Exhibit 1
FIRSTENERGY CORP.
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$_____ __% NOTES, SERIES A, DUE 2006
$_____ __% NOTES, SERIES B, DUE 2011
$_____ __% NOTES, SERIES C, DUE 2031
UNDERWRITING AGREEMENT
November __, 2001
November __, 2001
Barclays Capital Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
(collectively, the "Representatives")
and the other Underwriters listed on Annex A hereto
Ladies and Gentlemen:
I.
FirstEnergy Corp., an Ohio corporation (hereinafter called the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several underwriters named on Annex A hereto (the
"Underwriters", which term, when the context permits, shall also include any
underwriters substituted as hereinafter provided in Article IX), and the
Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree to purchase
from the Company, severally and not jointly, the principal amount of the
Company's securities identified in Annex B hereto (the "Debt Securities") to be
issued under an indenture, dated as of November __, 2001 (the "Indenture"),
between the Company and Bank One Trust Company, N.A., as trustee (the
"Trustee"), set forth on Annex A hereto opposite their names (in an aggregate
principal amount of $__ billion) at a purchase price identified in Annex B
hereto. The Debt Securities are more fully described in the Prospectus to which
reference is hereinafter made.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-69856), including a
preliminary prospectus relating to the Debt Securities, and will file with the
Commission a final form of a prospectus specifically relating to the terms of
the Debt Securities pursuant to Rule 424 under the Securities Act of 1933 (the
"Act"). Such registration statement has become effective. The Company qualifies
for use of Form S-3 for the registration of the Debt Securities and the Debt
Securities are registered under the Act. The preliminary prospectus forming a
part of such registration statement, at the time such registration statement (or
the most recent amendment thereto filed prior to the time of effectiveness of
this Agreement) became effective, including all documents incorporated by
reference therein at that time pursuant to Item 12 of Form S-3, is hereinafter
referred to as the "Basic Prospectus." In the event that (i) the Basic
Prospectus shall have been amended, revised or supplemented prior to the time of
effectiveness of this Agreement, including without limitation by any preliminary
prospectus supplement relating to the Debt Securities, or (ii) the Company shall
have filed documents pursuant to Section 13, 14 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") after the time such registration
statement (or the most recent amendment thereto filed prior to the time of
effectiveness of this Agreement) became effective and prior to the time of
effectiveness of this Agreement, which are incorporated or deemed to be
incorporated by reference in the Basic Prospectus pursuant to Item 12 of Form
S-3, the term "Basic Prospectus" as used herein shall also mean such prospectus
as so amended, revised or supplemented and reflecting such incorporation by
reference. Such registration statement in the form in which it became effective
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and as it may have been amended by all amendments thereto as of the time of
effectiveness of this Agreement (including, for these purposes, as an amendment
any document incorporated or deemed to be incorporated by reference in the Basic
Prospectus), and the Basic Prospectus as it shall be supplemented to reflect the
terms of the offering and sale of the Debt Securities by a prospectus supplement
(a "Prospectus Supplement") to be filed with the Commission pursuant to Rule
424(b) under the Act, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively.
II.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective Debt Securities as soon after this
underwriting agreement (the "Agreement") is entered into as in your judgment is
advisable. The Company is further advised by you that the Debt Securities are to
be offered to the public at the public offering prices set forth in Annex B
hereto. Annex B also sets forth the maximum concession and reallowance per Debt
Security.
III.
Payment for the Debt Securities shall be made to the Company or its
order by wire transfer or by certified or official bank check or checks in
immediately available funds at the office of _______________, New York, N.Y., at
10:00 A.M., New York City time, on November __, 2001, or at such other time on
the same or such other date, not later than November __, 2001, as we shall
mutually agree, upon delivery of the certificate(s) representing the Debt
Securities. Certificates for the Debt Securities shall be in definitive form and
registered in such names and in such denominations as you shall request in
writing not less than two full business days prior to the date of delivery. The
time and date of such payment and delivery are herein referred to as the Closing
Date.
IV.
The Company represents and warrants to you that as of the date hereof:
(a) (i) the Basic Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto or
filed pursuant to Rule 424 under the Act complied when so filed in all
material respects with the Act and the applicable rules and regulations
of the Commission thereunder, and each document incorporated by
reference therein complied when originally filed in all material
respects with the requirements of the Act or the Exchange Act pursuant
to which it was filed and the applicable rules and regulations of the
Commission thereunder, (ii) the Registration Statement and the
Prospectus, as amended or supplemented or modified by the filing of a
document incorporated by reference therein, will comply (at the time of
such amendment, supplement or modification and, if amended,
supplemented or modified prior to the Closing Date, on the Closing
Date) in all material respects with the Act and the applicable rules
and regulations thereunder, and (iii) the Registration Statement, as
amended or supplemented or modified by the filing of a document
incorporated by reference therein, will not contain (at the time of
such amendment, supplement or modification and, if amended,
supplemented or modified prior to the Closing Date, on the
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Closing Date) any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; except that these representations and warranties do not
apply to statements or omissions in the Registration Statement or the
Prospectus, in each case as amended, supplemented or modified, or the
Basic Prospectus, based upon information furnished to the Company in
writing by you or by any Underwriter expressly for use therein.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio, has the corporate power and authority to own, lease or operate
its property and to conduct its business as described in the Basic
Prospectus and the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(c) Each Significant Subsidiary (as defined below) of the
Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, and has corporate power and authority to own, lease or
operate its property and to conduct its business as presently being
conducted; and is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
"Significant Subsidiary" shall have the meaning as set forth in Rule
1-02 of Regulation S-X under the Act.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
enforceable against the Company in accordance with its terms except as
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, by general
equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or in law) and by an implied
covenant of good faith and fair dealing.
(f) The Debt Securities have been duly authorized, and, when
duly executed and authenticated, issued and delivered against payment
therefor as provided herein, will constitute valid and binding
obligations of the Company in accordance with the terms thereof,
subject to the effect of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and by an
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implied covenant of good faith and fair dealing and will be entitled to
the benefits of the Indenture.
(g) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture and the Debt Securities will not contravene any provision
of applicable law or the articles of incorporation or code of
regulations of the Company or any Significant Subsidiary of the Company
or any agreement or other instrument binding upon the Company or any
Significant Subsidiary of the Company or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company or any Significant Subsidiary of the Company, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture or the
Debt Securities, except such as may be required by the securities or
Blue Sky laws of the various states, the Act and the Public Utility
Holding Company Act of 1935 in connection with the offer or issuance of
the Debt Securities and from the Commission (whose approval for the
performance by the Company of its obligations under this Agreement, the
Indenture and the Debt Securities has been obtained).
(h) Since the respective dates as of which information is
given in the Prospectus, there has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in the business, properties, condition (financial or otherwise)
or operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(i) Other than as disclosed in or contemplated by the
Prospectus, there are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
subsidiary of the Company is a party or to which any of the properties
of the Company or any subsidiary of the Company is subject wherein an
unfavorable decision, ruling or finding would have a material adverse
effect on the business, properties, condition (financial or otherwise)
or operations of the Company and its subsidiaries, taken as a whole, or
on the power or ability of the Company to, perform its obligations
under this Agreement, or to consummate the transactions contemplated by
the Prospectus.
(j) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
V.
The several obligations of the Underwriters hereunder are subject to
the following conditions:
(a) (i) No stop order suspending the effectiveness of the
Registration Statement shall be in effect, no order of the Commission
directed to the adequacy or accuracy of
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any document incorporated by reference therein shall be in effect, and
no proceedings for either purpose shall be pending before or threatened
by the Commission; (ii) subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, there shall not have
occurred any downgrading in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436 (g) (2)
under the Act (a "Rating"); (iii) (x) subsequent to the execution and
delivery of this Agreement and prior to the Closing Date, no notice
shall have been given of an intended or potential downgrading of the
Rating of any of the Company's securities and (y) there shall not have
occurred any change, or any development involving a prospective change,
in the condition, financial or other, or in the earnings, business or
operations, of the Company and its subsidiaries taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), that in
the judgment of the Representatives is material and adverse and which,
in either case, makes it, in your judgment, impracticable to market the
Debt Securities; and (iv) you shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clauses (i) and (ii) above
and that the representations and warranties of the Company contained
herein are true and correct as of the Closing Date (except with respect
to the representations and warranties made as of a specified date, in
which case they are true and correct as of such date) and that there
shall not have occurred any material adverse change, in the condition,
financial or other, or in the earnings, business or operations, of the
Company and its subsidiaries taken as a whole, from that set forth in
the Registration Statement. In such certificate, the officer signing
and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(b) You shall have received, on and as of the Closing Date,
the favorable opinion of Xxxx X. Benz, Esq., Associate General
Counsel for the Company, or of such other member or members of the bar
of the State of Ohio who may be designated for that purpose by the
Company and who shall not be unsatisfactory to your counsel, to the
effect that:
(i) the Company was duly organized and is validly
existing under the laws of the State of Ohio, and has due
corporate authority to carry on the business in which it is
engaged and to own, lease or operate the properties owned,
leased or used by it in such business;
(ii) each Significant Subsidiary of the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, and has corporate power and authority to own,
lease or operate its property and to conduct its business as
presently being conducted and has full power and authority to
own, lease or operate its property and to conduct its business
as presently being conducted;
(iii) the Debt Securities have been duly authorized
and executed and, when authenticated and issued and delivered
against payment therefor as provided herein, will constitute
valid and binding obligations of the Company enforceable
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against the Company in accordance with the terms thereof,
subject to the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and
fair dealing;
(iv) all legally required proceedings under Ohio,
New Jersey and Pennsylvania law in connection with the
authorization, issuance and sale and the validity of the Debt
Securities by the Company in accordance with this Agreement
have been taken and all legally required orders, consents or
other authorizations or approvals of any Ohio, New Jersey and
Pennsylvania public boards or bodies in connection therewith
(other than in connection with or in compliance with the
provisions of the securities or Blue Sky laws of any
jurisdiction, as to which such counsel need not express an
opinion) have been obtained;
(v) this Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and legally binding agreement of the Company, enforceable
against the Company in accordance with the terms hereof,
subject to the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and
fair dealing;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
the Indenture has been duly authorized by all necessary
corporate action on the part of the Company; and the Indenture
constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with
the terms thereof, subject to the effect of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting the
enforcement of creditors' rights generally, by general
equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and by an implied covenant of good faith and fair
dealing;
(vii) to the best knowledge of such counsel, no
order directed to the adequacy of any document incorporated by
reference in the Prospectus has been issued by the Commission,
and no challenge by the Commission has been made to the
adequacy of any such document;
(viii) the descriptions in the Registration Statement
and Prospectus of franchises, regulations, statutes, legal and
governmental proceedings and contracts and other documents
insofar as such descriptions constitute (a) matters of law or
legal conclusions (or summaries thereof) involving the laws of
the State of Ohio, New Jersey or Pennsylvania or (b) summaries
of legal proceedings to
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which the Company is a party, are accurate in all material
respects, and such counsel does not know of any legal or
governmental proceedings required to be described in the
Registration Statement or the Prospectus which are not so
described (or the descriptions of which are not incorporated
by reference therein) as required, other than proceedings that
such counsel believes are not likely to have a material
adverse effect on the Company and its subsidiaries taken as a
whole, or on the power or ability of the Company to perform
its obligations under this Agreement or to consummate the
transactions contemplated by the Prospectus, nor of any
contracts or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not so
described (or the descriptions of which are not incorporated
by reference therein) or filed as required; and
(ix) the Company and each of its subsidiaries has
obtained all necessary consents, authorizations, approvals,
orders, licenses, certificates and permits of and from, and
has made all declarations and filings with, all foreign,
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other
tribunals, required to own, lease, license and operate and use
its properties and assets and to conduct its business in the
manner described in the Prospectus, except to the extent that
the failure to obtain, declare or file would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole.
In rendering such opinion, such counsel may rely as to all
matters of New York law upon the opinion referred to in (c) below and
as to all matters of New Jersey and Pennsylvania law upon the opinions
of [_____] and [______], respectively. In addition, such counsel shall
state that nothing has come to the attention of such counsel which
would lead such counsel to believe that the Registration Statement or
any post-effective amendment thereto (except for the financial
statements, including the notes thereto and any related schedules, and
other financial and statistical data included therein, as to which such
counsel need express no opinion), at the time such Registration
Statement or any such post-effective amendment thereto became
effective, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus, as
amended or supplemented or modified by the filing of a document
incorporated by reference therein (except for the financial statements,
including the notes thereto and any related schedules, and other
financial and statistical data therein, as to which such counsel need
express no opinion), as of its date and on the Closing Date included or
includes any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(c) You shall have received, on and as of the Closing Date,
the favorable opinion of Pillsbury Winthrop LLP, New York counsel for
the Company, to the effect that:
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(i) the statements made in the Prospectus under
the caption "Description of the Debt Securities," insofar as
such statements constitute summaries of the legal matters or
documents referred to therein, are accurate in all material
respects;
(ii) the Debt Securities have been duly authorized
and executed, and when authenticated, issued and delivered
against payment therefor as provided herein, the Debt
Securities will constitute valid and binding obligations of
the Company enforceable against the Company in accordance with
the terms thereof, subject to the effect of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting the
enforcement of creditors' rights generally, by general
equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and by an implied covenant of good faith and fair
dealing;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company; it constitutes a valid
and legally binding agreement of the Company enforceable
against the Company in accordance with the terms thereof,
subject to the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and
fair dealing;
(iv) all legally required proceedings under the laws
of the State of New York or the United States of America in
connection with the authorization, issuance and sale and the
validity of the Debt Securities by the Company in accordance
with this Agreement have been taken and all legally required
orders, consents or other authorizations or approvals of the
Commission and of any other New York or federal public boards
or bodies in connection therewith (other than in connection
with or in compliance with the provisions of the securities or
Blue Sky laws of any jurisdiction, as to which such counsel
need not express an opinion) have been obtained;
(v) the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); the Registration Statement has become
effective under the Act, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or
contemplated by the Commission;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company, it constitutes a valid
and legally binding agreement of the Company, in accordance
with the terms hereof, enforceable against the Company in
accordance with the terms thereof, subject to the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting the
enforcement of creditors' rights generally, by
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general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and by an implied covenant of good faith and fair
dealing;
(vii) the Registration Statement, the Prospectus and
any supplements or amendments thereto (except for the
financial statements, including the notes thereto and any
related schedules, and other financial and statistical data
included or incorporated by reference therein, as to which
such counsel need not express an opinion), as of their
respective effective or issue dates, complied as to form in
all material respects with the requirements of the Act and the
Trust Indenture Act and the applicable rules and regulations
of the Commission thereunder;
(viii) each document of the Company incorporated by
reference in the Prospectus, as such document was originally
filed by the Company pursuant to the Act or the Exchange Act
(except for the financial statements, including the notes
thereto and any related schedules, and other financial and
statistical data included or incorporated by reference
therein, as to which such counsel need not express an
opinion), complied as to form when so filed in all material
respects with the requirements of the Act or the Exchange Act
pursuant to which it was filed and the applicable rules and
regulations of the Commission thereunder;
(ix) to the best knowledge of such counsel, no
order directed to the adequacy of any document of the Company
incorporated by reference in the Prospectus has been issued by
the Commission, and no challenge by the Commission has been
made to the adequacy of any such document; and
(x) the Company is not an "investment company" or
an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as
amended.
In rendering such opinion, such counsel may rely as to all
matters of Ohio law upon the opinion referred to in (b) above and as to
all matters of New Jersey and Pennsylvania law upon the opinions of
[_____] and [_____], respectively. In addition, such counsel shall
state that nothing has come to the attention of such counsel which
would lead such counsel to believe that the Registration Statement or
any post-effective amendment thereto (except for the financial
statements, including the notes thereto and any related schedules, and
other financial and statistical data therein, as to which such counsel
need express no opinion), at the time such Registration Statement or
any such post-effective amendment thereto became effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented or modified by the filing of a document incorporated by
reference therein (except for the financial statements, including the
notes thereto and any related schedules, and other financial and
statistical data therein, as to which such counsel need express no
opinion), as of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make
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the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) You shall have received, on and as of the Closing Date,
the favorable opinion of Xxxxxx Xxxx & Priest LLP, counsel for the
Underwriters, with respect to the issue and sale of the Debt
Securities. In rendering such opinion, such counsel shall state that
nothing has come to the attention of such counsel which would lead such
counsel to believe that the Registration Statement or any
post-effective amendment thereto (except for the financial statements,
including the notes thereto and any related schedules, or other
financial data therein, as to which such counsel need express no
opinion), at the time such Registration Statement or any such
post-effective amendment thereto becomes effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented or modified by the filing of a document incorporated by
reference therein (except for the financial statements, including the
notes thereto and any related schedules, and other financial data
therein, as to which such counsel need express no opinion), as of its
date and on the Closing Date included or includes any untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) You shall have received on the Closing Date a letter,
dated as of the Closing Date, in form and substance satisfactory to
you, from Xxxxxx Xxxxxxxx LLP, independent public accountants for the
Company, in form and substance satisfactory to Xxxxxx Xxxxxxx & Co.
Incorporated, as representative of the Underwriters, confirming that
they are independent accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder
and that they have performed reviews of the unaudited interim
consolidated financial information of the Company for the three-month
period ended March 31, 2001, for the three-month and six-month periods
ended June 30, 2001, and for the three-month and nine-month periods
ended September 30, 2001, and as of March 31, 2001, June 30, 2001 and
September 30, 2001, in accordance with the Statement on Auditing
Standards No. 71, and stating in effect, that:
(i) in their opinion, the financial
statements and financial statement schedules included
or incorporated by reference in the Registration
Statement and the Prospectus and audited by them
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the applicable rules and regulations
adopted by the Commission thereunder;
(ii) on the basis of a reading of the latest
unaudited interim consolidated financial statements,
if any, made available by the Company; their limited
reviews in accordance with standards established
under Statement on Auditing Standards No. 71, of the
unaudited interim consolidated financial information
of the Company for the three-month period ended March
31, 2001, for the three-month and six-month periods
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ended June 30, 2001 and for the three-month and
nine-month periods ended September 30, 2001, and as
of March 31, 2001, June 30, 2001 and September 30,
2001; a reading of the minutes of the meetings of the
Board of Directors, Committees of the Board of
Directors, and the Shareholders, in each case, of the
Company; and inquiries of certain officials of the
Company who have responsibility for financial and
accounting matters of the Company,
(1) nothing came to their
attention which caused them to believe
that any material modifications should be
made to the unaudited interim
consolidated financial information of the
Company for the three-month period ended
March 31, 2001, for the three-month and
six-month periods ended June 30, 2001 and
for the three-month and nine-month
periods ended September 30, 2001, and as
of March 31, 2001, June 30, 2001 and
September 30, 2001, for them to be in
conformity with accounting principles
generally accepted in the United States
and the unaudited interim consolidated
financial information of the Company do
not comply as to form, in all material
respects, with the accounting
requirements of the [Act and] Exchange
Act and the related rules and regulations
adopted by the Commission thereunder; and
(2) with respect to the period
subsequent to September 30, 2001, they were
informed, at a specified date not more than
five days prior to the date of the letter,
of any changes in the Company's common
stock, the preferred stock of the Company's
consolidated subsidiaries, Ohio Edison
Company's company-obligated
mandatorily-redeemable preferred securities
or increase in the long-term debt of the
Company or decrease in the Company's common
shareholders' equity (except as occasioned
by the declaration of dividends) as compared
with the amounts shown on the September 30,
2001 consolidated balance sheet included or
incorporated by reference in the
Registration Statement and the Prospectus,
or for the period from October 1, 2001 to
October 31, 2001, there were any decreases,
as compared with the corresponding period in
the preceding year, in operating revenues or
net income of the Company;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company), as identified by Xxxxxx Xxxxxxx & Co. Incorporated
and set forth in the Registration Statement and the Prospectus
or in Exhibit 12 to the Registration Statement, or included or
incorporated by reference in Items 1, 2, 6 and 7 of the
Company's Annual Report on Form 10-K, as amended, for the year
ended December 31, 2000, which is incorporated by reference in
the Registration Statement and the
11
Prospectus, or included in "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
included in the Company's Quarterly Reports on Form 10-Q for
the quarterly periods ended March 31, 2001, June 30, 2001 and
September 30, 2001, which are incorporated by reference in the
Registration Statement and the Prospectus, or the historical
amounts included in the unaudited pro forma combined
information included in the Registration Statement and the
Prospectus, agrees with the related financial statements or
underlying accounting records of the Company, excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro
forma combined financial information included in the
Registration Statement and the Prospectus (the "pro forma
combined financial information"); inquiring of certain
officials of the Company who have responsibility for financial
and accounting matters; and proving the arithmetic accuracy of
the application of the pro forma adjustments to the historical
amounts in the pro forma combined financial information,
nothing came to their attention which caused them to believe
that the pro forma combined financial information does not
comply as to form, in all material respects, with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
information.
(f) You shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to you, from
PricewaterhouseCoopers LLP, former independent public accountants for
GPU, Inc. ("GPU"), in form and substance satisfactory to Xxxxxx Xxxxxxx
& Co. Incorporated, as representative of the Underwriters, confirming
that they are independent accountants within the meaning of the Act and
the rules and regulations adopted thereunder and that they have
performed reviews of the unaudited interim consolidated financial
information of GPU for the three-month period ended March 31, 2001, and
for the three-month and six-month periods ended June 30, 2001, and as
of March 31, 2001 and June 30, 2001, in accordance with the Statement
on Auditing Standards No. 71, and stating in effect, that:
(i) in their opinion, the financial
statements and financial statement schedules included
or incorporated by reference in the Registration
Statement and the Prospectus and audited by them
comply as to form in all material respects with the
applicable accounting requirements of the Act and the
Exchange Act and the applicable rules and regulations
thereunder;
(ii) on the basis of a reading of the latest
unaudited interim consolidated financial statements,
if any, made available by GPU; their limited reviews,
in accordance with standards established under
Statement on Auditing Standards No. 71, of the
unaudited interim consolidated financial information
for the three-month period ended March 31, 2001
12
and the three-month and six-month periods ended June
30, 2001, and as at March 31, 2001 and June 30, 2001;
a reading of the minutes of the meetings of the Board
of Directors, Committees of the Board of Directors,
and the Shareholders, in each case, of GPU; and
inquiries of certain officials of GPU who have
responsibility for financial and accounting matters
of GPU,
(1) nothing came to their
attention which caused them to believe
that any material modifications should be
made to the unaudited interim
consolidated financial information of GPU
for the three-month period ended March
31, 2001 and for the three-month and
six-month periods ended June 30, 2001,
and as of March 31, 2001 and June 30,
2001, for them to be in conformity with
accounting principles generally accepted
in the United States and the unaudited
interim consolidated financial
information of GPU do not comply as to
form, in all material respects, with the
accounting requirements of the [Act and]
Exchange Act and the related rules and
regulations adopted by the Commission
thereunder; and
(2) with respect to the period
subsequent to June 30, 2001, they were
informed, at a specified date not more than
five days prior to the date of the letter,
of any changes in GPU's common stock, the
cumulative preferred stock of GPU's
consolidated subsidiaries, GPU's
subsidiary-obligated mandatorily redeemable
preferred securities, GPU's
subsidiary-obligated trust preferred
securities or GPU's long-term debt or
decreases in GPU's common shareholders'
equity (except as occasioned by the
declaration of dividends) as compared with
the amounts shown on the September 30, 2001
consolidated balance sheet included or
incorporated by reference in the
Registration Statement and the Prospectus,
or for the period from June 30, 2001 to
October 31, 2001, there were any decreases,
as compared with the corresponding period in
the preceding year, in operating revenues or
net income of GPU and its subsidiaries; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of
GPU), as identified by Xxxxxx Xxxxxxx & Co. Incorporated and
set forth in the Registration Statement and the Prospectus or
in Exhibit 12 to the Registration Statement, or included or
incorporated by reference in Items 1, 2, 6 and 7 of GPU's
Annual Report on Form 10-K for the year ended December 31,
2000, which is incorporated by reference in the Registration
Statement and the Prospectus, or included in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included in GPU's Quarterly Reports on Form 10-Q
for the quarterly periods
13
ending March 31, 2001 and June 30, 2001, which are
incorporated by reference in the Registration Statement and
the Prospectus.
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish without charge to you a signed copy of the
Registration Statement, including all exhibits filed with the
Registration Statement and the documents incorporated by reference
therein (other than exhibits which are incorporated by reference
therein) and to each other Underwriter a copy of the Registration
Statement without exhibits and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus and any documents
incorporated by reference therein at or after the date thereof and any
amendments and supplements thereto as you may reasonably request. The
terms "supplement" and "amendments" or "amend" as used in this
Agreement shall include all documents filed by the Company with the
Commission subsequent to the date of the Prospectus pursuant to the
Exchange Act which are deemed to be incorporated by reference in the
Prospectus.
(b) Before amending or supplementing the Registration
Statement or the Prospectus or filing with the Commission any document
pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the
period referred to in paragraph (c) below, to furnish to you a copy of
each such proposed amendment, supplement or document for your review
prior to filing and not to file any such proposed amendment, supplement
or document to which you reasonably object.
(c) If, during such period (not in excess of nine months)
after the first date of the public offering of the Debt Securities, a
prospectus covering the Debt Securities is required by law to be
delivered in connection with sales of the Debt Securities by an
Underwriter or dealer, any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of your counsel or
counsel to the Company, to amend the Registration Statement or to amend
or supplement the Prospectus or modify the information incorporated by
reference therein in order that the Prospectus will not include any
untrue statements 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 existing at the time the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement
the Prospectus or modify such information to comply with the Act and
the rules and regulations thereunder, forthwith to prepare and file
with the Commission and to furnish (subject to the conditions in
Section (VI)(b) above), at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Debt Securities may have been sold by you on behalf of the
Underwriters, and to any other dealers upon request, such amendments or
supplements to the Prospectus or modifications to the documents
incorporated by reference therein, so that the statements in the
Prospectus as so amended, supplemented or modified will not, in the
light of the circumstances existing at the time such Prospectus is
delivered to a
14
purchaser, be misleading or so that the Prospectus will comply with the
Act and the rules and regulations thereunder.
(d) To endeavor to qualify the Debt Securities for offer and
sale under the securities or Blue Sky laws of such jurisdiction as you
shall reasonably request and to pay all filings fees, expenses and
legal fees (including fees and disbursements of counsel) in connection
with such qualification and in connection with the determination of the
eligibility of the Debt Securities as legal investments under the laws
of such jurisdictions as you may designate as well as any filing fees
payable in connection with any review of the offering of the Debt
Securities by the National Association of Securities Dealers, Inc.
(e) To make available generally to the Company's security
holders as soon as practicable an earning statement covering a twelve
month period beginning after the date of this Agreement which earning
statement shall satisfy the provisions of Section 11(a) of the Act.
(f) During the period beginning on the date of this Agreement
and continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any securities of the Company
substantially similar to the Debt Securities, without your prior
consent.
(g) Whether or not any sale of the Debt Securities is
consummated, to pay all expenses incident to the performance of your
obligations under this Agreement, including: (1) the preparation of the
Prospectus and all amendments and supplements thereto, (2) the
preparation, issuance and delivery of the Debt Securities, (3) the fees
and disbursements of the Company's counsel and accountants and the
Trustee and its counsel, if any (but not the fees and disbursements of
counsel to the Underwriters), (4) the printing and delivery to the
Underwriters in quantities as hereinabove stated of copies of the
Prospectus and any amendment or supplement thereto, (5) any fees
charged by rating agencies and (6) the fees and expenses, if any,
incurred in connection with the admission of the Debt Securities for
trading in any appropriate market system.
(h) To use the net proceeds received by it from the sale of
the Debt Securities pursuant to this Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds."
VII.
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (if used within the period set forth in paragraph
(c) of Article VI hereof and as amended, supplemented or modified if the Company
shall have furnished any amendments, supplements or modifications thereto) or
the Basic Prospectus (including documents incorporated by reference therein), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
15
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information furnished in writing
to the Company by you or by any Underwriter expressly for use therein; provided,
however, that the foregoing indemnification with respect to the Basic Prospectus
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) from whom the person asserting any such losses, claims,
damages or liabilities purchased any of the Debt Securities, if a copy of the
Prospectus (other than documents incorporated by reference therein) as then
amended or supplemented or modified (if the Company shall have furnished any
amendments, supplements or modifications thereto) had not been sent or given by
or on behalf of such Underwriter to such person at or prior to the written
confirmation of the sale of such Debt Securities to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished in writing by
you or by such Underwriter expressly for use in the Registration Statement or
the Prospectus or the Basic Prospectus.
In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such action (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to a conflict of interest
between them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate counsel
for all such indemnified parties. Such counsel shall be designated in writing by
you in the case of parties indemnified pursuant to the second preceding
paragraph, and by the Company in the case of parties indemnified pursuant to the
first preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in this Article VII is unavailable
to an indemnified party under the second or third paragraphs hereof in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a
16
result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations, including relative benefit. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such statement of omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Article VII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Debt Securities underwritten by it and distributed to the
public were offered to the public exceeds the amounts of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Article VII are several in the proportions which the number of
Debt Securities set forth opposite their names in Annex A bear to the total
number of Debt Securities so set forth in Annex A, or in such other proportions
as may be determined pursuant to Article IX, and not joint.
The indemnity and contribution agreements contained in this Article VII
and the representations and warranties of the Company in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by or on behalf of any
Underwriter to any person controlling any Underwriter or by or on behalf of the
Company, any of its directors, officers or any person controlling the Company
and (iii) acceptance of and payment for the Debt Securities.
VIII.
This Agreement shall be subject to termination in your absolute
discretion, by notice given to the Company, if (a) after the execution and
delivery of this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the
Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a
17
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets, or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)
(i) through (v), such event singly or together with any other such event makes
it, in your reasonable judgment, impracticable to market the Debt Securities.
IX.
This Agreement shall become effective when it has been executed by the
Company and you.
If any one or more of the Underwriters shall fail or refuse to purchase
the Debt Securities which it or they have agreed to purchase hereunder, and the
total number of Debt Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the total number of Debt Securities, the other Underwriters shall be
obligated severally in the proportions which the number of Debt Securities set
forth opposite their names in Annex A bear to the total number of Debt
Securities so set forth opposite the names of all such nondefaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Debt Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase; provided that in no event shall the number of
Debt Securities which any Underwriter has agreed to purchase pursuant to Article
I hereof be increased pursuant to this Article IX by an amount in excess of
one-ninth of such number of Debt Securities without the consent of such
Underwriter. If any Underwriter or Underwriters shall fail or refuse to purchase
Debt Securities and the total number of Debt Securities with respect to which
such default occurs is more than one-tenth of the total number of the Debt
Securities and arrangements satisfactory to you and the Company for the purchase
of such Debt Securities are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or of the Company except as provided in Article VII. In any such
case which does not result in such termination, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days in each case, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by them in connection with this Agreement or the offering
contemplated hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
18
This Agreement may be executed in counterparts each of which shall be
deemed to constitute an original and all of which shall be deemed to be one and
the same instrument binding on all of the parties hereto.
Very truly yours,
FIRSTENERGY CORP.
By:
---------------------------------
Name and Title:
---------------------
Accepted: November __, 2001
BARCLAYS CAPITAL INC.
XXXXXX XXXXXXX & CO.
INCORPORATED
XXXXXXX XXXXX BARNEY INC.
and the other Underwriters listed on
Annex A hereto
BY:
--------------------------------------------------
By:
--------------------------------------------------
Name and Title:
Acting severally on behalf of themselves and
on behalf of the several Underwriters named herein
and on Annex A hereto.
19
Annex A
to Underwriting
Agreement
LIST OF UNDERWRITERS
Principal Amount of Principal Amount of Principal Amount of
Series A Notes Due Series B Notes Due Series C Notes Due
NAME 2006 2011 2031
---- ------------------ ------------------ ------------------
Barclays Capital Inc........................... $ $ $
Xxxxxx Xxxxxxx & Co. Incorporated..............
Xxxxxxx Xxxxx Barney Inc. .....................
Banc One Capital Markets, Inc. ................
BNY Capital Markets, Inc.......................
X.X. Xxxxxx Securities Inc.....................
T.D. Securities (USA) Inc......................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
...............................................
------------------ ------------------ ------------------
Total.............................. $ $ $
20
Annex B
to Underwriting
Agreement
Underwriting Agreement dated November __, 2001
Registration Statement No.:
333-69856
Representatives:
Barclays Capital Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Xxxxx Barney Inc.
Maximum
Concession Maximum
To Dealers Reallowance
(% of (% of
Principal Purchase Price to Principal Principal
Title Amount Price Public Amount) Amount)
----- ------ ----- ------ ------- -------
__% Notes, Series A, Due 2006 $ $ $ % %
__% Notes, Series B, Due 2011 $ $ $ % %
__% Notes, Series C, Due 2031 $ $ $ % %
21
