Underwriting Agreement

EXHIBIT 1.1

PENNSYLVANIA ELECTRIC COMPANY

(a Pennsylvania corporation)

$250,000,000 5.20% Senior Notes due 2020

$250,000,000 6.15% Senior Notes due 2038

UNDERWRITING AGREEMENT

Ladies and Gentlemen:

Pennsylvania Electric Company, a corporation organized under the laws of the Commonwealth of Pennsylvania (the “ Company ”), proposes, subject to the terms and conditions stated herein, to issue and sell to the several underwriters named in Schedule I hereto (the “ Underwriters ”, which term, when the context permits, shall also include any underwriters substituted as hereinafter provided in Section 11 ), for whom Banc of America Securities LLC, Citigroup Global Markets

 

 

 

 

Inc., J.P. Morgan Securities Inc. and Wells Fargo Securities, LLC are acting as representatives (in such capacity, the “ Representatives ”), $250,000,000 aggregate principal amount of the Company’s 5.20% Senior Notes due 2020 (the “2020 Notes ”) and $250,000,000 aggregate principal amount of the Company’s 6.15% Senior Notes due 2038 (the “2038 Notes ” and together with the 2020 Notes, the “ Notes ”), to be issued under the Company’s Senior Note Indenture, dated as of April 1, 1999, between the Company and The Bank of New York Mellon, as successor trustee (the “ Trustee ”), as heretofore supplemented (the “ Senior Note Indenture ”) and as to be further supplemented, for the issuance of the Notes, by a Company Order issued pursuant to resolutions of the board of directors of the Company to be effective on or about September 29, 2009 (the “ Company Order ,” and, together with the Senior Note Indenture, hereinafter referred to as the “ Indenture ”) in accordance with the terms set forth in this underwriting agreement (the “ Underwriting Agreement ”).  The Notes shall have the series designation, denominations, issue price, maturities, interest rates, redemption provisions, if any, and other terms as set forth in the General Disclosure Package (hereinafter defined).

 

SECTION 1.   Representations and Warranties .

 

(a)   Representations and Warranties by the Company.   The Company represents and warrants to and agrees with each Underwriter that:

 

(i)   An “automatic shelf registration statement” as defined in Rule 405 (“ Rule 405 ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), on Form S-3 (File No. 333-153608-01) to be used in connection with the public offering and sale of debt securities, including the Notes, and other securities of the Company under the Securities Act and the rules and regulations promulgated thereunder (the “ Rules and Regulations ”) and the offering thereof from time to time in accordance with Rule 415 under the Securities Act, has been prepared and filed by the Company not earlier than three years prior to the date hereof, in conformity with the requirements of the Securities Act and the Rules and Regulations. The Company will file with the Securities and Exchange Commission (the “ Commission ”) a prospectus supplement specifically relating to the terms of the Notes pursuant to Rule 424(b) (“ Rule 424(b) ”) under the Securities Act.  The Company qualifies for use of Form S-3 for the registration of the Notes and the Notes are registered under the Securities Act.  “ Registration Statement ” as of any time means such registration statement in the form then filed with the Commission, including any amendment thereto, any document incorporated or deemed to be incorporated by reference therein and any information in a prospectus or prospectus supplement deemed or retroactively deemed to be a part thereof pursuant to Rule 430B (“ Rule 430B ”) or 430C (“ Rule 430C ”) under the Securities Act that has not been superseded or modified.  “ Registration Statement ” without reference to a time means the Registration Statement as of the Applicable Time (hereinafter defined), which time shall be considered the “ Effective Date ” of the Registration Statement relating to the Notes.  For purposes of this definition, information contained in a form of prospectus or prospectus supplement that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B shall be considered to be included in the Registration Statement as of the time specified in Rule 430B. At the time of filing the Registration Statement, at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or form of prospectus), at

 

 

 

 

the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) of the Securities Act) made any offer relating to the Notes in reliance on the exemption of Rule 163 of the Securities Act, and as of the date hereof, the Company was and is a “well known seasoned issuer” as defined in Rule 405 of the Securities Act.

 

(ii)   At the time the Registration Statement initially became effective, at the time that each amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether by post-effective amendment, incorporated report or form of prospectus) became effective and on the Effective Date relating to the Notes, the Registration Statement conformed and will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act of 1939 (“ Trust Indenture Act ”), as the case may be, and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.  On the date hereof, on the date of any filing pursuant to Rule 424(b) and on the Closing Date (as hereinafter defined), the Registration Statement and the Prospectus (as defined in this paragraph (ii)) will conform in all material respects to the requirements of the Securities Act, the Trust Indenture Act and the Rules and Regulations, and neither of such documents will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from any of such documents made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter through the Representatives, if any, specifically for use therein or to any statements in or omissions from the Statement of Eligibility of the Trustee under the Indenture, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof, but nothing contained herein is intended as a waiver of compliance with the Securities Act or the Rules and Regulations.  For purposes of this Underwriting Agreement, “ Statutory Prospectus ” as of any time means the preliminary prospectus supplement (which term includes the base prospectus) or prospectus relating to the Notes that is included in the Registration Statement immediately prior to that time, including any document incorporated by reference therein and any basic prospectus or prospectus supplement deemed to be a part thereof pursuant to Rule 430B or 430C that has not been superseded or modified.  For purposes of this definition, information contained in a form of prospectus (including a prospectus supplement) that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not retroactively.  “ Prospectus ” means the Statutory Prospectus that discloses the public offering price and other final terms of the Notes and otherwise satisfies Section 10(a) of the Securities Act.

 

(iii)   The documents incorporated or deemed to be incorporated by reference in the General Disclosure Package (as hereinafter defined) and the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements, as applicable, of the Exchange Act and the rules and regulations of the Commission thereunder, and, when read together with other information in the General Disclosure Package or the Prospectus, as applicable, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

 

(iv)   (A) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Notes and (B) on the date hereof,  the Company was not and is not an “ineligible issuer,” as defined in Rule 405, including (x) the Company or any other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company in the preceding three years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration statement be the subject of a proceeding under Section 8 of the Securities Act and not being the subject of a proceeding under Section 8A of the Securities Act in connection with an offering of securities, all as described in Rule 405.

 

(v)   As of the Applicable Time (as defined in this paragraph (v)), neither (A) the Issuer Free Writing Prospectus (as defined in this paragraph (v)) listed in Schedule II hereto, the Statutory Prospectus, all considered together (collectively, the “ General Disclosure Package ”), nor (B) any individual Issuer Free Writing Prospectus (as defined in this paragraph (v)), when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The preceding sentence does not apply to statements in or omissions from any prospectus included in the Registration Statement or any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.  “ Applicable Time ” means 4:45 p.m. (Eastern Time) on the date hereof.  “ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 (“ Rule 433 ”) under the Securities Act, relating to the Notes in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

(vi)   Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offering and sale of the Notes or until any earlier date that the Company notified or notifies the Representatives as described in the next sentence and in Section 3(j) hereof, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement, the General Disclosure Package and the Prospectus.  The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 7(b) hereof.

 

(vii)   The historical consolidated financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the Prospectus and the General Disclosure Package present fairly in all material respects the financial condition, results of operations and cash flows of the Company as of the dates and for the periods indicated and have been prepared in conformity with generally accepted accounting

 

principles applied on a consistent basis throughout the periods involved, except as otherwise disclosed in the General Disclosure Package.

 

(viii)   Since the most recent time as of which information is given in the General Disclosure Package and the Prospectus, there has not occurred any material adverse change, or any development involving a prospective material adverse change, in the business prospects, earnings, business, properties, condition (financial or otherwise) or operations of the Company and its subsidiaries, taken as a whole, other than changes and developments contemplated by the General Disclosure Package and the Prospectus, respectively.

 

(ix)   The Company has been duly incorporated and is validly subsisting as a corporation in good standing under the laws of the Commonwealth of Pennsylvania, has the corporate power and authority to own, lease or operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole.

 

(x)   Each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease or operate its property and to conduct its business as described in the Prospectus and the General Disclosure Package and is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole.

 

(xi)   This Underwriting Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws relating to or affecting enforcement of creditors’ rights generally, or by general principles of equity (whether enforcement is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing, and except that the enforcement of rights to indemnification and contribution hereunder may be limited by applicable law or public policy.

 

(xii)   The Senior Note Indenture has been, and on the Closing Date, the Indenture will be, (1) duly qualified under the Trust Indenture Act and (2) duly authorized, executed and delivered by the Company and constitutes a valid and binding agreement enforceable against the Company in accordance with its terms except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether enforceability is considered in a proceeding in equity or in law) and by an implied covenant of good faith and fair dealing.

(xiii)   The Notes have been duly authorized by the Company, and, when they have been duly executed by the Company, authenticated by the Trustee, and issued and delivered against payment therefor as provided herein, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors’ rights generally, by general equitable principles (whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing and will be entitled to the benefits provided by the Indenture.

 

(xiv)   The Notes and the Senior Note Indenture conform, and on the Closing Date, the Indenture will conform, in all material respects to the descriptions thereof contained in the Prospectus and the General Disclosure Package.

 

(xv)   Neither the issuance and sale of the Notes nor the execution and delivery by the Company of, and the performance by the Company of its obligations under, this Underwriting Agreement, the Indenture and the Notes will (A) contravene, or (B) result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (a) any provision of applicable law, (b) the amended and restated articles of incorporation or amended and restated bylaws, or other organizational documents, each as amended, of the Company or any subsidiary of the Company, (c) any agreement or other instrument binding upon the Company or any subsidiary of the Company or (d) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary of the Company or any of their properties.  Furthermore, neither the Company nor any subsidiary of the Company is (x) in violation of any applicable law, or (y) in violation  or in default, of its respective amended and restated articles of incorporation or amended and restated bylaws, each as amended, or other organizational documents, or in the performance of any bond, debenture, note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or other contract, lease or other instrument to which it is a party or by which any of them is bound, or to which any of its property or assets is subject, except such defaults as have been waived or which would not have, singly or in the aggregate, a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole.

 

(xvi)   Other than as disclosed in the Prospectus and the General Disclosure Package, there are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened, to which the Company or any subsidiary of the Company is a party or to which any of the properties of the Company or any subsidiary of the Company are subject wherein an unfavorable decision, ruling or finding could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its obligations under this Underwriting Agreement, or to consummate the transactions contemplated by the Prospectus and the General Disclosure Package; and there is no franchise, contract or other document of a character required to be described in the Registration Statement, the Prospectus or the General Disclosure Package, or to be filed or incorporated by reference as an exhibit thereto, which is not described, filed or incorporated as required.

(xvii)   No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Securities Act and the Trust Indenture Act, such as has been obtained from the Pennsylvania Public Utility Commission (“ PaPUC ”), and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Notes by the Underwriters in the manner contemplated herein and in the General Disclosure Package.  The Company possesses such certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct its business as currently operated, except where the failure to possess such certificate, authorization or permit would not have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole.

 

(xviii)   The Company and each of its subsidiaries (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”), (ii) has received all permits, licenses, consent decrees or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license, consent decree or approval, except in cases in which that noncompliance with Environmental Laws, failure to receive required permits, licenses, consent decrees or other approvals, or failure to comply with the terms and conditions of such permits, licenses, consent decrees or approvals would not, singly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole.

 

(xix)   The Company maintains (x) systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, its principal executive and principal financial officers, or persons performing similar functions, sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (y) a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files with the Commission pursuant to the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure, and such disclosure controls and procedures are effective.  The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting.

 

(xx)   The Company is not, and after giving effect to the offering and sale of

the Notes and the application of the proceeds thereof as described in the Prospectus and the General Disclosure Package will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(xxi)   PricewaterhouseCoopers LLP, which has certified certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Securities Act and the Rules and Regulations and the rules and regulations of the Public Company Accounting Oversight Board.

 

(xxii)   The Company does not own or control, directly or indirectly, any corporation or other entity other than the subsidiaries listed on Schedule III hereto.

 

(xxiii)   There is and has been no failure on the part of the Company and, to the Company’s knowledge (having made due inquiry), any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 relating to loans and Sections 302 and 906 relating to certifications.

 

(b)   Officer’s Certificates .  Any certificate signed by any duly authorized officer of the Company and delivered to the Underwriters or to counsel for the Underwriters in connection with this offering shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

 

SECTION 2.   Sale and Delivery to Underwriters; Closing .

 

(a)   Purchase and Sale.   Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of 98.998% with respect to the 2020 Notes and 98.910% with respect to the 2038 Notes, the principal amount of the Notes set forth opposite such Underwriter’s name in Schedule I hereto plus any additional principal amount of Notes which such Underwriter may become obligated to purchase pursuant to the provisions of Section 11 , subject to such adjustments among the Underwriters as the Representatives, on behalf of the Underwriters, shall make to eliminate any sales or purchases of fractional Notes.

 

(b)   Payment and Delivery.   Payment of the purchase price for, and delivery of certificates for, the Notes shall be made at the office of Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, New York  10036, or at such other place as shall be agreed upon by the Company and the Representatives on behalf of the Underwriters, at 10:00 a.m., (Eastern Time), on the second business day after the date hereof, or such other time not later than ten business days after such date as shall be agreed upon by the Company and the Representatives on behalf of the Underwriters (such time and date of payment and delivery being herein called the “ Closing Date ”).

 

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 Underwriters for the account of the Underwriters of the Notes to be purchased by them.

 

 

The delivery of the Notes shall be made in fully registered form, registered in the name of CEDE & CO., to the offices of The Depository Trust Company (“ DTC ”) in New York, New York, or its designee, and the Underwriters shall accept such delivery.

 

The certificate(s) representing the Notes shall be made available for examination by the Representatives not later than 2:00 p.m. (Eastern Time) on the last business day prior to the Closing Date at such place as may be agreed upon between the Representatives and the Company.

 

SECTION 3.   Covenants of the Company .  The Company covenants with the Underwriters as follows:

 

(a)   To promptly file each Statutory Prospectus (including the Prospectus) with the Commission pursuant to Rule 424(b) under the Securities Act.

 

(b)   The Company will advise the Representatives promptly of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof or any order suspending or preventing the use of the Statutory Prospectus, the Prospectus or any Issuer Free Writing Prospectus, and will use its best efforts to prevent the issuance of any such stop order or other such order and to obtain as soon as possible its lifting, if issued.

 

(c)   To furnish without charge to the Representatives a signed copy of the Registration Statement, including all exhibits filed with the Registration Statement and the documents incorporated by reference therein (other than exhibits which are incorporated by reference therein) and to each other Underwriter a copy of the Registration Statement without exhibits and, during the period mentioned in paragraph (e) below, as many copies of the Prospectus and any documents incorporated by reference therein at or after the date thereof and any amendments and supplements thereto as the Representatives may reasonably request.  The terms “supplement” and “amendment” as used in this Underwriting Agreement shall include all documents filed by the Company with the Commission subsequent to the date of the Prospectus pursuant to the Exchange Act which are deemed to be incorporated by reference in the Prospectus.

 

(d)   Before amending or supplementing the Registration Statement or any Statutory Prospectus or filing with the Commission any document pursuant to Section 13, 14 or 15(d) of the Exchange Act, during the period referred to in paragraph (e) below, to furnish to the Representatives a copy of each such proposed amendment, supplement or document for the Representatives’ review prior to filing and not to file any such proposed amendment, supplement or document to which the Representatives reasonably object.

 

(e)   The Company will promptly notify the Underwriters, and confirm such notice in writing (which notice and confirmation may be satisfied by providing the Underwriters with any related periodic report filed under the Exchange Act), of (x) any filing made by the Company of information relating to the offering of the Notes with any securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) any material changes in or affecting the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, which (i) make any statement in the Prospectus as then amended or supplemented materially false or misleading or (ii) are not

disclosed in the Prospectus as then amended or supplemented.  If, at any time when a prospectus covering the Notes is (or but for the exemption in Rule 172 under the Securities Act would be) required by law to be delivered in connection with sales of the Notes by an Underwriter or dealer, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or counsel for the Company, to amend the Registration Statement or to amend or supplement the Prospectus or modify the information incorporated by reference therein in order that the Prospectus will not include any untrue 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 existing at the time the Prospectus is (or but for the exemption in Rule 172 under the Securities Act would be) delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus or modify such information to comply with the Securities Act and the Rules and Regulations, forthwith to prepare and file with the Commission and to furnish (subject to the conditions in paragraph (c) above), at its own expense, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Notes may have been sold by the Underwriters, and to any other dealers upon request, such amendments or supplements to the Prospectus or modifications to the documents incorporated by reference therein, so that the statements in the Prospectus as so amended, supplemented or modified will not, in the light of the circumstances existing at the time such Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with the Securities Act and the Rules and Regulations.  If, prior to the Closing Date, there occurs an event or development as a result of which the General Disclosure Package would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the General Disclosure Package is delivered to a purchaser, not misleading, the Company promptly will notify the Representatives so that any use of the General Disclosure Package may cease until it is amended or supplemented, and will promptly prepare an amendment or supplement that will correct such statement or omission.

 

(f)   The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Notes for offering and sale under the applicable securities laws of such jurisdictions as the Underwriters may designate and will maintain such qualifications in effect as long as required for the sale of the Notes; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.  The Company will file such statements and reports as may be required by the laws of each jurisdiction in which the Notes have been qualified as above provided.  The Company will promptly advise the Representatives of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any such state or jurisdiction or the initiating or threatening of any proceedings for such purpose.  The Company will also supply the Underwriters with such information as is necessary for the determination of the legality of the Notes for investment under the laws of such jurisdictions as the Underwriters may reasonably request.

 

(g)   The Company shall take all reasonable action necessary to enable Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (“ S&P ”), and Moody’s Investors Service, Inc. (“ Moody’s ”) to provide their respective credit ratings of the Notes.

 

(h)   The Company will use the proceeds received by it from the sale of the Notes in the manner specified in the Prospectus under “Use of Proceeds.”

 

(i)   During a period beginning on the date of this Underwriting Agreement and continuing to and including the Closing Date, the Company will not, without the prior written consent of the Representatives, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, or otherwise dispose of, any other debt securities issued or guaranteed by the Company or any of its subsidiaries substantially similar to the Notes or securities of the Company or any of its subsidiaries that are convertible into, or exchangeable for, the Notes.

 

(j)   If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information then contained in the Registration Statement, would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that time, not misleading, (A) the Company will promptly notify the Representatives and (B) the Company will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

SECTION 4.   Free Writing Prospectuses .

 

(a)   Free Writing Prospectuses.   The Company represents and agrees that, unless it obtains the prior written consent of the Representatives, and each Underwriter represents and agrees that, unless it obtains the prior written consent of the Company and the Representatives, it has not made and will not make any offer relating to the Notes that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission.  The Company represents that it has complied and will comply with the requirements of Rule 164 under the Securities Act and Rule 433 applicable to any Issuer Free Writing Prospectus, including timely Commission filing where required, legending and record keeping.  The parties hereto agree that the only Issuer Free Writing Prospectuses issued on or prior to the Applicable Time and consented to by the Company and the Representatives are specified on Schedule II hereto (including the final term sheet prepared in accordance with Section 4(b) below).

 

(b)   Final Term Sheet.   The Company will prepare a final term sheet relating to the Notes, containing only information that describes the final terms of the Notes and otherwise in a form consented to by the Representatives, and will file such final term sheet within the period required by Rule 433(d)(5)(ii).  Any such final term sheet is an Issuer Free Writing Prospectus for purposes of this Underwriting Agreement and is specified in Schedule II hereto.

 

SECTION 5.   Payment of Expenses .

 

(a)   Expenses.   The Company will pay all expenses incident to the performance of its obligations under this Underwriting Agreement, including (i) the preparation, printing and any filing of each Statutory Prospectus (including the Prospectus) and each Issuer Free Writing Prospectus and of each amendment or supplement thereto, (ii) the preparation, reproduction and delivery to the Underwriters of this Underwriting Agreement and such other documents as may

 

 

be required in connection with the offering, purchase, sale and delivery of the Notes, (iii) the preparation, issuance and delivery of the certificates for the Notes to the Underwriters, including any charges of DTC in connection therewith, (iv) the fees and disbursements of the Company’s counsel, accountants and other advisors (but not the fees and disbursements of counsel for the Underwriters), (v) the qualification of the Notes under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey, any supplement thereto and any legal investment survey (such fees and disbursements not to exceed $7,500), (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Notes and (vii) any fees payable in connection with the rating of the Notes in accordance with Section 3(g) hereof.

 

(b)   Termination of Underwriting Agreement.   If this Underwriting Agreement is terminated by the Underwriters in accordance with the provisions of Section 6 , the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including fees and disbursements of counsel for the Underwriters which were reasonably incurred.

 

SECTION 6.   Conditions of Underwriters’ Obligations .  The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1(a) as of the Applicable Time, the time this Underwriting Agreement is executed and delivered by the parties hereto and the Closing Date, to the accuracy of the statements made in certificates of the Company executed by any officer of the Company or any officer of any of the Company’s subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions:

 

(a)   No Stop Orders .  Subsequent to the execution and delivery of this Underwriting Agreement and prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement or any part thereof shall be in effect, no order of the Commission directed to the adequacy or accuracy of any document incorporated or deemed to be incorporated by reference in the Prospectus shall be in effect, and no proceedings for either purpose or pursuant to Section 8A of the Securities Act against the Company or relating to the offering of the Notes shall be pending before or threatened by the Commission; and

 

(b)   No Material Adverse Change .  Subsequent to the execution and delivery of this Underwriting Agreement and prior to the Closing Date, there shall not have been, since the date hereof or since the respective dates as of which information is given in the General Disclosure Package and the Prospectus (exclusive of any amendments or supplements thereto subsequent to the Applicable Time), any material adverse change in the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not  arising in the ordinary course of business.

 

(c)   Officer’s Certificate .  The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Sections 6(a) and (b) above and to the effect that the representations and warranties of the Compa