each
corresponding fiscal year as promptly as practicable after
15
the publication of such financial statements but in any
event not later than 90 days after the end of such fiscal
year and cause the Offering Memorandum to be supplemented to
include such audited financial statements and the
accountants' report with respect thereto, as well as such
other information and explanations as shall be necessary for
an understanding of such financial statements, which
supplement may be in the form of a separate annual report
attached to the Offering Memorandum.
(x) The Issuer shall (1) furnish to each of you copies
of any proposed supplement or amendment to the Offering
Memorandum (other than any document incorporated by
reference therein) two business days in advance of using
such supplement or amendment and (2) permit each of you to
review and comment as to the form and content thereof;
PROVIDED, HOWEVER, that an amendment or supplement prepared
to set forth terms and conditions of any Notes need not be
furnished to or reviewed by those of you who are not named
therein, who shall not have solicited offers for such Notes
and who are not to be Purchasers of such Notes. Any of you
who shall have an objection to such proposed amendment or
supplement may immediately terminate this Agreement as to
such of you by notice to the Issuer. At the request of any
of you so terminating, the Issuer shall promptly amend or
supplement the Offering Memorandum to indicate those firms
that remain Agents.
(xi) The Issuer shall not offer or sell any securities
under circumstances which would require the registration of
any of the Notes under the Securities Act.
(xii) The Issuer will take appropriate steps to ensure
that the aggregate principal amount of Notes at any time
outstanding does not exceed U.S. $75,000,000, will not issue
any Notes if such issuance would cause such limit to be
exceeded, will promptly notify each of you in the event that
at any time such limit has been reached and will promptly
notify each of you if such limit is increased pursuant to
this Agreement.
(xiii) The Issuer shall not, without having given prior
written notice to each of you, consent to any amendment of
the Issuing and Paying Agency Agreement. The Issuer shall
promptly notify each of you of any resignation or removal of
the Issuing and Paying Agent and the appointment of any
successor thereto.
(xiv) For so long as any of the Notes are outstanding,
the Issuer will make available, upon request, and such
16
quantities as are reasonably requested, to any holder of a
Note and any prospective purchaser to whom such Note may be
offered or sold by such holder of the information (the "Rule
144A Information") required to allow the resale of such Note
pursuant to Rule 144A and shall further amend or supplement
the Offering Memorandum as required to satisfy Rule
144A(d)(4);
If at any time an event occurs or conditions exist
as a result of which any Rule 144A Information or any
amendment or supplement thereto would not comply with the
requirements of Rule 144A or would include an 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, the Issuer will promptly notify each of you
by telephone (with confirmation in writing) and will
promptly prepare an amendment or supplement to such Rule
144A Information that will correct such non-compliance,
untrue statement or omission. Notwithstanding the
foregoing, the Issuer shall not be required to provide more
information than is required to be delivered pursuant to
Rule 144A as in effect as of the date the Notes of the
corresponding Tranche shall have been first issued, to the
extent that such information cannot be provided without
unreasonable additional expense to the Issuer.
(xv) None of you shall be liable or responsible to the
Issuer for any losses, damages or liabilities suffered or
incurred by the Issuer, including any losses, damages or
liabilities under the Securities Act, arising from or
relating to any resale or transfer of a Note by a holder in
any manner that does not comply with the applicable
restrictions on resale and transfer or the procedures
required for resale and transfer set forth herein, in the
Issuing and Paying Agency Agreement and in the Notes;
provided that each of you, severally and not jointly, shall
remain liable for the performance of your own obligations
under this Agreement.
(xvi) The Issuer will at all times ensure that all
approvals, authorizations, consents or other orders of, and
all filings with, any governmental or other administrative
agency or body will be, prior to the time required, obtained
or made (1) so that the Issuer may lawfully perform its
obligations under the Notes, this Agreement and the Issuing
and Paying Agency Agreement and (2) so that performance of
such obligations will, in all respects material to the
Issuer and its subsidiaries considered as a single
enterprise or material to the Issuer's ability to perform
17
its obligations under this Agreement, the Issuing and Paying
Agency Agreement or the Notes, comply with any laws,
decrees, regulations, judgments or orders of any court,
government, governmental authority or agency to which the
Issuer or any of its subsidiaries or any of their respective
properties or assets is subject.
(xvii) The Issuer will send to each of you a copy of every
notice of a meeting of the holders of the Notes (or any of
them) that is sent by the Issuer to such holders at the same
time it is sent to such holders and will promptly notify
each of you immediately upon its becoming aware that a
meeting of the holders of the Notes (or any of them) has
been convened by any of such holders.
(xviii) The Issuer shall promptly notify each of you of any
lowering in the ratings of any of the Issuer's debt
securities by any Rating Agency, or any public announcement
that any Rating Agency has under surveillance or review its
ratings of any such debt securities (other than an
announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of
such rating).
(xix) During the six-month period following the issue
date of any Note, neither the Issuer nor any affiliate of
the Issuer will directly or indirectly, sell, offer for
sale, solicit offers to buy or otherwise negotiate in
respect of, any of the Notes or any other security (as
defined in the Securities Act) which will be integrated with
such sale of Notes in a manner that would require the
registration of the Notes under the Securities Act.
(xx) The Issuer will immediately notify each Agent by
telephone, promptly confirmed in writing, of any change, or
any development that the Company has reasonable cause to
believe will involve a prospective change in the financial
condition, earnings, results of operations, business or
business prospects or properties of the Issuer and its
subsidiaries considered as a single enterprise, that if not
disclosed in the Offering Memorandum would cause the
Offering Memorandum to include an untrue statement of fact
or to 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 or existing at the
time of the Offering Memorandum is delivered to a
prospective purchaser of Notes, not misleading. In such
event, each Agent shall not thereafter attempt to offer or
place any of the Notes until the Issuer shall have prepared
and furnished to each Agent, in such numbers as may be
18
required, supplements to or amendments of the Offering
Memorandum reflecting any such material change.
(xxi) If required by the Rules and Regulations, the
Issuer will file five copies of a notice on Form D with the
Commission no later than fifteen days after the first sale
of a Note hereunder.
(xxii) In the event that any Note being offered or to
be offered by an Agent would be ineligible for resale under
Rule 144A (because such Note is of the same class (within
the meaning of Rule 144A) as any other securities of the
Issuer that are at such time listed on a national securities
exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated inter-dealer quotation system),
the Issuer shall immediately notify each Agent (by
telephone, confirmed in writing) of such fact and will
promptly prepare and deliver to the Agents an amendment or
supplement to the Offering Memorandum describing the Notes
that are ineligible, the reason for such ineligibility and
any other relevant information relating thereto.
(xxiii) As of the date of delivery of any Notes sold
hereunder, the Issuer will not have any securities of the
same class as such Notes listed on a national securities
exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
(xxiv) The Issuer and its subsidiaries possess such
certificates, authorities, permits, licenses and approvals
issued by the appropriate federal, state or local regulatory
agencies or bodies necessary to conduct the business now
operated by them except where failure to so possess would
not have a material adverse effect on the financial
condition, earnings, results of operations, business or
business prospects or properties of the Issuer and its
subsidiaries considered as a single enterprise; the Issuer
and its subsidiaries are in compliance with the terms and
conditions of all such certificates, authorities, permits,
licenses and approvals, except where the failure so to
comply would not have a material adverse effect on the
financial condition, earnings, results of operations,
business or business prospects or properties of the Issuer
and its subsidiaries considered as a single enterprise; and
neither the Issuer nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or
modification of any such certificate, authority, permit,
license or approval that, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the financial condition,
19
earnings, results of operations, business or business
prospects or properties of the Issuer and its subsidiaries
considered as a single enterprise.
(b) The obligations of the Issuer under Sections
4(a)(i), (ii), (vi), (vii), (viii) and (ix) shall be suspended
during any period of time during which the Issuer shall have
suspended the solicitation of offers to purchase Notes by written
notice to each Agent; PROVIDED, HOWEVER, such obligations of the
Issuer shall remain in effect with respect to an Agent (i) for a
period of two years following the date of notice of such
suspension if such Agent shall own any Notes with the intention
of reselling them as contemplated by Section 2(b) or (ii) if the
Issuer has accepted an offer to purchase Notes solicited by such
Agent pursuant to this Agreement and the settlement for such sale
shall not have occurred. At least one week prior to end of any
such period during which solicitations shall have been suspended,
the Issuer shall notify each of you of any event or change
contemplated by the last sentence of Section 4(a)(ii) or by
Section 4(a)(vii) of which the Issuer would have been obligated
to notify each of you, and shall provide each of you all written
information and supplements referred to in Sections 4(a)(viii)
and (ix) that the Issuer would have been obligated to deliver to
each of you, had the Issuer not so suspended the solicitation of
offers.
5. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS.
(a) The obligations of each Agent to solicit offers to purchase
any Notes shall be subject to the accuracy of the representations
and warranties on the part of the Issuer contained herein as of
each time the Issuer gives a notice requesting any of you to
solicit offers as agents, at and as of each acceptance of an
offer by the Issuer and upon delivery of any Note to the
purchaser (or its agent) pursuant to such offer, to the accuracy
of the statements of the Issuer made in any certificates
delivered pursuant to the provisions hereof as of the respective
dates of such certificates, to the performance and observance by
the Issuer of all covenants and agreements herein contained on
its part to be performed and observed and to the following
additional conditions precedent:
(i) The Issuer shall have obtained all authorizations,
consents and approvals of any court or governmental or other
regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its
obligations hereunder and under the Notes and the Issuing
and Paying Agency Agreement.
(ii) The Issuer shall have furnished to each Agent a
certificate of the Issuer signed by the principal financial
20
or accounting officer of the Issuer, dated as of the date
hereof, to the effect that, to the best of his knowledge
after reasonable inquiry:
(1) the representations and warranties of the
Issuer in this Agreement are true and correct in all
material respects on and as of the date of the
certificate and the Issuer has performed in all
material respects all its obligations and satisfied all
the conditions on its part to be satisfied at or prior
to the date of the certificate;
(2) since the date of the most recent financial
statements included in the current Offering Memorandum,
there has been no material adverse change, or to the
knowledge of the Issuer any development involving a
prospective change, in the financial condition,
earnings, business or business prospects or properties
of the Issuer and its subsidiaries considered as a
single enterprise, except as set forth or contemplated
in the Offering Memorandum; and
(3) the Offering Memorandum (other than
statements made therein in reliance upon and in
conformity with information furnished to the Issuer in
writing by any of you, or on behalf of any of you which
has been furnished by a person authorized to do so,
specifically for use therein, as to which no
representation shall be made) does not contain any
untrue statement of a material fact or omit to state
any material fact necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(iii) The Issuer shall have furnished to each Agent the
opinion of Murtha, Cullina, Richter and Pinney, counsel to
the Issuer, substantially in the form of Exhibit C hereto.
(iv) Each Agent shall have received from Jones, Day,
Reavis & Pogue, your counsel, such opinion with respect to
the proposed issue and sale of the Notes and other related
matters as such Agent may reasonably require.
(v) Arthur Andersen LLP, independent accountants for
the Issuer, shall have furnished to each Agent an executed
copy of a letter in the form heretofore agreed to by each
Agent.
(b) The documents required to be delivered by this
Section 5 shall be delivered at, or transmitted by telecopy (with
21
an undertaking promptly to forward the original copies thereof)
to, the offices of Jones, Day, Reavis & Pogue, counsel for the
Agents, at 77 West Wacker, Chicago, Illinois 60601-1692 Attn:
Timothy J. Melton, at 9:30 A.M., New York City time, on the date
hereof, and an original of each such document will be sent to
each of you.
6. CONDITIONS TO THE OBLIGATIONS OF A PURCHASER.
(a) The obligations of any Purchaser to purchase any Notes shall
be subject to the accuracy of the representations and warranties
on the part of the Issuer contained herein or in the
corresponding Terms Agreement, if any, at and as of the date of
the corresponding Terms Agreement and upon the delivery to any
Purchaser of any Note pursuant to such Terms Agreement, to the
performance and observance by the Issuer of all covenants and
agreements herein or therein contained on its part to be
performed and observed and to the following additional conditions
precedent:
(i) The Issuer shall have obtained all authorizations,
consents and approvals of any court or governmental or other
regulatory agency or body required in connection with the
issuance and sale of the Notes and the performance of its
obligations hereunder and under the Notes and the Issuing
and Paying Agency Agreement.
(ii) To the extent provided by such Terms Agreement, the
Purchaser shall have received, appropriately updated, (1) a
certificate of the Issuer dated as of the Closing Date to
the effect set forth in Section 5(a)(ii), (2) the opinion of
Murtha, Cullina, Richter and Pinney dated the Closing Date
to the effect set forth in Section 5(a)(iii), (3) the
opinion of Jones, Day, Reavis & Pogue dated the Closing Date
to the effect set forth in Section 5(a)(iv) and (4) the
letter of Arthur Andersen LLP dated the Closing Date to the
effect set forth in Section 5(a)(v).
(iii) Prior to the Closing Date, the Issuer shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
(b) If any of the conditions specified in this Section
6 shall not have been fulfilled in all material respects when and
as provided in this Agreement and any Terms Agreement, or if any
other event occurs which permits cancellation under this
Agreement, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such
22
cancellation shall be given to the Issuer in writing or by
telephone confirmed in writing, which confirmation may be made by
telex or telecopy.
7. CONDITIONS TO ALL PURHCASES. The consummation of
the sale of any Note pursuant to this Agreement shall be subject
to the further condition that, at the date of issuance thereof,
in the judgment of the Purchaser or the Agent that obtained the
offer, (a) each condition set forth in Section 5 or 6, as
applicable, shall be satisfied and (b) subsequent to the
respective dates as of which information is given in the Offering
Memorandum (current as of the date of such agreement to purchase
a Note), except as set forth therein or contemplated thereby,
there shall not have occurred any change, or to the knowledge of
the Issuer any development involving a prospective change, in or
affecting the business or business prospects or properties of the
Issuer and its subsidiaries, the effect of which makes it
impracticable or inadvisable to market the Notes or to proceed
with completion of the sale and payment for such Notes.
8. RESTRICTIONS ON OFFERS AND SALES OF THE NOTES.
Each party hereto represents, warrants and agrees, severally and
not jointly, as follows:
(a) It will solicit offers to purchase Notes only
from, and it will offer and sell Notes only to, (i)
institutional purchasers that qualify, or that it reasonably
believes qualify, as "accredited investors" as such term is
defined in paragraphs (1), (2) and (3) of Rule 501(a) under
the Securities Act ("Institutional Accredited Investors"),
(ii) institutional purchasers that are, or that it
reasonably believes are, "qualified institutional buyers" as
such term is defined in paragraph (a)(1) of Rule 144A
("QIBs") or (iii) any of you. If it is an Agent, any
resales or transfers of Notes through, or arranged by, it
similarly will be made only to Institutional Accredited
Investors or QIBs. It will solicit such offers and offer to
sell Notes to Institutional Accredited Investors that are
not QIBs only by approaching such Institutional Accredited
Investors on an individual basis. Neither it, its
affiliates, nor any person acting on its or their behalf
(except that no representation is made with respect to any
other party to this Agreement) has engaged or will engage in
any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act)
in the United States with respect to the Notes.
(b) It will make reasonable inquiry to determine
whether a purchaser is purchasing for such purchaser's own
account as an Institutional Accredited Investor or QIB or
23
for the account of others and not with a view to, or for
sale in connection with, the public distribution thereof in
any transaction that would be in violation of Federal or
state securities laws and, in the case of any purchaser
acting on behalf of one or more third parties, it shall make
reasonable inquiry to determine that each such third party
is an Institutional Accredited Investor or QIB and that the
amount being purchased on behalf of each such third party is
not less than the authorized minimum denomination of such
Notes; PROVIDED that the Issuer shall have no duty to make
any such inquiry in connection with sales to any of you or
pursuant to offers transmitted to it by any of you.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuer
agrees to indemnify and hold harmless each of you and each person
who controls one or more of you within the meaning of either the
Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which any
such person may become subject under the law of any jurisdiction
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum, in any amendment thereof or
supplement thereto or in any information provided by the Issuer
and furnished to any purchaser of the Notes pursuant to Section
4(a)(xiv), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party,
as incurred, for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such
loss, claim, damage, liability or action; PROVIDED, HOWEVER, that
(i) the Issuer will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering
Memorandum or in any amendment thereof or supplement thereto in
reliance upon and in conformity with written information
furnished to the Issuer by the person seeking indemnification, or
on behalf of such person by another person authorized to do so,
specifically for use in connection with the preparation thereof
and identified on Schedule III hereto and (ii) the Issuer will
not be liable to those of you (or any person controlling those of
you) who sold to the person asserting any such loss, claim,
damage or liability the Notes which are the subject thereof to
the extent that (1) such loss, claim, damage or liability arises
out of or is based upon the fact that such person did not receive
a copy of the Offering Memorandum, as amended or supplemented,
excluding documents incorporated by reference therein, at or
prior to the confirmation of the sale of such Notes to such
24
person in any case where delivery of the Offering Memorandum by
such of you is required by this Agreement, unless such failure to
deliver the Offering Memorandum was a result of noncompliance by
the Issuer with Section 4(a)(vi) of this Agreement, and (2) such
loss, claim, damage or liability would have been avoided by
delivery of the Offering Memorandum to such person as so
required. This indemnity will be in addition to any liability
which the Issuer may otherwise have.
(b) Each of you, severally and not jointly, agrees to
indemnify and hold harmless the Issuer and each person who
controls the Issuer within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Issuer, but only with reference to written
information relating to the indemnifying party furnished to the
Issuer by it, or on its behalf by another person authorized to do
so, specifically for use in the preparation of the Offering
Memorandum or any amendment thereof (or supplement thereto) and
identified on Schedule III hereto. This indemnity will be in
addition to any liability which any of you may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 9 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 9,
notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 9. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to
the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party;
PROVIDED, HOWEVER, that if the defendants in any such action
include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available
to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and
approval by the indemnified party of counsel (which approval
shall not be unreasonably withheld), the indemnifying party will
not be liable to such indemnified party under this Section 9 for
25
any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance
with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in
addition to any local counsel), approved by a majority of the
indemnified parties in the case of paragraph (a) of this Section
9, representing the indemnified parties under such paragraph (a)
who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified
party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in
such clause (i) or (iii). The indemnifying party shall not be
liable for any settlement of any action or claim effected without
its consent, which consent shall not be unreasonably withheld.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification
provided for in this Section 9 is due in accordance with its
terms but if for any reason held by a court to be unavailable on
grounds of policy or otherwise, the Issuer and each of you shall
contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to
which the Issuer and any of you may be subject in such proportion
so that each of you, severally and not jointly, is responsible
only for that portion represented by the percentage that the
aggregate commissions received by you yourself pursuant to
Section 2 in connection with the Notes from which such losses,
claims, damages and liabilities arise (or, in the case of Notes
sold to a Purchaser, the discount to the Purchaser), bears to the
aggregate principal amount of such Notes sold and the Issuer is
responsible for the balance; PROVIDED, HOWEVER, that in no case
shall any of you be responsible for any amount in excess of the
commissions received by you yourself in connection with the Notes
from which such losses, claims, damages and liabilities arise
(or, in the case of Notes sold to a Purchaser, the discount to
the Purchaser). For purposes of this Section 9, each person who
controls any of you within the meaning of either the Securities
Act or the Exchange Act shall have the same rights to
contribution as such of you and each person who controls the
Issuer within the meaning of either the Securities Act or the
Exchange Act shall have the same rights to contribution as the
Issuer, subject in each case to the proviso to the preceding
26
sentence. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution hereunder from any person who was not
guilty of such fraudulent misrepresentation. Any party entitled
to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against
another party or parties under this paragraph (d), notify such
party or parties from whom contribution may be sought (which
obligation to give notice shall be deemed to be satisfied by the
delivery of notice pursuant to paragraph (c) of this Section 9),
but the omission so to notify such party or parties shall not
relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have hereunder or
otherwise than under this paragraph (d).
10. TERMINATION. (a) This Agreement will continue in
effect until terminated as provided in this Section 10 or
Section 4(a)(x). This Agreement may be terminated by the Issuer
as to any Agent or, in the case of any Agent, by such Agent
insofar as this Agreement relates to such Agent, by giving at
least 30 days' written notice of such termination to the other
parties hereto. Notwithstanding any such termination, the
rights and liabilities of each party under Sections 2(a)(iv) and
(vii), Sections 4(a)(iii), (xv) and (xvii), Sections 8(a) and (b)
(with respect to resales and transfers of Notes), Section 9,
Section 11 and any Terms Agreement executed prior to the date of
termination hereof shall survive any termination of this
Agreement, in whole or in part. In addition, if any termination
shall occur either (i) at a time when any Purchaser shall own any
Notes, purchased under this Agreement from the Issuer, with the
intention of reselling them or (ii) after the Issuer has accepted
an offer to purchase Notes and prior to the related settlement,
all agreements, terms and conditions relating to the purchase and
sale of such Notes shall also remain in effect.
(b) Each agreement to purchase Notes pursuant to a
solicitation by an Agent hereunder, and each agreement by a
Purchaser to purchase Notes hereunder, shall be subject to
termination in the absolute discretion of such Agent or the
Purchaser (as the case may be), by notice given to the Issuer
prior to delivery of any payment for Notes to be purchased, if
prior to such time (i) trading in any securities issued by the
Issuer shall have been suspended or halted on any exchange
(whether U.S. or foreign), or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited
or minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared by either U.S.
Federal or New York State or Connecticut State authorities,
(iii) there shall have been a lowering in the ratings of any of
27
the Issuer's debt securities by any Rating Agency or any public
announcement that any Rating Agency has under surveillance or
review its rating of any such debt securities (other than an
announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating) or
(iv) there shall have occurred, in the reasonable judgment of
such Agent or Purchaser (as the case may be), a material change
in national or international political, financial or economic
conditions that makes it impracticable or inadvisable to market
the Notes or to proceed with completion of the sale of and
payment for such Notes.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities
and other statements of the Issuer or its officers and of each of
you set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by
or on behalf of any of you or by or on behalf of the Issuer or
any of the controlling persons referred to in Section 9, and will
survive delivery of and payment for the Notes.
12. INCREASES IN THE AMOUNT OF THE NOTES. The
aggregate principal amount of Notes that may be sold by the
Issuer may be increased pursuant to an amendment to this
Agreement in the form attached hereto as Exhibit D executed by
all the parties hereto. Upon the execution and delivery of any
such amendment, to the extent agreed upon by the Issuer and you,
the Issuer shall deliver to each of you, appropriately updated,
(a) a certificate of the Issuer dated as of the date of such
amendment to the effect set forth in Section 5(a)(ii), (b) the
opinion of Murtha, Cullina, Richter and Pinney dated the date of
such amendment to the effect set forth in Section 5(a)(iii) and
(c) the letter of Arthur Andersen LLP dated the date of such
amendment to the effect set forth in Section 5(a)(v), and the
Issuer shall furnish to each of you such further information,
certificates and documents as you may reasonably request.
13. NOTICES. All communications hereunder will be in
writing, and effective only on receipt, or (but only where
specifically provided in the Procedures) by telephone and, if
sent to you, will be mailed, delivered, telecopied and confirmed
or telexed and confirmed to you, at the address specified in
Schedule II hereto; or, if sent to the Issuer, will be mailed,
delivered, telecopied and confirmed or telexed and confirmed to
it at 100 Columbus Boulevard, Hartford, Connecticut 06144,
Attention: Chief Financial Officer (telephone: (860) 727-3000;
telecopy: (860) 727-3064).
14. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
28
respective successors and the controlling persons referred to in
Section 9, and no other person will have any right or obligation
hereunder.
15. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED
-------------------------------------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
----------------------------------------------------------------
YORK.
----
16. COUNTERPARTS. This Agreement may be signed in
counterparts with the same effect as if the signatures thereto
and hereto were upon the same instrument.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement between the Issuer
and each of you.
Very truly yours,
CONNECTICUT NATURAL GAS CORPORATION,
by:
Name: James P. Bolduc
Title: Executive Vice President
and Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
PAINEWEBBER INCORPORATED
by:
Name:
Title:
A.G. EDWARDS & SONS, INC.,
by:
Name: Lester H. Krone
Title: Vice President
INDEX OF DEFINITIONS
--------------------
Term Section
---- -------
Introductory Paragraph
Agents 2(b)(i)
Closing Date 1(m)
CTG 2(a)(i)
Commission 1(u)
Environmental Laws 4(a)(viii)
Exchange Act 1(n)
FERC
Institutional Accredited 8(a)
Investors Introductory Paragraph
Issuer
Issuing and Paying Agency Introductory Paragraph
Agreement Introductory Paragraph
Issuing and Paying Agent
Materials of Environmental 1(n)
Concern Introductory Paragraph
Notes 1(a)
Offering Memorandum Introductory Paragraph
Procedures Introductory Paragraph
Purchaser 8(a)
QIBs 1(c)
Rating Agency Introductory Paragraph
Regulation D 1(i)
Rule 144A 4(a)(xiv)
Rule 144A Information Introductory Paragraph
Rules and Regulations Introductory Paragraph
Securities Act 2(b)(i)
Terms Agreement Introductory Paragraph
Tranche Introductory Paragraph
Trust Indenture Act Introductory Paragraph
you
SCHEDULE I
----------
The Issuer agrees to pay the Agents a commission equal
to the following percentage of the principal amount of each Note
sold by such Agent, and to pay the Purchasers a commission in the
form of a discount to the purchase price equal to the following
percentage of the principal amount of each Note purchased by such
Agent under Section 2(b):
Term Commission Rate
---- ---------------
Twelve months to less than eighteen months .150%
Eighteen months to less than two years .200%
Two years to less than three years .250%
Three years to less than four years .350%
Four years to less than five years .450%
Five years to less than six years .500%
Six years to less than seven years .550%
Seven years to less than ten years .600%
Ten years to less than fifteen years .625%
Fifteen years to less than twenty years .700%
Twenty years or longer but not more than
thirty years .750%
The commission rate payable to any Agent with respect
to any Notes, and the discount with respect to Notes sold to a
Purchaser, may be increased by agreement between the Issuer and
such Agent or Purchaser, with no requirement that the other
Agents or Purchasers receive notice of, or consent to, such
higher commission rate or discount.
SCHEDULE II
-----------
PaineWebber Incorporated
1285 Avenue of the Americas
New York, N.Y. 10019
Telephone: (212) 713-2000
Telecopy: (212) 969-7602
Attention: Walter S. Hulse, III
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Telephone: (314) 955-5000
Telecopy: (314) 955-5989
Attention: Corporate Debt Syndicate
SCHEDULE III
The information set forth below constitutes the only
information furnished to the Issuer by or on behalf of the Agents
expressly for use in the Offering Memorandum (or any amendment or
supplement thereto):
the names PaineWebber Incorporated and A.G. Edwards &
Sons, Inc. contained on the cover page of the Offering
Memorandum (each of which names has been provided solely by
the respective named placement agent).
EXHIBIT A
MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
------------------------------------------
August _____, 1997
The Medium-Term Notes, Series B (the "Notes") of
Connecticut Natural Gas Corporation (the "Issuers") are to be
offered on a continuing basis by PaineWebber Incorporated and
A.G. Edwards & Sons, Inc., as agents (the "Agents"). No Agent
will be obligated to purchase Notes for its own account. The
Notes are to be offered pursuant to an Amended and Restated
Placement Agency Agreement dated August _____, 1997 between the
Issuer and the Agents dated as of the date hereof (the
"Agreement"). The Agreement provides both for the sale of Notes
by the Company directly to investors (as may from time to time be
agreed to by the Company and the Agents) in which case each such
Agent will act as an agent of the Company in soliciting Note
purchases, and for the sale of Notes by the Company to one or
more of the Agents as principal for resale to investors and other
purchasers. The Agents have agreed to use reasonable efforts to
solicit offers to purchase Notes. State Street Bank and Trust
Company, as successor to Shawmut Bank Connecticut, National
Association (the "Issuing and Paying Agent") is the issuing and
paying agent with respect to the Notes under the Issuing and
Paying Agency Agreement, dated as of June 14, 1994 between the
Issuer and the Issuing and Paying Agent as amended by the First
Amendment thereto dated as of August _____, 1997, (the "Issuing
and Paying Agency Agreement"), under which the Notes will be
issued. The Notes are in the form of Exhibit I to the Issuing
and Paying Agency Agreement.
The procedures to be followed during, and the specific
terms of, the solicitation of offers by each Agent and the sale
as a result thereof by the Issuer are explained below.
Administrative and record-keeping responsibilities will be
handled for the Issuer by its Treasurer. The Issuer will advise
each Agent and the Issuing and Paying Agent in writing of those
persons handling administrative responsibilities with whom the
Agents and the Issuing and Paying Agent are to communicate
regarding offers to purchase Notes and the details of their
delivery and will promptly advise each Agent and the Issuing and
Paying Agent in writing if any such person shall cease to handle
such responsibilities or of the authorization of any additional
person to handle such responsibilities.
The Notes will either be issued (a) in book-entry form
and represented by one or more fully registered Notes (each, a
"Book-Entry Note") delivered to the Issuing and Paying Agent, as
A-1
agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated
form delivered to the purchaser thereof or a person designated by
such purchaser. Except in the limited circumstances described in
the Offering Memorandum, owners of beneficial interests in Book-
Entry Notes will not be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective
beneficial interests.
General procedures relating to the issuance of all
Notes are set forth in Part I hereof. Book-Entry Notes will be
issued in accordance with the procedures set forth in Part II, as
adjusted in accordance with changes in DTC's operating
requirements. Notes issued in certificated form will be issued
in accordance with the procedures set forth in Part III hereof.
Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Issuing and
Paying Agency Agreement or the Notes, as the case may be. Only
those provisions in the Administrative Procedures that are
applicable to the particular role to be performed by the related
Agent or Agents shall apply to the offer and sale of the relevant
Note. To the extent the procedures set forth below conflict with
the provisions of the Notes, the Issuing and Paying Agency
Agreement, DTC's operating requirements or the Agreement, the
relevant provisions of the Notes, the Issuing and Paying Agency
Agreement, DTC's operating requirements or the Placement Agency
Agreement shall control.
A-2
PART I: PROCEDURES OF GENERAL
APPLICABILITY
MATURITIES: Each Note will mature on a Business Day not
less than one year nor more than 30 years
after the Original Issue Date (as defined
below) for such Note.
DENOMINATIONS: The denomination of any Note will be in U.S.
dollars and a minimum of $100,000 or any
larger amount that is an integral multiple of
$1,000.
FORM: Notes will be issued only in fully registered
form in accordance with the Issuing and
Paying Agency Agreement.
DATE OF ISSUANCE: Each Note will be dated the date of its
authentication by the Issuing and Paying
Agent. Each Note will also bear an
"Original Issue Date", which will be the date
of its original issue, or in the case of any
Note (or portion thereof) issued subsequently
upon transfer or exchange of a Note or in
lieu of a destroyed, mutilated, defaced, lost
or stolen Note, the Original Issue Date of
the predecessor Note, regardless of the date
of authentication of such subsequently issued
Note.
PROCEDURE FOR RATE
SETTING AND POSTING:
The Issuer and the Agents will discuss from
time to time the aggregate principal amount
of, the issuance price of and the interest
rates to be borne by, Notes that may be sold
as a result of the solicitation of offers by
the Agents. If the Issuer decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
offers (the setting of such prices and rates
to be referred to herein as "posting") or if
the Issuer decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of such prices and rates to
be posted.
If the Issuer does not post prices and rates
and an Agent receives an offer to purchase
A-3
Notes, such Agent will promptly advise the
Issuer by telephone of any such offer other
than offers rejected by such Agent as
provided below.
ACCEPTANCE OF
OFFERS: Any Agent may, in its reasonable discretion,
reject any offer to purchase Notes received
by it, in whole or, if permitted by the terms
thereof, in part. Each Agent will promptly
advise the Issuer of any offers to purchase
Notes received by such Agent, other than
offers rejected by such Agent and, if such
Agent or any of its affiliates shall be the
offeror, shall advise the Issuer of that
fact. The Issuer will have the sole right to
accept offers to purchase Notes in whole or,
if permitted by the terms thereof, in part.
The Issuer may reject any such offer in whole
or, if permitted by the terms thereof, in
part. The Issuer will forthwith advise an
Agent of the acceptance or rejection of any
offer received through such Agent (the
"Presenting Agent"), and such Agent will so
advise the offeror.
SUSPENSION OF
SOLICITATION: The Issuer reserves the right, in its sole
discretion, to instruct the Agents to suspend
at any time, for any period of time or
permanently, the solicitation of offers to
purchase Notes. Upon receipt of such
instructions, the Agents will forthwith
suspend solicitation of offers to purchase
Notes from the Issuer until such time as the
Issuer has advised them that such
solicitation may be resumed.
In the event that at the time the Issuer
suspends solicitation of offers to purchase
there shall be any offers previously
communicated to the Issuer by any Agent and
which offers have not been accepted or
rejected at the time of such suspension, the
Issuer will accept or reject such offers in
whole or, if permitted by the terms thereof,
in part, and will promptly advise the
Presenting Agents of such acceptances or
rejections.
In the event that at the time the Issuer
suspends solicitation of offers to purchase
A-4
there shall be any offers that have been
accepted by the Issuer but are outstanding
for settlement, the Issuer will promptly
advise the Agents and the Issuing and Paying
Agent whether such offers may be settled and
whether copies of the Offering Memorandum as
in effect at the time of the suspension,
together with any appropriate Supplement, may
be delivered in connection with the
settlement of such offers. The Issuer will
have the sole responsibility for such
decision and for any arrangements that may be
made in the event that the Issuer determines
that such offers may not be settled or that
copies of such Offering Memorandum or
Supplement may not be so delivered. No such
suspension shall excuse any failure by the
Issuer to fulfill a contractual obligation to
deliver any Notes.
DELIVERY OF
OFFERING MEMORANDUM:
Subject to the immediately preceding
paragraph, the Presenting Agent will deliver
to each purchaser of Notes an Offering
Memorandum (other than documents incorporated
by reference therein unless such documents
are otherwise attached to the Offering
Memorandum) and, if applicable, a Supplement
as herein described with respect to each Note
sold pursuant to an offer solicited by such
Presenting Agent. Subject to the immediately
preceding paragraph, if notice of a change in
the terms of such Notes from the terms set
forth in the Offering Memorandum, as amended
or supplemented, is received by the
Presenting Agent between the time an offer
for a Note is received and the time the
Offering Memorandum is delivered to a
purchaser, such Offering Memorandum shall be
in the form in effect when the corresponding
offer was accepted. The Issuer will make such
delivery if such Note is sold directly by the
Issuer to a purchaser (other than a
Purchaser).
CONFIRMATION: For each offer to purchase a Note solicited
by an Agent and accepted by the Issuer, such
Agent will issue a confirmation to the
purchaser, with a copy to the Issuer, setting
A-5
forth the details set forth below in clauses
l through 8 of the first paragraph under
"Details for Settlement" and delivery and
payment instructions.
SETTLEMENT DATE: Subject to Section 6 of the Agreement, the
Settlement Date with respect to any offer to
purchase Notes accepted by the Issuer will be
the fifth Business Day next succeeding the
date of acceptance unless otherwise agreed by
the purchaser and the Issuer and shall be
specified upon acceptance of such offer.
ISSUING AND PAYING
AGENT NOT TO RISK FUNDS:
Nothing herein shall be deemed to require the
Issuing and Paying Agent to risk or expend
its own funds in connection with any payment
to the Issuer or the Agents or any purchaser,
it being understood by all parties that
payments made by the Issuing and Paying Agent
to the Issuer or the Agents or a purchaser
shall be made only to the extent that
immediately available funds are provided to
the Issuing and Paying Agent for such
purpose.
AUTHENTICITY OF
SIGNATURES: The Issuer will cause the Issuing and Paying
Agent to furnish the Agents from time to time
with the specimen signatures of each of the
Issuing and Paying Agent's officers,
employees or agents who has been authorized
by the Issuing and Paying Agent to
authenticate Notes, but the Agents will have
no obligation or liability to the Issuer or
to the Issuing and Paying Agent in respect of
the authenticity of the signature of any
officer, employee or agent of the Issuer or
the Issuing and Paying Agent on any Note.
PAYMENT OF EXPENSES:
Each Agent shall forward to the Issuer, on a
quarterly basis, a statement of the out-of-
pocket expenses incurred by such Agent during
that quarter that are reimbursable to it
pursuant to the terms of the Agency
Agreement. The Issuer will remit payment to
each Agent currently on a quarterly basis.
A-6
RESTRICTION ON
TRANSFERS: No Note may be resold or transferred in any
manner that does not comply with the
applicable restrictions on resale or transfer
or the procedures required for resale or
transfer set forth in the Issuing and Paying
Agency Agreement and on the Note certificate.
The Issuing and Paying Agent shall have no
obligation to monitor such restrictions,
other than as specifically provided in the
Issuing and Paying Agency Agreement.
PART II: PROCEDURES FOR NOTES ISSUED
-------------------------------------
IN BOOK-ENTRY FORM
------------------
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
the Issuing and Paying Agent will perform the custodial, document
control and administrative functions described below, in
accordance with its respective obligations under a Letter of
Representations from the Company and the Issuing and Paying Agent
to DTC, dated June 14, 1994, and a Medium-Term Note Certificate
Agreement, dated December 21, 1993, between the Issuing and
Paying Agent and DTC (the "Certificate Agreement"), and its
obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS").
ISSUANCE: All Book-Entry Notes having the
same Original Issue Date,
redemption provisions, interest
payment dates, interest rate, and
Stated Maturity (collectively, the
"Terms") will be represented
initially by a single Global Note
in fully registered form without
coupons.
Each Book-Entry Note will be dated
and issued as of the date of its
authentication by the Issuing and
Paying Agent. Each Book-Entry Note
will bear an original issue date,
which will be (i) with respect to
an original Book-Entry Note (or any
portion thereof), the original
issue date specified in such Book-
Entry Note and (ii) following a
consolidation of Global Notes, with
respect to the Book-Entry Note
A-7
resulting from such consolidation,
the most recent Interest Payment
Date to which interest has been
paid or duly provided for on the
predecessor Global Notes,
regardless of the date of
authentication of such resulting
Book-Entry Note. No Book-Entry
Note will represent any securities
in certificated form.
IDENTIFICATION: The Issuer has arranged with the
CUSIP Service Bureau of Standard &
Poor's Ratings Group, a division of
McGraw-Hill, (the "CUSIP Service
Bureau") for the reservation of
approximately 900 PPN numbers which
have been reserved for and relating
to Book-Entry Notes and the Company
has delivered to the Issuing and
Paying Agent and DTC a written list
of such PPN numbers. The Company
will assign PPN numbers to Book-
Entry Notes as described below
under Settlement Procedure B. DTC
will notify the CUSIP Service
Bureau periodically of the PPN
numbers that the Issuer has
assigned to Book-Entry Notes. The
Issuing and Paying Agent will
notify the Issuer at any time when
fewer than 100 of the reserved PPN
numbers remain unassigned to Book-
Entry Notes, and, if it deems
necessary, the Issuer will reserve
additional PPN numbers for
assignment to Book-Entry Notes.
Upon obtaining such additional PPN
numbers, the Issuer will deliver a
list of such additional numbers to
the Issuing and Paying Agent and
DTC.
REGISTRATION: Unless otherwise specified by DTC,
each Book-Entry Note will be
registered in the name of Cede &
Co., as nominee for DTC, on the
register maintained by the Issuing
and Paying Agent under the Issuing
and Paying Agency Agreement. The
beneficial owner of a Note issued
A-8
in book-entry form (I.E., an owner
of a beneficial interest in a Book-
Entry Note) (or one or more
indirect participants in DTC
designated by such owner) will
designate one or more participants
in DTC (with respect to such Note
issued in book-entry form, the
"Participants") to act as agent or
agents for such beneficial owner in
connection with the book-entry
system maintained by DTC, and DTC
will record in book-entry form, in
accordance with instructions
provided by such Participants, a
credit balance with respect to such
Note issued in book-entry form in
the account of such Participants.
The ownership interest of such
beneficial owner in such Note
issued in book-entry form will be
recorded through the records of
such Participants or through the
separate records of such
Participants and one or more
indirect participants in DTC.
TRANSFERS: Transfers of beneficial ownership
interests in a Book-Entry Note will
be accomplished by book entries
made by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Book-Entry
Note.
EXCHANGES: After the first Interest Payment
Date on individual issues of the
Notes, the Issuing and Paying Agent
may deliver to DTC Reorganization
Department, Interactive Data
Control and the CUSIP Service
Bureau at any time a written notice
of consolidation specifying (a) the
PPN numbers of two or more Global
Notes outstanding on such date that
represent Book-Entry Notes having
the same Terms, (other than
Original Issue Dates) and for which
interest has been paid to the same
A-9
date; (b) a date, occurring at
least 30 days after such written
notice is delivered and at least 30
days before the next Interest
Payment Date for the related Notes
issued in book-entry form, on which
such Global Notes shall be
exchanged for a single replacement
Global Note; and (c) a new PPN
number, obtained from the Issuer,
to be assigned to such replacement
Global Note. Upon receipt of such
a notice, DTC will send to its
participants (including the Issuing
and Paying Agent) a written
reorganization notice to the effect
that such exchange will occur on
such date. Prior to the specified
exchange date, the Issuing and
Paying Agent will deliver to the
CUSIP Service Bureau written notice
setting forth such exchange date
and the new PPN number and stating
that, as of such exchange date, the
PPN numbers of the Global Notes to
be exchanged will no longer be
valid. On the specified exchange
date, the Issuing and Paying Agent
will exchange such Global Notes for
a single Global Note bearing the
new PPN number and the PPN numbers
of the exchanged Global Notes will,
in accordance with CUSIP Service
Bureau procedures, be canceled and
not immediately reassigned.
INTEREST PAYMENTS: GENERAL. Interest (if any) on each
Note will accrue from the Original
Issue Date of such Note, and will
be calculated and paid in the
manner described in such Note.
Unless otherwise provided in the
Issuing and Paying Agency Agreement
or the Notes, the first payment of
interest on any Note originally
issued after a Record Date and on
or before the next succeeding
Interest Payment Date will be made
no earlier than the Interest
Payment Date following the next
succeeding Record Date. Interest
A-10
payable at maturity of a Note, or
upon earlier redemption or
repayment, will be payable to the
person to whom the principal of
such Note is payable. DTC will
arrange for each pending deposit
message described under Settlement
Procedure C below to be transmitted
to Standard & Poor's Ratings Group,
which will use the information in
the message to include certain
terms of the related Book-Entry
Note in the appropriate daily bond
report published by Standard &
Poor's Ratings Group.
RECORD DATES. The Record Dates
with respect to the Interest
Payment Dates shall be the first
calendar day (whether or not a
Business Day) of the month of such
Interest Payment Date.
INTEREST PAYMENT DATES. Unless
otherwise specified pursuant to
Settlement Procedure "A" below,
interest payments on Book-Entry
Notes will be made semiannually on
January 15 and July 15 of each year
and at Maturity; PROVIDED, HOWEVER,
that if an Interest Payment Date
for a Book-Entry Note is not a
Business Day, the payment due on
such day shall be made on the next
succeeding Business Day and no
interest shall accrue on such
payment for the period from and
after such Interest Payment Date;
PROVIDED FURTHER, that in the case
of a Book-Entry Note issued between
a Regular Record Date and an
Interest Payment Date, the first
interest payment will be made on
the Interest Payment Date following
the next succeeding Regular Record
Date.
PAYMENTS OF PRINCIPAL AND PAYMENTS OF INTEREST ONLY. Not
INTEREST: later than five Business Days
following each Record Date, the
Issuing and Paying Agent will
deliver to the Issuer and DTC a
A-11
written notice specifying by PPN
number the amount of interest to be
paid on each Book-Entry Note on the
following Interest Payment Date
(other than an Interest Payment
Date coinciding with a Maturity
Date) and the total of such
amounts. DTC will confirm the
amount payable on each Book-Entry
Note on such Interest Payment Date
by reference to the daily bond
reports published by Standard &
Poor's. On such Interest Payment
Date, the Issuer will pay to the
Issuing and Paying Agent, and the
Issuing and Paying Agent in turn
will pay to DTC, such total amount
of interest due (other than at
Maturity Date), at the times and in
the manner set forth below under
"Manner of Payment."
PAYMENTS AT MATURITY DATE. Prior
to the first Business Day of each
month in which principal and/or
interest is to be paid, the Issuing
and Paying Agent will deliver to
the Issuer and DTC a written list
of principal, interest and premium,
if any, to be paid on each Book-
Entry Note maturing either at
Stated Maturity or on a Redemption
Date in the following month. The
Issuing and Paying Agent, the
Issuer and DTC will confirm the
amounts of such principal and
interest payments with respect to a
Book-Entry Note on or about the
fifth Business Day preceding the
Maturity of such Book-Entry Note.
On or before Maturity Date, the
Issuer will pay to the Issuing and
Paying Agent, and the Issuing and
Paying Agent in turn will pay to
DTC, the principal amount of such
Note, together with interest and
premium, if any, due at such
Maturity Date, at the times and in
the manner set forth below under
"Manner of Payment." Promptly
after payment to DTC of the
principal and interest due at
A-12
Maturity of such Book-Entry Note,
the Issuing and Paying Agent will
cancel such Book-Entry Note in
accordance with the Issuing and
Paying Agency Agreement and so
advise the Issuer. If any Maturity
of a Book-Entry Note is not a
Business Day, the payment due on
such day shall be made on the next
succeeding Business Day and no
interest shall accrue on such
payment for the period from and
after such Maturity.
MANNER OF PAYMENT. The total
amount of any principal, premium,
if any, and interest due on Book-
Entry Notes on any Interest Payment
Date or at Maturity shall be
transferred by the Issuer to the
Issuing and Paying Agent to an
account designated by the Issuing
and Paying Agent in funds available
for use by the Issuing and Paying
Agent as of 12:00 noon, New York
City time, on such date. The
Issuer will confirm such
instructions in writing to the
Issuing and Paying Agent. Prior to
2:00 p.m., New York City time, on
such date or as soon as possible
thereafter, the Issuing and Paying
Agent will pay (but only from funds
withdrawn from such account) by
separate wire transfer (using
Fedwire message entry instructions
in a form previously specified by
DTC) to an account at the Federal
Reserve Bank of New York previously
specified by DTC, in funds
available for immediate use by DTC,
each payment of interest, principal
and premium, if any, due on a Book-
Entry Note on such date. Thereafter
on such date, DTC will pay, in
accordance with its SDFS operating
procedures then in effect, such
amounts in funds available for
immediate use to the respective
Participants in whose names such
Notes are recorded in the book-
entry system maintained by DTC.
A-13
Neither the Issuer nor the Issuing
and Paying Agent shall have any
responsibility or liability for the
payment by DTC of the principal of,
or premium, if any, or interest on,
the Book-Entry Notes to such
Participants.
WITHHOLDING TAXES. The amount of
any taxes required under applicable
law to be withheld from any
interest payment on a Note will be
determined and withheld by the
Participant, indirect participant
in DTC or other Person responsible
for forwarding payments and
materials directly to the
beneficial owner of such Note.
SETTLEMENT PROCEDURES: Settlement Procedures with regard
to each Book-Entry Note sold by the
Presenting Agent, as agent of the
Company, will be as follows:
A. The Presenting Agent will
advise the Issuer by telephone
(confirmed in writing) or
telecopy of the following
Settlement information:
1. Taxpayer identification
number of the purchaser.
2. Principal amount of the
Note.
3. Interest rate, and interest
payment dates.
4. Price to public of the
Note.
5. Trade date.
6. Settlement Date (Original
Issue Date).
7. Maturity.
8. Net proceeds to the
Company.
A-14
9. Agent's commission.
10. Redemption provisions, if
any.
B. The Issuer will advise the
Issuing and Paying Agent by
telephone (confirmed in
writing) or telecopy by 10:00
a.m. on the second Business Day
preceding the Settlement Date
of the above settlement
information received from the
Presenting Agent with respect
to the Book-Entry Note
representing such Note.
C. The Issuer will assign a PPN
number to such Note and the
Issuing and Paying Agent will
communicate to DTC through
DTC's Participant Terminal
System, a pending deposit
message specifying the
following settlement
information, which will route
such relevant information to
the Presenting Agent, Standard
& Poor's Ratings Group and
Interactive Data Corporation:
1. The information set forth
in Settlement Procedure A.
2. Identification numbers of
the participant accounts
maintained by DTC on behalf
of the Issuing and Paying
Agent and the Agent.
3. Initial Interest Payment
Date for such Note, number
of days by which such date
succeeds the related Record
Date for DTC purposes and,
if then calculable, the
amount of interest payable
on such Interest Payment
Date (which amount shall
have been confirmed by the
Issuing and Paying Agent).
A-15
4. PPN number of the Book-
Entry Note representing
such Note.
D. The Issuing and Paying Agent
will complete a Book-Entry Note
representing such Note in a
form that has been approved by
the Company, the Agents and the
Issuing and Paying Agent.
E. The Issuing and Paying Agent
will authenticate the Book-
Entry Note representing such
Note.
F. DTC will credit such Note to
the participant account of the
Issuing and Paying Agent
maintained by DTC.
G. The Issuing and Paying Agent
will enter an SDFS deliver
order through DTC's Participant
Terminal System instructing DTC
(i) to debit such Note to the
Issuing and Paying Agent's
participant account and credit
such Note to the participant
account of the Presenting Agent
maintained by DTC and (ii) to
debit the settlement account of
the Presenting Agent and credit
the settlement account of the
Issuing and Paying Agent
maintained by DTC, in an amount
equal to the price of such Note
less such Agent's commission.
Any entry of such a deliver
order shall be deemed to
constitute a representation and
warranty by the Issuing and
Paying Agent to DTC that (i)
the Book-Entry Note
representing such Note has been
issued and authenticated and
(ii) the Issuing and Paying
Agent is holding such Book-
Entry Note pursuant to the Note
Certificate Agreement between
the Issuing and Paying Agent
and DTC.
A-16
H. The Presenting Agent will enter
an SDFS deliver order through
DTC's Participant Terminal
System instructing DTC (i) to
debit such Note to the
Presenting Agent's participant
account and credit such Note to
the participant account of the
Participants maintained by DTC
and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of the
Presenting Agent maintained by
DTC, in an amount equal to the
public offering price of such
Note.
I. Transfers of funds in
accordance with SDFS deliver
orders described in Settlement
Procedures G and H will be
settled in accordance with SDFS
operating procedures in effect
on the Settlement Date.
J. Upon receipt of such funds, the
Issuing and Paying Agent will
credit to an account of the
Company identified to the
Issuing and Paying Agent funds
available for immediate use in
the amount transferred to the
Issuing and Paying Agent in
accordance with Settlement
Procedure G.
K. The Presenting Agent will
confirm the purchase of such
Note to the purchaser either by
transmitting to the Participant
with respect to such Note a
confirmation order through
DTC's Participant Terminal
System or by mailing a written
confirmation to such purchaser.
A-17
SETTLEMENT PROCEDURES For orders of Notes accepted by the
TIMETABLE: Company, Settlement Procedures "A"
through "K" set forth above shall
be completed as soon as possible
but not later than the respective
times (New York City time) set
forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade
date
B 12:00 noon on the trade
date
C 2:00 p.m. on the trade
date
D 3:00 p.m. on the
Business Day before
Settlement Date
E 9:00 a.m. on Settlement
Date
F 10:00 a.m. on
Settlement Date
G-H 2:00 p.m. on the
Settlement Date
I 4:45 p.m. on Settlement
Date
J-K 5:00 p.m. on Settlement
Date
If a sale is to be settled more
than one Business Day after the
trade date, Settlement Procedures
A, B, and C shall be completed as
soon as practicable but in no event
later than 11:00 a.m. and 12:00
noon on the first Business Day
after such sale date but no later
than 2:00 p.m. on the Business Day
before the Settlement Date,
respectively. Settlement Procedure
I is subject to extension in
accordance with any extension of
Fedwire closing deadlines and in
the other events specified in the
SDFS operating procedures in effect
on the Settlement Date.
If settlement of a Book-Entry Note
is rescheduled or canceled, the
Issuing and Paying Agent, if
A-18
notified in time, will deliver to
DTC, through DTC's Participant
Terminal System, a cancellation
message to such effect by no later
than 2:00 pm., New York City time,
on the Business Day immediately
preceding the scheduled Settlement
Date.
FAILURE TO SETTLE: If the Issuing and Paying Agent
fails to enter an SDFS deliver
order with respect to a Book-Entry
Note pursuant to Settlement
Procedure G, the Issuing and Paying
Agent may deliver to DTC, through
DTC's Participant Terminal System,
as soon as practicable a withdrawal
message instructing DTC to debit
such Note to the participant
account of the Issuing and Paying
Agent maintained at DTC. DTC will
process the withdrawal message,
PROVIDED that such participant
account contains a principal amount
of the Book-Entry Note representing
such Note that is at least equal to
the principal amount to be debited.
If withdrawal messages are
processed with respect to all the
Notes represented by a Book-Entry
Note, the Issuing and Paying Agent
will mark such Book-Entry Note
"canceled," make appropriate
entries in its records and send
such canceled Book-Entry Note to
the Company. The CUSIP number
assigned to such Book-Entry Note
shall, in accordance with CUSIP
Service Bureau procedures, be
canceled and not immediately
reassigned. If withdrawal messages
are processed with respect to a
portion of the Notes represented by
a Book-Entry Note, the Issuing and
Paying Agent will exchange such
Book-Entry Note for two Book-Entry
Notes, one of which shall represent
the Book-Entry Notes for which
withdrawal messages are processed
and shall be canceled immediately
after issuance, and the other of
which shall represent the other
A-19
Notes previously represented by the
surrendered Book-Entry Note and
shall bear the CUSIP number of the
surrendered Book-Entry Note.
If the purchase price for any Book-
Entry Note is not timely paid to
the Participants with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant
in DTC, acting on behalf of such
purchaser), such Participants and,
in turn, the related Agent may
enter SDFS deliver orders through
DTC's Participant Terminal System
reversing the orders entered
pursuant to Settlement Procedures G
and H, respectively. Thereafter,
the Issuing and Paying Agent will
deliver the withdrawal message and
take the related actions described
in the preceding paragraph. If
such failure shall have occurred
for any reason other than default
by the applicable Agent to perform
its obligations hereunder or under
the Placement Agency Agreement, the
Company will reimburse such Agent
on an equitable basis for its loss
of the use of funds during the
period when the funds were credited
to the account of the Company.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating Procedures then in
effect. In the event of a failure
to settle with respect to a Note
that was to have been represented
by a Book-Entry Note also
representing other Notes, the
Issuing and Paying Agent will
provide, in accordance with
Settlement Procedures D and E, for
the authentication and issuance of
a Book-Entry Note representing such
remaining Notes and will make
appropriate entries in its records.
A-20
PART III: PROCEDURES FOR NOTES ISSUED
--------------------------------------
IN CERTIFICATED FORM
--------------------
INTEREST PAYMENTS: Interest (if any) on each Note will
accrue from the Original Issue Date
of such Note, and will be
calculated and paid in the manner
described in such Note.
Unless otherwise provided in the
Issuing and Paying Agency Agreement
or the Notes, the first payment of
interest on any Note originally
issued after a Record Date and on
or before the next succeeding
Interest Payment Date will be made
no earlier than the Interest
Payment Date following the next
succeeding Record Date. Interest
payable at maturity of a Note, or
upon earlier redemption or
repayment, will be payable to the
person to whom the principal of
such Note is payable. All interest
payments for each Interest Payment
Date (excluding interest payments
made on the Maturity Date or upon
the acceleration thereof or on
earlier redemption) will be made by
check mailed to the person entitled
thereto as provided above, or at
the option of the registered
holder, at such other place in the
United States as the registered
holder shall designate to the
Issuing and Paying Agent in
writing, except that a holder of
the equivalent of $10,000,000 or
more in aggregate principal amount
of Notes with the same Interest
Payment Date shall be entitled to
receive such payments in
immediately available funds paid to
an account at a bank in New York,
New York (or other bank consented
to by the Issuer and the Issuing
and Paying Agent), but only if
appropriate payment instructions
A-21
have been received in writing by
the Issuing and Paying Agent not
less than 10 days prior to the
applicable Interest Payment Date
(provided that such bank designated
by the registered holder has
appropriate facilities therefor).
Within five Business Days following
each Record Date, the Issuing and
Paying Agent will provide to the
Issuer a list of interest payments
to be made for each Note on the
next succeeding Interest Payment
Date and the total amount of the
interest payments. The Issuing and
Paying Agent will provide monthly
to the Issuer a list of the
principal, premium, if any, and
interest to be paid on Notes
maturing or being redeemed in the
next succeeding month.
SETTLEMENT: The Issuer will instruct the
Issuing and Paying Agent to effect
delivery of each Note no later than
1:00 p.m., New York City time, on
the Settlement Date to the
Presenting Agent for delivery to
the purchaser.
DETAILS FOR
SETTLEMENT: For each offer to purchase a Note
that is accepted by the Issuer, the
Presenting Agent will provide
(unless provided by the purchaser
directly to the Issuer) by
telephone the following information
to the Issuer:
1. The exact name of the
Registered Owner.
2. The exact address of the
Registered Owner and the
address for delivery, notices
and payments of principal and
interest.
3. The taxpayer identification
number of the Registered Owner.
4. A description of the terms and
provisions of the Notes that
includes the information
A-22
identified in Exhibit B to the
Agreement and any other
information required to
describe such Notes properly.
5. The Issue Price.
6. The Trade Date.
7. The Settlement Date.
8. The Presenting Agent's
commission, determined as
provided in Section 2(a) of
the Agreement.
The Issuer will advise the Issuing
and Paying Agent of the foregoing
information for each offer to
purchase a Note solicited by the
Presenting Agent and accepted by
the Issuer in time for the Issuing
and Paying Agent to prepare and
authenticate the required Note, but
not later than 10:00 a.m. New York
City time on the second Business
Day preceding the Settlement Date.
Before accepting any offer to
purchase a Note to be settled in
less than three Business Days, the
Issuer shall verify that the
Issuing and Paying Agent will have
adequate time to prepare and
authenticate such Note.
After receiving from the Presenting
Agent the details for each offer to
purchase a Note, the Issuer will,
after recording the details and any
necessary calculations, provide
appropriate documentation to the
Issuing and Paying Agent, including
the information provided by the
Presenting Agent necessary for the
preparation and authentication of
such Note. Prior to preparing the
Note for delivery (but in any case
no later than 10:00 a.m. on the
Business Day next preceding the
Settlement Date therefor), the
Issuing and Paying Agent will
confirm the details of such issue
with the Issuer, and the Issuer
will confirm such instruction to
the Presenting Agent, in each case
by telephone, telecopy or telex.
A-23
DELIVERIES AND
CASH PAYMENT: Upon receipt of appropriate
documentation and instructions with
respect to the Notes constituting a
Tranche, the Issuer will cause the
Issuing and Paying Agent to prepare
and authenticate the form of Note
previously approved by the Issuer,
the Presenting Agent and the
Issuing and Paying Agent and
deliver such Note and a customer
receipt to the purchaser.
If the form of Note is not
pre-printed and four-ply, the
Issuing and Paying Agent shall
deliver a photocopy of such
authenticated Note to the
Presenting Agent and the Issuer and
shall retain one copy. Otherwise,
it shall deliver the copies in the
four-ply Note as follows:
Stub l--For the Presenting
Agent.
Stub 2--For the Issuer.
Stub 3--For the Issuing and
Paying Agent.
Each Note shall be authenticated on
the Settlement Date therefor. The
Issuing and Paying Agent will
authenticate each Note and deliver
it to the Presenting Agent (and
deliver the stubs as indicated
above), all in accordance with
written instructions (or oral
instructions confirmed in writing,
which may be given by telex or
telecopy, on the next Business Day)
from the Issuer.
Upon verification by the Presenting
Agent that a Note has been prepared
and properly authenticated by the
Issuing and Paying Agent and
registered in the name of the
purchaser in the proper principal
amount, payment will be made to the
Issuer by the Presenting Agent the
same day in immediately available
funds. Such payment shall be made
A-24
only upon prior receipt by the
Presenting Agent of immediately
available funds from or on behalf
of the purchaser unless the
Presenting Agent decides, at its
option, exercised in the sole
discretion of such Presenting
Agent, to advance its own funds for
such payment against subsequent
receipt of funds from the
purchaser. The Presenting Agent
shall immediately notify the Issuer
of its decision to advance its own
funds for payment against
subsequent receipt of funds from a
purchaser.
Upon delivery of a Note to the
Presenting Agent, the Presenting
Agent shall promptly deliver such
Note to the purchaser.
In the event any Note is
incorrectly prepared, the Issuing
and Paying Agent shall promptly
issue a replacement Note in
exchange for the incorrectly
prepared Note.
FAILURE TO SETTLE: If the Presenting Agent, at its own
option, has advanced its own funds
for payment against subsequent
receipt of funds from a purchaser,
and if such purchaser shall fail to
make payment for the Note on the
Settlement Date therefor, the
Presenting Agent will promptly
notify the Issuing and Paying Agent
and the Issuer by telephone,
promptly confirmed in writing,
which may be given by telex or
telecopy (but no later than the
next Business Day). In such event,
the Issuer shall promptly provide
the Issuing and Paying Agent with
appropriate documentation and
instructions consistent with these
procedures for the return of the
Note to the Issuing and Paying
Agent, and the Presenting Agent
will promptly return the Note to
the Issuing and Paying Agent. Upon
A-25
(i) confirmation from the Issuing
and Paying Agent in writing which
may be given by telex or telecopy)
that the Issuing and Paying Agent
has received the Note and upon (ii)
confirmation from the Presenting
Agent in writing (which may be
given by telex or telecopy) that
the Presenting Agent has not
received payment from such
purchaser (the matters referred to
in clauses (i) and (ii) are
referred to hereinafter as the
("confirmations"), the Issuer will
promptly pay to the Presenting
Agent an amount in immediately
available funds equal to the amount
previously paid by the Presenting
Agent in respect of such Note.
Assuming receipt of such Note by
the Issuing and Paying Agent and of
the confirmations by the Issuer,
such payment will be made on the
Settlement Date if reasonably
practical, and in any event not
later than the Business Day
following the date of receipt of
the Note and the confirmations. If
a purchaser shall fail to make
payment for such Note for any
reason other than the failure of
the Presenting Agent to provide the
necessary information to the Issuer
as described above for settlement
or to provide a confirmation to the
purchaser within a reasonable
period of time as described above
or otherwise to satisfy its
obligations hereunder or in the
Agreement, and if the Presenting
Agent shall have otherwise complied
with its obligations hereunder and
in the Agreement, the Issuer will
reimburse the Presenting Agent for
its loss of the use of funds during
the period when they were credited
to the account of the Issuer.
Immediately upon receipt of the
Note in respect of which the
failure occurred, the Issuing and
Paying Agent will void said Note,
A-26
make appropriate entries in its
records and destroy such Note; and
upon such action, such Note will be
deemed not to have been issued,
authenticated or delivered.
A-27
EXHIBIT B
TERMS AGREEMENT
[Date]
To: CONNECTICUT NATURAL GAS CORPORATION
Subject in all respects to the
terms and conditions of the Amended and Restated Placement Agency
Agreement (the "Agreement") dated as of August _____, 1997, among
PaineWebber Incorporated., A.G. Edwards & Sons, Inc. and you, the
undersigned agrees to purchase the following Notes of Connecticut
Natural Gas Corporation:
Principal Amount:
Interest Rate:
Maturity Date:
Discount to the Purchaser: ___% of Principal Amount
Purchase Price:
Closing Date and Time:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption [Percentage Reduction]:
Requirements to deliver
the documents specified in
Section 6(a)(ii) of the
Agreement:
Certificate contemplated by
clause (1): [Required/Not
Required]
Opinion contemplated by
clause (2): [Required/Not
Required]
Opinion contemplated by
clause (3): [Required/Not
Required]
Letter contemplated by
clause (4): [Required/Not
Required]
Period during which additional
Notes may not be sold
if not period between trade
date and Closing Date
as specified in Section 4(a)(v) of
the Agreement:
B-1
OTHER PROVISIONS:
[PAINEWEBBER INCORPORATED]
[A.G. EDWARDS & SONS, INC.],
as Purchaser(s),
By:
Name:
Title:
Accepted:
CONNECTICUT NATURAL GAS CORPORATION,
By:
Name:
Title:
B-2
EXHIBIT C
August 13, 1997
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Re: Connecticut Natural Gas Corporation U.S. $75,000,000
Medium-Term Notes, Series B
----------------------------------------------------
Dear Sirs:
We have acted as counsel to Connecticut Natural Gas
Corporation, a Connecticut corporation (the "Issuer"), in
connection with the issuance by the Issuer from time to time of
up to $75,000,000 aggregate principal amount of its Medium-Term
Notes, Series B (the "Notes"), due from one year to thirty years
from date of issuance, to be issued pursuant to the Issuing and
Paying Agency Agreement dated as of June 14, 1994 (as amended by
the First Amendment thereto, dated August 13, 1997, the "Issuing
and Paying Agency Agreement"), between the Issuer and State
Street Bank and Trust Company, as successor to Shawmut Bank
Connecticut, National Association.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such
documents, corporate records or other instruments as we have
deemed necessary or appropriate for the purposes of this opinion,
including: (a) the Issuing and Paying Agency Agreement; (b) the
form of the Notes; (c) the Amended and Restated Placement Agency
Agreement (the "Placement Agency Agreement"), including the
Procedures annexed thereto, dated as of August 13, 1997 (the
"Placement Agency Agreement"), between PaineWebber Incorporated
and A.G. Edwards & Sons, Inc. (each, an "Agent" and,
collectively, the "Placement Agents") and the Issuer; (d) the
Offering Memorandum dated August 13, 1997 (the "Offering
Memorandum"), relating to the Notes, which includes and
incorporates by reference the Issuer's audited financial
statements as of and for the fiscal years ended September 30,
1996 and 1995, as Exhibit A, the Issuer's unaudited financial
C-1
PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
August 13, 1997
Page 2
statements as of and for the nine months ended June 30, 1997 and
1996, as Exhibit B, Management's Discussion and Analysis of
Financial Condition and Results of Operations, as Exhibit C, and
the consolidated financial statements of the Issuer as of and for
the fiscal years ended September 30, 1996 and 1995, and the
related accountant's report and notes as filed with the
Securities and Exchange Commission in Item 8 of the Issuer's
Annual Report on Form 10-K for fiscal 1996 (collectively, the
"Incorporated Documents"); (e) the Certificate of Incorporation
and By-laws of the Issuer; (f) resolutions adopted by the Board
of Directors of the Issuer at meetings held on February 22, 1994,
May 24, 1994 and May 20, 1997; and (g) the Decision of the
Connecticut Department of Public Utility Control dated May 11,
1994 (Docket No. 94-04-10). The agreements referred to in (a)
and (c) above are herein referred to collectively as the
"Transaction Agreements."
With respect to matters stated herein to be to the best of
our knowledge, we have consulted with officers of the Issuer who,
by reason of their positions, would be expected to have knowledge
of the relevant facts and circumstances, and made such other
investigations as we have deemed necessary or appropriate.
Nothing has come to our attention in the course of such
consultations and investigations which has caused us to believe
that the statements so made herein as to the best of our
knowledge are untrue, incorrect or misleading. We have not
searched the dockets of any court or agency for litigation or
proceedings involving the Issuer.
We express no opinion as to the laws of any jurisdiction
other than the laws of Connecticut and the Federal laws of the
United States. We have made no inquiry into and express no
opinion as to the laws of other jurisdictions. As you are aware,
the Placement Agency Agreement purports to be governed by the
laws of the State of New York. For purposes of this opinion we
have assumed, without investigation, that the laws of the State
of New York applicable to that document and the transactions
contemplated thereby are the same in all respects as the
applicable laws of the State of Connecticut.
For purposes of our opinion concerning the valid existence
of the Issuer in the State of Connecticut, we have relied upon a
certificate of the Secretary of the State of the State of
Connecticut. Based upon the foregoing, and subject to the
limitations and qualifications set forth herein, we are of the
opinion that:
C-2
PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
August 13, 1997
Page 3
1. The Issuer and each of its subsidiaries have been duly
incorporated, are validly existing as corporations under the laws
of the State of Connecticut and have full corporate power and
authority to own their properties and conduct their business as
presently conducted. The Issuer has full corporate power and
authority to execute and deliver the Transaction Agreements and
the Notes and to perform its obligations under such agreements
and the Notes.
2. The Transaction Agreements have been duly authorized,
executed and delivered by the Issuer and constitute legal, valid
and binding obligations of the Issuer, enforceable against the
Issuer in accordance with their respective terms.
3. The Issuer has duly authorized the execution, delivery,
issuance, offering and sale of the Notes and performance of its
obligations thereunder in accordance with their respective terms
and conditions, subject to the determination of certain terms of
the Notes by officers of the Issuer authorized by the Issuer to
establish such terms. Each Note, when completed, executed,
authenticated and delivered as described in the Issuing and
Paying Agency Agreement and the Placement Agency Agreement
against payment of the consideration therefor, will constitute a
legal, valid and binding obligation of the Issuer, enforceable
against the Issuer in accordance with its terms and will entitle
its registered owner to the benefits of the Issuing and Paying
Agency Agreement.
4. The Issuing and Paying Agency Agreement and the form of
the Notes attached thereto conform in all material respects to
the descriptions thereof contained in the Offering Memorandum.
5. To the best of such counsels' knowledge, the Issuer is
not in violation of its charter or by-laws. The execution,
delivery and performance of the Transaction Agreements and the
execution, delivery, issuance, offering and sale of the Notes and
the performance of the obligations under the Notes and such
agreements will not conflict with, result in a breach of,
constitute a default under or result in the creation or
imposition of any lien, charge or encumbrance on any property or
assets of the Issuer or its subsidiaries pursuant to the Issuer's
Certificate of Incorporation, By-laws or, to the best of our
knowledge, any indenture, mortgage, loan agreement, note or
similar financial instrument to which the Issuer or any of its
subsidiaries is a party or to which any of its or their property
is subject or any statute, regulation or order or judgment
C-3
PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
August 13, 1997
Page 4
applicable to the Issuer of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Issuer or any of its subsidiaries.
6. Assuming that the Notes are offered, sold and issued in
compliance with the terms and conditions of the Issuing and
Paying Agency Agreement, the Placement Agency Agreement and the
Procedures contemplated therein, no approval, authorization,
consent or other order of, or filing with, any United States
Federal or Connecticut State governmental authority is legally
required in connection with the execution, delivery and
performance by the Issuer of the Transaction Agreements or the
issuance of the Notes, except such as may be required under
applicable state securities laws in connection with the offer and
sale of the Notes; provided, however, that the approval of the
Connecticut Department of Public Utility Control is required in
connection with the issuance of the Notes and has been obtained
and is in full force and effect with respect to the general terms
and conditions of the program for the issuance of Notes during
the period ending September 30, 1998 subject to the requirement
for further approval of said Department to proposed terms for the
specific issuances of Notes as may be filed by the Issuer with
said Department from time to time.
7. The Issuer is a subsidiary of CTG Resources, Inc., a
Connecticut corporation ("CTG"), and is exempt from any
provisions imposed upon it as a "subsidiary company" of a
"holding company" under the Public Utility Holding Company Act of
1935, as amended, except Section 9(a)(2) thereof.
8. Except as may be set forth or arising out of facts
disclosed in the Offering Memorandum, to the best of our
knowledge, there are no legal or governmental actions, suits or
proceedings before any court or governmental or other regulatory
agency or body of any jurisdiction or any arbitrator now pending
or threatened against the Issuer, its subsidiaries or any of its
or their properties, other than such actions, suits or
proceedings that, considered in the aggregate, would not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, business or
properties of the Issuer or the ability of the Issuer to perform
its obligations under the Transaction Agreements and the Notes.
9. The statements in the Offering Memorandum under the
caption "Description of the Notes," to the extent that they
constitute matters of law, summaries of legal matters, documents
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PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
August 13, 1997
Page 5
or proceedings, or legal conclusions, have been reviewed by us
and are correct in all material respects.
10. The form of Note annexed as Exhibit I to the Issuing
and Paying Agency Agreement conforms in all material respects to
all statements relating thereto contained in the Offering
Memorandum.
11. Neither registration of the Notes under the Securities
Act of 1933, as amended, nor the qualification of an indenture
under the Trust Indenture Act of 1939, as amended, with respect
thereto is required for the offer, sale and, assuming the sale to
an Agent as principal, initial resale of the Notes in the manner
contemplated by the Placement Agency Agreement.
12. The Issuer is not required to register as an
"investment company" under the Investment Company Act of 1940, as
amended, and will not be required to so register as a result of
the transactions contemplated by the Transaction Agreements.
We have not independently verified the accuracy,
completeness or fairness of the statements made or included in
the Offering Memorandum or the Incorporated Documents and take no
responsibility therefor, except to the extent referred to under
Paragraph 4 above and in this paragraph. In the course of the
preparation by the Issuer of the Offering Memorandum, excluding
the Incorporated Documents, we participated in conferences with
certain officers and employees of the Issuer and with its
accountants. We also participated in the preparation by the
Issuer of its Annual Report on Form 10-K for its fiscal year
ended 1996, its Quarterly Report for the quarter ended
December 31, 1996 and CTG's Quarterly Report for the quarter
ended March 31, 1997, and its Proxy Statement respecting its
annual meeting of stockholders held in 1997. Based upon our
examination of the Offering Memorandum, the Incorporated
Documents, our investigation in connection with the preparation
of the Offering Memorandum, and our participation in the
conferences referred to above, we have no reason to believe that
the Offering Memorandum (including the Incorporated Documents)
contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading, provided, however, that we express no view
with respect to any financial statements contained in or
incorporated by reference into the Offering Memorandum or the
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PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
August 13, 1997
Page 6
Incorporated Documents or any financial information derived
therefrom.
The foregoing is subject to the following:
a. The enforceability of the Transaction Agreements and
the Notes is subject to procedural due process and subject to
applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other laws affecting creditor's rights
generally from time to time in effect and general principles of
equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
b. No opinion is expressed as to the enforceability of (i)
provisions related to self-help, (ii) provisions which purport to
establish evidentiary standards, (iii) provisions related to
waiver of remedies (or the delay or omission of enforcement
thereof), disclaimers, releases of legal or equitable rights,
discharge of defenses, or liquidated damages, (iv) provisions
releasing, exculpating or exempting a party from, or requiring
indemnification of a party for, liability for its own action or
inaction to the extent the action or inaction involves
negligence, recklessness, willful misconduct, unlawful conduct or
conduct against public policy, or (v) any particular remedy where
another remedy has been selected.
c. Provisions in the Transaction Agreements and the Notes
which permit the holders of the Notes to make determinations or
to take actions may be subject to requirements that such
determinations be made or actions be taken on a reasonable basis
and in good faith.
Each of you may rely on this opinion in connection with the
transactions contemplated by the Transaction Agreements, but it
may not be relied upon by any other person or for any other
purpose whatsoever, without in each instance obtaining our prior
written consent.
Very truly yours,
MURTHA, CULLINA, RICHTER AND PINNEY
By:
Willard F. Pinney, Jr.
A Partner of the Firm
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EXHIBIT D
CONNECTICUT NATURAL GAS CORPORATION
U.S. $
Medium-Term Notes, Series B
With Maturities From One Year to
Thirty Years From Date of Issue
Amendment to Amended and Restated Placement Agency Agreement
------------------------------------------------------------
New York, New York
[Date]
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
Dear Sirs:
The Amended and Restated Placement Agency Agreement
dated August 13, 1997 (the "Agreement"), between Connecticut
Natural Gas Corporation, a Connecticut corporation (the
"Issuer"), and you is hereby amended to increase the aggregate
principal amount of Notes (as defined in the Agreement) at any
time outstanding to up to U.S. $ .
[The documents referred to in the second sentence of
Section 12 of the Agreement shall be delivered simultaneously
herewith.]
In all other respects the Agreement shall remain in
full force and effect.
This amendment to the Agreement may be executed in
counterparts, and the executed counterparts shall together
constitute a single instrument.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter shall represent
D-1
a binding agreement between the Issuer and each of you. This
letter shall not constitute a binding agreement unless and until
it is executed by the Issuer and each of you.
Very truly yours,
CONNECTICUT NATURAL GAS CORPORATION
by:
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
PAINEWEBBER INCORPORATED
by:
Name:
Title:
A.G. Edwards & SONS, INC.,
by:
Name:
Title:
D-2