Underwriting Agreement

 

Table of Contents

 

			PAGE
Section 1.		Representations and Warranties	2
Section 2.		Sale and Delivery to Underwriters; Closing	10
Section 3.		Covenants of the Company	12
Section 4.		Payment of Expenses	14
Section 5.		Certain Agreements of the Underwriters	15
Section 6.		Conditions of Underwriters’ Obligations	17
Section 7.		Conditions of Company’s Obligations	22
Section 8.		Indemnification	23
Section 9.		Contribution	25
Section 10.		Representations, Warranties and Agreements to Survive Delivery	26
Section 11.		Termination of Agreement	26
Section 12.		Default by One or More of the Underwriters	27
Section 13.		Notices	29
Section 14.		Parties	29
Section 15.		Governing Law and Time	29
Section 16.		Effect of Headings	29
Schedules
Schedule A-1	—	List of 2016 Senior Note Underwriters	A-1
Schedule A-2	—	List of 2036 Senior Note Underwriters	A-2
Schedule B	—	Pricing Information	B-1
Schedule C	—	Time of Sale Information	C-1
Schedule D	—	Information Provided by Underwriters	D-1
Schedule E	—	Form of Opinion of Jones Day	E-1

 

i

 

Oklahoma Gas and Electric Company
(an Oklahoma corporation)

 

$110,000,000 5.15% Senior Notes, Series due January 15, 2016
$110,000,000 5.75% Senior Notes, Series due January 15, 2036

 

Underwriting Agreement

 

January 4, 2006

 

To:                               J.P. Morgan Securities Inc., as Representative
Wachovia Capital Markets, LLC, as Representative

 

Ladies and Gentlemen:

 

Oklahoma Gas and Electric Company, an Oklahoma corporation (the “Company” ), confirms its agreement with J.P. Morgan Securities Inc. and Wachovia Capital Markets, LLC (the “Representatives” ), and each of the other entities identified on Schedules A-1 and A-2 hereto as underwriters (collectively, with the Representatives, the “Underwriters,” which term includes any underwriter substituted as hereinafter provided in Section 11 hereof), with respect to the issue and sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective principal amounts set forth in Schedule A-1 hereto of $110,000,000 aggregate principal amount of the Company’s 5.15% Senior Notes, Series due January 15, 2016 (the “2016 Senior Notes” ) and in Schedule A-2 hereto of $110,000,000 aggregate principal amount of the Company’s 5.75% Senior Notes, Series due January 15, 2036 (the “2036 Senior Notes” and together with the 2016 Senior Notes, the “Senior Notes” ).  The Senior Notes are to be issued pursuant to the Indenture dated as of October 1, 1995 between the Company and UMB Bank, N.A., as successor trustee (the “Trustee” ), as heretofore amended and supplemented and as amended and supplemented by Supplemental Indenture No. 7, dated as of January 1, 2006, creating the series in which the Senior Notes are to be issued.  The term “Indenture,” as used herein, means such Indenture dated as of October 1, 1995, as so amended and supplemented, and includes the Company Order (as defined in the Indenture), if any, establishing the form and terms of the Senior Notes pursuant to the Indenture.  The 2016 Senior Notes and the 2036 Senior Notes constitute separate series of securities under the Indenture.

 

The Company understands that the Underwriters propose to make a public offering of the Senior Notes as soon as they deem advisable after this Agreement has been executed and delivered.  The Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the “1939 Act” ).

 

The Company has filed with the Securities and Exchange Commission (the “Commission” ) two registration statements on Form S-3 (File Nos. 333-104615 and 333-127843) covering the registration of the Senior Notes under the Securities Act of 1933, as amended (the “1933 Act” ), including the related preliminary prospectus or prospectuses.  Such registration statements, as amended at the time each such registration statement became effective

 

 

(or upon effectiveness of any post-effective amendment thereto), including the information, if any, deemed pursuant to Rule 430A, 430B or 430C of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations” ) to be part of the registration statement at the time of its effectiveness ( “Rule 430 Information” ) are collectively referred to herein as the “Registration Statement” ; and as used herein, the term “Preliminary Prospectus” means the preliminary prospectus supplement dated January 4, 2006, including the accompanying prospectus dated September 8, 2005, and the term “Prospectus” means the prospectus in the form provided by the Company for use (or made available upon request of purchasers pursuant to Rule 173 under the 1933 Act) in connection with confirmation of sales of the Senior Notes.  Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement” shall include the Rule 462(b) Registration Statement.  Any reference in this Agreement to the Registration Statement, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, as of the applicable effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be.  For purposes of this Agreement, all references to the Registration Statement, the Preliminary Prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ( “EDGAR” ).

 

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, the Preliminary Prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, the Preliminary Prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, the Preliminary Prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended (the “1934 Act” ) which is incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be.

 

At or prior to the time when sales of the Senior Notes were first made on the date of this Agreement (the “Time of Sale” ), the Company had prepared the following information (collectively, the “Time of Sale Information” ): the Preliminary Prospectus and each “free-writing prospectus” (as defined pursuant to Rule 405 under the 1933 Act Regulations) listed on Schedule C hereto.

 

Section 1.                                                  Representations and Warranties.

 

(a)            Representations and Warranties by the Company.   The Company represents and warrants to each Underwriter as of the date hereof and as of the Closing Time (as defined in Section 2(b) hereof), and agrees with each Underwriter, as follows:

 

(i)             Compliance with Registration Requirements.   The Company meets the requirements for use of Form S-3 under the 1933 Act.  Each of the Registration Statement and

 

2

 

any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose or pursuant to Section 8A of the 1933 Act against the Company or related to the offering have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with.

 

At the respective times the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective (and, if later, at the time of filing of the Company’s annual report on Form 10-K) and at the Closing Time, the Registration Statement, the Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the “1939 Act Regulations” ), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.  Neither the Prospectus nor any amendments or supplements thereto, at the time the Prospectus or any such amendment or supplement was issued and at the Closing Time, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Preliminary Prospectus, as of its date, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The representations and warranties in this subsection shall not apply to (A) that part of the Registration Statement which constitutes the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee, (B) information contained in the Registration Statement, the Prospectus or the Preliminary Prospectus relating to The Depository Trust Company and its book-entry system, or (C) statements in or omissions from the Registration Statement, the Prospectus or the Preliminary Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus or the Preliminary Prospectus, which information is set forth on Schedule D hereto.

 

The Preliminary Prospectus and the Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 of the 1933 Act Regulations ( “Rule 424” ), complied when so filed in all material respects with the 1933 Act Regulations, and the Preliminary Prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

 

(ii)            Time of Sale Information.   The Time of Sale Information, at the Time of Sale did not, and at the Closing Time will not, contain any untrue statement of a material

 

3

 

fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The representations and warranties in this subsection shall not apply to (A) information contained in the Time of Sale Information relating to the Depository Trust Company and its book-entry system or (B) statements in or omissions from the Time of Sale Information made in reliance upon and in conformity with the information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Time of Sale Information, which information is set forth on Schedule D hereto.

 

(iii)           Issuer Free Writing Prospectus.   Other than the Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not made, used, prepared, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 of the 1933 Act Regulations) that constitutes an offer to sell or solicitation of an offer to buy the Senior Notes (each such communication by the Company or its agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus” ) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the 1933 Act or Rule 134 of the 1933 Act Regulations or (ii) the documents listed on Schedule C hereto and other written communications approved in writing in advance by the Representatives.  Each such Issuer Free Writing Prospectus complied in all material respects with the applicable requirements of the 1933 Act, has been or will be filed in accordance with the 1933 Act Regulations (to the extent required thereby) and, when taken together with the Preliminary Prospectus filed prior to the first use of such Issuer Free Writing Prospectus, did not, and at the Closing Time will not, contain 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; provided that the Company makes no representation and warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.

 

(iv)           Incorporated Documents.   The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Prospectus or the Time of Sale Information, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations” ), as applicable, and, when read together with the other information in the Prospectus or the Time of Sale Information, at the time the Registration Statement became effective (and, if later, at the time of filing of the Company’s annual report on Form 10-K), at the time the Prospectus or the Time of Sale Information was issued and at the Closing Time, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

 

4

 

(v)            Independent Accountants.   Ernst & Young LLP, the accountants who examined and audited the financial statements and supporting schedules included in the Registration Statement, is an independent registered public accounting firm as required by the 1933 Act and the 1933 Act Regulations and the Public Company Accounting Oversight Board (United States).

 

(vi)           Financial Statements.   The financial statements included or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company at the dates indicated and the results of operations, stockholder’s equity and cash flows of the Company for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ( “GAAP” ) applied on a consistent basis throughout the periods involved, except as otherwise stated in the notes thereto.  The supporting schedules, if any, included or incorporated by reference in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein.  The summary or selected financial information included or incorporated by reference in the Prospectus and the Time of Sale Information presents fairly the information shown therein and has been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement.  The Company has no material contingent obligation which is not disclosed in the Prospectus and the Time of Sale Information.

 

(vii)          No Material Adverse Change.   Since the respective dates as of which information is given or incorporated by reference in the Registration Statement, the Time of Sale Information and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, results of operations, properties, business affairs or business prospects of the Company, whether or not arising in the ordinary course of business (a “Material Adverse Effect” ), (B) there have been no transactions entered into by the Company, other than those in the ordinary course of business, which are material with respect to the Company, and (C) except for regular quarterly dividends on the Common Stock, par value $2.50 per share of the Company in amounts consistent with past practice, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

 

(viii)         Good Standing of the Company.   The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Oklahoma and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.

 

5

 

(ix)            No Subsidiaries.   The Company has no subsidiaries that would be considered a “significant subsidiary” under Rule 1-02(w) of Regulation S-X.

 

(x)             Capitalization.   The authorized, issued and outstanding capital stock of the Company is as stated in the Registration Statement, Prospectus and the Time of Sale Information.  The shares of issued and outstanding capital stock of the Company have been duly and validly issued and are fully paid and non-assessable.

 

(xi)            Authorization of Agreement.   This Agreement has been duly authorized, executed and delivered by the Company.

 

(xii)           Authorization of the Indenture.   The Indenture has been duly authorized by the Company and duly qualified under the 1939 Act and, when duly executed and delivered by the Company and the Trustee, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

 

(xiii)          Authorization of the Senior Notes.   The Senior Notes have been duly authorized and, at the Closing Time, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits provided by, the Indenture.

 

(xiv)         Description of the Senior Notes and the Indenture.   The Senior Notes and the Indenture will conform in all material respects to the respective statements relating thereto contained in the Prospectus and the Time of Sale Information and will be in substantially the respective forms filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement.  The “Release Date” (as defined in the Indenture) occurred on April 6, 1998 and no notes issued under the Indenture are secured by any property of the Company.

 

(xv)          Absence of Defaults and Conflicts.   The Company is not in violation of its Restated Certificate of Incorporation or By-Laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which it is a party or by which it may be bound, or to which any of its property or assets is subject (collectively, “Agreements and Instruments” ) or,

 

6

 

except as disclosed in the Registration Statement, the Prospectus and the Time of Sale Information, in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject except for such defaults or violations (other than with respect to its Restated Certificate of Incorporation or By-laws) that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture and the Senior Notes, and the consummation of the transactions contemplated herein and in the Registration Statement, the Prospectus and the Time of Sale Information (including the issuance and sale of the Senior Notes and the use of the proceeds from the sale of the Senior Notes as described in the Prospectus under the caption “Use of Proceeds” ) and compliance by the Company with its obligations hereunder and under the Indenture and the Senior Notes have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, the Agreements and Instruments (except for such conflicts, breaches, defaults or liens, charges or encumbrances that would not result in a Material Adverse Effect), nor will such action result in any violation of the provisions of the Restated Certificate of Incorporation or By-Laws of the Company or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its assets, properties or operations.  As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, other than such events or conditions that are contemplated by the terms of this Agreement and the Indenture.

 

(xvi)         Absence of Proceedings.   Other than as disclosed in the Registration Statement, the Prospectus and the Time of Sale Information, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company, which is required to be disclosed in the Registration Statement or which might reasonably be expected to result in a Material Adverse Effect, or which might reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder.  The aggregate of all pending legal or governmental proceedings to which the Company is a party or of which any of its property or assets is the subject which are not described in the Registration Statement, the Prospectus and the Time of Sale Information including ordinary routine litigation incidental to its business, could not reasonably be expected to result in a Material Adverse Effect.

 

(xvii)        Accuracy of Exhibits.   There are no contracts or documents which are required to be described in the Registration Statement, the Time of Sale Information, the

 

7

 

Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described or filed as required.

 

(xviii)       Regulatory Approvals; Absence of Further Requirements.   The Corporation Commission of the State of Oklahoma (the “Oklahoma Commission” ) has, to the extent necessary, duly authorized the issuance and sale of the Senior Notes on terms consistent with this Agreement.  No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Senior Notes hereunder or the consummation of the transactions contemplated by this Agreement and the Registration Statement, the Prospectus and the Time of Sale Information or for the due execution, delivery or performance of the Indenture by the Company, except such as have been already obtained, including from the Oklahoma Commission.

 

(xix)          Possession of Licenses and Permits.   The Company possesses such permits, licenses, approvals, consents, franchises and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct in all material respects the business now operated by it and as described in the Registration Statement, the Time of Sale Information and Prospectus, except where the failure so to possess such permit, license, approval, consent or authorization would not, singly or in the aggregate, have a Material Adverse Effect (collectively, “Governmental Licenses” ); the Company is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and the Company has not received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.

 

(xx)           Title to Property.   The Company has good and sufficient title to all real property, principal plants and all other property owned by it and which is material to the Company’s operations, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (a) are described in the Registration Statement, Prospectus and Time of Sale Information or (b) do not, singly or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company; and all of the leases and subleases material to the business of the Company, and under which the Company holds properties described in the Prospectus, are in full force and effect, and the Company does not have notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company to the continued possession of the leased or subleased premises under any such lease or sublease.

 

8

 

(xxi)          Labor .  No labor disturbance by the employees of the Company exists or, to the knowledge of the Company, is imminent which might be expected to have a Material Adverse Effect.

 

(xxii)         Taxes.   The Company, either directly or through its parent, has filed all federal, state and local income and franchise tax returns required to be filed through the date hereof (other than those filings being contested in good faith) and has paid all taxes, either directly or through its parent, of which it has notice are due thereon (other than those being contested in good faith and for which adequate reserves have been provided without penalty or interest), and no tax deficiency has been determined adversely to the Company which has had (nor does the Company have any knowledge of any tax deficiency which, if determined adversely to the Company, might have) a Material Adverse Effect.

 

(xxiii)        No Stabilization.   The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Senior Notes; provided, however, that this paragraph shall not apply to, and the Company does not accept any responsibility for, any stabilization activities conducted by the Underwriters, who shall remain solely responsible for such activities.

 

(xxiv)        Illegal Payments.   Neither the Company nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

(xxv)         Public Utility Holding Company Act.   The Company is a “public utility” as the term is defined in the Public Utility Holding Company Act of 1935, as amended (the “Holding Company Act” ).  The Company has complied with all rules and regulations of the Holding Company Act necessary to conduct its business as presently conducted and to allow the Company to enter into this Agreement and consummate the transactions contemplated hereby.  The Company is currently exempt from all provisions of the Holding Company Act, except Section 9(a)(2) thereof.

 

(xxvi)        Disclosure Controls and Procedures .  The Company (i) has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the 1934 Act), which (A) are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within the Company, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared, (B) have been evaluated for effectiveness, as of the end of the period covered by the respective annual or quarterly report, and (C) are effective in all material respects to perform the functions for which they were established, (ii) based on the evaluation of its disclosure

 

9

 

controls and procedures, is not aware of (A) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data or any material weaknesses in internal controls, or (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls, and (iii) since the date of the most recent evaluation of such disclosure controls and procedures, has experienced no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(xxvii)       Accounting Controls.   The Company maintains systems of “internal control over financial reporting” (as such term is defined in Rule 13a-15(f) of the 1934 Act) that comply with the requirements of the 1934 Act and have been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, including, but not limited to internal accounting controls sufficient to provide reasonable assurance that (i) records are maintained in reasonable detail so as to accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) the unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements is being prevented or timely detected.

 

(xxviii)      Sarbanes-Oxley Act.   There is and has been no failure on the part of the Company or, to the Company’s knowledge, any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.

 

(xxix)        Status under the 1933 Act.   The Company is not an “ineligible issuer” as defined under the 1933 Act at the times specified in the 1933 Act in connection with the offering of the Senior Notes.

 

(b)            Officer’s Certificates.   Any certificate signed by any officer of the Company and delivered to any Underwriter or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby.

 

Section 2.                                                  Sale and Delivery to Underwriters; Closing.

 

(a)            Senior Notes.   On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth:  (i) the Company agrees to sell to each Underwriter listed on Schedule A-1, severally and not jointly, and each Underwriter listed on Schedule A-1, severally and not jointly, agrees to purchase from the Company, at a price equal to

 

10

 

99.024% of the principal amount thereof, the principal amount of 2016 Senior Notes set forth in Schedule A-1 opposite the name of such Underwriter and (ii) the Company agrees to sell to each Underwriter listed on Schedule A-2, severally and not jointly, and each Underwriter listed on Schedule A-2, severally and not jointly, agrees to purchase from the Company, at a price equal to 98.713% of the principal amount thereof, the principal amount of 2036 Senior Notes set forth in Schedule A-2 opposite the name of such Underwriter, plus, in each case, any additional principal amount of 2016 Senior Notes or 2036 Senior Notes, as applicable, which such Underwriter may become obligated to purchase pursuant to the provisions of Section 12 hereof.

 

(b)            Payment.   Payment of the purchase price, and delivery of certificates, for the Senior Notes shall be made at the offices of Chapman and Cutler LLP, Chicago, Illinois, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 a.m. (Chicago time) on the third business day after the date hereof (unless postponed in accordance with the provisions of Section 12), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery for each series of Senior Notes being herein called a “Closing Time” ).  Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Senior Notes to be purchased by them.  It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Senior Notes which it has agreed to purchase.  The Representatives, individually and not as representatives of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Senior Notes to be purchased by any Underwriter whose funds have not been received by the Closing Time, but such payment shall not relieve such Underwriter from its obligations hereunder.

 

(c)            Denominations; Registration.   One certificate for the 2016 Senior Notes shall be in the amount of $110,000,000 and one certificate for the 2036 Senior Notes shall be in the amount of $110,000,000, each registered in the name of Cede & Co., as nominee of The Depository Trust Company.  The Company will make the Senior Notes, which may be in temporary forms, available for examination and packaging by the Underwriters in New York, New York not later than 10:00 a.m. (New York time) on the business day prior to the Closing Time.

 

(d)            No Fiduciary Duty.   The Company acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of the Senior Notes contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.  Additionally, neither the Representatives nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction.  The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and, except as otherwise contemplated in this Agreement, the Underwriters shall have no responsibility or liability to the Company with respect thereto.  Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company.

 

11

 

Section 3.                                                  Covenants of the Company.

 

The Company covenants with each Underwriter as follows:

 

(a)            Compliance with Securities Regulations and Commission Requests.   The Company, subject to Section 3(b), will comply with the requirements of Rule 424 and will notify the Underwriters promptly, and confirm the notice in writing, (i) of the effectiveness of any post-effective amendment to the Registration Statement, or of the filing of any supplement to the Prospectus or any amended Prospectus, or of any Issuer Free Writing Prospectus, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or any Issuer Free Writing Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the Preliminary Prospectus, or of the suspension of the qualification of the Senior Notes for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or pursuant to Section 8A of the 1933 Act, and (v) of the occurrence of any event within the Prospectus Delivery Period (as defined in Section 3(d) below) as a result of which the Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading.  The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 403A, 430B or 430C under the Securities Act, will file any Issuer Free Writing Prospectus (including the Pricing Information set forth in Schedule B) to the extent required by Rule 433 under the Securities Act and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus or Issuer Free Writing Prospectus transmitted for filing under Rule 424(b) or Rule 433, as applicable, was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus.  The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

 

(b)            Filing of Amendments; Issuer Free Writing Prospectus.   Prior to the later of the Closing Time or the termination of the Prospectus Delivery Period, before preparing, using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement or the Prospectus, the Company will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and prior to the later of the Closing Time or the termination of the Prospectus Delivery Period, will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.

 

(c)            Delivery of Registration Statements.