January 2, 2001
Northeast Utilities
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Credit Suisse First Boston International
One Xxxxx Xxxxxx
Xxxxxx X00 0XX
Dear Sirs:
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between Party A and Party B
through the Arranging Agent on the Trade Date specified below (the
"Transaction"). This Confirmation constitutes a "Confirmation" as referred to in
the Agreement specified below.
This Confirmation amends, restates and supersedes in its entirety the
Confirmation dated November 3, 1999 between the parties hereto.
1. The definitions and provisions contained in the 1991 ISDA Definitions (the
"1991 Swap Definitions"), as supplemented by the 1998 Supplement to the 1991
Swap Definitions (the "Swap Definitions") and in the 1996 ISDA Equity
Derivatives Definitions (the "Equity Definitions", together with the Swap
Definitions, the "Definitions") (in each case as published by the International
Swaps and Derivatives Association, Inc.) are incorporated into this
Confirmation. In the event of any inconsistency between the Swaps Definitions
and the Equity Definitions, the Equity Definitions will govern, and between the
Definitions and the provisions and this Confirmation, this Confirmation will
govern. References herein to a "Transaction" shall be deemed to be references to
a "Swap Transaction" for the purposes of the Swap Definitions.
If Party A and Party B are parties to the 1992 ISDA Master Agreement (the
"Agreement"), this Confirmation supplements, forms a part of, and is subject to
such Agreement. If Party A and Party B are not yet parties to the Agreement,
they agree to use their best efforts promptly to negotiate, execute, and deliver
the Agreement through the Arranging Agent, including Party A's standard form of
Schedule and Addendum for Physical Delivery of Shares attached thereto and made
a part thereof, with such modifications as Party A and Party B shall in good
faith agree. Upon execution and delivery by Party A and Party B of the
Agreement, this Confirmation shall supplement, form a part of, and be subject to
such Agreement. Until Party A and Party B execute and deliver the Agreement,
this Confirmation (together with all other Confirmations of Transactions
previously entered into between them, notwithstanding anything to the contrary
therein) shall supplement, form a part of, and be subject to the 1992 ISDA
Master Agreement, as if, on the Trade Date of the first such Transaction between
them, Party A and Party B had executed that agreement (incorporating therein
Party A's standard form of Schedule and Addendum for Physical Delivery of
Shares) and had specified that the Automatic Early Termination provisions
contained in Section 6(a) of such agreement would apply.
The Agreement and each Confirmation thereunder will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law doctrine.
Party A and Party B expressly acknowledge that, in reliance upon the other
party's entering into the Transaction evidenced by this Confirmation, each party
has made (or refrained from making) substantial financial commitments and has
taken (or refrained from taking) other material actions.
All payments in connection with this Transaction shall be made in U.S.
Dollars.
In this Confirmation, "Party A" means Credit Suisse First Boston International,
"Party B" means Northeast Utilities and "Arranging Agent" means Credit Suisse
First Boston Corporation, acting solely in its capacity as Arranging Agent for
both Party A and Party B.
2. The terms of the Transaction to which this Confirmation relates are as
follows:
General Terms:
Trade Date: November 3, 1999
Effective Date: November 3, 1999
Termination Date: June 29, 2001, subject to adjustment in accordance
the Following Business Day Convention, the terms of the
Party B Net Settlement Option, the Party A Optional
Termination and the Party B Optional Termination.
Transaction Type: Equity Forward
Seller: Party A
Buyer: Party B (sometimes also referred to as the "Issuer").
Shares: Common Shares, par value 5.00 dollars, of Party B.
Closing Price on the Exchange
As of the Business Day Prior
To the Trade Date:
21.0625 dollars
Notional Amount:
Initially, an amount equal to the Accumulated Adjusted Principal Share Amount,
up to an amount equal to the Principal Share Amount, in each case multiplied by
the Initial Share Price.
Principal Share Amount:
The number of Shares that represent purchase prices in an aggregate principal
amount of 100,000,000 dollars.
Accumulated Adjusted Principal Share Amount:
On any Valuation Date during the Initial Pricing Period the aggregate number of
Shares purchased by Party A up to the Principal Share Amount, for which full
payment has been made by Party A.
Initial Share Price:
The weighted average of the Average Share Prices for all Valuation Dates
occurring during the Initial Pricing Period or, if the last day of a Calculation
Period shall occur prior to the completion of the Initial Pricing Period, the
weighted average of the Average Share Price for all Valuation Dates occurring to
and including the last day of the relevant Calculation Period.
Average Share Price:
For any Valuation Date, the weighted average price of the Shares purchased by
Party A on such Valuation Date (plus a 0.04 per share commission charged by
Party A).
Initial Pricing Period:
The earlier to occur of (i) the Business Day that is 22 trading days prior to
the acquisition by Party B of Yankee Energy System, Inc. pursuant to the terms
of the Agreement and Plan of Merger dated as of June 14, 1999 between Yankee
Energy System, Inc. and Party B (the "Merger Agreement"), which acquisition is
currently expected to be April 15, 2000, subject to extension to such later date
as is permitted by the Merger Agreement, and for which Party B has provided
written notice to Party A through the Arranging Agent and (ii) the Exchange
Business Day on which Shares with an aggregate purchase price of 100,000,000
dollars have been purchased.
Valuation Date:
In respect of the Initial Pricing Period, any Exchange Business Day on which a
Market Disruption Event has not occurred. In respect of the Final Pricing
Period, any Exchange Business Day on which a Registration Suspension Event or
Market Disruption Event has not occurred.
Exclusion Period:
The first minute of trading and the last one-half hour before the scheduled
close of trading on the Exchange.
Calculation Period:
The period from and including a Calculation Period Interest Reset Date to but
excluding the next succeeding Calculation Period Interest Reset Date, provided
that, the first Calculation Period Interest Reset Date will commence on the
Effective Date and the final Calculation Interest Period will end on and exclude
the Termination Date.
Calculation Period
Interest Reset Dates:
The 15th day of each February, May, August and November, commencing on November
15, 1999.
Party A Calculation
Period Payment Dates:
The 15th day of each February, May, August and November, commencing on November
15, 1999.
Party A Payment:
The Dividend Amount (as defined below).
Party B Calculation
Period Payment Dates:
The 15th day of each February, May, August and November, commencing on November
15, 1999.
Party B Payment:
An amount in U.S. Dollars equal to the Interest Amount determined as of the
relevant Party B Calculation Period Payment Date.
Floating Rate Option:
USD-LIBOR-BBA
Spread:
2.5 percent per annum
Designated Maturity: 3 months
Interest Amount/Net
Interest Amount:
The payment obligation of Party A and Party B on such Calculation Period Payment
Dates in respect of the Dividend Amount (defined below) and any Interest Amounts
shall be netted, such that the party obligated to pay the greater amount shall
pay to the other party, through the Agent, an amount equal to the difference
between such amounts (the "Net Interest Amount").
For each Calculation Period during the Initial Pricing Period, an amount equal
to the product of (i) the weighted average Notional Amount for such Calculation
Period and (ii) USD-LIBOR-BBA, plus Spread, and for each Calculation Period
thereafter, the product of the Notional Amount and ISD-LIBOR-BBA, plus Spread
(subject to adjustment in all cases in accordance with the Following Business
Day Convention).
In the case either Net Cash Settlement or Net Share Settlement has been
designated as the Method of Settlement, the Notional Amount (and the accrued
interest attributable thereto) shall be reduced during the Final Reference Share
Price Pricing Period by amounts equal to the Net Proceeds (defined below)
received by the Selling Agent in respect to sales of the Shares, which reduction
shall occur on the Business Day on which such Net Proceeds are received as
immediately available funds by the Selling Agent. The Calculation Agent may rely
on the information provided pursuant to "(D)-Physical Settlement" hereunder
unless the Selling Agent delivers notice of any failure to receive an
anticipated payment in respect of the Shares sold or because of any Settlement
Disruption Event or an amendment to the time of payment in respect of any Shares
sold.
Dividend Amount: An amount in USD equal to the sum of:
(i) The aggregate amount in respect of all dividends declared by the Issuer to
which the record holder of the Principal Share Amount (provided, however, that
for purpose of determining the Dividend Amount in the case either Net Cash
Settlement or Net Share Settlement has been designated as the Method of
Settlement, the Principal Share Amount shall be reduced by the number of Shares
sold by the Selling Agent prior to the record date in respect of any dividend
declared in respect of the Shares during the Final Reference Share Price Pricing
Period) would be entitled by virtue of the occurrence of a dividend record date
during the period from the Effective Date to the Settlement Date (other than any
Lagging Dividend Payment Amount or any dividends resulting in an Adjustment due
to a Potential Adjustment Event); and
(ii) An amount representing the interest that could have been earned on such
dividends described in (i) at a rate equal to USD-LIBOR-BBA for a designated
maturity of one month (any non-conforming period shall be linearly interpolated
by the Calculation Agent) for the period from the date that such dividends were
or would have been received, for which a Party A Calculation Period Payment Date
is a compounding date; the applicable compounding rate for each compounding
period is USD-LIBOR-BBA with a designated maturity of one month, for which the
Day Count Fraction is Actual/360 and the Following Business Day Convention will
apply, and for which compounding is applicable to the Settlement Date
Lagging Dividend Payment Amount:
In the event that a dividend is declared and payable to a holder of record prior
to the Settlement Date of this Transaction but such dividend has not been paid
on or before such Settlement Date, Party A agrees to pay to Party B through the
Arranging Agent an amount equal to the dividends received by Party A in respect
of the Number of Shares on the next succeeding Business Day after the payment is
received.
Day Count Fraction:
Actual/360
Additional Party B Payment:
On the Effective Date, Party B shall pay to Party A, through the Arranging
Agent, a structuring fee equal to 1,250,000 dollars.
Party A and Party B Final Payments
Termination Settlement
Payment Options:
In respect of the Termination Date (including, in
case any Event of Default or Termination Event has occurred, the related Early
Termination Date) Party B shall elect one of the following Settlement Options
(each a "Method of Settlement"):
(A) Gross Physical Settlement:
Unless Party B has specified Net Cash Settlement or Net Share Settlement in
accordance with the terms hereof, on the Settlement Date, Party A will through
the Arranging Agent, deliver the Principal Share Amount to Party B, and Party B
will pay to Party A an amount equal to the sum of (i) the Notional Amount and
(ii) the Net Interest Amount.
(B) Net Cash Settlement:
If Party B has specified Net Cash Settlement as the Method of Settlement, the
Selling Agent will sell a number of Shares equal to the Principal Share Amount,
in accordance with the terms hereof. On the related Settlement Date, Party A
will pay to Party B, an amount in USD equal to the product of the Principal
Share Amount and the Final Reference Share Price, and Party B will pay to Party
A, through the Arranging Agent, an amount in USD equal to the sum of (i) the
Notional Amount and (ii) the Net Interest Amount (which will reduce the amount
due from Party B if the Net Interest Amount is negative). The payment
obligations of Party A and Party B on such date in respect of such amounts shall
be netted, such that the party obligated to pay the greater amount shall pay to
the other party, through the Arranging Agent, an amount equal to the difference
between such amounts.
If Party A is required to pay such differences on such Settlement Date the
Selling Agent, from the aggregate Net Proceeds (defined below) of the sales of
Shares, will pay such difference to Party B in accordance with the preceding
sentence and pay the remainder of such proceeds to Party A. If Party B is
obligated to pay such difference, Party B will pay such amount to Party A
through the Arranging Agent and the Selling Agent will pay the aggregate Net
Proceeds of the sales of Shares to Party A.
(C) Net Share Settlement:
If Party B has specified Net Share Settlement as the Method of Settlement, the
Selling Agent shall sell, in accordance with the terms hereof, such number of
Shares from the Principal Share Amount that will generate aggregate Net Proceeds
equal to the sum of (i) the Notional Amount, and (ii) the Net Interest Amount.
If during the Final Reference Share Price Pricing Period Party A receives
aggregate Net Proceeds equal to the sum of (i) the Notional Amount and (ii) the
Net Interest Amount (which will reduce the amount due from Party B if the Net
Interest Amount is negative) from the sale of a number of Shares that is less
than the Principal Share Amount, on the relevant Settlement Date the Selling
Agent shall deliver to Party B, a number of Shares equal to the excess of the
Principal Share Amount less such number of Shares sold by the Selling Agent
during such period (the "Party A Net Share Settlement Delivery").
If during the Final Reference Share Price Pricing Period the Selling Agent sells
a number of Shares equal to the Principal Share Amount and Party A receives
aggregate Net Proceeds from such sales in an amount that is less than the sum of
(i) the Notional Amount and (ii) the Net Interest Amount, Party A shall notify
Party B, through the Arranging Agent, of such fact, and by 4:30 p.m. New York
time on the second Exchange Business Day following such notification Party B
shall deliver a number of additional Shares (which Party A reasonably estimates
is equal in value to the Shortfall (defined below)) (the aggregate number of
additional Shares, delivered pursuant to this Net Share Settlement methodology,
the "Party B Net Share Settlement Delivery") to the Selling Agent, which will be
sold by the Selling Agent using the Offering Method determined pursuant to this
Confirmation as described below (to the extent that such sales are required to
generate aggregate Net Proceeds equal to the excess of (A) the sum of (i) the
Notional Amount and (ii) the Net Interest Amount over (B) the aggregate Net
Proceeds received by the Selling Agent from the sale of the Principal Share
Amount (for purposes of determining the obligation of Party B in connection with
Net Share Settlement, the term "Shortfall" at anytime and from time to time
means the US Dollar amount by which the sum of (i) the Notional Amount plus (ii)
the Net Interest Amount exceeds the aggregate Net Proceeds, if any, actually
received from the sale of (i) all or a portion of the Number of Shares plus (ii)
additional Shares delivered pursuant to the Party B Net Share Settlement
Delivery)). The Selling Agent shall use its best efforts to sell only such
additional Shares as shall generate aggregate Net Proceeds equal to the
Shortfall and return the excess Shares, if any, to Party B. In the event the
additional Shares delivered by Party B to the Selling Agent are sold for an
amount that is less than the Shortfall, the Selling Agent shall notify Party B,
through the Arranging Agent, of such fact and by 4:30 p.m. New York time on the
second Exchange Business Day following such notification Party B shall deliver
additional Shares to Party A, through the Arranging Agent, and, subject to Party
B's delivery of a Sale Revocation and Designation Notice (defined below) in
connection with Physical Settlement (defined below), Party B shall continue to
so deliver additional Shares upon notification until the aggregate Net Proceeds
received by the Selling Agent from the sale of all such Shares delivered by
Party B to Party A results in a Shortfall equal to zero; provided, however, that
notwithstanding Party B's obligations set forth in Appendix A hereto, in the
event that Party B is required pursuant to this paragraph to deliver additional
Shares and is unable to deliver additional Shares which are at the time of
delivery duly authorized, validly issued, fully paid and nonassessable and free
of any liens, claims or encumbrances (except liens, claims or encumbrances
pursuant to this Transaction), or Party B otherwise fails to deliver such
additional Shares and such inability or failure continues for five Exchange
Business Days (the "Net Share Settlement Incapacity Event"), such Net Share
Settlement shall be deemed terminated and Party B shall be obligated to pay
Party A within five Business Days from the date of the Net Share Settlement
Incapacity Event an amount in cash equal to the amount of the Shortfall that has
not been received from the sale of additional Shares as of the date of the Net
Share Settlement Incapacity Event and the Selling Agent shall deliver to Party B
any additional Shares received in respect of such Shortfall and not sold by the
Selling Agent as of the date of the Net Share Settlement Incapacity Event.
The term "Net Proceeds" in respect of a sale of Shares shall mean gross proceeds
of such sale less reasonable and customary discounts, fees, commissions and
expenses (the "Sale Expenses"), including, but not limited to, reasonable
commissions, discounts, fees and expenses customarily payable to underwriter(s)
in the case of a Registered Offering (defined below) or to a placement agent in
the case of an Exempt Offering (defined below), which may include reasonable
amounts customarily payable to the Selling Agent acting as underwriter or
placement agent, as well as any additional reasonable fees and expenses of any
dealers engaged by any such underwriter or placement agent which are customarily
payable.
(D) Physical Settlement:
In the event Party B elects either Net Cash Settlement or Net Share Settlement,
the Selling Agent agrees to provide the Calculation Agent and Party B not later
than 5:00 PM on any Business Day on which it has sold Shares a report through
the Arranging Agent of the number of Shares sold, the average sale price and the
aggregate Net Proceeds received by the Selling Agent from such sales and a
reasonable breakdown of the Sales Expenses.
At any time after the designation of the Method of Sale, and if applicable, the
Offering Method, but prior to the execution and delivery of any underwriting
agreement with respect to the Shares, Party B may deliver to the Selling Agent
and to Party A through the Arranging Agent a revocation of the Net Cash
Settlement or Net Share Settlement Method of Settlement and request the
suspension of any further sales of Shares in respect of this Transaction by the
Selling Agent (a "Sale Revocation and Designation Notice") on the Business Day
immediately following delivery of such Sale Revocation and Designation Notice.
Receipt of the Sale Revocation and Designation Notice shall obligate the Selling
Agent to suspend any sales and solicitations of orders to buy the Shares but
shall not affect Party A's obligations to perform any settlement or delivery of
Shares in connection with sales previously agreed and sales which are pending
agreement on the date such Sale Revocation and Designation Notice is received
and which have been agreed before the close of business on such date. Upon
receipt of a Sale Revocation and Designation Notice, the Selling Agent shall
report to Party B the number of Shares that remain unsold (which may be some or
all of the Principal Share Amount and any additional Shares) as of the Business
Day succeeding delivery of the Sale Revocation and Designation Notice (the
"Remaining Shares"). In the event of delivery of the Sale Revocation and
Designation Notice, Party B shall be required to deliver to Party A through the
Arranging Agent a cash amount in respect of the Remaining Shares such that the
amount paid by Party B to Party A for the Remaining Shares plus the aggregate
Net Proceeds received by the Selling Agent from the sale of other Shares in
connection with the Net Cash Settlement or the Net Share Settlement equals (i)
the Notional Amount plus (ii) the Net Interest Amount, and Party A shall be
required to deliver to Party B the Remaining Shares. Settlement and delivery of
the Remaining Shares and payment therefor shall be made to the parties through
the Arranging Agent on the second Business Day after the delivery of such Sale
Revocation and Designation Notice.
(E) Offering Method
Upon receipt of notice designating either Net Cash Settlement or Net Share
Settlement as the Method of Settlement, Party B may determine the offering
method (the "Offering Method") including whether the Shares to be sold will be
offered pursuant to a registration statement filed or to be filed (a "Registered
Offering") pursuant to the Securities Act of 1933 (the "1933 Act"), subject to
Party A's consent to a Registered Offering, which consent shall not be
unreasonably withheld.
If Party B determines the Shares will be offered in a Registered Offering and
Party A consents to a Registered Offering (which consent shall not be
unreasonably withheld), Party B (and to the extent required therein, Party A)
will use their reasonable efforts to comply in all material respects with the
Registration Procedures set forth in Appendix A attached hereto. In the event
that Party A, and its underwriter(s), upon advice from their respective counsel,
reasonably object to the form or substance of the registration statement, Party
A will deliver to Party B through the Arranging Agent a suspension request
stating the reason or reasons for such objection ("Suspension Request") and
Party B will either (i) modify or amend the registration statement to address
such reasonable objection(s) or (ii) suspend the preparation of such
registration statement with respect to the offering of the Principal Share
Amount. In addition, if such registration statement has been filed and
identifies either Party A or the Principal Share Amount and Party B determines
not to amend or modify, or that it cannot amend or modify the registration
statement to address Party A's or its underwriter(s)' reasonable objections,
Party B will withdraw such registration statement pursuant to Rule 259 of the
1933 Act if such registration statement relates solely to the offering of the
Principal Share Amount. In the event that no registration statement has been
filed identifying Party A or the Principal Share Amount and Party B determines
not to amend or modify, or that it cannot amend or modify the registration
statement to address Party A's or its underwriter(s)' reasonable objections,
Party B may within five Business Days of the delivery of the Suspension Request
determine whether the Principal Share Amount will be sold pursuant to an
offering that is exempt from the registration requirements of the 1933 Act (an
"Exempt Offering") as the means of sale in respect of either a Net Cash
Settlement or a Net Share Settlement or designate Gross Physical Settlement as
the Method of Settlement. If, however, a registration statement identifying
Party A or the Principal Share Amount has been filed and such registration
statement is not amended to address Party A's or its underwriter(s) reasonable
objections or has been withdrawn, as set forth herein, then not later than the
third succeeding Business Day from the receipt of the Suspension Request Party B
shall deliver to Party A through the Arranging Agent a notice designating Gross
Physical Settlement as the Method of Settlement.
In the event Party A delivers to Party B through the Arranging Agent a notice
that it will not consent to Party B's determination that the Principal Share
Amount are to be sold in a Registered Offering as provided herein, Party B may,
within five Business Days from the delivery of such notice, either revoke the
Net Cash Settlement or Net Share Settlement Method of Settlement and designate
Gross Physical Settlement as the Method of Settlement or elect to have Party A
pursue the contemplated sale of Shares in connection with Net Cash Settlement or
Net Share Settlement through an Exempt Offering. If an Exempt Offering is
pursued and Party B and its counsel object to the exemption to be relied on
pursuant to which Shares are to be sold by either Party A or the Selling Agent
or the opinion of counsel to Party A or any related documentation to be used in
connection with the Exempt Offering, Party B may deliver a notice of suspension
to Party A through the Arranging Agent and Party B may either (i) designate
Gross Physical Settlement as the Method of Settlement, (ii) renew its
solicitation of Party A's consent for a Registered Offering within five Business
Days of its delivery of any notice of objection or (iii) subject to the consent
of Party A and its counsel (which consent will not be unreasonably withheld),
request an alternative Exempt Offering.
Notwithstanding the foregoing, if an Event of Default or Termination Event has
occurred and is continuing with respect to Party B, Party B will be foreclosed
from making any determination as to the Offering Method and, subject to the
terms hereof and all applicable regulatory requirements, such determination
shall be in Party A's sole discretion. In connection with any Offering Method,
Party B shall co-operate with the reasonable requirements of Party A and its
underwriter(s) and Party A and its underwriter(s) shall co-operate with the
reasonable requests of Party B, including without limitation providing such
additional information as may reasonably be required so that any offering
document to be used does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made in
such offering document, in light of the circumstances under which they were
made, not misleading.
Final Reference Share Price:
In respect of the number of Shares sold by the Selling Agent in connection with
a Net Cash Settlement or a Net Share Settlement, the average Net Proceeds per
Share of all sales of the Shares sold by the Selling Agent in (i) transactions
on the Exchange at the exchange prices received by the Selling Agent, if any,
(ii) a Registered Offering, if any, based on the public offering price and (iii)
transactions with recognized dealers or principals in the private placement
market which are unaffiliated with Party A pursuant to an Exempt Offering, if
any, and with or through which the Selling Agent effects any sales of Shares
pursuant to a Net Cash Settlement or Net Share Settlement, which may be
shortened by the delivery of a Sale Revocation and Designation Notice by Party
B.
Final Reference Share Price Pricing Period:
The period commencing on the Termination Date, and continuing until the
completion of the deliveries and any sales of Shares related thereto required
for Net Cash Settlement or Net Share Settlement.
Notwithstanding any other provisions set forth herein, in the event that the
Settlement Date for this transaction has been delayed to a date that is the one
year anniversary of the Termination Date for any reason, including, without
limitation, because a Net Share Settlement or a Net Cash Settlement has been
designated and the Final Reference Share Price Pricing Period has not been
completed, or in the case of any designated Method of Settlement because of any
Market Disruption Event or Settlement Disruption Event, then on the Business Day
next succeeding such anniversary, Party B shall be deemed to have delivered a
Sale Revocation and Designation Notice to Party A through the Arranging Agent
suspending any further sales pursuant to the terms and conditions set forth in
"(D)- Physical Settlement". Pursuant to such paragraph (D)- Physical Settlement,
on the date such Sale and Revocation and Designation Notice is delivered any
unsold Shares shall be deemed to be Remaining Shares and the payment and
delivery procedures set forth in such paragraph shall govern the payment and
delivery obligations of the parties
Settlement Dates:
To the extent not otherwise provided for hereunder, each of (i) the third
Exchange Business Day following the end of the Final Reference Share Price
Pricing Period in the case of Net Cash Settlement or Net Share Settlement, and
(ii) the next Exchange Business day following (a) the Termination Date that
Party B specifies or is deemed to have specified in a Termination Notice
hereunder specifying Gross Physical Settlement as the Method of Settlement or
(b) the Termination Date that is applicable in the event Party B is deemed to
have specified Gross Physical Settlement as the Method of Settlement in the case
of Gross Physical Settlement.
If a Settlement Disruption Event prevents a Net Share Settlement or a Net Cash
Settlement on the day that otherwise would have been the Settlement Date, then
the Settlement Date will be the first succeeding day on which settlement can
take place through the Clearance System unless a Settlement Disruption Event
prevents settlement on each of the ten (10) consecutive Clearance System
Business Days immediately following the original date that, but for such
Settlement Disruption Event, would have been the Settlement Date. In that case,
(a) if the Shares can be delivered in any other commercially reasonable manner,
then the Settlement Date will be the first day on which settlement of a sale of
Shares executed on that tenth (10th) Clearance System Business Day customarily
would take place using such other commercially reasonable manner of delivery
(which other manner of delivery will be deemed the Clearance System for purposes
of delivery of the relevant Shares), and (b) if the Shares cannot be delivered
in any other commercially reasonable manner, then the Settlement Date will be
postponed until delivery can be effected through the Clearance System or any
other commercially reasonable manner.
Settlement Disruption Event:
An event beyond the control of the parties as a result of which (i) the
Clearance System cannot clear the transfer of the Shares or (ii) in the case of
any Shares in physical certificate form, the payment system for bank fund
transfers (e.g. the Federal Reserve wire payment system) cannot make electronic
funds payments or otherwise transfer funds in the ordinary course.
Trading Day:
An Exchange Business Day other than an Exchange Business Day on which (i) a
Market Disruption Event occurs, or (ii) Party B, by notice to Party A, through
the Arranging Agent, by 8:30 a.m., New York time, determines, on the advice of
counsel respecting applicable federal securities laws, that such day shall not
be a Trading Day for one or more purposes of this Transaction specified by Party
B in accordance with such advice.
Exchange Business Day:
Any day that is (or, but for the occurrence of a Market Disruption Event, would
have been) a Trading Day on the Exchange other than a day on which trading on
the Exchange is scheduled to close prior to its regular weekday closing time.
Market Disruption Event:
The occurrence or existence on any Exchange Business Day of any suspension of or
material limitation imposed on trading (by reason of movement in price exceeding
limits permitted by the relevant exchange or otherwise) on the Exchange in the
Shares, if, in the reasonable determination of the Calculation Agent, such
suspension or limitation prevents such day from being used as a Trading Day.
Exchange:
The New York Stock Exchange.
Calculation Agent:
Party A, whose determinations and calculations hereunder as Calculation Agent
will be binding in the absence of manifest error. Subject to the foregoing, the
Calculation Agent will have no responsibility for good faith errors or omissions
in making any determination or calculation as provided herein.
Selling Agent:
Credit Suisse First Boston Corporation. When selling any Shares pursuant to this
Transaction, the Selling Agent shall determine the number of Shares to be sold
on any Trading Day and the price or prices at which such Shares are sold,
provided, however, that it shall act in a commercially reasonable manner and on
commercially reasonable terms, and shall comply with applicable securities laws,
rules and regulations, applicable to it and the Transaction (including sales
relating thereto).
Party A and Party B hereby acknowledge and agree that the execution and delivery
of this Confirmation by the Selling Agent does not constitute a commitment or an
obligation of the Selling Agent to purchase or sell any Shares or any other
security as principal.
Party A Optional Termination:
In addition to any other termination rights that Party A may have under the
Agreement, in the event of any Merger Event, the terms of which are
Share-for-Other or Share-for-Combined, pursuant to which a registered holder of
Shares is entitled to receive cash consideration in connection with the Merger
Event, Party A shall have the right within three Business Days after the payment
of any cash consideration in connection with the Merger Event, to cause the
Transaction to terminate in part before the originally scheduled Termination
Date by giving a Termination Notice to Party B through the Arranging Agent,
designating a Termination Date not earlier than five Business Days after the
delivery date of the Termination Notice and making the Partial Termination
Payments consisting of (i) a deemed payment by Party B to Party A by means of
the Merger Termination Payment (defined below) and (ii) the payment by Party A
to Party B of the Premium Cash Merger Payment (defined below) on the date
designated as the Termination Date.
"Merger Termination Payment" means an amount equal to the product of (i) the
Termination Share Amount (defined below) and (ii) the Per Share Cash Component
(defined below).
"Termination Share Amount" means the number of Shares equal to the product of
the Principal Share Amount and a fraction, the numerator of which is equal to
the Per Share Cash Component and the denominator if which is equal to the per
share total consideration of such offer.
"Per Share Cash Component" means the per share cash component of any offer to
purchase the Shares underlying the Merger Event.
"Premium Cash Merger Payment" means the amount equal to the product of (i) the
Termination Share Amount and (ii) the result of the per share total
consideration of any offer to purchase the Shares underlying the Merger Event,
minus the Initial Share Price, provided, however, that such difference shall not
be less than zero.
Party B Optional Termination:
In addition to any other termination rights that Party B may have under the
Agreement, Party B may elect to cause this Transaction to terminate in whole, or
in part, before the originally scheduled Termination Date for any reason by
giving a Termination Notice to Party A through the Arranging Agent during the
last five Business Days prior to any Party B Calculation Period Payment Date and
designating a Termination Date.
Except for the originally scheduled Termination Date for which no written notice
is required, no Termination Date designated hereunder may be set unless Party A
has received a written notice not less than 30 Business Days, in the case of
either Net Cash Settlement or Net Share Settlement and not less than two
Business Days in the case of Gross Physical Settlement in connection with the
relevant Method of Settlement. Subject to the terms of this Transaction, Party B
shall give Party A written notice, through the Arranging Agent of the Method of
Settlement.
Registration Notice:
Party B agrees that subsequent to the Effective Date it will not file any
registration statement, amend a previously filed registration statement or
commence any of the procedures set forth in Appendix A attached hereto with
respect to any Shares that may be sold in connection with Net Cash Settlement or
Net Share Settlement without providing notice to, and receiving the consent of,
Party A, which consent shall not be unreasonably withheld.
Sale Notification:
If the Selling Agent sells any Shares acquired pursuant to this Transaction in
the Initial Transaction or in either a Net Cash Settlement or a Net Share
Settlement, such sale(s) must be in accordance with the terms and conditions set
forth herein and the Selling Agent must notify Party B of such sale(s) as
provided herein by telephonic notice, promptly confirmed in writing.
Settlement Terms:
In respect of the Termination Date Party B shall specify whether Gross Physical
Settlement, Net Cash Settlement or Net Share Settlement is to apply. In the
event Party B fails to specify the Method of Settlement as provided herein,
Party B shall be deemed to have specified Gross Physical Settlement as the
Method of Settlement in respect of such Termination Date.
Adjustment Events:
Method of Adjustment: Calculation Agent Adjustment.
Extraordinary Events:
Consequences of Merger Events: Following each Merger Event:
(a) Share-for-Share: Alternative Obligation
(b) Share-for-Other: Alternative Obligation
(c) Share-for-Combined: Alternative Obligation
Nationalization or Insolvency: Cancellation and Payment
3. Miscellaneous
Transfer:
Neither the Transaction nor any interest or obligation in or under the
Transaction may be transferred (whether by way of security or otherwise) by
either party without the prior written consent of the other party, except that a
party may make a transfer of the Transaction pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity, or upon or after any default of the other
party. Any purported transfer that is not in compliance with this paragraph will
be void.
Party B Representation and Covenants:
On each Exchange Business Day during a Final Reference Share Price Pricing
Period, Party B hereby represents and warrants to Party A that, unless Party B
notifies Party A, through the Arranging Agent, that such day is not a Trading
Day, it has publicly disclosed all material information necessary for Party B to
be able to purchase or sell Shares in compliance with applicable federal
securities laws. Party B hereby represents and warrants to Party A that: (i) it
has entered into this Transaction in connection with the Share repurchase
program announced publicly on June 3, 1998, and July 13, 1999 for purposes
consistent with those stated in such public disclosures and (ii) on the Trade
Date and on the Settlement Date, Party B has available to it before and
immediately after any purchase of Shares pursuant to this Transaction such
orders, consents or other authorities as may be required by the SEC pursuant to
rules and regulations of the Public Utility Holding Company Act of 1935 (the
"1935 Act"), with respect to the execution, delivery and performance of the
forward purchase obligations under this Transaction , and (iii) on the filing
date of any registration statement or the commencement of any offer not
involving a public offering in the case of any Net Cash Settlement or Net Share
Settlement, the offering of Shares (or New Shares as provided herein), on the
Settlement Date and on each day during the Final Share Price Pricing Period,
will be made pursuant to the orders, consents or other authorizations that may
be required under the rules and regulations promulgated under the 1935 Act ,
which will be in full force and effect and, to Party B's knowledge, will be free
of any pending or overtly threatened proceedings contemplating the revocation or
modification of such order; provided, however, in lieu of making the
representations and warranties and agreeing the covenants set forth in clauses
(i) and (ii), delivering an opinion of counsel addressing such matters as Party
A may reasonably request and are customarily provided in connection with the
purchase and sale of common stock, including, without limitation, that Party B
is not subject to the 1935 Act, that no authorisation, consent or notice is
required in order for Party B to perform any purchase or sale obligation with
respect to the Shares other than any authorisations, consents, filings or
notices that may be required under the 1933 Act and any applicable state law
that may be required for the authorisation of any purchase of Shares. Party B
also represents that it is not subject to regulation by any state, county or
municipal agency, authority, board, council or similar body having authority or
jurisdiction over Party B within the meaning of any applicable state law, order
or regulation or any municipal government or authority with the capacity or
power to regulate electric utility or gas utility companies ("Local Regulators")
and all approvals and consents from or notices to any Local Regulator required
by Party B to execute and deliver the Confirmation and to perform the
Transaction and the related transactions contemplated thereby have been received
or given and remain in full force and effect.
Party B hereby agrees that from the Trade Date through and including the
Settlement Date, it will comply in all material respects with all corporate or,
if applicable, similar laws affecting its ability to perform its repurchase
obligations under this Transaction, including any such requirements of the SEC
or any Local Regulator. In the event that Party B reasonably believes that at
any time during the term of this Transaction Party B would be prohibited from
performing its repurchase obligations under this Transaction as currently
contemplated without delivering notice to or obtaining the consent of the SEC or
any Local Regulator, Party B will provide notice thereof through the Arranging
Agent and designate a date for Settlement, which shall be a date on which Party
B still satisfies such requirements and for which no notice or consent is
required to perform the repurchase obligations contemplated by this Transaction.
Other Provisions:
If, notwithstanding any other provision of this Confirmation, this Transaction
is terminated at a time when any law, rule or regulation, including without
limitation, the 1935 Act or any applicable state law, order or regulation,
prevents Party B from repurchasing the Number of Shares, Gross Physical
Settlement shall not apply. Each party agrees that if delivery of the Shares on
any Settlement Date is subject to any restriction imposed by a regulatory
authority (other than the federal securities laws and the rules of the SEC
affecting Registered or Exempt Offerings) that materially restricts or prevents
delivery of any such Shares, the parties will negotiate in good faith a
procedure to effect settlement of such affected Shares in a manner which
complies with any relevant rules of such regulatory authority.
Party B Undertakings:
Party B hereby agrees that if it is the object of any merger, consolidation,
amalgamation of Party B with or into another entity (and Party B is not the
surviving entity) or a third party acquires such number of Shares or the right
to control such number of Shares (or the voting power thereof) and the
acquisition of such number of Shares or the voting power with respect thereto
results in the transfer of control of Party B (within the meaning of Rule 405 of
the 1933 Act), then in the event that (i) Alternative Obligation is elected in
respect of Consequences of Merger Event - Share- for-Combined and (ii) a
material portion of Shares are exchanged or exchangeable for New Shares (as
defined in the Equity Definitions), then Party B shall cause the issuer of such
New Shares to undertake and perform each and every obligation and satisfy each
and every condition precedent of Party B arising under this Confirmation with
respect to any purchase or sale of the Shares, including, but not limited to,
the representations, agreements, and covenants that relate to the Shares and any
purchase or sale thereof, the exercise or election of any Method of Settlement
or Offering Method, the participation and preparation of any materials relating
to any registration statement in connection with any Registered Offering of
Shares, and the determinations and decisions relating thereto, modified in all
cases, mutatis mutandis, to apply to the issuer and to the New Shares. Any
failure by Party B to cause the issuer of New Shares to achieve any
undertakings, performance or satisfaction of any such obligations to the
reasonable satisfaction of Party A shall be deemed an irrevocable exercise of
Gross Physical Settlement option as the Method of Settlement that shall be
deemed to supersede any prior exercise of any Method of Settlement Option.
Cessation and Suspension:
If at any time during the Term of the Transaction Party B is subject to any
legal or regulatory requirements ("Legal Requirements") or any directly related
policies or procedures adopted by Party B with respect to the Legal
Requirements, which, in Party B's reasonable judgement requires it, or Party A
if acting on behalf of Party B, to refrain from purchasing or selling Shares on
any Trading Day, Party B shall give prompt telephonic notice of the cessation of
any further purchases or sales of Shares and the suspension of any further
purchases or sales of Shares (each, a "Cessation Notice"), which cessation and
suspension shall remain in effect until further notice from Party B. Each
telephonic notice of a Cessation Notice shall be promptly confirmed in writing.
Notwithstanding the foregoing, the delivery of a Cessation Notice shall not
affect any obligation of Party A to deliver or receive Shares in settlement of
any purchase or sale of Shares agreed prior to the delivery of the Cessation
Notice.
Issuer Repurchase Safe Harbor:
Assuming that Party B's conduct complies with the requirements of rule 10b-18
promulgated under the 1934 Act ("Rule 10b-18"), Party A will use its best
efforts to comply with the manner of purchase, time, price and volume
requirements of Rule 10b-18 in connection with its purchase of Shares under this
Transaction.
Limited Liability:
No shareholder or trustee of Party B shall be held to any liability whatever for
the payment of any sum of money or for damages or otherwise under this
Confirmation, and this Confirmation shall not be enforceable against any such
trustee in their or his or her individual capacities or capacity and this
Confirmation shall be enforceable against the trustees of Party B only as such,
and every person, firm, association, trust or corporation having any claim or
demand arising under this Confirmation and relating to Party B, its shareholders
or trustees shall look solely to the trust estate of Party B for the payment or
satisfaction thereof.
Securities Contract:
Each party hereby represents to the other that it intends this Transaction to be
a securities contract within the meaning of Section 741 of Bankruptcy Code, as
amended (11 U.S.C. Section 741).
4. Credit Support Documents: Party A: None
Party B: Collateral Appendix
5. Account Details:
Payments to Party A: Citibank, NY
ABA Number: 000-000-000
A/C: Credit Suisse First Boston Corp.
A/C: 40804388
FFC: Northeast Utilities
A/C Number: 2GA3P0
Payments to Party B: Fleet
ABA Number: 000000000
Acct No.: 50252481
Ref.: NU Share Repurchase
Delivery of Shares to Party A:
To be advised by written notice within 30 days of the Trade Date
Delivery of Shares to Party B:
To be advised by written notice within 30 days of the Trade Date
6. U.S. Private Placement Representations
As this Transaction may constitute the sale by Party A to Party B in the case of
this Transaction, and by Party B to Party A in the case of the Number of Shares,
in each case, through Arranging Agent, of a Security or Securities (as defined
in the 1933 Act), in addition to the representations contained in Section 3 of
the Agreement, Party B hereby represents to Party A in respect of this
Transaction and Party A represents to Party B in respect of the Number of Shares
(for purposes of this Section 6, the representation of Party A with respect to
Securities shall be made with respect to the Number of Shares and the
representation of Party B shall be made with respect to the Transaction, in
accordance with Section 3 of the Agreement), as follows:
(a) Each party is acquiring such Securities through the Arranging Agent for its
own account as principal, for investment purposes only, and not with a view to,
or for, resale, distribution or fractionalization thereof, in whole or in part,
and no other person has a direct or indirect beneficial interest in any such
Securities acquired by it through the Arranging Agent;
(b) Each party understands that the offer and sale by the other party, through
the Arranging Agent, of such Securities are intended to be exempt from
registration under the 1933 Act, by virtue of Section 4(2) thereof. In
furtherance thereof, each Party represents and warrants that (i) it has the
financial ability to bear the economic risk of its investment and has adequate
means of providing for its current needs and other contingencies, (ii) it is
experienced in investing in forward purchase contracts and similar instruments
and has determined that such securities are a suitable investment for it, and
(iii) it is an institution that qualifies as an "accredited investor" as that
term is defined in Regulation D under the 1933 Act; and
(c) Each party has been given the opportunity to ask questions of, and receive
answers from, the other party through the Arranging Agent concerning the terms
and conditions of such Securities and concerning the financial condition and
business operations of the other party and has been given the opportunity to
obtain such additional information necessary in order for each party to evaluate
the merits and risks of purchase of such Securities to the extent the issuer of
the Securities possesses such information or can acquire it without unreasonable
effort or expense.
(d) The Shares shall bear a legend substantially as set forth below:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES
LAWS ("BLUE SKY LAW") ANY MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE BLUE SKY LAW
OR UNLESS SUCH SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM
REGISTRATION THEREUNDER.
THE SALE, TRANSFER, PLEDGE OR OTHER DISPOSTION OF THIS SECURITY IS SUBJECT TO
THE AGREEMENT BETWEEN THE ISSUER, CREDIT SUISSE FIRST BOSTON CORPORATION, AS
ARRANGING AGENT, AND CREDIT SUISSE FINANCIAL PRODUCTS DATED NOVEMBER 3, 1999
(THE "AGREEMENT").
Each party hereby acknowledges that it understands and agrees that disposition
of any such Securities is restricted in the manner set forth under the
Agreement, the 1933 Act and state securities laws. For example, such Securities
have not been registered under the 1933 Act or under the securities laws of
certain states and, therefore, cannot be resold, pledged, assigned or otherwise
disposed of unless they have been registered under the 1933 Act and under the
applicable laws of such states or an exemption from such registration is
available.
9. Matters relating to the Arranging Agent:
(a) As a broker-dealer registered with the SEC, Credit Suisse First Boston
Corporation in its capacity as Arranging Agent will be responsible for (i)
effecting this Transaction, (ii) issuing all required confirmations and
statements to Party A and Party B, (iii) maintaining books and records relating
to this Transaction as required by Rules 17a-3 and 17a-4 under the Securities
Exchange Act of 1934 (the "1934 Act") and (iv) unless otherwise requested by
Party B, receiving, delivering, and safeguarding Party B's funds and any
securities in connection with this Transaction, in compliance with Rule 15c3-3
under the Exchange Act.
(b) Credit Suisse First Boston Corporation is acting in connection with this
Transaction solely in its capacity as Arranging Agent for Party A and Party B
pursuant to instructions from Party A and Party B. Credit Suisse First Boston
Corporation shall have no responsibility or personal liability to Party A or
Party B arising from any failure by Party A or Party B to pay or perform any
obligations hereunder, or to monitor or enforce compliance by Party A or Party B
with any obligation hereunder, including without limitation, any obligations to
maintain collateral. Each of Party A and Party B agrees to proceed solely
against the other to collect or recover any securities or monies owing to it in
connection with or as a result of this Transaction. Credit Suisse First Boston
Corporation shall otherwise have no liability in respect of this Transaction,
except for its gross negligence or wilful misconduct in performing its duties as
Arranging Agent.
(c) Any and all notices, demands, or communications of any kind relating to this
Transaction, including without limitation, any option exercise notice, between
Party A and Party B shall be transmitted exclusively through the Arranging Agent
at the following address:
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
(d) The date and time of the Transaction evidenced hereby will be furnished by
the Arranging Agent to Party A and Party B upon written request.
(e) The Arranging Agent will furnish to Party B upon written request a statement
as to the source and amount of any remuneration received or to be received by
the Arranging Agent in connection with the Transaction evidenced hereby.
(f) Party A and Party B each represents and agrees (i) that this Transaction is
not unsuitable for it in the light of such party's financial situation,
investment objectives and needs and (ii) that it is entering into this
Transaction in reliance upon such tax, accounting, regulatory, legal and
financial advice as it deems necessary and not upon any view expressed by the
other or the Arranging Agent.
(g) Party A and Party B each is aware of and agrees to be bound by the rules of
the National Association of Securities Dealers, Inc. ("NASD") applicable to the
Transaction and is aware of and agrees not to violate, either alone or in
concert with others, any applicable position or exercise limits established by
the NASD.
Credit Suisse Financial Products is regulated by The Securities and Futures
Authority and has entered into this transaction as principal.
Please confirm that the foregoing correctly sets forth the terms of the
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
CREDIT SUISSE FIRST BOSTON CORPORATION,
solely in its capacities as Arranging Agent and Selling Agent
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By:
Name:
Title:
Confirmed as of the date first written above:
NORTHEAST UTILITIES
By:
Name:
Title:
APPENDIX A
TO
CONFIRMATION OF TRANSACTION
BETWEEN
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
AND
NORTHEAST UTILITIES
CSFBi REFERENCE NO. 5672645
Unless otherwise agreed in writing by Party A and Party B with respect to
specific sales of Shares by the Selling Agent or specific Shares to be delivered
to the Selling Agent by Party B, the provisions of this Appendix A shall apply
to all Shares in satisfaction of a Party B Net Cash Settlement or Net Share
Settlement Delivery including the resale of the Number of Shares which were
acquired in a transaction not involving any public offering and, in the case of
Net Share Settlement, any additional Shares (collectively, the "Shares").
(a) Party B shall have reserved and have available, out of its authorized but
unissued capital stock, for the purpose of effecting the payment of any Party B
Net Cash or Net Share Settlement Delivery in Shares as provided in the
Confirmation, the full number of shares of capital stock that would then be
issuable with respect to such payment.
(b) Party B shall have filed with the SEC a registration statement on Form S-3
or such other form as is acceptable to Party A; such registration statement
shall have been declared effective with respect to such Shares (the
"Registration Statement") and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the Commission. Party B, at the request
of Party A, shall deliver an underwriting agreement naming Party A, or its
designee, as underwriter, together with such other agreements, certificates and
instruments as Party A may reasonably require either pursuant to such
underwriting agreement or as are customarily provided together with such
underwriting agreement.
(c) Party B shall have registered or qualified such Shares under such securities
or "blue sky" laws of such States and other jurisdictions in the United States
and Puerto Rico as Party A or any underwriter shall have reasonably requested,
and shall have done any and all other acts and things as may be reasonably
necessary to be done by Party B to enable Party A or any underwriter to
consummate the disposition in such jurisdictions of the Shares covered by the
Registration Statement; provided that Party B shall not be required to make any
filing or take any action as a result of this paragraph (c) that would required
it to qualify as a foreign corporation or file a general consent to service of
process in any jurisdiction.
(d) Party B shall have caused such Shares and the issuance thereof to be
registered with or approved by such other governmental agencies or authorities
in the United States as may be reasonably necessary to be done by Party B to
enable Party A or any underwriter to consummate the disposition of such Shares.
(e) Party B shall have (i) given Party A and its underwriter(s), if any, and
their respective counsel and accountants, the opportunity to participate in the
preparation of all materials filed with the SEC or any other governmental agency
(the "Filed Materials") prior to the first day of such Final Reference Share
Price Pricing Period, (ii) furnished to each of them copies of all such Filed
Materials (and all documents incorporated therein by reference) sufficiently in
advance of filing to provide them with a reasonable opportunity to review such
documents and comment thereon, (iii) given each of them such opportunities to
discuss the business of Party B with its officers and the independent public
accountants who have issued a report on its financial statement as shall be
reasonably necessary, in the opinion of Party A and such underwriter(s) or their
respective counsel, to conduct a reasonable investigation (within the meaning of
the 1933 Act, as amended) with respect to such Filed Materials, (iv) delivered
to Party A and its underwriter(s), if any, the financial statements of Party B
filed with the SEC, (v) included in such Filed Materials material, furnished to
Party B in writing, which in the reasonable judgement of Party A or its
underwriter(s), if any, subject to the consent of Party B (which shall not be
unreasonably withheld), should be included with respect to Party A, Party A's
underwriter(s) and the "Plan of Distribution", including, without limitation,
language to the effect that the holding by Party A of the Shares is not to be
construed as a recommendation by Party A of the investment quality thereof and
(vi) if requested by Party A, deleted from such Filed Materials any reference to
Party A if in the written opinion of counsel to Party A, in form and substance
to Party B, such reference to Party A by name or otherwise is not required by
the 1933 Act or any similar Federal statute then in force.
(f) Party B shall have furnished to Party A and any underwriter, addressed to
Party A and any such underwriter and dated the first day of the Final Reference
Share Price Pricing Period, (i) an opinion of counsel for Party B (which opinion
may be from internal counsel for Party B) and (ii) a "cold comfort" letter
signed by the independent public accountants who have issued a report on Party
B's financial statements included in such Registration Statement, covering
substantially the same matters with respect to such Shares and the offering,
sale and issuance thereof as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to underwriter(s) in underwritten
public offerings of securities and, in the case of the accountants' letter, such
other financial matters as Party A may have reasonably requested.
(g) Party B shall have complied with all applicable provisions of the 1933 Act
and the 1934 Act and the Public Utility Holding Company Act of 1935, all
applicable rules of the SEC and all other applicable laws, rules and regulations
of any governmental or regulatory authority with respect to such Filing
Materials and such Shares and the offering, sale and issuance thereof.
(h) Party B shall have caused all such Shares to be listed on the Exchange and
on each securities exchange on which Party B has caused similar securities
issued by Party B to be listed.
(i) Party B shall have provided a transfer agent and registrar for such Shares.
(j) Party B shall have taken such other actions as Party A or any underwriter of
such Shares shall have reasonably requested in order to expedite or facilitate
the disposition of such Shares.
(k) Party B shall provide Party A and its underwriter(s), if any, with indemnity
and contribution in form and substance acceptable to Party A covering such
matters relating to the Shares, the Filed Materials, and such other matters as
Party A shall reasonably request.
(l) Party B shall have paid all customary costs and expenses reasonably incurred
in connection with the foregoing, provided, that unless otherwise agreed, Party
A and its underwriter(s) shall be responsible for the fees and expenses of their
respective counsel.
(m) Party B shall deliver all such registered Shares through the Clearance
System.
