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Exhibit 1(b)
THE CLEVELAND ELECTRIC ILLUMINATING COMPANY
REGISTRATION AGREEMENT
October 16, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
First Chicago Capital Markets, Inc.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
TD Securities (USA) Inc.
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The Cleveland Electric Illuminating Company, an Ohio
corporation (the "Company") proposes to issue and sell to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated Chase Securities Inc., First Chicago Capital Markets, Inc.,
▇▇▇▇▇▇▇▇ & Company Securities, Inc., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, TD Securities (USA) Inc. and the other purchasers identified in
Schedule I of the Placement Agreement (defined below) (collectively, the
"Purchasers"), on the terms set forth in a placement agreement of even date
herewith (the "Placement Agreement"), $150,000,000 principal amount of 7.43%
Series C Secured Notes Due 2009, $ 300,000,000 principal amount of 7.88% Series
C Secured Notes Due 2017, (those two tranches of notes, collectively, the
"Notes"). The Notes will be issued pursuant to an Indenture to be dated as of
October 24, 1997 and a First Supplemental Indenture to be dated as of October
24, 1997 (that Indenture, as supplemented by that First Supplemental Indenture,
the "Indenture") between the Company and The Chase Manhattan Bank, a New York
banking corporation, as trustee (the "Trustee").
As an inducement to the Purchasers to enter into the Placement
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with the Purchasers for the benefit of the registered holders of
the Notes (including, without limitation, the Purchasers) and the Exchange Notes
(as defined below) (collectively, the "Holders"), as follows:
SECTION 1. REGISTERED EXCHANGE OFFER. The Company shall use
its best efforts to prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to an offer (the "Registered Exchange
Offer") to the holders of Transfer Restricted Notes (as defined in
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Section 6 hereof), who are not prohibited by any law or policy of the
Commission from participating in the Registered Exchange Offer, to issue and
deliver to such Holders, in exchange for the Notes of each tranche, a like
aggregate principal amount of debt securities (the "Exchange Notes") of the
Company issued under the Indenture and identical in all material respects to the
Notes of that tranche (excluding the transfer restrictions relating to the
Notes) that would be registered under the Securities Act. The Company shall use
its best efforts to cause that Exchange Offer Registration Statement to become
effective under the Securities Act within 150 days after the date of original
issue of the Notes and shall keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (that period being called the "Exchange Offer Registration Period").
If the Company effects the Registered Exchange Offer, the
Company will be entitled to close the Registered Exchange Offer 30 days after
the commencement thereof if the Company has accepted all the notes validly
tendered by the 30th day after that commencement in accordance with the terms of
the Registered Exchange Offer.
Following the declaration of the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of the Registered Exchange Offer to
enable each Holder of Transfer Restricted Notes electing to exchange those
Transfer Restricted Notes for Exchange Notes (assuming that Holder is not an
affiliate of the Company within the meaning of the Securities Act, acquires the
Exchange Notes in the ordinary course of that Holder's business and has no
arrangement with any person to participate in the distribution of the Exchange
Notes, and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) -to trade those Exchange Notes
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. In connection with the Registered
Exchange Offer, the Company shall use its best efforts to consummate the
Registered Exchange Offer and shall comply with the applicable requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and other
applicable laws and regulations in connection with the Registered -Exchange
Offer.
The Company acknowledges that, pursuant to current
interpretations by the Commission's staff of section 5 of the Securities Act, in
the absence of an applicable exemption therefrom, (a) each Holder that is a
broker-dealer electing to exchange Notes, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Notes (an "Exchanging Dealer"), is required to deliver a prospectus containing
the information set forth in Annex A hereto on the cover, in Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and in Annex C hereto in the "Plan of Distribution" section, in
connection with a sale of any such Exchange Notes received by that Exchanging
Dealer pursuant to the Registered Exchange Offer; and (b) if the Purchasers are
permitted to and elect to sell Exchange Notes acquired in exchange for Notes
constituting any portion of an unsold allotment, they are required to deliver a
prospectus containing the
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information required by Item 507 or 508 of Regulation S-K under the Securities
Act, as applicable, in connection with that sale.
The Company shall include in the prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Purchasers, that contains a summary statement of
the positions taken or policies made by the staff of the Commission with respect
to the potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by that broker-dealer in the Registered Exchange Offer (a
"Participating Broker-Dealer"), whether those positions or policies have been
publicly disseminated by the staff of the Commission or those positions or
policies, in the reasonable judgment of the Purchasers based on advice of
counsel (which may be in-house counsel), represent the prevailing views of the
staff of the Commission.
The Company shall use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein, in order to permit that prospectus to be lawfully
delivered by the Purchasers and all Exchanging Dealers subject to the prospectus
delivery requirements of the Securities Act and shall make that prospectus
available to the Purchasers and those Exchanging dealers for such period of time
after the consummation of the Registered Exchange Offer as those persons must
comply with those requirements in order to resell the Exchange Notes, but that
period shall not exceed 120 days (unless extended pursuant to Section 30)
below), and those persons are not authorized by the Company to deliver and shall
not deliver any such prospectus after the expiration of that period in
connection with the resales contemplated by this paragraph.
The Company shall make available for a period of 120 days
after the consummation of the Registered Exchange Offer a copy of the
prospectus, and any amendment or supplement thereto, forming part of the
Exchange Offer Registration Statement, to any broker-dealer for use in
connection with any resale of any Exchange Notes. The Notes and the Exchange
Notes are herein collectively called the "Securities."
In connection with the Registered Exchange Offer, the Company
shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date
notice thereof is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of
New York, which may be the Trustee or an affiliate of the Trustee;
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(d) permit Holders to withdraw tendered Notes at any time
prior to the close of business, New York time, on the last business day
on which the Registered Exchange Offer remains open; and
(e) otherwise comply in all material respects with all
applicable laws.
As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
(i) accept for exchange all the Notes validly
tendered and not withdrawn pursuant to the Registered Exchange
Offer;
(ii) deliver, or cause to be delivered, to the
Trustee for cancellation all the Notes so accepted for
exchange; and
(iii) issue, and cause the Trustee to authenticate
and deliver promptly to each Holder of the Notes of any
tranche, Exchange Notes of the same tranche, equal in
principal amount to the Notes of that tranche of that Holder
so accepted for exchange.
The Indenture will provide that the Exchange Notes will not be
subject to the transfer restrictions set forth in the Indenture.
Interest on each Exchange Note issued pursuant to the
Registered Exchange Offer will accrue from the last interest payment date on
which interest was paid on the Notes surrendered in exchange therefor or, if no
interest has been paid on those Notes, from the date of original issue of those
Notes.
Each Holder participating in the Registered Exchange Offer
will be required to represent to the Company at the time of the consummation of
the Registered Exchange Offer (a) that any Exchange Note received by that Holder
will be acquired in the ordinary course of business; (b) that the Holder will
have no arrangement or understanding with any person to participate in the
distribution of the Notes or the Exchange Notes within the meaning of the
Securities Act; (c) that the Holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Company or if it is an affiliate, that Holder
will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable; (d) if that Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, any
distribution of the Exchange Notes; and (v) if that Holder is a broker-dealer,
that it will receive Exchange Notes for its own account in exchange for Notes
that were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of those Exchange Notes.
Notwithstanding any other provision hereof, the Company will
ensure that (a) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act
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and the rules and regulations thereunder; (b) any Exchange Offer Registration
Statement and any amendment thereto does not, when it becomes effective, 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, in light of
the circumstances under which they were made, not misleading; and (c) any
prospectus forming part of any Exchange Offer Registration Statement, and any
supplement to that prospectus, at the time of issuance does not include an
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 light
of the circumstances under which they were made, not misleading.
SECTION 2. SHELF REGISTRATION. If (a) the Company determines
that a Registered Exchange Offer, as contemplated by Section 1 hereof, is not
available or may not be consummated as soon as practicable after the last date
the Registered Exchange Offer is open because it would violate applicable law or
the applicable interpretations of the staff of the Commission; (b) the
Registered Exchange Offer is not consummated within 180 days after the date of
original issue of the Notes; (c) the Purchasers so request with respect. to the
Notes not eligible to be exchanged for Exchange Notes in the Registered Exchange
Offer and held by them following consummation of the Registered Exchange Offer;
or (d) any Holder (other than an Exchanging Dealer) is not eligible to
participate in the Registered Exchange Offer, or any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer does not
receive freely tradeable Exchange Notes on the date of the exchange for validly
tendered (and not withdrawn) Notes:
(i) The Company shall use all reasonable efforts to prepare
and file, as promptly as practicable, with the Commission and
thereafter to cause to be declared effective a registration statement
(the "Shelf Registration Statement" and, together with the Exchange
Offer Registration Statement, a "Registration Statement") on an
appropriate form under the Securities Act relating to the offer and
sale of the Transfer Restricted Notes (as defined below), by the
Holders thereof from time to time in accordance, with the methods of
distribution set forth in the Shelf Registration Statement and Rule 415
under the Securities Act (hereinafter, the "Shelf Registration"), but
no Holder (other than the Purchasers) is entitled to have any
Securities held by it covered by that Shelf Registration Statement
unless that Holder agrees in writing to be bound by all the provisions
of this Agreement applicable to that Holder.
(ii) The Company shall use all reasonable efforts to keep the
Shelf Registration Statement continuously effective in order to permit
the prospectus included therein to be lawfully delivered by the Holders
of the relevant Securities, until the earlier of (A) the end of the
period referred to in Rule 144(k) under the Securities Act after the
original issue date of the Notes expires (or the end of such longer
period as may result from an extension pursuant to Section 3(j) below),
and (B) the date on which all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto.
(iii) Notwithstanding any other provision of this Agreement to
the contrary, the Company shall cause the Shelf Registration Statement
and the related prospectus and any
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amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement, amendment or supplement, (A)to comply in all
material respects with tile applicable requirements of the Securities
Act and the rules and regulations of the Commission and (B) not to
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 light of the circumstances under which
they were made, not misleading.
SECTION 3. REGISTRATION PROCEDURES. In connection with any
Shelf Registration contemplated by Section 2 hereof and, to the extent
applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the
following provisions shall apply:
(a) The Company shall (i) furnish to the Purchasers, prior to
the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to
the prospectus included therein and shall not file any such
Registration Statement or amendment thereto or any prospectus or any
supplement thereto (including any document that, upon filing, would be
incorporated or deemed to be incorporated by reference therein and any
amendment to any such document other than documents required to be
filed pursuant to the Exchange Act) to which the Purchasers shall
reasonably object, except for any Registration Statement or amendment
thereto or prospectus or supplement thereto (a copy of which has been
previously furnished to the Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel))
which counsel to the Company has advised the Company in writing is
required to be filed, notwithstanding any such objection, in order to
comply with applicable law; (ii) include information substantially to
the effect set forth (A) in Annex A hereto on the cover, (B) in Annex B
hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, (C) in Annex C hereto in the "Plan of
Distribution" section, of the prospectus forming a part of the Exchange
Offer Registration Statement, and (D) include the information set forth
in Annex D hereto in the Letter of Transmittal delivered in connection
with the Registered Exchange Offer; (iii) to the extent required by law
or interpretation of the staff of the Commission, if requested by the
Purchasers, include the information required by Item 507 or 508 of
Regulation S-K under the Securities Act, as applicable, in the
prospectus forming a part of the Exchange Offer Registration Statement;
and (iv) to the extent required by law or interpretation of the staff
of the Commission, in the case of a Shelf Registration Statement,
include the names of the Holders who propose to sell Securities
pursuant to the Shelf Registration Statement as selling
securityholders.
(b) The Company shall notify promptly the Purchasers, the
Holders and any Participating Broker-Dealer from whom the Company has
received prior written notice stating that it will be a Participating
Broker-Dealer in the Registered Exchange Offer (which notice pursuant
to clauses (ii) through (v) hereof shall be accompanied by an
instruction to suspend the use of the prospectus until the requisite
changes have been made) and, if requested by the Purchasers, the
Holders or any such Participating Broker-Dealer, confirm such notice in
writing:
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(i) when the Registration Statement or any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment thereto
has become effective;
(ii) of any request by the Commission for an
amendment or supplement to the Registration Statement or the
prospectus included therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceeding for that
purpose;
(iv) of the receipt by the Company or its legal
counsel of any notification with respect to the suspension of
the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any
proceeding for that purpose;
(v) of the happening of any event that requires the
Company to make changes in the Registration Statement or the
prospectus in order that the Registration Statement or the
prospectus does 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; in light
of the circumstances under which they were made, not
misleading; and
(vi) of any determination by the Company that a
post-effective amendment to a Registration Statement would be
appropriate.
(c) The Company shall make every reasonable effort to prevent
the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of the
Registration Statement and shall provide prompt written notice to the
Purchasers and each Holder of the withdrawal of any such order.
(d) The Company shall furnish to each Holder of Securities
included in the Shelf Registration, without charge, at least one
conformed copy of the Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference or
exhibits thereto, unless a Holder so requests in writing).
(e) The Company shall deliver to the Purchasers, and to any
other Holder that so requests, without charge, at least one conformed
copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference or
exhibits thereto, unless the Purchasers or any such Holder so request
in writing).
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(f) The Company shall deliver to each Holder of Securities
included in the Shelf Registration, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
that Holder may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the
Securities in connection with the offering and sale of the Securities
covered by, and as contemplated by, the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to each Purchaser, any
Participating Broker-Dealer and any Exchanging Dealer, without charge,
as many copies of the final prospectus included in the Exchange Offer
Registration Statement and any amendment or supplement thereto as that
person or entity may reasonably request, during a period not exceeding
120 days following the consummation of the Registered Exchange Offer.
The Company consents, subject to the provisions of this Agreement, to
the use of the prospectus or any amendment or supplement thereto by the
Purchasers, if necessary, any Participating Broker-Dealer and any
Exchanging Dealer and such other persons as may be required to deliver
a prospectus following the Registered Exchange Offer in connection with
the offering and sale of the Exchange Notes covered by the prospectus,
or any amendment or supplement thereto, included in the Exchange Offer
Registration Statement, but no such person or entity is authorized by
the Company to deliver and no such person or entity shall deliver any
such prospectus after the expiration of the period referred to in the
immediately preceding sentence, in connection with any resale
contemplated by this paragraph.
(h) Prior to any public offering of Securities pursuant to
any Registration Statement, the Company shall use its best efforts to
register or qualify or cooperate with the Holders of the Securities
included therein and their respective counsel in connection with the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of such states of the United
States as any Holder of the Securities reasonably requests in writing
and shall do any and all other acts or things necessary or advisable to
enable that Holder to offer and sell in such jurisdictions the
Securities covered by that Registration Statement owned by that Holder,
but the Company is not required to (i) qualify generally or as foreign
corporations to do business in any jurisdiction where they are not
then so qualified or (ii) take any action which would subject them to
general service of process or to taxation in any jurisdiction where
they are not then so subject.
(i) The Company shall cooperate with the Holders of the
Securities to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold pursuant to any
Shelf Registration Statement free of any restrictive legend and in such
denominations (consistent with the provisions of the Indenture) and
registered in such names as the Holders may request at least two
business days prior to closing of any sale of the Securities pursuant
to such Shelf Registration Statement.
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(j) If any event contemplated by paragraphs (ii) through (vi)
of Section 3(b) above occurs during the period in which the Company is
required to maintain an effective Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and
any other required document so that, as thereafter delivered to Holders
of the Notes or purchasers of Securities, the prospectus will not
contain an 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, in light of the circumstances under which they were
made, not misleading. If the Company notifies the Purchasers, the
Holders of the Securities and any known Participating Broker-Dealer in
accordance with paragraphs (ii) through (vi) of Section 3(b) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Purchasers, the Holders of the
Securities and any such Participating Broker-Dealer shall suspend use
of that prospectus until the Company has amended or supplemented the
prospectus to correct that misstatement or omission, and the period of
effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement
provided for in Section 1 above shall each be extended by the number of
days from and including the date of the giving of that notice to and
including the date when the Purchasers, the Holders of the Securities
and any known Participating Broker-Dealer shall have received that
amended or supplemented prospectus pursuant to this Section 3(j), but
the minimum time period before the Company is entitled to close the
Registered Exchange offer will be extended only to the extent required
by the Commission. Each Purchaser, Holder and Participating
Broker-Dealer agrees that on receipt of any such notice from the
Company it will not distribute copies of the prospectus that are the
subject of that notice and will retain those copies in its files.
(k) Not later than the effective date of the applicable
Registration Statement, the Company will obtain a CUSIP number for each
tranche of the Transfer Restricted Notes or the Exchange Notes, as the
case may be, and provide the Trustee with printed certificates for the
Notes or the Exchange Notes, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to their security holders (or otherwise provide in
accordance with section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of section 11(a) of the Securities
Act, no later than 45 days after the end of the 12-month period (or 90
days, if that period is a fiscal year) that begins with the first month
of the Company's first fiscal quarter commencing after the effective
date of the Registration Statement, which statement will cover that
12-month period.
(m) The Company shall cause the Indenture to be qualified
under the Trust Indenture Act of 1939, as amended, in a timely manner
and to contain any changes that
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are necessary for that qualification. If that qualification would
require the appointment of a new trustee under the Indenture, the
Company shall appoint a new trustee thereunder pursuant to the
applicable provisions of the Indenture.
(n) The Company may require each Holder of Securities to be
sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding that Holder and the distribution of
the Securities as the Company may from time to time reasonably request
for inclusion in the Shelf Registration Statement, and the Company may
exclude from that registration the Securities of any Holder that
unreasonably fails to furnish that information within a reasonable time
after receiving that request.
(o) In the case of any Shelf Registration, the Company shall
enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other
action, if any, as the Holders of a majority of the Securities being
sold shall reasonably request in order to facilitate the disposition of
the Securities pursuant to that Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall
make available for inspection by a representative of the Holders of
Securities being sold, their counsel and an accountant retained by
those Holders, in a manner designed to permit underwriters to satisfy
their due diligence investigation under the Securities Act, all
financial and other records, pertinent corporate documents and
properties of the Company customarily inspected by underwriters in
primary underwritten offerings and shall cause the officers, directors
and employees of the Company and its subsidiaries to supply all
information reasonably requested by, and customarily supplied in
connection with primary underwritten offerings to, any such
representative, attorney or accountant in connection with that
registration, but any records, information or documents that are
designated by the Company as confidential at the time of delivery
thereof shall be kept confidential by those persons, unless (i) those
records, information or documents are in the public domain or otherwise
publicly available (ii) disclosure of those records, information or
documents is required by a court or administrative order; or (iii)
disclosure of those records, information or documents, in the written
opinion of counsel to those persons, is otherwise required by law
(including, without limitation, pursuant to the Securities Act).
(q) In the case of any Shelf Registration, the Company, if
requested by any Holder of Securities covered thereby, shall (i) cause
its counsel to deliver an opinion and updates thereof relating to the
Securities in customary form addressed to the selling Holder and the
managing underwriters, if any, covering matters customarily covered in
opinions requested in underwritten offerings; (ii) cause its officers
to execute and deliver such documents and certificates and updates
thereof as may be reasonably requested by any underwriter of the
applicable Securities, and which are customarily delivered in
underwritten offerings, to evidence the continued validity of the
representations and warranties of the Company made pursuant to, and to
evidence compliance with any customary conditions contained in, an
underwriting agreement; and (iii) cause its independent public
accountants to provide to the selling Holders of the applicable
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Securities (and any underwriter therefor) a comfort letter in customary
form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to
receipt of appropriate documentation as contemplated, and only if
permitted, by Statement of Auditing Standards No. 72.
(r) If a Registered Exchange Offer is to be consummated, upon
delivery of the Notes by Holders to the Company (or to any other Person
designated by the Company) in exchange for the Exchange Notes, the
Company shall ▇▇▇▇, or caused to be marked, on the Notes so exchanged
that those Notes are being canceled in exchange for the Exchange Notes,
and in no event shall the Notes be marked as paid or otherwise
satisfied.
(s) The Company shall use its best efforts to cause the
Securities covered by a Registration Statement to be rated by two
nationally recognized statistical rating organizations (as that term is
defined in Rule 436(g)(2) under the Securities Act) if so requested by
Holders of a majority in aggregate principal amount of the Securities
covered by that Registration Statement, or by the managing
underwriters, if any.
(t) If any broker-dealer registered under the Exchange Act
underwrites any Securities or participates as a member of an
underwriting syndicate or selling group or assists in the distribution"
(within the meaning of the Conduct Rules of the National Association of
Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of
those Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall
assist such broker-dealer in complying with the requirements of those
Rules and By-Laws, including by (i) if those Rules, including Rule
2720, shall so require, engaging a "qualified independent underwriter"
(as defined in Rule 2720) to participate in the preparation of the
Registration Statement relating to those Securities, to exercise usual
standards of due diligence in respect thereto and, if any portion of
the offering contemplated by that Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities, (ii) indemnifying any such
qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 5 hereof; and (iii) providing such
information to that broker-dealer as may be required in order for that
broker-dealer to comply with the requirements of the Conduct Rules of
the NASD.
SECTION 4. REGISTRATION RESPONSES. The Company shall pay all
fees and expenses incident to the performance of or compliance with this
Agreement by the Company including, without limitation, (a) all Commission,
stock exchange or NASD registration and filing fees; (b) all fees and expenses
incurred in connection with compliance with state securities or Blue Sky laws
(including reasonable fees and disbursements of counsel for any underwriters or
holders in connection with Blue Sky qualification of any of the Securities); (c)
all out of pocket expenses of any persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any prospectus, any amendment or supplement to either thereof, any
underwriting agreement, securities sales agreement or other document relating to
the performance of and compliance with this Agreement; (d) all rating agency
fees; and (e) the fees and disbursements of counsel for the Company and, in the
event of a Shelf Registration, the
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reasonable fees and disbursements of one firm of counsel designated by the
Holders of a majority in principal amount of the Securities covered thereby and
of the independent public accountants of the Company, including the expense of
any special audit or "cold comfort" letter required by or incident to that
performance and compliance, but excluding fees and expenses of counsel to the
underwriters and underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Securities by a Holder.
SECTION 5. INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless each Holder of Securities, any Participating
Broker-Dealer, and each person, if any, who controls that Holder or
Participating Broker-Dealer within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, that Holder or Participating Broker-Dealer, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus (as amended or supplemented if the Company
shall have furnished any amendment or supplement thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based on information
relating to that Holder or Participating Broker-Dealer furnished to the Company
in writing by that Holder or Participating Broker-Dealer expressly for use
therein, but the foregoing indemnity with respect to any preliminary prospectus
will not inure to the benefit of any Holder or Participating Broker-Dealer from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling or affiliated with that Holder
or Participating Broker-Dealer, if a copy of the final prospectus (as then
amended or supplemented if the Company shall have furnished any amendment or
supplement thereto) was not sent or given by or on behalf of that Holder or
Participating Broker-Dealer to that person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to that person, and if the final prospectus (as so amended or supplemented)
would have cured the defect giving rise to that loss, claim, damage or
liability.
(b) Each Participating Broker-Dealer and Holder of securities,
severally and not jointly, agrees to indemnify and hold harmless the Company,
other selling Holders and participating Broker-Dealers, directors of the
Company, the officers of the Company who sign a Registration Statement and each
person, if any, who controls the Company or any selling Holder or Participating
Broker-Dealer, within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to that Holder or Participating Broker-Dealer, but only with
reference to information relating to that Holder furnished to the Company in
writing by that Holder or Participating Broker-Dealer expressly for use in a
Registration Statement, any preliminary prospectus, prospectus or any amendment
or supplement to any thereof.
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(c) If any proceeding (including any governmental
investigation) is instituted involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or (b) above, that person (the
"indemnified party") shall promptly notify the person against whom that
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in that proceeding and
shall pay the fees and expenses of that counsel related to that proceeding. In
any such proceeding, any indemnified party may retain its own counsel, but the
fees and expenses of that counsel will be at the expense of that indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of that counsel, or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate because of actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. If an indemnified party
includes (x) the Purchasers or such controlling persons of the Purchasers, that
firm will be designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated; or (y)
Holders of Securities (other than the Purchasers) or controlling persons of
those Holders, that firm will be designated in writing by the Holders of a
majority in aggregate principal amount of those Securities. In all other cases,
that firm will be designated by the Company. The indemnifying party will not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with that consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of that settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party has
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it will be liable for any
settlement of any proceeding effected without its written consent if (i) that
settlement is entered into more than 90 days after receipt by the indemnifying
party of the aforesaid request and (ii) the indemnifying party shall not have
reimbursed the indemnified party in accordance with that request prior to the
date of that settlement. No indemnifying party may, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by that indemnified
party, unless that settlement includes an unconditional release of that
indemnified party from all liability on claims that are the subject matter of
that proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 5 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under that paragraph, in lieu of
indemnifying that indemnified party thereunder, shall contribute to the amount
paid or payable by that indemnified party as a result of those losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying
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party or parties, on the one hand, and the indemnified party or parties, on the
other hand, in connection with the statements or omissions that resulted in
those losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by that Holder,
Participating Broker-Dealer or other party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent that
statement or omission. The Holders, and Participating Broker-Dealers' respective
obligations to contribute pursuant to this Section 5 are several in proportion
to the respective amount of Notes they have purchased, not joint.
(e) The Company, each Participating Broker-Dealer and each
Holder agree that it would not be just or equitable if contribution pursuant to
this Section 5 were determined by PRO RATA allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in subsection (d) of this Section 5. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in subsection (d) above is deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
that indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5, no Holder of
Securities is required to contribute any amount in excess of the amount by which
the total price at which the securities were sold by that Holder pursuant to a
Registration Statement exceeds the amount of any damages that Holder has
otherwise been required to pay by reason of that untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) is
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution provisions contained in
this Section 5 will remain operative and in full force and effect regardless of
(i) any termination of this Agreement; (ii) any investigation made by or on
behalf of any Holder or Participating Broker-Dealer or any person controlling
that Holder or Participating Broker-Dealer or by or on behalf of the Company,
its officers or directors or any person controlling the Company; and (iii) the
sale of the Securities. The remedies provided for in this Section 5 are not
exclusive and do not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
SECTION 6. ADDITIONAL INTEREST UNDER CERTAIN CIRCUMSTANCES.
(a) Additional interest (the "Additional Interest") with respect to the
Securities will be assessed as follows if any of the following events occurs
(each event identified in clause (i), (ii) or (iii) below, a "Failure to
Register"):
(i) If by the 150th day after the date of the original issue
of the Notes (that date of issue, the "Closing Date"), neither the
Exchange Offer Registration Statement nor a Shelf Registration
Statement has been filed with the Commission;
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(ii) If by the 180th day after the Closing Date, the
Registered Exchange Offer is not consummated and, if required in lieu
thereof, the Shelf Registration Statement is not declared effective by
the Commission; or
(iii) If, after the 180th day after the Closing Date, and
after either the Exchange Offer Registration Statement or the Shelf
Registration Statement is declared effective, (A) that Registration
Statement thereafter ceases to be effective prior to completion of the
Exchange Offer or the sale of all the Transfer Restricted Notes
registered pursuant to the Shelf Registration Statement, as the case
may be; or (B) that Registration Statement or the related prospectus
ceases to be usable in connection with resales of Transfer Restricted
Notes during the periods specified in this Agreement (except as
permitted in paragraph (b) of this Section 6) because either (1) any
event occurs as a result of which the related prospectus forming part
of that Registration Statement would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they
were made not misleading, or (2) it shall be necessary to amend that
Registration Statement, or supplement the related prospectus, to comply
with the Securities Act or the Exchange Act or the respective rules
thereunder.
Additional Interest shall accrue on the Notes of each tranche
over and above the interest set forth in the title of the Notes of that tranche
from and including the date on which any such Failure to Register shall occur to
but excluding the date on which all such Failures to Register have been cured,
at a rate of 0.50% per annum.
(b) A Failure to Register referred to in Section 6(a)(iii) is
deemed not to be continuing in relation to a Registration Statement or the
related prospectus if (i) that Failure to Register has occurred solely as a
result of (x) the filing of a post-effective amendment to that Registration
Statement to incorporate annual audited financial information with respect to
the Company, when such post-effective amendment is not yet effective and needs
to be declared effective to permit Holders to use the related prospectus or (y)
the occurrence of other material events or developments with respect to the
Company or its Affiliates that would need to be described in that Registration
Statement or the related prospectus, and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement that
Registration Statement and related prospectus to describe those events or, in
the case of material developments that the Company determines in good faith must
remain confidential for business reasons, the Company is proceeding promptly and
in good faith to take such steps as are necessary so that those developments
need no longer remain confidential, but in any case, if any Failure to Register
(including any referred to in clause (x) or (y), above) continues for a period
in excess of 45 days, Additional Interest will be Payable in accordance with the
above paragraph from the day following the last day of that 45-day period until
the date on which that Failure to Register is cured.
(c) Any Additional Interest payable will be payable on the
regular interest payment dates with respect to the Notes, in the same manner as
the manner in which regular interest is payable. The amount of Additional
Interest for any period will be determined by
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multiplying the applicable Additional Interest rate by the principal amount of
the applicable Notes, multiplied by a fraction, the numerator of which is the
number of days that Additional Interest rate was applicable during that period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
(d) "Transfer Restricted Note" means each Security until (i)
the date on which that Security has been exchanged by a person other than a
broker-dealer for a freely transferable Exchange Note in the Registered Exchange
Offer; (ii) following the exchange by a broker-dealer in the Registered Exchange
Offer of a Transfer Restricted Note for an Exchange Note, the date on which that
Exchange Note is sold to a purchaser who receives from that broker-dealer on or
prior to the date of that sale a copy of the prospectus contained in the
Exchange Offer Registration Statement; (iii) the date on which that Security has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement; or (iv) the date on which that
Security is distributed to the public pursuant to Rule 144 under the Securities
Act or is saleable pursuant to Rule 144(k) under the Securities Act.
SECTION 7. RULES 144 AND 144A. The Company shall use its best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file those reports, it will, upon the request of any Holder of
Transfer Restricted Notes, make publicly available other information so long as
is necessary to permit sales of Securities pursuant to Rules 144 and 144A. The
Company covenants that it will take such further action as any Holder of
Transfer Restricted Notes may reasonably request, all to the extent required
from time to time to enable that Holder to sell Transfer Restricted Notes
without registration under the Securities Act within the limitation of the
exemptions provided by Rules 144 and 144A (including the requirements of Rule
144A(d)(4)). Upon request by a Purchaser, the Company will provide a copy of
this Agreement to prospective purchasers of Notes identified to the Company by
that Purchaser. Upon the request of any Holder of Transfer Restricted Notes, the
Company shall deliver to that Holder a written statement as to whether it has
complied with those requirements. Notwithstanding the foregoing, nothing in this
Section 7 requires the Company to register any of its securities under the
Exchange Act.
SECTION 8. UNDERWRITTEN REGISTRATIONS. If any of the Transfer
Restricted Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Notes included in that offering, but the Managing
Underwriters must be reasonably satisfactory to the Company.
No person may participate in any underwritten registration
hereunder unless that person (a) agrees to sell that person's Transfer
Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve those
arrangements; and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of those underwriting arrangements.
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SECTION 9. MISCELLANEOUS. (a) AMENDMENTS AND WAIVERS. The
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
except by the Company and the written consent of the Holders of a majority in
principal amount of the Securities affected thereby.
(b) NOTICES. All notices and other communications provided for
or permitted hereunder must be given in writing by hand-delivery, first-class
mail, facsimile transmission, or air courier that guarantees overnight delivery:
(i) if to a Holder of Securities, at the most current address
given by that Holder to the Company in accordance with this Section
9(b), which address initially is, with respect to each Holder, the
address of that Holder to which confirmation of the sale of the Notes
to that Holder was first sent by the Purchasers, with a copy in like
manner to you as follows:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Managing Director, Syndicate
with a copy to:
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP
1400 ▇▇▇▇▇▇▇▇ Investment Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(2) if to the Company, at the following address:
The Cleveland Electric Illuminating Company
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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with a copy to:
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
All such notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by the recipient's facsimile machine operator, if
sent by facsimile transmission; and on the day delivered, if sent by overnight
air courier guaranteeing next day delivery.
(c) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, entered into, nor may the Company, on or after the date hereof,
enter into, any agreement with respect to the Securities that is inconsistent
with the rights granted to the Holders herein or that otherwise conflicts with
this Agreement.
(d) SUCCESSORS AND ASSIGNS. This Agreement is binding on the
Company and its successors and assigns.
(e) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed will constitute an original and all of which taken
together constitute one and the same agreement.
(f) GOVERNING LAW. THIS AGREEMENT IS GOVERNED BY, AND IS TO BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
(h) SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein is not affected or impaired thereby.
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(i) SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Securities
is required hereunder, Securities held by the Company or its affiliates will not
be counted in determining whether that consent or approval was given by the
Holders of that required percentage.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Purchasers and the Company in accordance with its terms.
Very truly yours,
THE CLEVELAND ELECTRIC
ILLUMINATING COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Chase Securities Inc.
First Chicago Capital Markets, Inc.
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
TD Securities (USA) Inc.
Acting severally on behalf of
themselves and the several Purchasers
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------
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ANNEX A
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Existing Notes where
such Existing Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 120 days after the consummation of the Exchange Offer, it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
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ANNEX B
Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, that were acquired by that broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of those
Exchange Notes. See "Plan of Distribution."
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ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of those Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Existing Notes when those Existing Notes were acquired as a result
of market making activities or other trading activities. The Company has agreed
that, for a period of 120 days after the consummation of the Exchange Offer,
they will make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
________________ 199__, all dealers effecting transactions in the Exchange Notes
may be required to deliver a prospectus.1
The Company will not receive any proceeds from any sale of
Exchange Notes by broker-dealers. Exchange Notes received by any broker-dealer
for its own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Notes or a
combination of those methods of resale, at market prices prevailing at the time
of resale or at prices related to those prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Notes. Any broker-dealer that resells Exchange Notes that were received by it
for its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of those Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commission or concessions received by any
such person may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 120 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus, and any amendment or
supplement to this Prospectus, to any broker-dealer that requests those
documents in the Letter of Transmittal. The Company has agreed to pay all
expenses incident to the Exchange Offer (including the expenses of one counsel
for the Holders of the Notes) other than commissions or concessions of any
broker or dealer and will indemnify the Holders of the Securities (including any
broker-dealer) against certain liabilities, including liabilities under the
Securities Act.
----------------
1 In addition, the legend required by Item 502(e) of Regulation S-K will appear
on the back cover page of the Exchange Offer prospectus.
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ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10
COPIES OF ANY AMENDMENT OR SUPPLEMENT THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
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