DQE Capital Corporation
$300,000,000
Medium-Term Notes, Series A
Unconditionally Guaranteed by DQE, Inc.
SELLING AGENCY AGREEMENT
____________, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
[Names and Addresses of Agents]
Dear Sirs:
DQE Capital Corporation, a Delaware corporation (the
"Company"), and DQE, Inc., a Pennsylvania corporation, as guarantor (the
"Guarantor", and together with the Company, the "Offerors") confirm their
agreement (the "Agreement") with each of you with respect to the issue and sale
by the Company of up to $300,000,000 aggregate principal amount of its
Medium-Term Notes, Series A (the "Notes").
The Company proposes to issue the Notes under an Indenture,
dated as of _________ __, 1999 (the "Indenture"), among the Company, the
Guarantor and The First National Bank of Chicago as trustee (the "Trustee"). DQE
will unconditionally guarantee (the "Guaranty") to the Holder of each Note, and
to the Trustee on behalf of each Holder, the due and punctual payment of the
principal of and premium, if any, and interest, if any, on such Notes when and
as the same shall become due and payable, in accordance with the terms of the
Notes and the Indenture.
The Notes will be issued in minimum denominations of $1,000
and any integral multiple thereof (unless otherwise specified by the Company),
will be issued only in fully registered form and will have the annual interest
rates, maturities and, if appropriate, other terms set forth in a supplement or
supplements to the Prospectus referred to below. The Notes will be issued, and
the terms thereof established, in accordance with the Indenture, and, in the
case of Notes sold pursuant to Section 2(a), the Administrative Procedures for
the Notes, attached hereto as Exhibit A (the "Procedures"). The Procedures may
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only be amended by written agreement of the Company, the Guarantor and you after
notice to, and with the approval of, the Trustee. For the purposes of this
Agreement, the term "Agent" shall refer to any of you acting solely in the
capacity as agent for the Company pursuant to Section 2(a) and not as principal
(collectively, the "Agents"), the term "Purchaser" shall refer to any of you
acting solely as principal pursuant to Section 2(b) and not as agent, and the
term "you" shall refer to you together whether at any time any of you is acting
in both such capacities or in either such capacity.
1. Representations and Warranties of Company and the
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Guarantor. Each of the Company and the Guarantor jointly and severally
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represents and warrants to, and agrees with, you as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph (c)
hereof.
(a) The Guarantor meets, and the Company and the Guarantor,
together, meet, the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and the Company and the
Guarantor, as co-registrants, have filed with the Securities and
Exchange Commission (the "Commission"), as co-registrants, a
registration statement on such Form (File Nos. 333-_____ and 333-
____), including a basic prospectus, which has become effective, for
the registration under the Act of $300,000,000 aggregate principal
amount of the Company's debt securities, including the Notes, and the
Guarantor's Guaranty. Such registration statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other material
respects with said Rule 415. The Company and the Guarantor have
included in such registration statement, or have filed or will file
with the Commission pursuant to the applicable paragraph of Rule 424(b)
under the Act, one or more supplements to the basic prospectus included
in such registration statement relating to the Notes and the plan of
distribution thereof (any such supplement being hereinafter called a
"Prospectus Supplement"). In connection with the sale of Notes, the
Company and the Guarantor propose to file with the Commission pursuant
to the applicable paragraph of Rule 424(b) under the Act further
supplements to the Prospectus Supplement providing for the
specification of or a change in the interest rates, if any, maturity
dates, issuance prices, redemption terms and prices, if any, and, if
appropriate, other terms of the Notes sold pursuant hereto or the
offering thereof (any such further supplement being hereinafter called
a "Pricing Supplement").
(b) (i) As of the Execution Time, (ii) on the Effective Date,
(iii) when any supplement to the Prospectus (as defined below) is filed
with, or transmitted for filing to, the Commission pursuant to Rule
424(b), (iv) as of the date of any Terms Agreement (as defined in
Section 2(b)) and (v) at the date of delivery by the Company of any
Notes sold hereunder (each, a "Closing Date"), (1) the Registration
Statement, as amended or supplemented as of any such time, the
Prospectus, as amended or supplemented as of any such time, and the
Indenture, as amended and supplemented as of any such time, complied or
will comply in all material respects with the applicable requirements
of the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the applicable instructions, rules and regulations
of the Commission thereunder or pursuant to such instructions, rules
and regulations are deemed to comply therewith; (2) the Incorporated
Documents (as defined below), when filed with the Commission, complied
or will comply in all material respects with the applicable
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the applicable instructions, rules and regulations
of the Commission thereunder or pursuant to such instructions, rules
and regulations were or will be deemed to comply therewith; (3) the
Registration Statement, as amended or supplemented as of any such time,
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and
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(4) the Prospectus, as amended or supplemented as of any such time, did
not or will not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company and the Guarantor
make 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 Mortgage
Trustee (the "Form T-1"), (B) any information contained in any
Prospectus Supplement specified to have been furnished or obtained from
The Depository Trust Company or (C) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company or the Guarantor by any of you
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean the
later of the date and time that the Registration Statement or any
post-effective amendment or amendments thereto became or becomes
effective or the date and time of the filing thereafter of the
Guarantor's most recent Annual Report on Form 10-K. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall mean the
basic prospectus under the Act relating to the Notes included in the
Registration Statement at the Effective Date thereof (unless such basic
prospectus has been amended subsequent to the Effective Date, in which
case "Basic Prospectus" shall mean the basic prospectus as so amended).
"Prospectus" shall mean the Basic Prospectus as supplemented by the
Prospectus Supplement. "Registration Statement" shall mean the
registration statement referred to in paragraph (a) above, including
all Incorporated Documents, exhibits and financial statements, as
amended at the Execution Time. "Rule 415" and "Rule 424(b)" refer to
such rules under the Act. Any reference herein to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents that
are, or are deemed to be, incorporated by reference therein pursuant to
Item 12 of Form S-3 (the "Incorporated Documents") which were filed
under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, the
Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, the
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the
case may be, deemed to be incorporated therein by reference.
(d) None of the Company, the Guarantor or any of their
respective subsidiaries is in violation of its charter or by-laws, or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, agreement
or other instrument to which it is a party or by which it or any of
them or their properties may be bound, the effect of which is material
to the Guarantor and its subsidiaries, taken as a whole, and neither
the execution, delivery or performance by the
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Company and the Guarantor of this Agreement, the execution or delivery
by the Company and the Guarantor of the Indenture, the consummation of
the transactions herein contemplated, the fulfillment of the terms of
the Indenture or the Notes, nor compliance with the terms and
provisions hereof or of the Indenture or the Notes will conflict with,
or result in a breach or violation of, or constitute a default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company or the
Guarantor or any of their respective subsidiaries pursuant to the terms
of, any statute, indenture, mortgage, deed of trust, loan agreement,
note, lease, or other agreement or instrument to which the Company or
the Guarantor or any of their respective subsidiaries is a party or by
which the Company or the Guarantor or any of their respective
subsidiaries is bound or to which any of the properties or assets of
the Company or the Guarantor or any of their respective subsidiaries is
subject, the effect of which is material to the Guarantor and the
Company taken as a whole, nor will such action result in a violation of
the provisions of (i) the charter or by-laws of the Company, the
Guarantor or any of their respective subsidiaries or (ii) any order,
rule or regulation applicable to the Company, the Guarantor or any of
their respective subsidiaries of any court or any federal or state
governmental body having jurisdiction over the Company, the Guarantor
or any of their respective subsidiaries or over their respective
properties, the effect of which is material to the Guarantor and the
Company taken as a whole.
(e) The Indenture has been duly authorized, executed and
delivered by each of the Company and the Guarantor and is a legal,
valid and binding obligation of the Company and the Guarantor,
enforceable against the Company and the Guarantor in accordance with
its terms, subject, as to enforcement, to laws relating to or affecting
generally the enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws, and to general principles
of equity.
(f) The creation, issuance and sale of the Notes has been duly
and validly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered and paid
for by the purchasers thereof, the Notes will constitute legal, valid
and binding obligations of the Company and the Guarantor enforceable
against the Company and the Guarantor in accordance with its terms,
subject, as to enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency laws, and to general principles of equity,
and will be entitled to the benefits provided by the Indenture,
including the Guaranty contained therein.
(g) This Agreement has been duly and validly authorized,
executed and delivered by each of the Company and the Guarantor and,
upon execution and delivery to the Agents, will constitute a valid and
legally binding obligation of the Company and the Guarantor enforceable
against the Company and the Guarantor in accordance with its terms
subject, as to enforcement, to laws relating to or affecting generally
the enforcement of creditors' rights, including, without limitation,
bankruptcy and insolvency laws, and to general principles of equity..
(h) Each of the Company and the Guarantor has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its
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incorporation, with full corporate power and authority to own its
properties and conduct its business as described in the Registration
Statement and the Prospectus, and each of the Company and the Guarantor
is duly qualified as a foreign corporation to transact business as a
foreign corporation and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of their respective
businesses, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the condition,
financial or otherwise or the results of operations of the Company or
the Guarantor, as applicable.
(i) Duquesne Light Company, Montauk, Inc., AquaSource, Inc.,
Duquesne Enterprises, Inc., DQE Energy Services, Inc. and DQEnergy
Partners, Inc., each a subsidiary of the Guarantor (each a "Subsidiary"
and together, the "Subsidiaries") and the Guarantor, each has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described in the
Registration Statement and the Prospectus, and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, or the results of operations of the Guarantor and its
subsidiaries considered as one enterprise; all of the issued and
outstanding shares of capital stock of each such Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable
and all such shares are owned by the Guarantor directly or through its
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(j) No consent, approval, authorization or order of any court
or other governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement except such as have
been obtained and such as may be required under the Blue Sky Laws of
any jurisdiction in connection with the sale of the Notes as
contemplated by this Agreement.
(k) Deloitte & Touche LLP are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder.
(n) Immediately after the sale of the Notes by the Company
hereunder, the aggregate amount of the Notes which shall have been
issued and sold by the Company hereunder and of any debt securities of
the Company (other than the Notes) that shall have been issued and sold
pursuant to the Registration Statement will not exceed the amount of
debt securities registered under the Registration Statement.
(o) None of the Company, the Guarantor or any of their
respective subsidiaries is an "investment company" or under the
"control" of an "investment company" as such terms are defined under
the Investment Company Act of 1940, as amended (the "1940 Act").
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2. Appointment of Agents; Solicitation by the Agents of Offers
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to Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and
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conditions set forth herein, the Company hereby authorizes each of the Agents to
act as its agent to solicit offers for the purchase of all or part of the Notes
from the Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the Agents agrees,
as agent of the Company, to use its reasonable best efforts to solicit offers to
purchase the Notes from the Company upon the terms and conditions set forth in
the Prospectus (and any supplement thereto) and in the Procedures.
The Company reserves the right, in its sole discretion, to
reject any offer to purchase Notes, in whole or in part. In addition, the
Company reserves the right, in its sole discretion, to instruct the Agents to
suspend at any time, for any period of time or permanently, the solicitation of
offers to purchase the Notes. Upon receipt of instructions from the Company, the
Agents will forthwith suspend solicitations of offers to purchase Notes from the
Company until such time as the Company has advised the Agents that such
solicitation may be resumed.
Each Agent may, in its discretion reasonably exercised, reject
any offer to purchase Notes received by it in whole or in part.
The Company agrees to pay each Agent a commission, in the form
of a discount, on the Closing Date with respect to each sale of Notes by the
Company as a result of a solicitation made by such Agent, in an amount equal to
that percentage specified in Schedule I hereto of the aggregate principal amount
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of the Notes sold by the Company. Such commission shall be payable as specified
in the Procedures.
Subject to the provisions of this Section 2 and to the
Procedures, offers for the purchase of Notes may be solicited by an Agent as
agent for the Company at such times and in such amounts as such Agent deems
advisable. The Company may appoint additional agents in connection with the
offering of the Notes; provided that (i) the Company promptly notifies the
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Agents of such appointment and (ii) the commission paid to any such additional
agent with respect to the sale of Notes by the Company as a result of a
solicitation made by such additional agent does not exceed that percentage
specified in Schedule I hereto of the aggregate principal amount of such Notes
sold by the Company; and provided further that, unless the appointment of such
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additional agent is expressly limited to the solicitation of offers to purchase
a specified principal amount of Notes on specified terms, such additional agent
enters into an agreement with the Company making such agent an Agent under this
Agreement or enters into an agreement with the Company on terms which are
substantially similar to those contained in this Agreement, which agreement
shall include appropriate changes to reflect the arrangements between the
Company and such additional agent. The Company may from time to time offer Notes
for sale other than through an Agent.
Each Agent agrees that in carrying out the transactions
contemplated by this Agreement, it will observe and comply with all state
securities or Blue Sky Laws, regulations, rules and ordinances in any
jurisdiction in which the Notes may be offered, sold or delivered applicable to
it as Agent hereunder. Each Agent agrees not to cause any advertisement of the
Notes to be published in any newspaper or periodical or posted in any public
place and not to
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issue any publicly distributed circular relating to the Notes other than the
Prospectus, as then amended and supplemented, except in any such case with the
express consent of the Company.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any Agent determine that the Company shall sell Notes
directly to such Agent as Purchaser, each such sale of Notes shall be made in
accordance with the terms of this Agreement and, unless otherwise agreed by the
Company and such Agent, any supplemental agreement relating thereto between the
Company and the Purchaser. Without prior notice to the Company, no purchase by
an Agent as principal of any Notes shall be made other than pursuant to such a
supplemental agreement. Each such supplemental agreement (which may be (i) an
oral agreement between an authorized officer of the Company and such Agent
promptly confirmed in writing (including facsimile transmission), provided such
oral agreement contains all the information, as applicable, specified in Exhibit
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B hereto or (ii) a written agreement, provided such written agreement is
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substantially in the form of Exhibit B hereto) is herein referred to as a "Terms
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Agreement." The Purchaser's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company and the Guarantor herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
describe (whether orally or in writing) the Notes to be purchased by the
Purchaser pursuant thereto and confirm the continued effectiveness of the
Guaranty, specify the principal amount of such Notes, the price to be paid to
the Company for such Notes, the rate at which interest will be paid on the
Notes, the redemption provisions, if any, or other terms of such Notes, the
Closing Date for such Notes, the place of settlement of the Notes and payment
therefor, the method of payment and any modification of the requirements for the
delivery of the opinions of counsel, the certificates from the Company or its
officers, and the letter from the Company's independent public accountants,
pursuant to Section 6(b). Such Terms Agreement shall also specify the period of
time referred to in Section 4(m).
Delivery of the certificates for Notes sold to the Purchaser
pursuant to any Terms Agreement shall be made as agreed to between the Company
and the Purchaser as set forth in the respective Terms Agreement, not later than
the Closing Date set forth in such Terms Agreement, against payment of funds to
the Company in the net amount due to the Company for such Notes by the method
and in the form set forth in the respective Terms Agreement. If a Terms
Agreement does not contain such settlement details, the settlement details
specified in the Procedures shall apply; provided that in such event all
references to the Agent and the beneficial owner shall be deemed to refer to the
Purchaser.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall be
purchased by such Purchaser at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and (ii) may be resold by such Purchaser at a
fixed public offering price or at varying prices determined at the time of sale.
In connection with any resale of Notes purchased, a Purchaser may use a selling
or dealer group and may reallow any portion of the discount or commission
payable pursuant hereto to the dealers or purchasers.
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3. Offering and Sale of Notes. Each Agent and the Company
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agree to perform the respective duties and obligations specifically provided to
be performed by them in the Procedures.
4. Agreements. Each of the Company and the Guarantor agrees
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with you that:
(a) Prior to the termination of the offering of the Notes
(including by way of resale by a Purchaser of Notes, provided that, if
such offering and resale of Notes has not terminated prior to the later
of the termination of this Agreement or the 60th day following the
Closing Date with respect to such Notes, such Purchaser shall have
notified the Company that such Notes have not yet been resold), the
Company and the Guarantor will not file any amendment of the
Registration Statement or supplement to the Prospectus (except for (i)
periodic or current reports filed under the Exchange Act, (ii) a
Pricing Supplement, or (iii) a supplement relating to an offering of
debt securities other than the Notes) unless the Company has furnished
each of you a copy for your review prior to filing and given each of
you a reasonable opportunity to comment on any such proposed amendment
or supplement. Subject to the foregoing sentence, the Company and the
Guarantor will cause each supplement to the Prospectus to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed. The Company will promptly advise
each of you (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b), (ii) when,
prior to the termination of the offering of the Notes, any amendment of
the Registration Statement shall have been filed or become effective,
(iii) of any request by the Commission for any amendment of the
Registration Statement or supplement to 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 proceeding for that purpose
and (v) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company and the Guarantor will use their 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 Notes is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then 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 to amend the Registration Statement or to supplement
the Prospectus to comply with the Act, the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify each
of you to suspend solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend such
solicitation and cease using the Prospectus as then supplemented), (ii)
unless the Company shall have determined to suspend the solicitation of
offers to purchase Notes pursuant to Section 2 or to terminate this
Agreement, prepare and file with the Commission, subject to the first
sentence of paragraph (a) of this Section 4, an amendment or supplement
which will correct such statement or omission or effect such compliance
and (iii) supply any supplemented
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Prospectus to each of you in such quantities as you may reasonably
request; provided, however, that should any such event relate solely to
activities of any Purchaser, then such Purchaser shall assume the
expense of preparing and furnishing any such amendment or supplement.
Notwithstanding any suspension by the Company of solicitation of offers
to purchase Notes, the Company's obligations to prepare and file
amendments or supplements and supply supplemented Prospectuses shall
remain in effect if, at the time the Company gives notice of such
suspension, any Purchaser then holds Notes purchased pursuant to a
Terms Agreement pursuant to Section 2(b) and in connection with resales
of such Notes is required by law to deliver the Prospectus. If such
amendment or supplement, and any documents, certificates and opinions
furnished to each of you pursuant to paragraphs (j), (k) and (l) of
this Section 4 in connection with the preparation or filing of such
amendment or supplement are satisfactory in all respects to you, you
will, upon the filing of such amendment or supplement with the
Commission and upon the effectiveness of an amendment to the
Registration Statement, if such an amendment is required, resume your
obligation to solicit offers to purchase Notes hereunder. If requested
by the Company each Purchaser will inform the Company if it is then
holding any Notes purchased pursuant to a Terms Agreement pursuant to
Section 2(b).
(c) During the term of this Agreement, the Company and the
Guarantor will timely file all documents required to be filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and will furnish to each of you copies of such documents.
In addition, on the date on which the Company or the Guarantor (or as
soon as practicable thereafter) makes any announcement to the general
public concerning earnings or concerning any other event which is
required to be described, or which the Company or the Guarantor
proposes to describe, in a document filed pursuant to the Exchange Act,
the Company or the Guarantor, as the case may be, will furnish to each
of you the information contained in such announcement. The Company and
the Guarantor will notify each of you of any downgrading in the rating
of the Notes or any other debt securities of the Company or the
Guarantor, respectively, or any action which either of them has actual
knowledge to downgrade the rating of the Notes or any other debt
securities of the Company or the Guarantor, by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), promptly after the Company or the Guarantor
learns of any such downgrading or action to downgrade.
(d) As soon as practicable, the Company will make generally
available to its security holders and to each of you an earning
statement or statements of the Guarantor and its subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(e) The Company will furnish to each of you and your counsel,
without charge (except as otherwise provided herein), copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus may be required by the Act, as many copies of
the Prospectus and any supplement thereto as you may reasonably
request.
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(f) The Company and the Guarantor will arrange for the
qualification of the Notes for sale under the laws of such
jurisdictions as any of you may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Notes, and will arrange for the determination of the legality of
the Notes for purchase by institutional investors; provided, however,
that neither the Company nor the Guarantor shall be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction, or to comply with any other requirement
reasonably deemed by the Company or the Guarantor to be unduly
burdensome.
(g) During the term of this Agreement, the Company shall
furnish to each of you (i) copies of all annual, quarterly and other
reports furnished to stockholders of the Guarantor, (ii) copies of all
annual, quarterly and current reports (without exhibits but including
documents incorporated by reference therein) of the Guarantor filed
with the Commission under the Exchange Act and (iii) such other
information concerning the Company or the Guarantor as you may
reasonably request from time to time.
(h) The Company and the Guarantor shall, whether or not any
sale of the Notes is consummated, (i) pay all expenses incident to the
performance of its obligations under this Agreement, including the fees
and disbursements of its accountants and counsel, the cost of printing
or other production and delivery of the Registration Statement, the
Prospectus, all amendments thereof and supplements thereto, the
Indenture, this Agreement, any Terms Agreement and all other documents
relating to the offering, the cost of preparing, printing, packaging
and delivering the Notes, the fees and disbursements, including fees of
counsel, incurred in compliance with Section 4(f), the fees and
disbursements of the Trustee and the fees of any ratings agency that
rates the Notes, (ii) reimburse each of you on a monthly basis for all
reasonable out-of-pocket expenses (including without limitation
advertising expenses) incurred by you in connection with this Agreement
and (iii) pay the reasonable fees and expenses of your counsel incurred
in connection with the execution of this Agreement and the reasonable
fees and expenses of your counsel incurred from time to time in
connection with offering of the Notes.
(i) Each acceptance by the Company of an offer to purchase
Notes and each delivery of the Notes by the Company will be deemed to
be a reconfirmation to you that the representations and warranties of
the Company contained in Section 1 are true and correct at the time of
such acceptance or delivery, as though made at and as of such time
(except that such representations and warranties shall be deemed to
relate solely to the Registration Statement as then amended and to the
Prospectus as then amended and supplemented to each such time).
(j) Except as otherwise provided in subsection (p) of this
Section 4, each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by (i) an amendment or
supplement relating to any offering of debt securities other than the
Notes or (ii) a Pricing Supplement), the Company will deliver or cause
to be delivered promptly to each of you a certificate or certificates
of the Company and the Guarantor, signed by its Chairman of the Board,
President and Chief Executive Officer, any Vice President having
responsibilities for financial matters, or the Treasurer of the Company
-10-
and the Guarantor, dated the date of the effectiveness of such
amendment or the date of the filing of such supplement, in form
reasonably satisfactory to you, of the same tenor as the certificate
referred to in Section 5(e) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of
the effectiveness of such amendment or the filing of such supplement.
(k) Except as otherwise provided in subsection (p) of this
Section 4, each time that the Registration Statement or the Prospectus
is amended or supplemented (other than by (i) an amendment or
supplement relating to any offering of debt securities other than the
Notes, (ii) a Pricing Supplement or (iii) an amendment or supplement
setting forth or incorporating by reference financial statements or
other information as of and for a fiscal quarter, unless, in the case
of clause (iii) above, in the reasonable judgment of the Agents, such
financial statements or other information are of such a nature that an
opinion of counsel should be furnished), the Company and the Guarantor
shall furnish or cause to be furnished promptly to each of you a
written opinion of ▇▇▇▇▇ ▇. High, Esq., Associate General Counsel of
the Guarantor, dated the date of the effectiveness of such amendment or
the date of the filing of such supplement, in form satisfactory to each
of you, of the same tenor as the opinion referred to in Section 5(b),
but modified to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or, in lieu of such opinion,
such counsel may furnish each of you with a letter to the effect that
you may rely on such counsel's last opinion to the same effect as
though it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement).
(l) Except as otherwise provided in subsection (p) of this
Section 4, each time that the Registration Statement or the Prospectus
is amended or supplemented to include or incorporate amended or
supplemental financial information, the Company and the Guarantor shall
cause their independent public accountants promptly to furnish each of
you a letter, dated the date of the effectiveness of such amendment or
the date of the filing of such supplement, in form satisfactory to each
of you, of the same tenor as the letter referred to in Section 5(f)
with such changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended
or supplemented to the date of such letter; provided, however, that, if
-------- -------
the Registration Statement or the Prospectus is amended or supplemented
solely to include or incorporate by reference financial information as
of and for a fiscal quarter, the Company's or the Guarantor's
independent public accountants may limit the scope of such letter to
cover the matters set forth in Section 5(f)(i) and (ii)(1); provided
--------
further that after a reading of the "Management's Discussion and
------- ----
Analysis of Financial Condition and Results of Operations" disclosure
included in such amendment or supplement, the Agents may request that
the scope of such letter be expanded to cover specified information
relating to a material event of an accounting, financial or statistical
nature included in such amendment or supplement.
(m) During the period, if any, specified in any Terms
Agreement, the Company shall not, without the prior consent of the
Purchaser thereunder, issue or announce the
-11-
proposed issuance of any of its debt securities, including Notes, with
maturities or other terms substantially similar to the Notes being
purchased pursuant to such Terms Agreement, other than borrowings under
its revolving credit agreements and lines of credit and issuances of
its commercial paper.
(n) Notwithstanding anything contained in this Agreement to
the contrary, the Company shall not be required to comply with the
provisions of subsections (j), (k) and (l) of this Section 4 during any
period (which may occur from time to time during the term of this
Agreement) for which the Company has instructed the Agents to suspend
the solicitation of offers to purchase Notes; provided that, during any
-------- ----
such period, any Purchaser does not then hold any Notes for resale
purchased pursuant to a Terms Agreement. Upon the Company's request,
each Purchaser shall promptly notify the Company as to whether such
Purchaser then holds any Notes for resale purchased pursuant to a Terms
Agreement. The Company shall be required to comply with the provisions
of subsections (b), (j), (k) and (l) of this Section 4 prior to
instructing the Agents to resume the solicitation of offers to purchase
Notes or prior to entering into a Terms Agreement.
5. Conditions to the Obligations of the Agents. The
-------------------------------------------
obligations of each Agent to solicit offers to purchase the Notes shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantor contained herein as of the Execution Time, on the
Effective Date, when any supplement to the Prospectus is filed with the
Commission and to the accuracy of the statements of the Company and the
Guarantor made in any certificates pursuant to the provisions hereof, to the
performance by the Company and the Guarantor of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and 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
threatened.
(b) The Company shall have furnished to each Agent the opinion
of ▇▇▇▇▇ ▇. High, Esq., Associate General Counsel of the Guarantor,
dated the Execution Time, in form and substance satisfactory to the
Agents, to the effect that:
(i) Each of the Company and the Guarantor has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, with full corporate power and authority to own
its properties and conduct its business as described in the
Registration Statement and the Prospectus, and each of the
Company and the Guarantor is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or
the conduct of their respective businesses, except where the
failure to so qualify or be in good standing would not
-12-
have a material adverse effect on the condition, financial or
otherwise, or the results of operations of the Company and the
Guarantor, as applicable;
(ii) the Indenture has been duly authorized, executed
and delivered by each of the Company and the Guarantor, has
been duly qualified under the Trust Indenture Act, and is a
legal, valid and binding obligation of the Company and the
Guarantor, enforceable against the Company or the Guarantor,
as the case may be, in accordance with its terms, subject, as
to enforcement, to laws relating to or affecting generally the
enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws, and to general
principles of equity;
(iii) the creation, issuance and sale of the Notes
has been duly and validly authorized by each of the Company
and the Guarantor and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the purchasers thereof in accordance with
this Agreement, the Notes will constitute legal, valid and
binding obligations of the Company and the Guarantor,
enforceable against the Company or the Guarantor, as the case
may be, in accordance with their terms, subject, as to
enforcement, to laws relating to or affecting generally the
enforcement of creditors' rights, including, without
limitation, bankruptcy and insolvency laws, and to general
principles of equity, and will be entitled to the benefits of
the Indenture and the Guaranty included in the Indenture; and
the Notes conform as to legal matters to the description of
the terms thereof contained in the Registration Statement and
the Prospectus;
(iv) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or the Guarantor or any of
their respective subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required
to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed
as required; and the statements included or incorporated in
the Prospectus describing any legal proceedings or material
contracts or agreements relating to the Company or the
Guarantor fairly summarize such matters;
(v) the Registration Statement, at the Effective
Date, and the Prospectus, at the date it was filed with, or
transmitted for filing to, the Commission pursuant to Rule
424(b) and at the date of such opinion (except as to the
financial statements and other financial and statistical data
contained or incorporated by reference in the Registration
Statement
-13-
and the Prospectus as to which such counsel need express no
opinion), complied as to form in all material respects with
all applicable requirements of the Act and the Trust Indenture
Act, and the applicable instructions, rules and regulations of
the Commission thereunder or pursuant to such instructions,
rules and regulations are deemed to have complied therewith;
the Incorporated Documents (except as to the financial
statements and other financial and statistical data contained
therein or incorporated by reference as to which such counsel
need express no opinion), when filed with the Commission,
complied as to form in all material respects with the
applicable requirements of the Exchange Act, and the
applicable instructions, rules and regulations of the
Commission thereunder or pursuant to such instructions, rules
and regulations are deemed to have complied therewith; the
Registration Statement has become effective under the Act,
and, to the best knowledge of such counsel, no proceedings for
a stop order with respect thereto have been instituted or are
pending or threatened under Section 8 of the Act;
(vi) such counsel has no reason to believe that the
Registration Statement, at the Effective Date, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
Prospectus, at the date it was filed with, or transmitted for
filing to, the Commission pursuant to Rule 424(b), and as of
the date of such opinion, includes an untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, that such counsel need not express any belief as to
(1) the financial statements or other financial or statistical
data contained in or incorporated by reference in the
Registration Statement and the Prospectus, (2) any information
contained in the Prospectus that was furnished to the Company
in writing by any of the Agents expressly for use therein or
specified therein to have been obtained from The Depository
Trust Company, or (3) statements contained in the Form T-1
filed as an exhibit to the Registration Statement;
(vii) this Agreement has been duly authorized
executed and delivered by each of the Company and the
Guarantor; and
(viii) none of the execution and delivery of the
Indenture, the issue and sale of the Notes in accordance with
this Agreement, or the consummation of any other of the
transactions contemplated by this Agreement or the fulfillment
of the terms thereof will conflict with, result in a breach
of, or constitute a default under, the respective charter or
By-Laws of the Company and the Guarantor, as amended, or the
terms of any indenture or other agreement or instrument known
to such counsel and to which the Company, the Guarantor or any
of their respective subsidiaries is a party or is bound, or
any order or regulation known to such counsel to be applicable
to the Company, the Guarantor or any of their respective
subsidiaries of any court, regulatory body, administrative
agency,
-14-
governmental body or arbitrator having jurisdiction over the
Company, the Guarantor or any of their respective
subsidiaries.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of the State of New York, the
Federal Securities Laws of the United States and the Federal Income
Tax Laws of the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest
LLP, counsel to the Company and the Guarantor.
(c) Each Agent shall have received from ▇▇▇▇▇▇ ▇▇▇▇ & Priest
LLP, counsel to the Company and the Guarantor, dated the Execution
Time, an opinion to the same effect with respect to the matters
enumerated in paragraphs (ii), (iii), (v) (provided that such counsel
need not express any opinion as to the documents incorporated by
reference in the Registration Statement and the Prospectus, (vii) and
(ix) (to the extent such paragraph (ix) opines as to the respective
charter, as amended, and By-Laws of the Company and the Guarantor) of
subsection (b) of this Section 5 as the opinion of ▇▇▇▇▇ ▇. High, Esq.
As to matters of Pennsylvania Law ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP may rely on
the opinions of ▇▇▇▇▇ ▇. High, Esq.
(d) Each Agent shall have received from Milbank, Tweed, ▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP, counsel for the Agents, such opinion or opinions, dated
the Execution Time, with respect to the issuance and sale of the Notes,
the Indenture, the Registration Statement, the Prospectus and other
related matters as the Agents may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(e) The Company and the Guarantor shall have furnished to each
Agent a certificate or certificates of the Company and the Guarantor,
signed by the respective Chairman of the Board, President and Chief
Executive Officer, any Vice President having responsibilities for
financial matters, or the Treasurer of the Company and the Guarantor,
dated the Execution Time, to the effect that:
(i) the representations and warranties of each of the
Company and the Guarantor in this Agreement are true and
correct in all material respects on and as of the date hereof
with the same effect as if made on the date hereof and each of
the Company and the Guarantor has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation of the
Agents to solicit offers to purchase the Notes;
(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 the Company's or
Guarantor's knowledge, threatened;
(iii) since the date of the most recent financial
statements included in the Prospectus, there has been no
material adverse change in the business, properties or
condition (financial or other) of the Company, the Guarantor
and their respective subsidiaries, considered as one
enterprise, whether or not arising from
-15-
transactions in the ordinary course of business, except as set
forth in or contemplated by the Prospectus; and
(iv) no proceeding for the dissolution, merger,
consolidation or liquidation of the Company or the Guarantor
or for the sale of all or substantially all of its assets is
pending, or to the best of the signer's knowledge, threatened,
other than as described in the Registration Statement and
Prospectus or the documents incorporated therein by reference.
(f) At the Execution Time, Deloitte & Touche LLP shall have
furnished to each Agent a letter, dated as of the Execution Time, in
form and substance satisfactory to the Agents, confirming that they are
independent public accountants within the meaning of the Act and the
applicable published rules and regulations thereunder and stating in
effect that:
(i) in their opinion the audited consolidated
financial statements and related supplemental schedules
included or incorporated by reference in the Registration
Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Act and the Exchange Act and the published rules and
regulations thereunder;
(ii) on the basis of a reading of the latest
unaudited consolidated financial statements made available by
the Guarantor and its subsidiaries; a reading of the minutes
of the meetings of the Board of Directors of the Guarantor;
and inquiries of certain officials of the Guarantor who have
responsibility for financial and accounting matters of the
Guarantor and its subsidiaries, nothing came to their
attention which caused them to believe that:
(1) any unaudited condensed consolidated
financial statements included or incorporated by
reference in the Registration Statement and the
Prospectus do not comply in form in all material
respects with the applicable accounting requirements
and with the published rules and regulations of the
Commission with respect to financial statements
included or incorporated in Quarterly Reports on Form
10-Q under the Exchange Act; and said unaudited
condensed consolidated financial statements are not
in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated by reference in
the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information) included or
incorporated by reference in the Registration
Statement and the Prospectus, there were any changes,
at a specified date not more than five business days
prior to the date of the letter, in the consolidated
capital stock, short-term indebtedness or long-term
debt of the Guarantor and its subsidiaries as
compared with the amounts shown on the most recent
-16-
consolidated balance sheet included or incorporated
by reference in the Registration Statement and the
Prospectus, or for the period from the end of the
most recent fiscal year of the Guarantor to the date
of the most recent available consolidated financial
statements of the Guarantor there was any decrease in
consolidated net assets or there were any decreases,
as compared with the corresponding period in the
preceding year, in operating revenues, operating
income, income before interest charges, net income,
or the ratio of earnings to fixed charges (all
determined on a consolidated basis), except in all
instances for changes or decreases set forth in such
letter; or
(3) the amounts included in any unaudited
"capsule" information included or incorporated by
reference in the Registration Statement and the
Prospectus do not agree with the amounts set forth in
the unaudited financial statements for the same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited financial
statements included or incorporated by reference in
the Registration Statement and the Prospectus;
(iii) they have compared certain dollar amounts (or
percentages derived from such dollar amounts) and other
financial information specified by the Agents (A) which appear
or are incorporated by reference in the Guarantor's Annual
Report on Form 10-K incorporated by reference in the
Registration Statement and the Prospectus in Item 1 under the
captions "General," "Financial Condition," "Construction,"
"Rate Matters," "Electric Operations," "Fossil Fuel,"
"Long-Term Power Sales," "Nuclear Fuel," "Nuclear
Decommissioning" and in Item 6 under the caption "Selected
Financial Data," and in Item 7 under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and (B) which appear in Part I of any of the
Guarantor's Quarterly Reports on Form 10-Q incorporated by
reference in the Registration Statement and the Prospectus
under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations", "Ratio of
Earnings to Fixed Charges" and "Operating Statistics
(Unaudited)" (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Guarantor
subject to the internal controls of the Guarantor's accounting
system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter. All financial statements included in material
incorporated by reference in the Prospectus shall be deemed
included in the Prospectus for purposes of this subsection.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
-17-
(g) On and as of each Closing Date with respect to the sale by
the Company of Notes, counsel for the Agents shall have received copies
of (i) all documents required to be delivered to the Trustee under the
Indenture by the Company and the Guarantor in connection with the
issuance of Notes on such date.
(h) Prior to the Execution Time, the Company shall have
furnished to each Agent such further information, documents,
certificates and opinions of counsel as the Agents may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to such Agents and counsel for the Agents,
this Agreement and all obligations of any Agent hereunder may be canceled at any
time by the Agents. Notice of such cancellation shall be given to the Company in
writing or by telephone confirmed in writing by facsimile.
The documents required to be delivered by this Section 5 at
the Execution Time shall be delivered at the office of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP,
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
6. Conditions to the Obligations of the Purchaser. The
----------------------------------------------
obligations of the Purchaser to purchase any Notes will be subject to the
accuracy (to the extent set forth below in subsection (b)) of the
representations and warranties on the part of the Company and the Guarantor
herein as of the date of any related Terms Agreement and as of the Closing Date
for such Notes, to the performance and observance by each of the Company and the
Guarantor of all covenants and agreements in all material respects herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
the purpose shall have been instituted or threatened;
(b) If specified by any related Terms Agreement and except to
the extent modified by such Terms Agreement, the Purchaser shall have
received, appropriately updated, (i) a certificate of the Company and
the Guarantor, dated as of the Closing Date, to the effect set forth in
Section 5(e), (ii) the opinion of ▇▇▇▇▇ ▇. High, Esq., Associate
General Counsel of the Guarantor, dated as of the Closing Date,
substantially to the effect set forth in Section 5(b) (provided, that,
-------- ----
unless otherwise agreed in the Terms Agreement, the opinions set forth
in Section 5(b)(iv) shall be deemed to speak as of the later of the
Execution Time or such other date on which such opinions of such
counsel shall have been furnished to the Purchaser if such opinion has
been previously furnished within one year of such Closing Date), (iii)
the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, counsel to the Company and the
Guarantor, dated as of the Closing Date, substantially to the effect
set forth in Section 5(c), (iv) the opinion of Milbank, Tweed, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, counsel for the Purchaser, dated as of the Closing Date,
substantially to the effect set forth in Section 5(d), and (v) the
letter of Deloitte & Touche LLP, independent public
-18-
accountants for the Company and the Guarantor, dated as of the Closing
Date, substantially to the effect set forth in Section 5(f); provided,
--------
however, that references to the Registration Statement and the
-------
Prospectus in such certificate, opinions and letter shall be to the
Registration Statement and the Prospectus as then amended and
supplemented.
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement and any Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement shall not
be in all material respects reasonably satisfactory in form and substance to the
Purchaser and its counsel, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject thereto may be
canceled at, or any time prior to, the respective Closing Date by the Purchaser.
Notice of such cancellation shall be given to the Company in writing or by
telephone and confirmed in writing by facsimile transmission.
7. Right of Person Who Agreed to Purchase to Refuse to
---------------------------------------------------
Purchase. The Company agrees that any person who has agreed to purchase and pay
--------
for any Note, including a Purchaser and any person who purchases pursuant to a
solicitation by any of the Agents, shall have the right to refuse to purchase
such Note if, at the Closing Date therefor, any condition set forth in Section 5
or 6, as applicable, shall not be satisfied.
8. Indemnification and Contribution. (a) Each of the Company
--------------------------------
and the Guarantor agrees to indemnify and hold harmless each of you and each
person who controls each of you 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 you, they or any of you or 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 Notes as originally filed or
in any amendment thereof, or in the Prospectus or any preliminary 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 not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that (i) neither the Company nor the Guarantor will 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 or the Guarantor by any of you
specifically for use in connection with the preparation thereof and (ii) such
indemnity with respect to the Prospectus or any preliminary prospectus shall not
inure to the benefit of any of you (or any person controlling any of you) from
whom the person asserting any such loss, claim, damage or liability purchased
the Notes which are the subject
-19-
thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Notes 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 or any
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
supplemented); provided that, copies of the Prospectus (or the Prospectus as
-------- ----
supplemented) were sufficiently and timely provided to you. This indemnity
agreement will be in addition to any liability which the Company or the
Guarantor may otherwise have.
(b) Each of you agrees to indemnify and hold harmless the
Company and the Guarantor, each of their directors, each of their officers who
signs the Registration Statement and each person who control either the Company
or the Guarantor within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company and the Guarantor to
you, but only with reference to written information relating to such of you
furnished to the Company or the Guarantor by such of you specifically for use in
the preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which you may otherwise
have. The Company and the Guarantor acknowledge that the statements set forth in
[the last paragraph of the cover page, and in the paragraph regarding
market-making activities of the Agents under the heading "Plan of Distribution",
of the Prospectus Supplement constitute the only information furnished in
writing by any of you for inclusion in the documents referred to in the
foregoing indemnity, and you confirm that such statements are correct].
(c) Promptly after receipt by an indemnified party under this
Section 8 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 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. 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, that 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 assert 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 8 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 (plus any local
counsel retained in the indemnified parties' reasonable
-20-
judgment), representing the indemnified parties under such paragraph (a) 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).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of this
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable from the Company or the Guarantor on grounds of policy
or otherwise, the Company, the Guarantor and each of you shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which the Company, the Guarantor and any of you may be subject in such
proportion so that each of you is responsible for that portion represented by
the percentage that the aggregate commissions received by such of you pursuant
to Section 2 in connection with the Notes from which such losses, claims,
damages and liabilities arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been received by each of
you if such commissions had been payable), bears to the aggregate principal
amount of such Notes sold and the Company is responsible for the balance;
provided, however, that (y) in no case shall any of you be responsible for any
-------- -------
amount in excess of the commissions received by such of you in connection with
the Notes from which such losses, claims, damages and liabilities arise (or, in
the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions had been
payable) and (z) 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. For purposes of
this Section 8, each person who controls any of you within the meaning of the
Act shall have the same rights to contribution as you and each person who
controls the Company or the Guarantor within the meaning of either the Act or
the Exchange Act, each officer of the Company and the Guarantor who shall have
signed the Registration Statement and each director of the Company and the
Guarantor shall have the same rights to contribution as the Company and the
Guarantor, respectively, subject in each case to clauses (y) and (z) of this
paragraph (d). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d). For purposes of this paragraph (d), any notice provided for
indemnification under this Section 8 will be deemed to constitute notice for
purposes of this paragraph (d).
9. Termination. (a) This Agreement will continue in effect
-----------
until terminated as provided in this Section 9. This Agreement may be terminated
by either the Company or the Guarantor as to any of you or any of you insofar as
this Agreement relates to such of you, giving written notice of such termination
to such of you or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
-21-
receipt of such notice by the party to whom such notice is given, and in any
event this Agreement shall terminate on the date when all of the Notes have been
issued, delivered and paid for hereunder. In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the fifth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the Company prior
to delivery of any payment for Notes to be purchased thereunder, if prior to
such time (i) the Purchaser shall exercise its right to refuse to purchase the
Notes which are the subject of such Terms Agreement in accordance with the
provisions of Section 7, or (ii) there shall have occurred any outbreak or
escalation of hostilities or other national or international calamity or crisis,
the effect of which shall be such as to make it, in the judgment of the
Purchaser, impractical to market the Notes or enforce contracts for the sale of
the Notes, or (iii) trading in any securities of the Company or the Guarantor
shall have been suspended by the Commission or a national securities exchange,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, by either of said exchanges or by order of the Commission or
any other governmental authority, or (iv) if a banking moratorium shall have
been declared by either Federal or New York authorities, or (v) if the rating
assigned by any nationally recognized securities rating agency to any debt
securities of the Company or the Guarantor as of the date of the applicable
Terms Agreement shall have been lowered since that date or if any such rating
agency shall have publicly announced that it has placed any debt securities of
the Company or the Guarantor on what is commonly termed a "watch list" for
possible downgrading.
10. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company and the Guarantor or their respective officers and of you 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 you, the Company or the
Guarantor or any of the officers, directors or controlling persons referred to
in Section 8 hereof, and will survive delivery of and payment for the Notes.
11. Notices. Unless otherwise provided herein, any
-------
communication hereunder will be in writing and effective only on receipt, and,
if sent to any of you, will be mailed, delivered or telecopied and confirmed to
such of you, at the address specified in Schedule I hereto; or, if sent to the
Company, will be mailed, delivered or telecopied and confirmed to it at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, telecopy number:
▇▇▇-▇▇▇-▇▇▇▇, attention of the Treasurer and if sent to the Guarantor, will be
mailed, delivered or telecopied and confirmed to it at ▇▇▇▇▇▇▇▇▇▇▇ Corporate
Center, Suite 100, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
telecopy number ▇▇▇-▇▇▇-▇▇▇▇.
12. 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 8 hereof,
and no other person will have any right or obligation hereunder.
-22-
13. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be simultaneously
------------
executed in counterparts, each of which when so executed shall be deemed to be
an original. Such counterparts shall together constitute one and the same
instrument.
-23-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Guarantor and you.
Very truly yours,
DQE CAPITAL CORPORATION
By:
----------------------
Name:
Title:
DQE, INC.
By:
----------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
[UNDERWRITER]
By:
--------------------------
Name:
Title:
-24-
SCHEDULE I
Commissions:
-----------
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
Term Commission Rate
---- ---------------
From 9 months to less than 1 year %
From 1 year to less than 18 months %
From 18 months to less than 2 years %
From 2 years to less than 3 years %
From 3 years to less than 4 years %
From 4 years to less than 5 years %
From 5 years to less than 6 years %
From 6 years to less than 7 years %
From 7 years to less than 10 years %
From 10 years to less than 15 years %
From 15 years to less than 20 years %
From 20 years up to and including 40 years %
Address for Notice to You:
-------------------------
Notices to [Agents]
EXHIBIT A
DQE Capital Corporation
Medium-Term Notes, Series A
Administrative Procedures
Medium-Term Notes, Series A (the "Notes"), are to be offered
on a continuing basis by DQE Capital Corporation (the "Company") and will be
unconditionally guaranteed by DQE, Inc., as guarantor (the "Guarantor").
[Agents], as agents (each an "Agent" and collectively the "Agents"), have agreed
to use their reasonable best efforts to solicit offers to purchase the Notes.
The Notes are being sold pursuant to a Selling Agency Agreement among the
Company, the Guarantor and the Agents dated _________, 1998 (the "Agency
Agreement") to which these administrative procedures are attached as Exhibit A.
The Agency Agreement provides that Notes may also be purchased
by an Agent acting solely as principal and not as agent. In the event of any
such purchase, the functions of both the Agent and the beneficial owner under
the administrative procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between the Company and
such Agent acting as principal.
The Notes will be issued under an Indenture, dated as of
___________, 1999 (the "Indenture") among the Company, the Guarantor and
_______________, as trustee (the "Trustee"). [_______________] will act as the
paying agent (the "Paying Agent") for the payment of principal of and premium,
if any, and interest on the Notes and will perform, as the Paying Agent, unless
otherwise specified, the other duties specified herein. [____________] will act
as the authenticating agent (the "Authenticating Agent") under the Indenture.
The Notes will rank equally and ratably with all other Notes
outstanding or hereafter issued under the Indenture. The Notes have been
registered with the Securities and Exchange Commission (the "Commission") and
will bear interest at [floating/fixed] rates.
Each Note will be represented by either a Global Security (as
defined hereinafter) delivered to the Trustee, as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note") or a certificate delivered to the holder thereof or a person
designated by such holder (a "Certificated Note"). Except as set forth in the
Prospectus (as defined in Section 1(c) of the Agency Agreement), an owner of a
Book-Entry Note will not be entitled to receive a certificate representing such
Note.
The procedures to be followed during, and the specific terms
of, the solicitation of offers by the Agents and the sale as a result thereof by
the Company are explained below. Book-Entry Notes will be issued in accordance
with the administrative procedures set forth in Part I hereof and Certificated
Notes will be issued in accordance with the administrative procedures set forth
in Part II hereof. Administrative procedures applicable to both Book-Entry Notes
and Certificated Notes are set forth in Part III hereof. Administrative
responsibilities, document control and record-keeping functions will be handled
for the Company by [its Chief Financial
A-1
Officer or its Treasurer]. The Company will advise the Agents, the Paying Agent
and the Trustee in writing of those persons handling administrative
responsibilities with whom the Agents, the Paying Agent and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery.
To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture or the Agency Agreement, the relevant
provisions of the Notes, the Indenture and the Agency Agreement shall control.
Unless otherwise defined herein, terms defined in the Indenture shall be used
herein as therein defined.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, the Paying Agent
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representations to be delivered from the Company and the Paying Agent to DTC and
a Medium-Term Note Certificate Agreement between the Paying Agent and DTC, dated
as of _______, 1999, as the same may be amended from time to time, to include
the Notes (the "MTN Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined under
-------- "Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in full registered form without coupons
(a "Global Security") representing up to
$[150,000,000] principal amount of all such Notes
that have the same interest rate, date of maturity
("Maturity Date"), redemption provisions, if any,
or provisions for the repayment or purchase by the
Company at the option of the Holder, if any, and
other terms and provisions (collectively, the
"Terms"). Each Global Security will be dated and
issued as of the date of its authentication by the
Authenticating Agent. No Global Security will
represent any Certificated Note.
Identification
Numbers: The Paying Agent or the Company has arranged with
------- the CUSIP Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for the
reservation of one series of CUSIP numbers
(including tranche numbers), which series consists
of approximately 900 CUSIP numbers and relates to
Global Securities representing the Book-Entry
Notes. The Paying Agent or the Company has
obtained from the CUSIP Service Bureau a written
list of such series of reserved CUSIP numbers and
has delivered to DTC a written list of 900 CUSIP
numbers of such series. The Paying Agent will
assign CUSIP numbers to Global Securities as
described below under Settlement Procedure
A-2
"B". It is expected that DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers
that the Paying Agent has assigned to Global
Securities. At any time when fewer than 100 of the
reserved CUSIP numbers of the series remain
unassigned to Global Securities, and if it deems
necessary, the Paying Agent will reserve
additional CUSIP numbers for assignment to Global
Securities representing Book-Entry Notes. Upon
obtaining such additional CUSIP numbers, the
Paying Agent shall deliver a list of such
additional CUSIP numbers to the Company and DTC.
Registration: Each Global Security will be registered in the
------------ name of Cede & Co., as nominee for DTC, on the
Security Register maintained under the Indenture.
It is expected that the beneficial owner of a
Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Note, the "Participants") to act
as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and
it is expected that DTC will record in book-entry
form, in accordance with instructions provided by
such Participants, a credit balance with respect
to such beneficial owner in such Note in the
account of such Participants. The ownership
interest of such beneficial owner in such Note
will be recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
--------- accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
behalf of beneficial transferees and transferors
of such Note.
Consolidations: Upon receipt of instructions from the Company, the
-------------- Paying Agent may deliver to DTC and the CUSIP
Service Bureau at any time a written notice of
consolidation (a copy of which shall be attached
to the resulting Global Security described below)
specifying (i) the CUSIP numbers of two or more
Outstanding Global Securities that represent
Book-Entry Notes having the same Terms and for
which interest has been paid to the same date,
(ii) a date, occurring at least thirty days after
such written notice is delivered and at least
thirty days before the next Interest Payment Date
(as defined below) for such Book-Entry Notes, on
which such Global Securities shall be exchanged
for a single replacement Global Security and (iii)
a new CUSIP number
A-3
to be assigned to such replacement Global
Security. Upon receipt of such a notice, it is
expected that DTC will send to its Participants
(including the Paying Agent) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Paying Agent will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the
new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, the Paying
Agent will exchange such Global Securities for a
single Global Security bearing the new CUSIP
number, and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not
reassigned until the Book-Entry Notes represented
by such exchanged Global Securities have matured
or been redeemed. Notwithstanding the foregoing,
if the Global Securities to be exchanged exceed
$[150,000,000] in aggregate principal amount, one
Global Security will be authenticated and issued
to represent each $[150,000,000] of principal
amount of the exchanged Global Security and an
additional Global Security will be authenticated
and issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date not
---------- less than nine months nor more than 40 years after
the date of settlement for such Note.
Denominations: Book-Entry Notes will be issued in principal
------------- amounts of $1,000 or any integral multiple
thereof. Global Securities will be denominated in
principal amounts not in excess of $[150,000,000].
If one or more Book-Entry Notes having an
aggregate principal amount in excess of
$[150,000,000] would, but for the preceding
sentence, be represented by a single Global
Security, then one Global Security will be issued
to represent each $[150,000,000] principal amount
of such Book-Entry Note or Notes and an additional
Global Security will be issued to represent any
remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global
Securities representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
Interest: General: Interest on each Book-Entry Note will
-------- -------
accrue from and include the original issue date
of, or the last date to which interest has been
paid on, the Global Security representing such
Note. Each payment of interest on a Book-Entry
Note will include interest accrued to but
A-4
excluding the Interest Payment Date or the
Maturity Date or, upon earlier redemption or
repayment, the date of such redemption or
repayment (the "Redemption Date"), as the case may
be. Interest payable on the Maturity Date or the
Redemption Date of a Book-Entry Note will be
payable to the person to whom the principal of
such Note is payable. It is expected that
[Standard & Poor's Corporation] will use the
information received in the pending deposit
message described under Settlement Procedure "C"
below in order to include the amount of any
interest payable and certain other information
regarding the related Global Security in the
appropriate weekly Note report published by
[Standard & Poor's Corporation].
Record Dates. The record date with respect to any
------------
Interest Payment Date is the date fifteen calendar
days next preceding such Interest Payment Date
(each, a "Regular Record Date").
Interest Payment Dates. Interest payments on
----------------------
Book-Entry Notes will be made on the days of each
year set forth in the applicable Pricing
Supplement (as defined under "Preparation of
Pricing Supplement" in Part III below) (each, an
"Interest Payment Date") and on the Maturity Date
or the Redemption Date; provided, however, that in
-------- -------
the case of a Book-Entry Note issued between a
Regular Record Date and an Interest Payment Date,
the first interest payment will be made on the
Interest Payment Date following the next
succeeding Regular Record Date.
Payments of
Principal and
Interest: Payment of Interest Only. Promptly after each
-------- ------------------------
Regular Record Date, the Paying Agent will deliver
to the Company and DTC a written notice specifying
by CUSIP number the amount of interest to be paid
on each Global Security on the following Interest
Payment Date (other than an Interest Payment Date
coinciding with the Maturity Date) and the total
of such amounts. It is expected that DTC will
confirm the amount payable on each Global Security
on such Interest Payment Date by reference to the
appropriate Note reports published by [Standard &
Poor's Corporation]. The Company will pay to the
Paying Agent the total amount of interest due on
such Interest Payment Date (other than on the
Maturity Date), and the Paying Agent will pay such
amount to DTC at the times and in the manner set
forth under "Manner of Payment" below. If any
Interest Payment Date for a Book-Entry Note is not
a Business Day, the payment due on such day shall
be made on the
A-5
next succeeding Business Day, and no interest
shall accrue on such payment for the period from
and after such Interest Payment Date.
Payments on Maturity Date, Etc. On or about the
------------------------------
first Business Day of each month, the Paying Agent
will deliver to the Company and DTC a written list
of principal and, to the extent known at such
time, interest to be paid on each Global Security
maturing either on the Maturity Date or the
Redemption Date in the following month. The
Company and DTC will confirm with the Paying Agent
the amounts of such principal and interest
payments with respect to each such Global Security
on or about the fifth Business Day preceding the
Maturity Date or the Redemption Date, as the case
may be, of such Global Security. The Company will
pay to the Paying Agent the principal amount of
such Global Security, together with interest due
on such Maturity Date or Redemption Date. The
Paying Agent will pay such amounts to DTC at the
times and in the manner set forth below under
"Manner of Payment". If the Maturity Date or the
Redemption Date of a Global Security representing
Book-Entry Notes is not a Business Day, the
payment due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Maturity Date or the Redemption Date.
Promptly after payment to DTC of the principal and
interest due at the Maturity Date or the
Redemption Date of such Global Security, the
Paying Agent will cancel such Global Security in
accordance with the terms of the Indenture.
Manner of Payment. The total amount of any
-----------------
principal and interest due on Global Securities on
any Interest Payment Date or on the Maturity Date
or the Redemption Date shall be paid by the
Company to the Paying Agent in immediately
available funds for use by the Paying Agent on
such date. The Company will make such payment on
such Global Securities by wire transfer to the
Paying Agent or by the Paying Agent's debiting the
account of the Company maintained with the Paying
Agent. The Company will confirm such instructions
in writing to the Paying Agent. Prior to 10:00
A.M. (New York City time) on each Maturity Date or
Redemption Date or as soon as possible thereafter,
the Paying Agent will pay by separate wire
transfer (using Fedwire message entry instructions
in a form previously agreed to with DTC) to an
account at the Federal Reserve Bank of New York
previously agreed to with DTC, in same day funds,
each payment of principal (together with interest
thereon) due on Global Securities on
A-6
any Maturity Date or Redemption Date. On each
Interest Payment Date, interest payments shall be
made to DTC or its nominee in same day funds in
accordance with existing arrangements between the
Paying Agent and DTC. Thereafter, on each such
date, it is expected that DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names the Book-Entry Notes represented by
such Global Securities are recorded in the
book-entry system maintained by DTC. Neither the
Company, the Trustee nor the Paying Agent shall
have any responsibility or liability for the
payment by DTC to such Participants of the
principal of and interest on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes
-----------------
required under applicable law to be withheld from
any interest payment on a Book-Entry Note will be
determined and withheld by the Participant,
indirect participant in DTC or other person
responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Settlement: The receipt by the Company of immediately
---------- available funds in payment for a Book-Entry Note
and the authentication and issuance of the Global
Security representing such Note shall constitute
"settlement" with respect to such Note. All orders
accepted by the Company will be settled on the
fifth Business Day following the date of sale of a
Book-Entry Note unless the Company and the
purchaser agree to settlement on another day that
shall be no earlier than the next Business Day.
Settlement
Procedures: Settlement Procedures with regard to each
---------- Book-Entry Note sold by the Company through an
Agent, as agent, shall be as follows:
A. Such Agent will confirm that the transaction
is an agency transaction and advise the
Company by telephone or facsimile (facsimile
no. [__________, Attn: _________________]) of
the following settlement information:
1. Principal amount.
2. Maturity Date.
3. Interest rate.
A-7
4. Redemption provisions, if any, or
provisions for the repayment or purchase
by the Company at the option of the
Holder, if any.
5. Settlement date.
6. Issue price.
7. Agent's commission, determined as
provided in Section 2(a) of the Agency
Agreement.
8. Any other Terms.
B. The Company will advise the Paying Agent by
telephone (confirmed in writing at any time
on the same date) or electronic transmission
of the information set forth in Settlement
Procedure "A" above and the name of such
Agent. The Paying Agent will assign a CUSIP
number to the Global Security representing
such Note and notify the Company of such
number. The Company will notify the Agent of
such CUSIP number by telephone or electronic
transmission as soon as practicable. Each
such communication by the Company shall
constitute a representation and warranty by
the Company to the Trustee and the Paying
Agent and each Agent that (i) such Note is
then, and at the time of issuance and sale
thereof will be, duly authorized for issuance
and sale by the Company, (ii) the Global
Security representing such Note will conform
with the terms of the Indenture pursuant to
which such Note and Global Security are
issued and (iii) upon authentication and
delivery of such Global Security, the
aggregate principal amount of all Notes
issued under the Indenture will not exceed
$300,000,000 (except for Global Securities or
Notes represented by and authenticated and
delivered in exchange for or in lieu of Notes
in accordance with the Indenture).
C. The Paying Agent will enter a pending deposit
message through DTC's Participant Terminal
System, providing the following settlement
information to DTC, such Agent and [Standard
& Poor's Corporation]:
1. The information set forth in Settlement
Procedure "A".
A-8
2. CUSIP number of the Global Security
representing such Note.
3. Whether such Global Security will
represent any other Book- Entry Note (to
the extent known at such time).
D. The Authenticating Agent will complete and
authenticate the Global Security representing
such Note.
E. It is expected that DTC will credit such Note
to the Paying Agent's participant account at
DTC.
F. The Paying Agent will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such Note
to the Paying Agent's participant account and
credit such Note to such Agent's participant
account and (ii) debit such Agent's
settlement account and credit the Paying
Agent's settlement account for an amount
equal to the price of such Note less such
Agent's commission. The entry of such a
deliver order shall constitute a
representation and warranty by the Paying
Agent to DTC that (a) the Global Security
representing such Book-Entry Note has been
issued and authenticated by the
Authenticating Agent and (b) the Paying Agent
is holding such Global Security pursuant to
the MTN Certificate Agreement.
G. Such Agent will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to
such Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and
(ii) to debit the settlement accounts of such
Participants and credit the settlement
account of such Agent for an amount equal to
the price of such Note.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. The Paying Agent will, upon receipt of funds
from the Agent, wire transfer to the account
of the
A-9
Company maintained at [name and location of
bank] (for credit to DQE Capital Corporation,
Account No. ____________)] in immediately
available funds in the amount transferred to
the Paying Agent in accordance with
Settlement Procedure "F".
J. Such Agent will confirm the purchase of such
Note to the purchaser either by transmitting
to the Participants with respect to such Note
a confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
Settlement
Procedures
Timetable: For orders of Book-Entry Notes solicited by an
--------- Agent, as agent, and accepted by the Company for
settlement on the first Business Day after the
sale date, Settlement Procedures "A" through "J"
set forth above shall be completed as soon as
possible but not later than the respective times
(New York City time) set forth below:
Settlement
Procedures Time
---------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business
Day after the sale date, Settlement Procedures
"A", "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M. and 12:00
Noon on the first Business Day after the sale date
with respect to Settlement Procedures "A" and "B",
respectively, and no later than 2:00 P.M. on the
Business Day before the settlement date, with
respect to Settlement Procedure "C". Settlement
Procedures "H" and "I" are subject to extension in
accordance with any extension of Fedwire closing
deadlines and in the other events specified in the
SDFS operating procedures in effect on the
settlement date.
A-10
If settlement of a Book-Entry Note is rescheduled
or canceled, the Company will notify the Trustee
and instruct the Paying Agent by no later than
12:00 noon to deliver to DTC a cancellation
message to such effect on the Business Day
immediately preceding the scheduled settlement
date and the Paying Agent will enter such message
no later than 2:00 P.M. through DTC's
Participation Terminal System.
Monthly
Reports: Monthly, the Paying Agent will send to the Company
------- and the Trustee a statement setting forth the
principal amount of Notes outstanding as of that
date under the Indenture and setting forth a brief
description of any sales of which the Company has
advised the Paying Agent but which have not yet
been settled.
Failure to
Settle: If the Paying Agent or the Agent fails to enter an
------ SDFS deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "F" or "G",
the Paying Agent may upon the approval of the
Company deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Paying Agent's participant account,
provided that the Paying Agent's participant
account contains a principal amount of the Global
Security representing such Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, the Paying Agent will cause such Global
Security to be "canceled" in accordance with the
provisions of the Indenture, make appropriate
entries in the Paying Agent's records and send
such canceled Global Security to the Company. The
CUSIP number assigned to such Global Security
shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not reassigned until
the Book-Entry Notes represented by such Global
Security have matured or been redeemed. If a
withdrawal message is processed with respect to
one or more, but not all, of the Book-Entry Notes
represented by a Global Security, the Paying Agent
will exchange such Global Security for another
Global Security, which shall represent the
Book-Entry Notes previously represented by the
surrendered Global Security with respect to which
a withdrawal message has not been processed and
shall bear the CUSIP number of the surrendered
Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the
A-11
beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants
and, in turn, the Agent for such Note may enter
SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered
pursuant to Settlement Procedures "G" and "F",
respectively. Thereafter, the Paying Agent will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than a default by the Agent in
the performance of its obligations hereunder or
under the Agency Agreement, then the Company will
reimburse such Agent or the Paying Agent as
applicable on an equitable basis for the loss of
the use of funds during the period when they were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes to have
been represented by a Global Security, the
Authenticating Agent will provide, in accordance
with Settlement Procedure "D", for the
authentication and issuance of a Global Security
representing the other Book-Entry Notes to have
been represented by such Global Security and will
make appropriate entries in its records.
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Paying Agent will serve as registrar in connection with the
Certificated Notes.
Maturities: Each Certificated Note will mature on a date not
---------- less than nine months and not more than 40 years
after the date of delivery by the Company of such
Note.
Price to Public: Each Certificated Note will be issued at the
--------------- percentage of principal amount specified in the
Pricing Supplement relating to such Note.
Denominations: The denomination of any Certificated Note will be
------------- a minimum of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000.
Registration: Certificated Notes will be issued only in fully
------------ registered form.
A-12
Interest: General. Interest on each Certificated Note will
-------- -------
accrue from and include the original issue date
of, or the last date to which interest has been
paid on, such Note. Each payment of interest on a
Certificated Note will include interest accrued to
but excluding the Interest Payment Date or the
Maturity Date or, upon earlier redemption, the
Redemption Date, as the case may be. Interest
payable on the Maturity Date or the Redemption
Date of a Certificated Note will be payable to the
person to whom the principal of such Note is
payable.
Record Dates. The record dates with respect to the
------------
Interest Payment Dates shall be the Regular Record
Dates.
Interest Payment Dates. Interest payments on
----------------------
Certificated Notes will be made on each Interest
Payment Date and on the Maturity Date or the
Redemption Date; provided, however, that in the
-------- -------
case of a Certificated Note issued between a
Regular Record Date and an Interest Payment Date,
the first interest payment will be made on the
Interest Payment Date following the next
succeeding Regular Record Date.
Payments
of Principal
and Interest: Interest will be payable to the person in whose
------------ name a Certificated Note is registered at the
close of business on the Regular Record Date next
preceding an Interest Payment Date; provided,
--------
however, that, in the case of a Certificated Note
-------
originally issued between a Regular Record Date
and an Interest Payment Date, the first payment of
interest will be made on the Interest Payment Date
following the next succeeding Regular Record Date
to the person in whose name such Note was
registered at the close of business on such next
Regular Record Date. Unless other arrangements are
made acceptable to the Company, all interest
payments (excluding interest payments made on the
Maturity Date or the Redemption Date) on a
Certificated Note will be made by check mailed to
the person entitled thereto as provided above.
The Paying Agent will pay the principal amount of
each Certificated Note on the Maturity Date upon
presentation of such Certificated Note. Such
payment, together with payment of interest due on
the Maturity Date, will be made from funds
deposited with the Paying Agent by the Company.
A-13
The Paying Agent will be responsible for
withholding taxes on interest paid on Certificated
Notes as required by applicable law.
Within 10 days following each Regular Record Date,
the Paying Agent will inform the Company of the
total amount of the interest payments to be made
by the Company on the next succeeding Interest
Payment Date. The Paying Agent will provide
monthly to the Company a list of the principal and
interest to be paid on Certificated Notes maturing
in the next succeeding month.
If any Interest Payment Date, Maturity Date or,
upon earlier redemption, Redemption Date, is not a
Business Day, the payment due on such date shall
be made on the next succeeding Business Day, and
no interest shall accrue on such payment for the
period from and after such Interest Payment Date,
Maturity Date or Redemption Date, as the case may
be.
Settlement: The settlement date with respect to any offer to
---------- purchase Certificated Notes accepted by the
Company will be a date on or before the fifth
Business Day next succeeding the date of
acceptance unless otherwise agreed by the
purchaser and the Company and shall be specified
upon acceptance of such offer. The Company will
instruct the Paying Agent to effect delivery of
each Certificated Note no later than 1:00 P.M.,
New York City time, on the settlement date to the
presenting Agent (as defined under "Preparation of
Pricing Supplement" in Part III below) for
delivery to the purchaser.
Settlement
Procedures: For each offer to purchase a Certificated Note
---------- that is accepted by the Company, the Presenting
Agent will provide (unless provided by the
purchaser directly to the Company) by telephone
the following information to the Company:
1. Name in which such Note is to be registered
(the "Registered Owner").
2. Address of the Registered Owner and, if
different, address for payment of principal
and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount.
A-14
5. Maturity Date.
6. Interest Rate, interest payment dates,
including without limitation all necessary
information with respect to floating rate
notes, and initial interest payment date.
7. Redemption provisions, if any, or provisions
for the repayment or repurchase by the
Company at the option of the Holder, if any.
8. Settlement date.
9. Issue price.
10. Agent's commission, determined as provided in
Section 2(a) of the Agency Agreement.
11. Any other Terms.
The Agent that presented such offer (the
"Presenting Agent") will advise the Company of the
foregoing information (unless provided by the
purchaser directly to the Company) for each offer
to purchase a Certificated Note solicited by such
Agent and accepted by the Company in time for the
Authenticating Agent to prepare and authenticate
the required Certificated Note. Before accepting
any offer to purchase a Certificated Note to be
settled in less than three Business Days, the
Company shall verify that the Authenticating Agent
will have adequate time to prepare and
authenticate such Note. After receiving from the
Presenting Agent the details for each offer to
purchase a Certificated Note that has been
accepted by the Company, the Company will, after
recording the details and any necessary
calculations, provide appropriate documentation to
the Authenticating Agent, including the
information provided by the Presenting Agent
necessary for the preparation and authentication
of such Note.
Note Deliveries
and Cash Payment: Upon receipt of appropriate documentation and
instructions, the Company will cause the
Authenticating Agent to prepare and authenticate
the pre-printed 4-ply Certificated Note packet
containing the following documents in forms
approved by the Company, the Presenting Agent and
the Authenticating Agent:
1. Note with customer receipt.
A-15
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Authenticating Agent.
Each Certificated Note shall be authenticated on
the settlement date therefor. The Authenticating
Agent will authenticate each Certificated Note and
deliver it (with the confirmation) to the
Presenting Agent (and deliver the stubs as
indicated above), all in accordance with written
or electronic instructions (or oral instructions,
confirmed in writing (which may be given by telex
or telecopy) on the next Business Day) from the
Company. Delivery by the Authenticating Agent of
each Certificated Note will be made in accordance
with said instructions against receipts therefor
and in connection with contemporaneous receipt by
the Company from the Presenting Agent on the
settlement date in immediately available funds of
an amount equal to the issue price of such Note
less the Presenting Agent's commission.
Upon verification ("Verification") by the
Presenting Agent that a Certificated Note has been
prepared and properly authenticated by the
Authenticating Agent and registered in the name of
the purchaser in the proper principal amount and
other terms in accordance with the aforementioned
confirmation, payment will be made to the Company
by the Presenting Agent the same day as the
Presenting Agent's receipt of the Certificated
Note in immediately available funds. Such payment
shall be made by the Presenting Agent only upon
prior receipt by the Presenting Agent of
immediately available funds from or on behalf of
the purchaser unless the Presenting Agent decides,
at its option, to advance its own funds for such
payment against subsequent receipt of funds from
the purchaser.
Upon delivery of a Certificated Note to the
Presenting Agent, Verification by the Presenting
Agent and the giving of instructions for payment,
the Presenting Agent shall promptly deliver such
Note to the purchaser.
In the event any Certificated Note is incorrectly
prepared, the Authenticating Agent shall promptly
issue a replacement Certificated Note in exchange
for such incorrectly prepared Note.
Failure
to Settle: If the Presenting Agent, at its own option, has
advanced its own funds for payment against
subsequent receipt of funds from the purchaser,
and if the purchaser shall fail to make
A-16
payment for the Certificated Note on the
Settlement Date therefor, the Presenting Agent
will promptly notify the Authenticating Agent and
the Company by telephone, promptly confirmed in
writing (but no later than the next Business Day).
In such event, the Company shall promptly provide
the Authenticating Agent with appropriate
documentation and instructions consistent with
these procedures for the return of the
Certificated Note to the Authenticating Agent and
the Presenting Agent will promptly return the
Certificated Note to the Authenticating Agent.
Upon (i) confirmation from the Authenticating
Agent in writing (which may be given by telex or
telecopy) that the Authenticating Agent has
received the Certificated Note and upon (ii)
confirmation from the Presenting Agent in writing
(which may be given by telex or telecopy) that the
Presenting Agent has not received payment from the
purchaser (the matters referred to in clauses (i)
and (ii) are referred to hereinafter as the
"Confirmations"), the Company will promptly pay to
the Presenting Agent an amount in immediately
available funds equal to the amount previously
paid by the Presenting Agent in respect of such
Note. Assuming receipt of the Certificated Note by
the Authenticating Agent and of the Confirmations
by the Company, such payment will be made on the
settlement date, if reasonably practical, and in
any event not later than the Business Day
following the date of receipt of the Certificated
Note and Confirmations. If a purchaser shall fail
to make payment for the Certificated Note for any
reason other than the failure of the Presenting
Agent to provide the necessary information to the
Company as described above for settlement or to
provide a confirmation to the purchaser within a
reasonable period of time as described above or
otherwise to satisfy its obligations hereunder or
in the Agency Agreement, and if the Presenting
Agent shall have otherwise complied with its
obligations hereunder and in the Agency Agreement,
the Company will reimburse the Presenting Agent on
an equitable basis for its loss of the use of
funds during the period when they were credited to
the account of the Company.
Immediately upon receipt of the Certificated Note
in respect of which the failure occurred, the
Authenticating Agent will void such Note, make
appropriate entries in its records and send such
canceled Note to the Company, and upon such
action, the Certificated Note will be deemed not
to have been issued, authenticated and delivered.
A-17
PART III: ADMINISTRATIVE PROCEDURES APPLICABLE TO BOTH BOOK-
ENTRY NOTES AND CERTIFICATED NOTES
Procedure for
Rate Setting
and Posting: The Company and the Agents will discuss from time
----------- to time the aggregate amount of, the issuance
price of, and the interest rates to be borne by,
Notes that may be sold as a result of the
solicitation of offers by the Agents. If the
Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agents are
to solicit offers (the setting of such prices and
rates to be referred to herein as "posting") or if
the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance
of Offers: If the Company posts prices and rates as provided
above, each Agent as agent for and on behalf of
the Company, shall promptly accept offers received
by such Agent to purchase Notes at the prices and
rates so posted, subject to (i) any instructions
from the Company received by such Agent concerning
the aggregate principal amount of such Notes to be
sold at the prices and rates so posted or the
period during which such posted prices and rates
are to be in effect, (ii) any instructions from
the Company received by such Agent changing or
revoking any posted prices and rates, (iii)
compliance with the securities laws of the United
States and all other relevant jurisdictions and
(iv) such Agent's right to reject any such offer
as provided below.
If the Company does not post prices and rates and
an Agent receives an offer to purchase Notes or,
if while posted prices and rates are in effect, an
Agent receives an offer to purchase Notes on terms
other than those posted by the Company, such Agent
will promptly advise the Company of each such
offer other than offers rejected by such Agent as
provided below. The Company will have the sole
right to accept any such offer to purchase Notes.
The Company may reject any such offer in whole or
in part.
Each Agent may, in its discretion reasonably
exercised, reject any offer to purchase Notes
received by it in whole or in part.
A-18
Preparation of
Pricing
Supplement: If any offer to purchase a Note is accepted by the
---------- Company, the Company and the Guarantor, with the
approval of the Presenting Agent, will prepare a
pricing supplement (a "Pricing Supplement")
reflecting the terms of such Note and identifying
the Presenting Agent, and will arrange to have ten
copies filed with the Commission in accordance
with the applicable paragraph of Rule 424(b) under
the Act and will supply at least 10 copies thereof
(or additional copies if requested) to the
Presenting Agent. At least one copy of such
Pricing Supplement shall be delivered to the
Presenting Agent not later than the close of the
first Business Day immediately following the date
on which such offer to purchase is accepted. Any
such Pricing Supplement may be delivered to the
Presenting Agent as follows: (i) if to
[Underwriter], to ___________, Attention: ______,
Tel. No. ______________, Facsimile No.
___________, and also for record keeping purposes
to ___________, Attention: ____________, Tel. No.
___________, Facsimile No. _____________; (ii) if
to [Underwriter], to ___________, Attention:
____________, Tel. No. __________, Facsimile No.
___________ and (iii) if to [Underwriter], to
_____________, Attention: ____________, Facsimile
No. ____________, and for record keeping purposes
to ______________, Attention: _____________,
Telephone No. _____________, Facsimile
No.____________. The Presenting Agent will cause a
Prospectus and Pricing Supplement to be delivered
to the purchaser of such Note.
A copy of the Pricing Supplement should also be
sent to the following: [the Trustee]; ▇▇▇▇▇▇ ▇▇▇▇
& Priest; Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP; and
[rating agencies].
In each instance that a Pricing Supplement is
prepared, the Agents will affix the Pricing
Supplement to Prospectuses prior to their use.
Outdated Pricing Supplements (other than those
retained for files) will be destroyed.
Suspension of
Solicitation;
Amendment or
Supplement of
Prospectus: The Company may instruct the Agents to suspend at
---------- any time, for any period of time or permanently,
the solicitation of offers to purchase Notes. Upon
receipt of such instructions from the Company, the
Agents will forthwith suspend solicitation of
offers to purchase Notes from the
A-19
Company until such time as the Company has advised
them that such solicitation may be resumed.
If the Company and the Guarantor decide to amend
or supplement the Registration Statement (as
defined in Section 1(c) of the Agency Agreement)
or the Prospectus (except for a supplement
relating to an offering of securities other than
the Notes), they will promptly advise the Agents,
the Paying Agent and the Trustee and will furnish
the Agents, the Paying Agent and the Trustee with
the proposed amendment or supplement in accordance
with the terms of, and its obligations under, the
Agency Agreement. The Company will, consistent
with such obligations, promptly advise each Agent,
the Paying Agent and the Trustee whether orders
outstanding at the time each Agent suspends
solicitation may be settled and whether copies of
such Prospectus and Prospectus Supplement as in
effect at the time of the suspension, together
with the appropriate Pricing Supplement, may be
delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements that may be made in the event that
the Company determines that such orders may not be
settled or that copies of such Prospectus,
Prospectus Supplement and Pricing Supplement may
not be so delivered.
The Company and the Guarantor will file with the
Commission, as co-registrants, any supplement to
the Prospectus relating to the Notes, provide the
Agents with copies of any such supplement, and
confirm to the Agents that such supplement has
been filed with the Commission pursuant to the
applicable paragraph of Rule 424.
Confirmation: For each offer to purchase a Note solicited by an
------------ Agent and accepted by or on behalf of the Company,
the Presenting Agent will issue a confirmation to
the purchaser, with a copy to the Company, setting
forth the details set forth above and delivery and
payment instructions.
Paying Agent Not
to Risk Funds: Nothing herein shall be deemed to require the
------------- Paying Agent to risk or expend its own funds in
connection with any payment to the Company, or the
Agents or the purchaser or a holder, it being
understood by all parties that payments made by
the Paying Agent to the Company, the Agents or a
holder shall be made only to the extent that funds
are provided to the Paying Agent for such purpose.
A-20
Authenticity
of Signatures: The Company will furnish the Agents from time to
------------- time with the specimen signatures of each of the
Authenticating Agent's officers, employees or
agents who has been authorized by the
Authenticating Agent to authenticate Notes, but
the Agents will have no obligation or liability to
the Company, the Guarantor or the Trustee in
respect of the authenticity of the signature of
any officer, employee or agent of the Company or
the Authenticating Agent on any such Note.
Payment of
Expenses: Each Agent shall forward to the Company, on a
-------- monthly basis, a statement of the reasonable
out-of-pocket expenses incurred by such Agent
during that month which are reimbursable to it
pursuant to the terms of the Agency Agreement. The
Company will remit payment to the Agents currently
on a monthly basis.
Delivery of
Prospectus: A copy of the Prospectus, Prospectus Supplement
---------- and Pricing Supplement relating to a Note must
accompany or precede the earliest of any written
offer of such Note, confirmation of the purchase
of such Note or payment for such Note by its
purchaser. If notice of a change in the terms of
the Notes is received by an Agent between the time
an order for a Note is placed and the time written
confirmation thereof is sent by such Agent to a
customer or his agent, such confirmation shall be
accompanied by a Prospectus, Prospectus Supplement
and Pricing Supplement setting forth the terms in
effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement of Prospectus" above, each Agent will
deliver a Prospectus, Prospectus Supplement and
Pricing Supplement as herein described with
respect to each Note sold by it.
EXHIBIT B
TERMS AGREEMENT
---------------
DQE Capital Corporation
[address]
Attention: Treasurer
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agency Agreement") dated ___________, 1999, among
[Underwriters] (the "Underwriters"), DQE Capital Corporation (the "Company") and
DQE, Inc., as guarantor (the "Guarantor"), the undersigned agrees to purchase
the following principal amount of the Company's Medium-Term Notes, Series A (the
"Notes"):
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: % of Principal Amount
[plus accrued interest from ____,
199__]
Denominations:
Redemption Terms:
Settlement Date and Time:
Place for Settlement:
Method of Payment:
Documents, if any, to be
delivered pursuant to Section
B-1
6(b) of the Agency Agreement:
Period, if any, during which
additional Notes may not be
sold pursuant to Section 4(m)
of the Agency Agreement:
Additional Terms:
1. Upon the execution of this Terms Agreement, the several
Underwriters propose to offer such Notes for sale upon the terms and conditions
set forth in the Prospectus as amended or supplemented.
2. The Notes to be purchased by the Underwriters pursuant to
this Terms Agreement will be represented by Global Securities (as defined in the
Administrative Procedures), shall be delivered by or on behalf of the Company as
described in the Administrative Procedures against payment by the Underwriters
or on their behalf of the purchase price to the Company in the funds specified
above all at the place and time and date specified above or at such other place
and time and date as the Underwriters and the Company may agree upon in writing.
3. The Company and the Guarantor agree with each of the
Underwriters to prepare the Prospectus as amended and supplemented in relation
to the Notes in a form approved by the Underwriters and to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the Commission's close of
business on the second business day following the execution and delivery of this
Terms Agreement, or, if applicable, such earlier time as may be required by Rule
424(b).
4. A. If any Underwriter shall default in its obligation to
purchase the Notes which it has agreed to purchase under this Terms Agreement,
the non-defaulting Underwriters may in their discretion arrange for themselves
or another party or other parties to purchase such Notes on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
non-defaulting Underwriters do not arrange for the purchase of such Notes, then
the Company shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties reasonably satisfactory to the
non-defaulting Underwriters to purchase such Notes on such terms. In the event
that, within the respective prescribed period, the non-defaulting Underwriters
notify the Company that they have so arranged for the purchase of such Notes, or
the Company notifies the non-defaulting Underwriters that it has so arranged for
the purchase of such Notes, the non-defaulting Underwriters or the Company shall
have the right to postpone the Settlement Date and Time for such Notes for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company and the Guarantor agree to file promptly any amendments or supplements
to the Registration Statement or the Prospectus which in the opinion of the
Underwriters may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Terms Agreement
with respect to such Notes.
B-2
B. If, after giving effect to any arrangements
for the purchase of the Notes of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in subsection (A) above,
the aggregate principal amount of such Notes which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of the Notes, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Notes which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Notes which such
Underwriter agreed to purchase hereunder) of the Notes of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
C. If, after giving effect to any arrangements
for the purchase of the Notes of a defaulting Underwriter or Underwriters by the
non-defaulting Underwriters and the Company as provided in subsection (A) above,
the aggregate principal amount of Notes which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Notes, as referred to in
subsection (B) above, or if the Company shall not exercise the right described
in subsection (B) above to require non-defaulting Underwriters to purchase Notes
of a defaulting Underwriter or Underwriters, then this Terms Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter, the Company or the Guarantor, except for the expenses to be borne
by the Company as provided in Section 4(h) of the Agency Agreement and the
indemnity and contribution agreements in Section 8 of the Agency Agreement; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
D. If for any other reason Notes are not
delivered by or on behalf of the Company as provided herein, the Company shall
be under no liability to any Underwriter with respect to such Notes except as
provided in Sections 4(h) and 8 of the Agency Agreement and except that the
Company will reimburse the Underwriters for any additional out-of-pocket
expenses reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Notes.
5. In all dealings hereunder, [Name of Lead Purchaser] shall
act on behalf of each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or agreement on
behalf of any Underwriter made or given by [Name of Lead Purchaser]. The
following are the names and addresses of the Underwriters:
Underwriters: [Names of Purchasers]
B-3
Address for Notices,
etc.: c/o [Name of Lead Purchaser]
[Address of Lead Purchaser]
Attention:
Telephone:
Telecopy:
6. This Terms Agreement shall be subject to termination by the
Underwriters, by notice given to the Company prior to delivery of any payment
for Notes to be purchased hereunder, if subsequent to the date hereof there
shall have occurred any change in or affecting the business or properties of the
Company, the Guarantor, or their respective subsidiaries, considered as one
enterprise, the effect of which is, in the judgment of the [Lead Purchaser], so
material and adverse as to make it impractical to proceed with the offering or
delivery of such Notes.
This Agreement shall be governed by and construed in
accordance with the laws of New York.
[Insert name of Purchaser(s)]
By
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Title:
Accepted: , 19__
DQE CAPITAL CORPORATION
By
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Name:
Title:
DQE, INC.
By
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Name:
Title:
B-4