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EXHIBIT 1(b)
NIAGARA MOHAWK POWER CORPORATION
FORM OF SENIOR DEBT SECURITIES UNDERWRITING AGREEMENT
New York, New York
[Date]
To the Representative(s)
named in Schedule I hereto
of the Underwriters named
in Schedule II hereto
Dear Ladies and Gentlemen:
Niagara Mohawk Power Corporation, a New York corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters") for whom you are acting as representatives (the
"Representatives"), its Senior Debt Securities of the designations, with the
terms, the initial public offering price, the purchase prices to the
Underwriters and in the aggregate principal amounts specified in Schedule I
hereto (the "Securities") to be issued under its Indenture, dated as of
_________, 2000, from the Company to The Bank of New York (the "Trustee"), as to
be further supplemented and amended by a supplemental indenture relating to the
Securities (such Indenture as so supplemented and amended and as to be so
supplemented and amended being hereinafter referred to as the "Indenture"), and
Schedule I hereto sets forth the date, time and manner of delivery of the
Securities.
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1. Representations and Warranties by the Company. The Company
represents and warrants to, and agrees with each Underwriter that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act") and has filed
with the Securities and Exchange Commission (the "Commission") a
registration statement (with the file number set forth on Schedule I
hereto) on such Form, including a prospectus, for the registration
under the Act of the Securities, which registration statement has
become effective. Such registration statement and prospectus may have
been amended or supplemented from time to time prior to the date of
this Agreement. Any such amendment or supplement was or will be timely
filed with the Commission and any such amendment has become effective.
The Company will file with the Commission a prospectus supplement (the
"Prospectus Supplement") relating to the Securities pursuant to Rule
424 under the Act. Copies of such registration statement and
prospectus, any such amendment or supplement, the Prospectus Supplement
and all documents incorporated by reference therein which were filed
with the Commission on or prior to the date of this Agreement have been
delivered to you. Such registration statement and such prospectus or
any prospectus used in place thereof pursuant to Rule 429 under the
Act, as amended or supplemented prior to the date of this Agreement and
as supplemented by the Prospectus Supplement, are hereinafter called
the "Registration Statement," and the "Prospectus," respectively. Any
reference herein to the Registration Statement or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934 (the "Exchange Act") on or
before the date of this Agreement, and any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act deemed to
be incorporated by reference therein after the date of this Agreement.
(b) (i) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Prospectus, at the date of this Agreement and at the
Closing Date (as hereinafter defined), any amendments thereof and
supplements thereto and the Indenture complied or will comply in all
material respects with the Act, the Trust Indenture Act of 1939 (the
"Trust Indenture Act") and the Exchange Act and the respective rules
thereunder and (ii) neither the Registration Statement nor the
Prospectus nor any amendment thereof or supplement thereto contained or
will contain any untrue statement of a material fact or omitted or will
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however,
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that the Company makes no representations or warranties as to (A) that
part of the Registration Statement which shall constitute the Statement
of Eligibility (Form T-1) under the Trust Indenture Act of the Trustee
or (B) the information contained in or omitted from the Registration
Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives expressly for use in the Prospectus as amended or
supplemented.
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission or became effective, conformed
in all material respects to the requirements of the Act or the Exchange
Act and the rules and regulations of the Commission thereunder, and any
documents so filed and incorporated by reference subsequent to the date
of this Agreement will, when they are filed with the Commission,
conform in all material respects to the requirements of the Act and the
Exchange Act, and the rules and regulations of the Commission
thereunder, and none of such documents include or will include any
untrue statement of a material fact or omit or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that such representation
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished by an Underwriter through
the representatives expressly for use in the Prospectus as supplemented
or amended.
(d) The accountants who have certified or shall certify the
audited financial statements incorporated by reference as parts of the
Registration Statement and the Prospectus are independent accountants
as required by the Act and the rules and regulations of the Commission
thereunder.
(e) The financial statements and information included or
incorporated by reference in the Registration Statement present fairly,
in all material respects, the financial position, results of operations
and changes in financial position of the Company at the respective
dates and for the respective periods indicated, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved except as therein stated. The Company
has no material contingent obligation which is not disclosed in the
Registration Statement and Prospectus.
(f) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has
not been any material
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adverse change in the condition (financial or other), earnings,
business or properties of the Company, whether or not arising from
transactions in the ordinary course of business.
(g) The Securities have been duly authorized, and, when are
issued and delivered pursuant to this Agreement, such securities will
have been duly executed, authenticated, issued and delivered in
accordance with the Indenture and sold to the Underwriters as provided
herein, will constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture.
(h) The Company has been duly incorporated and validly
existing corporation in good standing under the laws of the State of
New York; the Company holds all material licenses, certificates and
permits from governmental authorities necessary for the conduct of its
business; and the Company has the corporate power and authority to own
its properties and conduct its business as described in the Prospectus.
(i) Neither the issuance or sale of the Securities, nor the
consummation of any other of the transactions herein contemplated, nor
the fulfillment of the terms hereof, will conflict with, result in a
breach of or constitute a default under the terms of any indenture, or
other agreement or instrument to which the Company is a party or by
which it is bound or, to the best knowledge of the Company, any order
or regulation applicable to the Company of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Company.
(j) The Company has filed a petition with the Public Service
Commission of the State of New York ("PSC") with respect to the issue
and sale of the Securities. The PSC has authorized the issue and sale
thereof but upon the express condition that the Company shall file with
the PSC for its consideration a copy of this Agreement and a statement
setting forth (i) the interest rate for the Securities, (ii) any
initial public offering price thereof, (iii) the price to be paid to
the Company for the Securities, (iv) any underwriting commissions, (v)
any sinking fund or other mandatory redemption provisions, and (vi) any
redemption prices and dates with respect to redemption of the
Securities at the option of the Company.
(k) The Company and each material subsidiary of the Company
have good and valid title to all or substantially all of their
permanent fixed properties (including the specified undivided interests
in generating units and plants referred to in the Prospectus), except
as otherwise indicated in the Prospectus, subject only to the
respective liens of the indentures securing its mortgage debt.
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2. 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 you and each other Underwriter, and you and each other
Underwriter agree, severally and not jointly, to purchase from the Company, at
the purchase price set forth in Schedule I hereto, the respective principal
amounts of the Securities set forth opposite your respective names in Schedule I
hereto and Schedule II hereto and Schedule I hereto sets forth the date, time
and manner of delivery of the Securities.
Upon authorization by the Representatives of the release of
the Securities, the several Underwriters propose to offer the Securities for
sale upon the terms and conditions set forth in the Prospectus.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at the place, date and time specified in Schedule I
hereto. The Securities shall be in definitive form and shall be registered in
such names and in such authorized denominations as the Representatives may
request not less than forty-eight hours in advance of the Closing Date, and
shall be delivered by or on behalf of the Company to the Representatives for the
account of such underwriter, against payment by such underwriter or on its
behalf of the purchase price therefor by wire transfer of federal (same day)
funds to the account specified by the Company to the Representatives at least
forty-eight hours in advance of the Closing Date.
4. Agreements. The Company agrees with each of the several
Underwriters that:
(a) The Company will cause the Prospectus Supplement to be
filed or mailed for filing, in a form approved by the Representatives,
pursuant to Rule 424 under the Act and will notify you promptly of such
filing or mailing. During the period for which a prospectus relating to
the Securities is required to be delivered under the Act, the Company
will promptly advise the Representatives (i) when any amendment to the
Registration Statement shall have become effective, (ii) when any
subsequent supplement to the Prospectus has been filed or mailed for
filing, (iii) of any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceedings for that purpose,
and (v) of the receipt by the Company 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
such purpose. The Company will not file any amendment to the
Registration Statement or supplement to the Prospectus (other than any
prospectus supplement relating to the offering of securities registered
under the Registration Statement
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other than the Securities and permitted by Section 4(g) hereof, or any
document required to be filed under the Exchange Act which upon filing
is deemed to be incorporated by reference in the Registration Statement
or Prospectus) unless the Company has furnished to you a copy for your
review prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object after receiving a reasonable
notice from the Representatives thereof. The Company will furnish to
you prior to the filing thereof a copy of any such prospectus
supplement and any document which upon filing is deemed to be
incorporated by reference in the Registration Statement or Prospectus.
The Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then amended or supplemented
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 if it shall be necessary at any time to amend or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company promptly will prepare and file with the
Commission, subject to paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or an
amendment or supplement which will effect such compliance.
(c) The Company will make generally available to its security
holders and to the Representatives as soon as practicable, but in any
event not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement (which need not be audited) of the Company, for a
twelve-month period beginning after the date of the Prospectus
Supplement filed pursuant to Rule 424 under the Act, which will satisfy
the provisions of Section 11(a) of the Act.
(d) The Company has previously furnished to each of the
Representatives, upon request, a signed copy of the Registration
Statement as originally filed and of each amendment thereto, including
the statement on Form T-1 of the Trustee and all powers of attorney,
consents and exhibits filed therewith (other than exhibits incorporated
by reference), and will deliver to the Representatives conformed copies
of the Registration Statement, the Prospectus (including all documents
incorporated by reference therein) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, all
amendments of and supplements to such documents, in each case as soon
as available and in such quantities as the Representatives may
reasonably request.
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(e) The Company will furnish such information, execute such
instruments and take such action as may be required to qualify the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided, however, that the Company shall not be required to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general or unlimited service
of process in any jurisdiction where it is not now so subject.
(f) So long as the Securities are outstanding, the Company
will furnish (or cause to be furnished) to each of the Representatives,
upon request, copies of (i) all reports to stockholders of the Company
and (ii) all reports and financial statements filed with the Commission
or any national securities exchange.
(g) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
termination of trading restrictions on the Securities, as notified to
the Company by the Representatives, or (ii) the thirtieth day after the
Closing Date for the Securities, not to offer, sell, or otherwise
dispose of any debt securities of the Company (except under prior
contractual commitments which have been disclosed to you), without the
prior written consent of the Representatives, which consent shall not
be unreasonably withheld.
5. Expenses. Whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, the Company will pay
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including, without limiting the generality of the foregoing,
all costs, taxes and expenses incident to the issue and delivery of the
Securities to the Underwriters, all fees and expenses of the Company's counsel
and accountants, all costs and expenses incident to the preparing, printing and
filing of the Registration Statement (including all exhibits thereto), the
Prospectus and any amendments thereof or supplements thereto, all costs and
expenses incurred in connection with "blue sky" qualifications, the legality of
the Securities for investment and the rating of the Securities, and all costs
and expenses of the printing and distribution of all documents in connection
with this underwriting. Except as provided in this Section 5 and Section 8
hereof, the Underwriters will pay all their own costs and expenses, including
the fees of their counsel and any advertising expenses in connection with any
offer they may make.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Company contained herein as of the date hereof and the Closing
Date, to the accuracy of the
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statements of Company officers made in any certificates given pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Representatives, threatened.
(b) The Company shall furnish to the Representatives opinions,
addressed to the Underwriters and dated the Closing Date, of
__________, the Company's General Counsel to the effect that (i) the
Company has all requisite corporate power and authority to own or lease
and operate its properties and to carry on its own business as now
conducted; (ii) To such counsel's knowledge, no consent, waiver,
approval, authorization or order of, or filing, registration,
qualification license or permit of or with, any Federal or New York
State court or governmental agency, body or administrative agency is
required for the execution, delivery and performance by the Company of
the Underwriting Agreement and the Indenture, the issuance and sale of
the Securities, and the consummation of the transactions contemplated
thereby, except (a) such as have been obtained and made under the
Securities Act and the Trust Indenture Act and from the PSC, or have
been obtained as described in the Prospectus, (b) such as are required
under state securities of Blue Sky laws and regulations, and (c) such
as to which the failure to be obtained or made would not reasonably be
expected, either individually or in the aggregate, to have a material
adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole;
provided, that insofar as performance by the Company of its obligations
under the Underwriting Agreement, the Indenture and the Securities is
concerned, such counsel expresses no opinion as to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights; provided
further that such counsel express no opinion as to any laws, rules,
regulations applicable to the Company in its capacity as an electric
and gas utility and as an operator, owner, or operator and owner of
nuclear powered generating facilities, including the New York Public
Service Law, the Federal Power Act, the Public Utility Holding Company
Act of 1935 (the "Holding Company Act"), as amended, the Atomic Energy
Act of 1954 (the "AEA") and the rules and regulations of the PSC and,
solely with respect to jurisdiction granted by the Holding Company Act,
the Commission, and the Nuclear Regulatory Commission (the "NRC"); and
(iii) To such counsel's knowledge, there is not action, suit,
investigation, litigation or proceeding affecting the Company or any of
its subsidiaries pending or threatened before any court,
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governmental authority, governmental agency, regulatory body or
arbitrator that would be reasonably likely to have a material adverse
effect.
(c) The Company shall furnish to the Representatives opinions,
addressed to the Underwriters and dated the Closing Date, of
__________, the Company's regulatory counsel to the effect that the PSC
has approved the Power Choice Settlement, including the MRA, and has
issued the Financing Order granting consent to the Company's issuance
and sale of the Securities, subject to the conditions contained in that
Order. Based upon the Financing Order, the Company does not require
authorization from the Federal Energy Regulatory Commission to issue
and sell the Securities as provided for in the Underwriting Agreement
and the Indenture. There is not other Federal or New York State
regulatory regime naming the Company's securities issuances solely in
its capacity as an electric and gas company under which the Company is
required to obtain consent and authorization to issue and sell the
Security in accordance with the Underwriting Agreement and the
Indenture.
(d) The Company shall furnish to the Representatives opinions,
addressed to the Underwriters and dated the Closing Date, of
__________, the Company's nuclear regulatory counsel to the effect that
the Company's execution of the Underwriting Agreement and the Indenture
and the issuance and sale of the Securities would neither contravene
the AEA nor the regulations of the NRC in 10 Code of Federal
Regulations, Chapter I, nor would such actions require any application
for approval by the NRC.
(e) The Company shall furnish to the Representatives opinions,
addressed to the Underwriters and dated the Closing Date, of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Company, to the effect that (i) the Company
has been duly incorporated and is existing corporation in good standing
under the laws of the State of New York, with full corporate power and
authority to own its properties and conduct its business as described
in the Prospectus; (ii) the Indenture has been duly authorized executed
and delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes a valid, binding and
enforceable instrument, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally from time to time in effect
and general principles of equity and except that certain laws and
judicial decisions of the United States and the State of New York may
limit the remedies provided for in the Indenture in connection with the
security provided for therein and, as to nuclear facilities, such
remedies may also be limited or rendered unavailable by the AEA, as
amended, and regulations thereunder; (iii) the Securities have been
duly authorized, executed and issued by the Company and, assuming due
authentication thereof by the Trustee, and upon payment and delivery in
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accordance with this Agreement, and subject to the qualification in
(ii) above with respect to the validity, binding effect and
enforceability of the Indenture, will constitute valid and binding
obligations of the Company entitled to the benefit and the security
afforded by the Indenture; (iv) all regulatory consents,
authorizations, approvals and filings required to be made or obtained
by the Company under the Federal laws of the United States and the laws
of the State of New York for the issuance, sale and delivery of the
Securities by the Company in accordance with this Agreement have been
obtained or made (other than any such regulatory consents,
authorizations, approvals or filings arising out of, relating to, or
required to be taken pursuant to, those regulatory regimes that govern
the Company in its capacity as an electric and gas utility and as an
operator, owner, or operator and owner of nuclear powered generating
facilities, including the New York Public Service Law, the Federal
Power Act, the Holding Company Act, the AEA and the rules and
regulations of the PSC, and, solely with respect to jurisdiction
granted by the Holding Company Act, the Securities and Exchange
Commission, and the NRC ("Utility Related Approvals") or any blue sky
or state securities laws or regulations, as to which such counsel need
express no opinion); (v) the Indenture is qualified under the Trust
Indenture Act; (vii) this Agreement has been duly authorized, executed
and delivered by the Company; (viii) the Registration Statement, as of
its effective date and the Prospectus, as of the date of the
Prospectus, appear on their face to be appropriately responsive in all
material respects to the requirements of the Act, the Exchange Act and
the Trust Indenture Act and the rules and regulations of the Commission
thereunder; (ix) such counsel have no reason to believe that either the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Prospectus, contained or on the
Closing Date contains an untrue statement of a material fact or on the
Closing Date omits to state a material fact necessary to make the
statements therein, in the light of the circumstance under which they
were made, not misleading (except for financial statements and other
financial data included or incorporated by reference therein as to
which such counsel need express no opinion); and (x) neither the issue
or sale of the Securities nor the consummation of any other of the
transactions contemplated by this Agreement will result in a breach by
the Company of any terms of, or constitute a default under, the
Certificate of Incorporation, as amended, or By-Laws of the Company or
any indenture or other agreement or undertaking of the Company known to
such counsel.
(f) The Representatives shall receive from counsel for the
Underwriters such opinion or opinions dated the Closing Date with
respect to the validity of the Securities, the Registration Statement,
the Prospectus and other related matters as the Representatives may
reasonably require, and the Company
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shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(g) The Company shall furnish to the Representatives a
certificate of a Vice President, the Treasurer or the Controller of the
Company and a Vice President, the Assistant Controller or the Assistant
Treasurer of the Company, dated the Closing Date, to the effect that
the signers of such certificate have carefully examined the
Registration Statement, the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been instituted, or, to their knowledge,
threatened; and
(iii) the Registration Statement, as of the later of
the date it became effective or the date of filing of the
Company's most recent Annual Report on Form 10-K, does not
contain 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, in the light of the
circumstances under which they were made, not misleading; the
Prospectus, including any supplements or amendments thereto
and the documents incorporated by reference therein, does 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 the light of the
circumstances under which they were made, not misleading; and
since the effective date of the Registration Statement there
has not occurred any event required to be set forth in an
amended or supplemented prospectus which has not been so set
forth and there has been no document required to be filed
under the Exchange Act and the rules and regulations
thereunder, which would be deemed to be incorporated by
reference in the Prospectus, which has not been so filed.
(h) The Representatives (i) shall have received at or prior to
the time of execution of this Agreement a letter to the Board of
Directors of the Company dated the date of such delivery and (ii) shall
receive at the Closing Date, a letter dated the date of delivery
thereof from the independent accountants of the Company who have
certified the financial statements of the Company included or
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incorporated by reference in the Registration Statement stating that
(1) with respect to the Company and its subsidiaries they are
independent accountants within the meaning of the Act and the
applicable published rules and regulations thereunder; (2) in their
opinion the unaudited consolidated financial statements of the Company
and subsidiary companies included or incorporated by reference in the
Registration Statement and examined by such firm comply as to form in
all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder; (3) on the
basis of the following procedures (but not an examination in accordance
with generally accepted auditing standards a reading of the minutes of
meetings of the Board of Directors and stockholders of the Company and
its subsidiaries since the date of the last audited Balance Sheet as
set forth in the minute books through a specified date not more than
five business days prior to the date of delivery of such letter, (B)
performance of the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS 71, Interim Financial Information, on
the unaudited condensed consolidated interim financial statements of
the Company and its subsidiaries as incorporated by reference in the
Registration Statement and the Prospectus, (C) if applicable, a reading
of the latest available unaudited interim financial data, and (D)
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters, nothing has come to their
attention which caused them to believe that (I) the unaudited condensed
consolidated interim financial statements, incorporated by reference in
the Registration Statement and the Prospectus, do not comply as to form
in all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder; (II) any
material modifications should be made to the unaudited condensed
consolidated interim financial statements, incorporated by reference in
the Registration Statement and the Prospectus, for them to be in
conformity with generally accepted accounting principles; and (III) on
the basis of inquiries of certain officials of the Company who have
responsibilities for financial and accounting matters and a reading of
the minutes as stated above, nothing has come to their attention which
caused them to believe that there was any change at the date of the
latest available interim financial data and at a specified date not
more than five business days prior to the date of delivery of such
letter in the capital stock, other than changes arising as a result of
sales of Common Stock under the Company's Dividend Reinvestment and
Stock Purchase Plan and Employee Savings Fund Plan, or long-term debt
of the Company and its consolidated subsidiaries as compared with
amounts shown on the latest balance sheet included or incorporated by
reference in the Registration Statement, or for the period from the
date of the Company's latest balance sheet included or incorporated by
reference in the Registration Statement to the end of the preceding
calendar month for which balance sheet data is available, there were
any decreases, as compared with the corresponding period in the
preceding year, in consolidated operating
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revenues or net income, or any decreases in unconsolidated
capitalization, as compared with amounts shown on the latest balance
sheet included or incorporated by reference in the Registration
Statement, except in all instances for changes or decreases which the
Registration Statement discloses have occurred or may occur. The
letters of such independent accountants also shall be to the effect
that they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information which are derived from the general accounting
records of the Company, which appear or are incorporated by reference
in the Registration Statement and Prospectus and which are specified by
the Representatives, and have compared such amounts, percentages and
financial information with the accounting records of the Company and
have found them to be in agreement.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall
not have been any change or decrease specified in the letter or letters
referred to in paragraph (e) of this Section 6 which makes it
impractical or inadvisable in the judgment of the Representatives to
proceed with the public offering or the delivery of the Securities as
contemplated by the Prospectus.
(j) Prior to the Closing Date, the Company shall furnish to
the Representatives such further information, certificates and
documents as they may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects satisfactory in form and substance to the
Representatives and their counsel, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company in writing, or by telephone or telegraph confirmed in writing.
7. Conditions of Company's Obligations. The obligations of the
Company to sell and deliver the Securities are subject to the following
conditions:
(a) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, threatened.
(b) The PSC shall have granted authorization, and on the
Closing Date such authorization shall be in full force and effect,
permitting the issuance and
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sale of the Securities upon the terms and conditions hereunder set
forth or contemplated and containing no provision unacceptable to the
Company.
(c) The Underwriters shall have furnished to the Company
completed underwriters' questionnaires from each underwriter named in
Schedule II hereto, in form and substance satisfactory to counsel for
the Company, which disclose no relationship between any such
underwriter, or its directors, officers or partners, and the Company or
the Trustee, or the directors, officers or partners thereof, which
would require, in the opinion of such counsel, an amendment of the
Statement of Eligibility under the Trust Indenture Act on Form T-l
filed by the Trustee and disqualification of the Trustee.
If any of the conditions specified in this Section 7 shall not
have been fulfilled, this Agreement and all obligations of the Company hereunder
may be canceled on or at any time prior to the Closing Date by the Company.
Notice of such cancellation shall be given to the Underwriters in writing or by
telephone or telegraph confirmed in writing.
8. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
fees and disbursements of counsel not to exceed $30,000) that shall have been
reasonably incurred by them in connection with the proposed purchase and sale of
the Securities.
9. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the
Prospectus or in any amendment thereof or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating
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or defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representatives specifically for use in connection with the preparation
thereof; and provided, further, that such indemnity with respect to a prospectus
included in the Registration Statement or any amendment thereto prior to the
supplementing thereof with the Prospectus Supplement shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Securities which are the subject thereof if such person did not receive a
copy of the Prospectus as amended or supplemented (but without the documents
incorporated by reference therein) at or prior to the confirmation of the sale
of such Securities to such person in any case where such delivery is required by
the Act and the untrue statement or omission of a material fact contained in the
Prospectus was corrected in the Prospectus as amended or supplemented. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to the Underwriters but only with
reference to written information furnished to the Company by or on behalf of
such Underwriter through the Representatives specifically for use in the
preparation of the documents referred to in the foregoing indemnity, and agrees
to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity agreement will be
in addition to any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof; but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 9. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided, however,
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if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party, or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of subparagraph
(a), representing the indemnified parties under subparagraphs (a) or (b), as the
case may be, who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only in
respect of the counsel referred to in such clause (i) or (iii). In any case to
which an exception set forth in (i), (ii) or (iii) above applies, the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraph (a) is
due in accordance with its terms but is for any reason unavailable from the
Company or insufficient to hold the Underwriters harmless in respect of any
losses claims, damages or liabilities (or actions in respect thereof) referred
to therein, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (or actions in respect thereof) to which
the Company and one or more of the Underwriters may be subject, as a result of
such losses, claims, damages or liabilities (or actions in respect thereof), in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other equitable
considerations, including relative benefit. The relative fault 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 on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
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omission. The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the offering of the
Securities, in each case as set forth in the table on the cover page of the
Prospectus Supplement. Notwithstanding the foregoing, no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subparagraph
(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subparagraph (d). The amount paid or payable by a party entitled to
contribution as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subparagraph (d) shall be
deemed to include any legal or other expenses reasonably incurred by such party
in connection with investigating or defending any such action or claim. The
Underwriters' obligations under this subparagraph (d) are several in proportion
to their respective underwriting obligations and not joint. For purposes of this
subparagraph (d), each person, if any, who controls an Underwriter within the
meaning of either the Act or the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject to the fourth sentence of this subparagraph (d).
10. Default by an Underwriter. If any one or more of the
Underwriters shall fail to purchase and pay for all of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed l0% of the aggregate amount of
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any of, the Securities, and if such nondefaulting Underwriters do not
purchase all of the Securities, this Agreement will terminate without liability
on the part of any nondefaulting Underwriter or the Company. In the event of a
default by any Underwriter, as set forth in this Section 10, the Closing Date
shall be
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postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Nothing herein contained shall relieve any defaulting Underwriter of its
liability, if any, to the Company or any nondefaulting Underwriter for damages
occasioned by its default hereunder.
11. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for all Securities, (a) if prior
to such time trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established, or (b) if a banking moratorium shall have been declared either by
Federal or New York State authorities, or (c) if trading in any securities of
the Company shall have been suspended or halted, or (d) if there shall have
occurred any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets in the United
States is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities.
12. Representations and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of its officers or directors or any controlling person within the
meaning of the Act, and will survive delivery of and payment for the Securities.
The provisions of Sections 5, 8 and 9 hereof shall survive the termination or
cancellation of this Agreement.
13. Notices. All communications hereunder will be in writing
and, if sent to the Representatives, will be mailed, delivered or telegraphed
and confirmed to them at their address set forth for that purpose in Schedule I
hereto or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention
of [ ], Vice President -- Law and General Counsel.
14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 9 hereof,
and no other person will have any right or obligation hereunder.
15. Applicable Law. This Agreement will be governed by and
construed in accordance with the internal substantive laws and not the choice of
law rules of the State of New York.
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16. Counterparts. This Agreement may be executed in
counterparts, all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
17. Representation of the Underwriters. The Representatives
represent and warrant to the Company that they are authorized to act as the
representatives of the Underwriters in connection with this financing and that
the execution and delivery of this Agreement and any action under this Agreement
taken by such Representatives will be binding upon all Underwriters.
18. Interpretation When No Representatives. In the event no
Underwriters are named in Schedule II hereto, the term "Underwriters" shall be
deemed for all purposes of this Agreement to be the Underwriter or Underwriters
named as such in Schedule I hereto, the principal amount of the Securities to be
purchased by any such Underwriter shall refer to that set opposite its name in
Schedule I hereto and all references to the "Representatives" shall be deemed to
refer to the Underwriter or Underwriters named in Schedule I.
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters in accordance with its terms.
Very truly yours,
NIAGARA MOHAWK POWER CORPORATION
By: ________________________________
Title: Treasurer
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The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
For themselves and as Representatives of the several Underwriters, if any, named
in Schedule II hereto.
By __________________________,
as representative
By ______________________________
Title:
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SCHEDULE I
Underwriting Agreement dated:
Registration Statement No.
Representatives and Address:
Bonds:
Designation:
Principal Amount:
Supplemental Indenture: Dated as of
Date of Maturity:
Interest Rate:
Purchase Price:
Public Offering Price:
Redemption Provisions:
Closing Date and Location:
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SCHEDULE II
Name of Underwriter Principal
Amount of
New Bonds