-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, VZOeqiwMUnUZ8bIaOY4dZxVHNo6SgNShKQW3mtE4W7YxJ361NpsITm4dB6lR2/HF Jwt2FFl2dWlXyE83XPfuWQ== 0000950123-94-000695.txt : 19940405 0000950123-94-000695.hdr.sgml : 19940405 ACCESSION NUMBER: 0000950123-94-000695 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 18 REFERENCES 429: 033-45834 REFERENCES 429: 033-60744 FILED AS OF DATE: 19940404 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LONG ISLAND LIGHTING CO CENTRAL INDEX KEY: 0000060251 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 111019782 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 33 SEC FILE NUMBER: 033-52963 FILM NUMBER: 94520158 BUSINESS ADDRESS: STREET 1: 175 E OLD COUNTRY RD CITY: HICKSVILLE STATE: NY ZIP: 11801 BUSINESS PHONE: 5169334590 S-3 1 LONG ISLAND LIGHTING COMPANY, S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1994 REGISTRATION NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ LONG ISLAND LIGHTING COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------ NEW YORK 11-1019782 (State or other jurisdiction) (I.R.S. Employer of incorporation or organization) Indentification No.)
------------------ 175 East Old Country Road, Hicksville, New York 11801 516-755-6650 (Address and telephone number of principal executive offices) ------------------ ANTHONY NOZZOLILLO, Senior Vice President and Chief Financial Officer or HERBERT M. LEIMAN, Assistant Corporate Secretary LONG ISLAND LIGHTING COMPANY 175 East Old Country Road Hicksville, New York 11801 516-755-6650 (Name, address and telephone number of agents for service) ------------------ Copies to: GEORGE J. FORSYTH, ESQ. MILBANK, TWEED, HADLEY & McCLOY 1 Chase Manhattan Plaza New York, New York 10005 ------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE REGISTRATION STATEMENT BECOMES EFFECTIVE. ------------------ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. /X/ CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ PROPOSED PROPOSED AMOUNT MAXIMUM MAXIMUM TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE* REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------ Debentures, General and Refunding Bonds, Preferred Stock and Common Stock....... $500,000,000 100% $500,000,000 $172,414 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------
* Estimated solely for the purpose of calculating the registration fee. The prospectus, included in this Registration Statement is a combined prospectus as permitted by Rule 429 under the Securities Act of 1933 and includes $299,550,000 of securities previously registered and unissued under Registration Statement No. 33-60744. In addition, if the Securities are issued as General and Refunding Bonds, the prospectus will also cover $4,000,000 of General and Refunding Bonds previously registered and unissued under Registration Statement No. 33-45834. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION DATED APRIL 4, 1994 PROSPECTUS $803,550,000 LONG ISLAND LIGHTING COMPANY SECURITIES ------------------------------ Long Island Lighting Company (the "Company") may offer from time to time, in one or more series, Debentures or General and Refunding Bonds (the "Debt Securities") or Preferred Stock or Common Stock (the "Equity Securities") (collectively, the "Securities"), on terms to be determined at the time of offering. The aggregate offering price of the Securities will not exceed $803,550,000. The form in which the Securities are to be issued, their specific designation, aggregate principal amount or aggregate initial offering price, maturity, if any, rate and times of payment of interest or dividends, if any, redemption and sinking fund terms, if any, and other specific terms in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement, together with the terms of offering of such Securities. ------------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------------ The Securities will be sold through underwriters, including the underwriter listed below (the "Underwriters"). The Prospectus Supplement applicable to each sale of Securities hereunder will set forth the names of each such Underwriter, the proposed amounts to be purchased by the Underwriters and the compensation of such Underwriters. Pricing information and net proceeds to the Company from the sale of such Securities will also be set forth in such Prospectus Supplement. See "Plan of Distribution" herein. ------------------------------ LEHMAN BROTHERS , 1994 3 NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. ---------------- AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "SEC"). Information as of particular dates concerning Directors and Officers of the Company, their remuneration and any material interest of such persons in transactions with the Company is disclosed in proxy statements distributed to shareowners of the Company and filed with the SEC. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices at 500 West Madison Street, Chicago, Illinois 60661 and at 7 World Trade Center, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, certain securities of the Company are listed on the New York Stock Exchange and the Pacific Stock Exchange where reports, proxy statements and other information concerning the Company may be inspected. 4 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE There are hereby incorporated by reference in this Prospectus the following documents heretofore filed with the SEC pursuant to the Exchange Act: 1. The Company's Annual Report on Form 10-K for the Year Ended December 31, 1993. 2. The Company's Current Reports on Form 8-K dated January 21, 1994 and February 7, 1994. 3. The description of the Common Stock, $5 Par Value, of the Company contained in a registration statement filed under Section 12 of the Exchange Act. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the Securities hereby shall be deemed to be incorporated by reference in this Prospectus and to be a part thereof from the date of filing of such documents. THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS AND EXHIBITS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS. Exhibits not specifically incorporated herein by reference will be furnished upon payment of 25 cents per page. Requests for such copies should be directed to Investor Relations, Long Island Lighting Company, 175 East Old Country Road, Hicksville, New York 11801, telephone number (516) 933-4914. 2 5 THE COMPANY The Company supplies electric and gas service in Nassau and Suffolk Counties and to the Rockaway Peninsula in Queens County, all on Long Island, New York. The principal executive offices of the Company are located at 175 East Old Country Road, Hicksville, New York 11801 and the general telephone number is (516) 755-6650. The Company's service territory covers an area of approximately 1,230 square miles. The population of the service area, according to the Company's 1993 estimate, is approximately 2.7 million persons, reflecting a .14% increase since the 1990 census. This is a larger population than in each of 20 of the 50 states and includes approximately 98,000 persons who reside in Queens County within the City of New York. The area served is predominantly residential, but the Company receives approximately one-half of its electric revenues from commercial and industrial customers. Although electronics and aerospace are the largest manufacturing industries in the area, about 88% of total employment is non-manufacturing. Industrialization is gradually increasing in Suffolk County which, with three times the land area, has only one-third the population density of Nassau County. The percentages of total revenues and operating income before income taxes derived from electric and gas operations for each of the last three years ended December 31 are shown in the following table:
Percentage of Percentage of Operating Total Revenue Income* ------------- ------ Electric Gas Electric Gas -------- --- -------- --- 1991 86 14 98 2 1992 84 16 92 8 1993 82 18 89 11
- ----------------- * Before income taxes. - ----------------- USE OF PROCEEDS Unless otherwise set forth in the applicable Prospectus Supplement, the Company plans to use the net proceeds from the sale of the Securities to refund high-cost, long-term debt or Preferred Stock, to satisfy maturing debt obligations, and to provide funds for working capital and for general corporate purposes. 3 6 RATIOS OF EARNINGS Ratio of Earnings to Fixed Charges The Company's ratios of earnings to fixed charges, including AFC and RMC (as defined below), for each of the last five years ended December 31 were as follows: Year Ended December 31,
1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- 1.87 1.90 1.93 1.98 *
For purposes of computing the ratio of earnings to fixed charges for rate-regulated public utilities, earnings represent principally net income before the deduction of fixed charges and federal income taxes. Fixed charges during the period include an interest factor and an amortization factor. The interest factor includes the interest charges on long-term and short-term debt and the portion of rentals deemed representative of the interest factor. The amortization factor includes the amortization of debt expenses and discounts or premiums related to any indebtedness. Generally, the decrease in the ratio of earnings to fixed charges since 1990 reflects many factors, including among others, decreases in the Company's net income which have resulted from a lower allowed rate of return on common equity and increases in total interest charges. - --------------- * For the year ended December 31, 1989, earnings were inadequate to cover fixed charges. To attain a one-to-one coverage, earnings were deficient by approximately $1.1 billion as a result of the Company having recorded in June 1989 the effects of two agreements: (1) an agreement among the Company and the State of New York entered into in 1989 (the "1989 Settlement") settling certain issues relating to the Company and providing, among other matters, for the transfer of the Shoreham Nuclear Power Station ("Shoreham") to the Long Island Power Authority, an entity of the State, and (2) an agreement among the Company, certain of its former officers and the class of ratepayers acting through counsel for the class entered into in 1989 (the "Class Settlement") settling a lawsuit brought against the Company under the federal Racketeer Influenced and Corrupt Organizations Act (the "RICO Act"). Had the Company computed the ratio of earnings to fixed charges without giving effect to the discontinuance of accruing Allowance for Funds used during Construction ("AFC") on Shoreham and the losses resulting from the 1989 Settlement and the Class Settlement, the resulting ratio would have been 1.85. - --------------- 4 7 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends The Company's ratio of earnings to combined fixed charges and Preferred Stock dividends, including AFC and RMC (as defined below), for each of the last five years ended December 31 were as follows:
Year Ended December 31, -------------------------------- 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- 1.61 1.59 1.60 1.64 *
For purposes of computing the ratio of earnings to combined fixed charges and Preferred Stock dividends for rate-regulated public utilities, earnings represent principally net income before the deduction of fixed charges and federal income taxes. Fixed charges during the period represent the portion of rentals deemed representative of the interest factor, the interest charges during the period on long-term and short-term debt and the amortization of debt expenses and discounts or premiums related to any indebtedness. Preferred Stock dividend requirements are computed by increasing Preferred Stock dividends by an amount representing the pre-tax earnings which would be required to cover such Preferred Stock dividend requirements. - --------------- * For the year ended December 31, 1989, earnings were inadequate to cover combined fixed charges and Preferred Stock dividends. To attain a one-to-one coverage, earnings were deficient by approximately $1.3 billion as a result of the Company having recorded in June 1989 the 1989 Settlement and the Class Settlement. Had the Company computed the ratio of earnings to combined fixed charges and Preferred Stock dividends without giving effect to the discontinuance of accruing AFC on Shoreham and the losses resulting from the 1989 Settlement and the Class Settlement, the resulting ratio would have been 1.42. - --------------- 5 8 Additional Information Concerning the Ratios of Earnings The Company's ratios of earnings reflect certain accounting and regulatory aspects of the utility industry and the Company's experience with Shoreham. Because of long-lead times in the construction of major capital projects, utility ratemaking and accounting practices provide for the recognition of AFC, a non-cash credit to income that represents the net cost of borrowed funds for construction purposes and a reasonable rate of return upon a utility's other funds when so used. The amount of AFC fluctuates from period to period with changes in the cost of money, the level of construction activity, the amount of construction work in progress included in rate base and modifications in regulatory policy and the effect of regulatory disallowances. AFC is traditionally recovered from customers over the service life of the project through revenues when the project is completed and included in rate base. Generally accepted accounting principles ("GAAP") recognize that a regulatory agency may take actions that create future economic benefits--the essence of an asset--known as a regulatory asset. In considering the rate relief to be granted to the Company upon the effectiveness of the 1989 Settlement, the Public Service Commission of the State of New York (the "PSC") created such a regulatory asset, the Financial Resource Asset (the "FRA"), to provide the Company with sufficient cash flows to assure its financial recovery. The FRA is embodied in the Rate Moderation Agreement (the "RMA") which is one of the constituent documents of the 1989 Settlement. The FRA consists of two components, the Base Financial Component (the "BFC") and the Rate Moderation Component (the "RMC"). The RMA provides that the Company amortize the BFC over a forty-year period beginning July 1, 1989 and permits a full return on the unamortized balance. The BFC, as initially established, represents the present value of the future net-after-tax cash flows which were provided to the Company for its financial recovery and are included in the Company's electric rates through an amortization over forty years on a straight-line basis. The RMC reflects the difference between the Company's revenue requirements under conventional ratemaking and revenues resulting from the implementation of the rate moderation plan provided in the RMA. This rate moderation plan is designed to hold electric rate increases to the levels provided for in the RMA, subject to adjustments provided therein. The Company's revenue requirements are those revenues needed to recover (i) the rate of return allowed by the PSC and (ii) all other elements of its allowed costs. 6 9 DESCRIPTION OF THE SECURITIES The Company will issue the Securities from time to time in one or more series either as General and Refunding Bonds (the "New Bonds"), as Debentures (the "New Debentures"), as Preferred Stock (the "New Preferred Stock") or as Common Stock, par value $5 per share (the "New Common Stock"). The following descriptions of the terms of such Securities set forth certain general terms and provisions. The particular terms of the Securities offered by any Prospectus Supplement (the "Offered Securities") will be described therein. The statements herein do not purport to be complete and are qualified in their entirety by express reference to the G&R Mortgage, the First Mortgage, the Debenture Indentures, and the Restated and Amended Certificate of Incorporation (the "Certificate of Incorporation") (each as defined below) and to the definitions therein of the terms used herein. Reference is made to the Prospectus Supplement relating to a particular series of Securities offered thereby for, among other things, the following terms or additional provisions of the Offered Securities: (1) the form of the Offered Securities; (2) the title of the Offered Securities; (3) any limit on the aggregate principal amount or number of shares of the Offered Securities; (4) the price (expressed as a percentage of the aggregate principal amount or price per share thereof) at which the Offered Securities will be offered; (5) if applicable, the date or dates on which the Offered Securities will mature; (6) if applicable, the rate or rates per annum at which the Offered Securities will bear interest; (7) if applicable, the date from which such interest on the Offered Securities will accrue, the dates on which such interest will be payable and the record dates of any interest payment dates; (8) if applicable, the date after which and the price or prices at which the Offered Securities may, pursuant to any redemption or sinking fund provisions, be redeemed by the Company and the other detailed terms of such redemptions; (9) if applicable, the dividend rate (or method of calculation thereof); (10) if applicable, the dividend payment dates and the date on which dividends will commence being paid and (11) any additional terms of the Offered Securities. Unless otherwise provided in a Prospectus Supplement relating thereto, application will be made to list the Securities on the New York Stock Exchange. Listing will be subject to meeting the requirements of the New York Stock Exchange, including those relating to distribution. General and Refunding Bonds New Bonds and the G&R Mortgage General: The New Bonds are to be issued under the General and Refunding Indenture, dated as of June 1, 1975, between the Company and United States Trust Company of New York, as Trustee (the "Trustee" or "G&R Trustee"), as heretofore supplemented and amended and as hereinafter to be further 7 10 supplemented in connection with the sale of each series of New Bonds (the "G&R Mortgage"). Chemical Bank is Authenticating Agent and Paying Agent for the New Bonds. All bonds (including the New Bonds) which may from time to time be issued and outstanding under the G&R Mortgage are herein referred to as "G&R Bonds." Form and Exchange: Unless otherwise provided in a Prospectus Supplement relating thereto, the New Bonds will be registered G&R Bonds, without coupons, issuable in denominations of $1,000 and any integral multiple thereof. The New Bonds may be exchanged for other New Bonds of the same series of different authorized denominations and may be transferred at Chemical Bank without charge to the holders thereof other than for applicable taxes or other governmental charges. Interest and Payment: Unless otherwise provided in a Prospectus Supplement relating thereto, checks for the payment of interest will be mailed to the registered holders. Principal is payable at the principal corporate trust office of Chemical Bank located at 450 West 33rd Street, New York, New York 10001. Redemption Provisions: The New Bonds may not be redeemed prior to the date set forth in the applicable Prospectus Supplement relating to a series of New Bonds, except as set forth below under the heading "Extraordinary Redemption." On or after such date, the New Bonds of such series may be redeemed, as a whole or in part, at any time or times, upon at least 30 days' notice, upon payment of the relevant percentage of the principal amount so redeemed set forth in the applicable Prospectus Supplement (1) under the heading "Special Redemption Price" in case of redemption from cash deposited pursuant to the provisions of the G&R Mortgage relating to either the Sinking and Improvement Fund or the Maintenance Fund as required in the G&R Mortgage and (2) under the heading "Regular Redemption Price" in case of any other redemption at the option of the Company, together, in each case, with interest accrued thereon to the redemption date. For information regarding the circumstances under which cash may be deposited pursuant to the provisions relating to the Sinking and Improvement Fund and the Maintenance Fund, see the discussion below under the headings "Sinking and Improvement Fund" and "Maintenance Fund," respectively. At the Company's election, any notice of redemption may provide that it is subject to the deposit of the required redemption funds with the Trustee before the date fixed for such redemption and will be of no effect if such deposit is not made. Extraordinary Redemption: The New Bonds may be redeemed at 100% of their principal amount, together with interest accrued thereon to the redemption date, upon at least 30 days' notice, as a whole, (i) at the Company's election within 120 days of the acquisition date if all of the Company's Common Stock is acquired by a governmental body or instrumentality, or (ii) at any time that all or substantially all of the Company's property is released from the lien of the G&R Mortgage. 8 11 Issuance of Additional G&R Bonds: The G&R Mortgage provides that, so long as the Company is not in default in the performance of any covenant to be performed by it under the G&R Mortgage and obtains all requisite authorizations of governmental bodies, it may issue additional G&R Bonds thereunder to the extent of any one or more of the following: (1) 60% of the Bondable Value of Property Additions ("BVPA"); (2) the amount of Refundable Prior Lien Bonds theretofore or then retired or deposited with the Trustee or the trustee under a Prior Lien (including bonds, other than Pledged Bonds, issued under the Company's Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, as supplemented and as to be further supplemented (the "First Mortgage")), as provided in the G&R Mortgage; (3) the amount of certain G&R Bonds theretofore or then retired or (4) the amount of cash deposited with the Trustee against the issuance of G&R Bonds. Currently, for the reasons set forth below, the Company is unable to issue G&R Bonds pursuant to (1) above. However, based upon Refundable Prior Lien Bonds and retired G&R Bonds available as a basis for issuance of New Bonds, as of December 31, 1993, the Company was able to issue approximately $707 million of additional G&R Bonds. Generally, when issuing G&R Bonds, the Company must satisfy a mortgage interest coverage requirement (the "G&R Mortgage Interest Coverage"). The G&R Mortgage Interest Coverage requires that the Net Earnings available for interest for any twelve consecutive calendar months within the fifteen consecutive calendar months preceding the issuance of the G&R Bonds be equal to at least two times the stated annual interest payable on the G&R Bonds to be outstanding and on Prior Lien Bonds (other than Pledged Bonds) to be outstanding. Based upon earnings for the year ended December 31, 1993 and after giving effect to the issuance of $707 million of New Bonds with an assumed interest rate of 9% per annum, but without giving effect to the redemption of any series of G&R Bonds or First Mortgage Bonds with the proceeds of the New Bonds, the G&R Mortgage Interest Coverage would be 4.90. The Company is unable at this time to issue additional G&R Bonds pursuant to (1) above. When Property Additions are to be used as a basis for the issuance of G&R Bonds, the G&R Mortgage requires recognition of any depreciation, retirement or adjustment, such as the write-downs made pursuant to the Financial Accounting Standards Board Statement of Financial Accounting Standards ("SFAS") No. 90, Regulated Enterprises-Accounting for Abandonments and Disallowances of Plant Costs and the retirement of Shoreham following the effectiveness of the 1989 Settlement. Although the Company has had Property Additions since the effectiveness of the 1989 Settlement and expects to continue to do so in the future, the write-downs associated with SFAS No. 90, retirements and other adjustments in 1988 and the retirement of Shoreham in 1989 resulted in a "deficit" in the BVPA which, at December 31, 1993, was $202 million. The existence of this deficit precludes the issuance of any G&R Bonds on the basis of Property Additions at this time. However, the deficit is expected to be eliminated by the end of 1994 allowing the Company to issue G&R Bonds again on the basis of Property Additions beginning in 1995. There are no other restrictions on the Company's ability to issue G&R Bonds on the basis of Property Additions. 9 12 Security and Priority: The New Bonds are to be secured together with all other G&R Bonds, whenever issued, by a lien on substantially all of the Company's property. Excluded from the lien of the G&R Mortgage are cash, securities, contracts, accounts receivable, property owned by the Company located outside the State of New York, products held for sale in the ordinary course of business and all fuel (including nuclear fuel), materials and supplies and other personal property which are consumable (otherwise than by ordinary wear and tear) in their use in the operation of the plants of the Company (unless and until such excepted property is expressly subjected by the Company to the lien of the G&R Mortgage). The lien of the G&R Mortgage is subject to Excepted Encumbrances (including the lien of the First Mortgage) and certain minor restrictions. The G&R Mortgage contains provisions subjecting after-acquired property to the lien thereof (subject to pre-existing liens) except in the case of a consolidation or merger in connection with which arrangements are made whereby no additional G&R Bonds are to be issued other than for refunding purposes. The lien of the G&R Mortgage, which is currently subordinate to the lien of the First Mortgage, will become the Company's most senior mortgage lien upon the Company's properties in 1997, the year in which the last of the currently outstanding bonds under the First Mortgage ("First Mortgage Bonds") matures. As of December 31, 1993, there were $1.7 billion of G&R Bonds outstanding under the G&R Mortgage. The aggregate principal amount of First Mortgage Bonds outstanding at December 31, 1993, exclusive of Pledged Bonds, was $125 million maturing at various dates through 1997. At December 31, 1993, the G&R Trustee held $1.0 billion of Pledged Bonds. Pledged Bonds are First Mortgage Bonds which have been deposited with the Trustee under the G&R Mortgage as additional security for the payment of the obligations represented by the G&R Bonds. In connection with the issuance of the New Bonds, the Company expects to issue, concurrently with the New Bonds, additional Pledged Bonds. No other material Prior Liens exist at present. As the bonds currently outstanding under the First Mortgage mature or are redeemed, such bonds will represent a decreasing share of the security afforded by the lien of the First Mortgage and to the extent that such bonds mature or are redeemed or additional Pledged Bonds are issued, the Pledged Bonds will represent an increasing share of the lien of the First Mortgage. When all outstanding bonds issued under the First Mortgage (other than the Pledged Bonds) have been purchased, redeemed or have matured, the Pledged Bonds will be surrendered and the First Mortgage discharged. Highly Leveraged Transaction Protection: The provisions in the G&R Mortgage affording debt holders some protection in the event of a highly leveraged transaction are those described under this heading and under the headings "New Bonds and the G&R Mortgage -- Redemption Provisions," "Issuance of Additional G&R Bonds" and "Security and Priority." In addition, in New York State, the issuance of most debt securities, the acquisition by another corporation of significant percentages of the corporate stock of a utility company and generally the repurchase of a utility company's securities by that company require the approval of the PSC. 10 13 The G&R Mortgage provides that no merger or acquisition and no transfer of all or substantially all of the Company's properties shall impair the lien and security of the G&R Mortgage. The G&R Mortgage requires any successor to the Company to expressly assume the obligations to the holders of G&R Bonds. The provisions protecting the holders of G&R Bonds may be waived only by those holders that are adversely affected. The percentage of any vote required to carry any direction, waiver or consent depends upon the issue being voted on. No proposal can be adopted with the vote of less than a majority of the aggregate principal amount of outstanding G&R Bonds. Pledged Bonds: The Company has agreed (except as indicated below) that so long as any of the bonds now outstanding under the First Mortgage remain outstanding, whenever it issues G&R Bonds (or withdraws, on the basis of Property Additions, cash deposited with the Trustee which was the basis for the authentication and delivery of G&R Bonds), it will also (to the extent permitted by the terms of the First Mortgage, other than on the basis of the deposit of cash, and applicable law and regulations) issue to and deposit or pledge with the Trustee additional bonds under the First Mortgage to be held as additional security for the G&R Bonds. Other than these Pledged Bonds, the Company will not issue any additional bonds under the First Mortgage. Such Pledged Bonds will be issued in a principal amount as near as may be equal to, to the nearest $1,000,000 but not in excess of, the principal amount of G&R Bonds then outstanding and then to be issued, less the principal amount of Pledged Bonds then held by the Trustee. Except during the continuance of a Completed Default hereafter described, no payment by way of principal, interest or otherwise shall be made on any of the Pledged Bonds, and at their respective maturities they are to be canceled. The G&R Mortgage provides that the Pledged Bonds may not be sold by the Trustee. The Trustee may exercise, in its absolute discretion without the consent of the Company, any and all rights of a bondholder with respect to the Pledged Bonds then held by the Trustee and participate in any bondholder proceedings relating to the First Mortgage. All of the holders of the G&R Bonds share, equally and ratably, in the benefits of the lien of the First Mortgage resulting from the issuance and deposit of all Pledged Bonds. The total principal amount of such Pledged Bonds will vary from time to time, depending principally upon the ability of the Company to meet the tests for issuance of additional bonds under the First Mortgage. Accordingly, the interest of the holders of G&R Bonds in the lien of the First Mortgage through the Pledged Bonds may increase or decrease with each new issue of G&R Bonds. The deposit of Pledged Bonds with the Trustee as described above does not increase the total amount of property in which holders of G&R Bonds have a direct or indirect security interest since the G&R Mortgage constitutes a junior lien on substantially the same property that is subject to the first lien of the First Mortgage. The principal benefit to holders of G&R Bonds provided by the Pledged Bonds is that the Pledged Bonds will provide such holders a means of participating indirectly in the lien of the First Mortgage. If, for example, in the event of a reorganization or insolvency, values allocated to the 11 14 holders of bonds under both Mortgages were less than the principal amount of and interest on bonds then outstanding under the First Mortgage, including the Pledged Bonds, then the allocation to the holders of G&R Bonds would be increased by reason of their participation with all other First Mortgage Bonds through the Pledged Bonds, pari passu, in the lien of the First Mortgage. Pledged Bonds issued and held by the G&R Trustee currently represent 89% of all First Mortgage Bonds, including Pledged Bonds. The issuance of Pledged Bonds in connection with the issuance of G&R Bonds is largely dependent upon the availability of Property Additions and the use of available Property Additions and retired First Mortgage Bonds to satisfy the Depreciation Fund and Sinking Fund requirements under the First Mortgage. For information respecting the amount of Pledged Bonds which the Company is currently able to issue, see the discussion below under the heading "Pledged Bonds and the First Mortgage -- Issuance of Pledged Bonds." Sinking and Improvement Fund: The G&R Mortgage requires the Company to make annual Sinking Fund deposits on or before June 30 of each year. The amount to be deposited is to be equal to 1% of the principal amount of any G&R Bonds issued thereunder (except G&R Bonds issued against retired G&R Bonds, G&R Bonds retired with certain cash held by the Trustee and G&R Bonds issued to secure other indebtedness) and of outstanding bonds (other than Pledged Bonds) issued under the First Mortgage, in each case as of December 31 of the prior year. Deposits are to be made in cash, reduced by credits elected by the Company for (i) 60% of the BVPA, (ii) the principal amount of Refundable Prior Lien Bonds and certain G&R Bonds previously issued and retired and (iii) cash previously or concurrently deposited with the Trustee under the First Mortgage pursuant to its Sinking Fund provisions and not withdrawn. Cash deposited under the G&R Mortgage pursuant to this requirement may, during the next succeeding three years, be withdrawn upon the same basis that a credit may be taken as set forth in (i) and (ii) above, or may be applied to the payment, purchase or redemption of G&R Bonds, including G&R Bonds subject to a mandatory Retirement Fund. The 1993 Sinking Fund requirement, due on or before June 30, 1994, is expected to be approximately $24 million. Sinking Fund cash amounting to $100,000 or more which has been held by the Trustee for more than three years must be applied to the retirement of G&R Bonds. Whenever cash held by the Trustee in the Sinking Fund is used by the Trustee to purchase G&R Bonds and such G&R Bonds are purchased at less than the principal amount thereof, an amount equal to the discount is to be paid to the Company. Maintenance Fund: The Maintenance Fund covenant under the G&R Mortgage requires that the aggregate amount of Property Additions added subsequent to December 31, 1974 must be, as of the end of each calendar year subsequent to 1974, at least equal to the cumulative Provision for Depreciation (as defined in the G&R Mortgage) from December 31, 1974. The Company is required to satisfy Maintenance Fund obligations through the deposit of cash or, in lieu of such deposit, through certification of retired G&R Bonds or retired First Mortgage Bonds, if Property Additions cumulative from December 31, 1974 do not 12 15 equal or exceed the cumulative Provision for Depreciation. Currently, such cumulative Property Additions exceed the cumulative Provision for Depreciation. As of December 31, 1993, the amount of such cumulative Property Additions calculated pursuant to the G&R Mortgage was approximately $9.4 billion, including approximately $5.5 billion of Property Additions attributable to Shoreham. Also, as of December 31, 1993, the amount of the cumulative Provision for Depreciation, similarly calculated, was approximately $1.4 billion. The Company anticipates that the aggregate amount of cumulative Property Additions will continue to exceed the cumulative Provision for Depreciation and therefore deposits of cash or certifications of retired G&R Bonds or retired First Mortgage Bonds will not be required to satisfy the requirements of the Maintenance Fund. Modification or Amendment of the G&R Mortgage: The rights of the bondholders may be modified with the consent of the holders of 66-2/3% of the principal amount of the G&R Bonds of all series affected. Notwithstanding the foregoing, no modification is effective against any bondholder without his consent if such modification would (a) alter the terms of payment of principal, premium, if any, or of interest, (b) permit creation of additional prior or parity liens other than Excepted Encumbrances, (c) reduce the percentage of the principal amount of G&R Bonds required for modification or (d) reduce materially the bondholders' security by depriving them in any respect of the lien of the G&R Mortgage. Default and Notice Thereof: Completed Defaults include (a) default in the payment of principal of and premium, if any, on any of the G&R Bonds, (b) default for 30 days in payment of interest on any of the G&R Bonds, (c) default in the payment of principal or interest continued beyond the period of grace on any Prior Lien Bonds (except Pledged Bonds), (d) default under the First Mortgage continued beyond the period of grace specified therein, (e) bankruptcy, insolvency or reorganization (under certain circumstances) of the Company, (f) default in the performance of the covenant with respect to merger or consolidation and (g) default, for 60 days after notice, in the performance of any other covenant, agreement or condition in the G&R Mortgage. The holders of 10% or more in principal amount of the outstanding G&R Bonds may give notice of certain defaults. Holders of not less than 25% in principal amount of outstanding G&R Bonds or the Trustee may declare the principal of and accrued interest on all outstanding G&R Bonds due upon the occurrence of a Completed Default. Under certain circumstances, including the curing of such Completed Default, the holders of a majority in principal amount of the outstanding G&R Bonds may annul any such declaration. Holders of not less than a majority in principal amount of G&R Bonds may direct the Trustee as to the time, method and place of enforcing the lien of the G&R Mortgage, but the Trustee may decline to follow such direction should its responsible officers determine that the directed action would involve the Trustee in personal liability or would be unjustly prejudicial to the rights of non-assenting holders of G&R Bonds. 13 16 The Trustee may require reasonable indemnification before being required to enforce the lien of the G&R Mortgage. Evidence as to Compliance with the Mortgage Provisions: On or before June 30 of each year, certificates of Company Officers are required to be furnished to the Trustee with respect to the BVPA and the absence of defaults under the G&R Mortgage. Pledged Bonds and the First Mortgag General: The G&R Mortgage prohibits the issuance of additional bonds under the First Mortgage except as Pledged Bonds. Upon the maturity on April 1, 1997 of the last series of non-pledged First Mortgage Bonds, the Company will be able to remove the First Mortgage as a lien upon its properties and will no longer be required to issue First Mortgage Bonds as Pledged Bonds. Until that time, however, the Company anticipates that it will issue additional Pledged Bonds concurrently with the issuance of each series of the New Bonds. For a description of the circumstances under which additional Pledged Bonds of the same and other series of First Mortgage Bonds are required to be issued and a description of the new Pledged Bonds, see the discussion under the heading "New Bonds and the G&R Mortgage -- Pledged Bonds" above and "Interest and Payment" and "Issuance of Pledged Bonds" below, respectively. IBJ Schroder Bank & Trust Company is the trustee under the First Mortgage. Citibank, N.A. ("Citibank") is Paying Agent and Authenticating Agent of the First Mortgage Bonds (including the Pledged Bonds). Citibank, in addition, provides the Company with depository and other normal banking services (including participation in the Company's bank credit facilities). The statements herein concerning the First Mortgage, and the bonds issued thereunder, do not purport to be complete and are qualified in their entirety by express reference to the First Mortgage and to the definitions therein of the terms used herein. The particular terms of the Pledged Bonds issued concurrently with the issuance of the New Bonds will be described in the Prospectus Supplement relating to such Bonds. Interest and Payment: In connection with the issuance of each series of New Bonds, the Company will, as required by the G&R Mortgage and to the extent permitted by the First Mortgage, issue First Mortgage Bonds to be pledged with the G&R Trustee. See the discussion under the heading "New Bonds and the G&R Mortgage -- Pledged Bonds." The Pledged Bonds, to be issued pursuant to a supplemental indenture to the First Mortgage, will mature on the date set forth in an applicable Prospectus Supplement and will bear interest at the rate shown in their title until maturity. At a later date, the Company may issue and pledge additional First Mortgage Bonds up to a principal amount equal to the principal amount of G&R Bonds then outstanding. In the event of default, the Pledged Bonds will bear interest at the rate of 6% per annum thereafter. However, the G&R Mortgage 14 17 provides that, except during the continuance of a Completed Default under the G&R Mortgage, no payment by way of interest, principal or otherwise shall be demanded or received on any Pledged Bonds. Issuance of Pledged Bonds: Pledged Bonds may be issued (1) on the basis of and in an amount up to 60% of Net Bondable Additions or (2) on the basis of and in the amount of retired First Mortgage Bonds (initially issued on the basis of Property Additions) only if Gross Income for twelve consecutive months within the preceding fifteen months equals at least two times annual interest charges on all bonds to be outstanding under the First Mortgage and all prior lien obligations (the "First Mortgage Interest Coverage"). In this calculation, the stated interest rate on Pledged Bonds is included even though no interest is payable thereon except during the continuance of a Completed Default under the G&R Mortgage. Gross Income is the sum of Utility Operating Income and Other Income. Utility Operating Income is equal to the Company's gross operating revenues less related expenses and deductions, taxes other than income taxes and Minimum Depreciation. Minimum Depreciation is the greater of (a) the amount actually charged on the Company's books as a utility operating revenue deduction for the preceding calendar year for depreciation, depletion, obsolescence, retirements and amortization of the Company's Utility Plant ("Book Depreciation") or (b) an amount equal to (i) 15% of gross operating revenues (less the cost of electricity and gas purchased for resale) from Utility Plant for such year less (ii) the amount actually expended for maintenance of Utility Plant used during such year ("Revenue Depreciation"). Other Income is equal to the Company's gross non-operating revenues less related expenses and deductions, up to an amount not to exceed 5% of Utility Operating Income. Based upon earnings for the year ended December 31, 1993, and after giving effect to the Depreciation Fund and Sinking Fund requirements under the First Mortgage, the Company will be able to issue concurrently with the issuance of New Bonds approximately $234 million of Pledged Bonds with an assumed average interest rate of 9% per annum. However, the maximum amount of First Mortgage Bonds that the Company will be able to issue as Pledged Bonds concurrently with the New Bonds will depend upon the amount of Net Bondable Additions and the amount of retired First Mortgage Bonds then available. Depreciation Fund: The Depreciation Fund covenant of the First Mortgage requires that the Company pay to the Trustee under the First Mortgage, by June 30 of each year, cash (which may be withdrawn up to the amount of Gross Bondable Additions and First Mortgage Bonds made the basis for such withdrawal) equal to Minimum Depreciation which is described above. Since the oil crisis of the 1970s, Revenue Depreciation in each year has been greater than Book Depreciation for such year. Under the First Mortgage, the Company may satisfy this requirement with cash or through the delivery of First Mortgage Bonds or through the certification of retired First Mortgage Bonds or Gross Bondable Additions. Prior to the issuance in 1994 of any New Bonds, the Company intends to satisfy the 1993 Depreciation Fund requirement with unused 15 18 Property Additions and retired First Mortgage Bonds. The 1993 Depreciation Fund requirement, due on or before June 30, 1994, is approximately $216 million. Assuming the Company's expenditures for capital improvements are approximately $250 million annually, the Company expects that it will have sufficient Property Additions and sufficient retired First Mortgage Bonds, including Pledged Bonds, in 1995 and 1996, to satisfy the remaining annual Depreciation Fund requirements under the First Mortgage. If the Company is required to deposit any cash on any June 30 to satisfy in part or in full the Depreciation Fund or Sinking Fund requirements of the First Mortgage, the Company expects that it will be able to withdraw all or substantially all of such cash on the basis of Net Bondable Additions or retired First Mortgage Bonds. Sinking Fund: The First Mortgage requires the Company to pay the Trustee under the First Mortgage, by June 30 of each year, cash equal to 1% of all previously issued First Mortgage Bonds (excluding bonds issued on the basis of retired bonds). The 1993 Sinking Fund requirement due on or before June 30, 1994 is estimated to be $18 million. The annual Sinking Fund requirement will increase upon the issuance of additional First Mortgage Bonds as Pledged Bonds concurrently with the issuance of New Bonds. Thereafter, the annual Sinking Fund requirement is not expected to change unless, when additional G&R Bonds are issued, additional First Mortgage Bonds to be pledged are issued on the basis of Net Bondable Additions. The Company expects that it will be able to satisfy the remaining annual Sinking Fund requirements from its available Property Additions and with retired First Mortgage Bonds which become available through scheduled maturities. Security and Priority: Bonds (including Pledged Bonds) issued or to be issued under the First Mortgage are and will be secured by a direct first lien on substantially all of the Company's properties (except cash, contracts, accounts receivable and products held for sale or consumable in the ordinary course of business), subject to Permitted Encumbrances and certain minor restrictions. The First Mortgage contains provisions subjecting after-acquired property (subject to pre-existing liens) to the lien thereof. There are no securities or debt of senior rank (except those secured by Permitted Encumbrances) and none of equal rank except bonds of other series outstanding under the First Mortgage. Defaults and Notice Thereof: Events of Default include default in the payment of principal or satisfaction of any Sinking Fund obligation, default for 30 days in payment of interest, default in performance of certain specified covenants, default for 30 days after notice in performance of any other covenant and certain events in bankruptcy, insolvency or reorganization. The Trustee is required to give bondholders notice of defaults known to it within 90 days of the occurrence thereof, unless remedied before the giving of such notice. The Trustee may withhold notice to bondholders of default (except in payment of principal, interest or sinking or depreciation fund 16 19 obligations) if its responsible Officers think it in the interest of the bondholders. The holders of 25% in amount of the Bonds or the Trustee may accelerate maturity upon an Event of Default, and the holders of 10% in amount of the Bonds may give notice of certain defaults. The holders of not less than 66-2/3% in principal amount of all Bonds of all series then outstanding (excluding Bonds disqualified from participating) may on behalf of the holders of all such Bonds waive any past default under the First Mortgage and its consequences, except a default in the payment of the principal of, or premium or interest on, any of the Bonds as and when the same shall become due by the terms of such Bonds or upon a call for redemption. The holders of a majority in amount of the Bonds may require the Trustee to proceed to enforce the Mortgage and, with certain exceptions, may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee. The Company is required to file annually with the Trustee a certificate as to existence or nonexistence of defaults and as to compliance with certain terms of the Mortgage. Debentures New Debentures and the Debenture Indenture General: The New Debentures are to be issued either under the Indenture, dated as of November 1, 1986, between the Company and The Connecticut Bank and Trust Company, National Association, (predecessor in interest to State Street Bank and Trust Company), as Trustee, as supplemented, or under the Indenture, dated as of November 1, 1992, between the Company and Chemical Bank, as Trustee, as supplemented. Both indentures are herein referred to individually or collectively, as the case may be, as the "Debenture Indenture." Likewise, State Street Bank and Trust Company and Chemical Bank are herein referred to individually or collectively, as the case may be, as the "Trustee." All debentures, including the New Debentures, which may from time to time be issued and outstanding under the Debenture Indenture are herein sometimes referred to as "Debentures." The Debenture Indenture does not limit the amount of Debentures which may be issued thereunder and provides that Debentures may be issued thereunder up to the aggregate principal amount which may be authorized from time to time. The New Debentures may be issued from time to time in one or more series. The New Debentures will be unsecured obligations of the Company and will rank on a parity with all other unsecured and unsubordinated indebtedness of the Company. The New Debentures will be subordinate to the indebtedness outstanding under the Company's two mortgages, each of which is a lien on substantially all of the Company's properties, and to the indebtedness under the Company's Revolving Credit Agreement, dated as of June 27, 1989, as amended (the "1989 Credit Agreement"), which is secured by a first lien on the Company's accounts receivable and fuel oil inventory. 17 20 The Company's senior mortgage is its First Mortgage. The lien of the G&R Mortgage is subordinate to the lien of the First Mortgage. For a description of the G&R Mortgage and the First Mortgage, see the discussion above under the headings "New Bonds and the G&R Mortgage -- Security and Priority" and "Pledged Bonds and the First Mortgage -- Security and Priority." G&R Bonds are currently the only debt senior to the New Debentures which the Company may issue. See "New Bonds and the G&R Mortgage -- Issuance of Additional G&R Bonds." In addition, the Company currently has outstanding $3.7 billion of unsecured debt (including $2.9 billion of Debentures, and $817 million of Electric Facilities Revenue Bonds, Pollution Control Revenue Bonds and Industrial Development Revenue Bonds) with which all of the Company's debentures, including the New Debentures, rank pari passu. Form and Exchange: Unless otherwise provided in a Prospectus Supplement relating thereto, the New Debentures will be issued only in fully registered form, without coupons, in denominations of $1,000 and any integral multiple thereof. The New Debentures may be presented for exchange or transfer at the corporate trust office of the Trustee. No service charge will be made for any transfer or exchange of the New Debentures, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Interest and Payment: Unless otherwise provided in a Prospectus Supplement relating thereto, checks for the payment of interest will be mailed to the registered holders. Principal and premium, if any, will be payable at the principal corporate trust office of the Trustee. Modification of the Debenture Indenture: The Debenture Indenture and the rights of the holders may be modified or amended by the Company with the consent of the holders of not less than 66-2/3% in principal amount of Outstanding Debentures of all series affected by the modification (voting as a class). Notwithstanding the foregoing, no modification or amendment altering the terms of payment of principal, premium, if any, or interest, changing the place or medium of payment of principal, premium, if any, or interest, impairing the rights of holders to institute suit for payment or reducing the percentage required for certain modifications or waivers will be effective against any holder without his consent. Under certain circumstances, the Debenture Indenture may be modified without the consent of the holders. Merger and Consolidation: The Debenture Indenture provides that the Company may, without the consent of the holders of Debentures, consolidate with or merge into any other corporation or convey, transfer or lease its assets substantially as an entirety to any person, permit any person to consolidate with or merge into the Company or acquire or lease the assets of any person substantially as an entirety, provided that (i) the successor corporation (if not the Company) shall be a domestic corporation and shall assume by a supplemental indenture the Company's obligations under the Debenture Indenture, (ii) immediately after giving effect to the transaction, 18 21 no Event of Default (as defined below), and no event which, after notice or lapse of time or both, would become an Event of Default shall have occurred and be continuing and (iii) certain other conditions shall have been met. Upon compliance with these provisions by a successor corporation, except in the case of a lease, the Company will be relieved of its obligations under the Debenture Indenture. Highly Leveraged Transaction Protection: Unless otherwise indicated in a Prospectus Supplement, certain of the covenants described herein would not necessarily afford debt holders protection in the event of a highly leveraged transaction involving the Company. However, in New York State, the issuance of most debt securities, the acquisition by another corporation of significant percentages of the corporate stock of a utility company and generally the repurchase of a utility company's securities by that company require the approval of the PSC. Events of Default: The Debenture Indenture defines an Event of Default with respect to the Debentures of any series as being any one of the following events: (a) default for 30 days in any payment of interest on that series when due, (b) default in any payment of principal (or premium, if any) on that series when due, (c) default in any payment of any sinking fund installment on that series when due, (d) default for 60 days after the appropriate notice in the performance of any other covenant in the Debentures of that series or in the Debenture Indenture (other than a covenant included in the Debenture Indenture solely for the benefit of any series of Debentures other than that series), (e) default under any indebtedness for money borrowed by the Company resulting in such indebtedness becoming due prior to maturity, without such acceleration having been rescinded within 10 days after due notice of such default as provided in the Debenture Indenture, (f) certain events in bankruptcy, insolvency or reorganization of the Company or (g) any other Event of Default provided with respect to Debentures of such series. In case an Event of Default shall occur and be continuing with respect to the Debentures of any series, the Trustee or the holders of not less than 25% in aggregate principal amount of the Debentures then outstanding of that series may declare the principal of the Debentures of such series (or, if the Debentures of that series were issued as discounted Debentures, such portion of the principal as may be specified in the terms of that series) to be due and payable. Any Event of Default with respect to the Debentures of any series which has been cured may be waived by the holders of a majority in aggregate principal amount of the Debentures of that series then outstanding. The Debenture Indenture requires the Company to file annually with the Trustee a written statement signed by an Officer of the Company as to compliance with all conditions and covenants under the Debenture Indenture. The Debenture Indenture provides that the Trustee may withhold notice to the holders of any default (except in payment of principal or premium, if any, or interest or in payment of any sinking fund installment) if it considers it in the interest of the holders to do so. 19 22 Subject to the provisions of the Debenture Indenture relating to the duties of the Trustee in case an Event of Default shall occur and be continuing, the Debenture Indenture provides that the Trustee shall be under no obligation to exercise any of its rights or powers under the Debenture Indenture at the request, order or direction of holders unless such holders shall have offered to the Trustee reasonable indemnity. Subject to such provisions for indemnification and certain other rights of the Trustee, the Debenture Indenture provides that the holders of a majority in principal amount of the Debentures of any series then outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. Defeasance Provisions: If, among other things, the Company deposits irrevocably with the Trustee, in trust specifically for the benefit of the holders of Debentures of a particular series, money and/or U.S. Governmental Obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient to pay (a) all of the principal of, premium, if any, and interest on the Debentures of such series on the dates such payments are due in accordance with the terms of such Debentures through their maturity or earlier redemption date and upon satisfaction of certain other conditions set forth in the Debenture Indenture, and (b) any mandatory sinking fund payments applicable to the Debentures of such series on the day on which such payments are due and payable in accordance with the terms of the Debenture Indenture and of the Debentures of such series; at the Company's option, either: (i) the Company will be discharged from any and all obligations in respect of such series of Debentures or (ii) the Company will cease to be under any obligation to comply with certain restrictive covenants contained in the Debenture Indenture. To exercise any such option, the Company is required to meet certain conditions, including delivering to the Trustee an opinion of counsel to the effect that the Company has received from or there has been published by the Internal Revenue Service a ruling to the effect that the deposit and related defeasance would not cause the holders of the Debentures to recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge. If the Company elects to defease a series of Debentures pursuant to its option (i) described above, it is possible that holders would be required for federal income tax purposes to treat the defeasance as a taxable exchange of that series of Debentures for interests in the trust, notwithstanding the opinion of counsel. In that event, (1) a holder would recognize gain or loss upon the defeasance in an amount equal to the difference between the holder's tax basis for the holder's defeased Debentures and the value of the holder's interest in the trust and (2) the trust should be treated as a trust for federal income tax purposes, in which case each holder would report its proportionate share of the income, gains, deductions and losses of the trust. Purchasers of the New Debentures should consult their own advisers with 20 23 respect to the tax consequences to them of such deposit and discharge, including the applicability and effect of tax laws of taxing jurisdictions other than the United States Government. Relationship with Trustee: Chemical Bank, or its affiliates, is a potential lender under the Company's Revolving Credit Agreement and participates on a regular basis in various general financing and banking transactions for the Company. Equity Securities For the year 1992, the Company reported to its shareowners that 100% of Common Stock dividends and 100% of Preferred Stock dividends were to be treated as a return of capital rather than ordinary income. However, for the year 1993 the Company reported to its shareowners that 100% of Common Stock dividends and 100% of Preferred Stock dividends were to be treated as ordinary income rather than return of capital. Whether or not any portion of the dividends, if any, in future years will constitute a return of capital or taxable gain and, therefore, not be treated as ordinary dividend income is dependent upon the current and accumulated earnings and profits of the Company and the shareowner's tax basis for his shares. Whether the Company has current or accumulated earnings and profits will depend upon a number of factors including, but not limited to, the net operating loss carryforward, future rate relief, the resultant earnings of the Company, the size of the Company's construction program and changes in income tax laws. Furthermore, earnings and profits are attributable to Preferred Stock dividends before they are attributable to Common Stock dividends. The calculation to determine the amount of dividends considered a return of capital is subject to audit by the Internal Revenue Service. Preferred Stock General: The Company is authorized to issue 7,000,000 shares of $100 Par Value Preferred Stock and 30,000,000 shares of $25 Par Value Preferred Stock, issuable in series, each with such serial designation, dividend rate, redemption prices, sinking fund provisions and conversion privileges as the Board of Directors may by resolution fix and determine prior to issuance of a particular series. At December 31, 1993, 1,515,375 shares of $100 Par Value Preferred Stock were issued and outstanding. At that date, 22,658,000 shares of $25 Par Value Preferred Stock were issued and outstanding. Any shares of Preferred Stock that are redeemed, converted or otherwise acquired by the Company, including shares of Preferred Stock redeemed with the proceeds of the New Preferred Stock and shares of Preferred Stock held as treasury shares that will be used to satisfy the requirements of sinking funds, may be restored to the status of authorized but unissued shares. The New Preferred Stock will be fully paid and nonassessable and will have no preemptive rights. Each series of the New Preferred Stock will rank on a parity with each other series of Preferred Stock as to receipt of 21 24 dividends and liquidating distributions. The rights of the holders of each series of New Preferred Stock will be subordinate to those of the Company's general creditors. Issuance of Additional Preferred Stock: The Certificate of Incorporation provides that the Company may issue Preferred Stock if, for any twelve consecutive calendar months within the fifteen calendar months immediately preceding the calendar month within which such additional shares are to be issued, the net earnings of the Company available for the payment of interest charges on its interest-bearing debt, determined after provision for depreciation and all taxes and in accordance with sound accounting practice, shall have been at least 1.5 times the aggregate of the annual interest charges on the interest-bearing debt of the Company and annual dividend requirements on all shares of, or ranking on a parity with, Preferred Stock to be outstanding immediately after the proposed issue of such shares of, or ranking on a parity with, the Preferred Stock (the "Earnings Ratio"). When interest-bearing indebtedness or shares of Preferred Stock are to be retired with the proceeds of a new series of Preferred Stock, there shall be excluded from the computation of the Earnings Ratio the interest charges on such interest-bearing indebtedness and the annual dividend requirements on such shares of Preferred Stock. Currently, the Company cannot meet the Earning Ratio and therefore is unable to issue any Preferred Stock at this time except as indicated in the following two sentences. When the Earnings Ratio cannot be met, the Certificate of Incorporation permits Preferred Stock to be issued in connection with the purchase, redemption or other acquisition of outstanding Preferred Stock if the aggregate annual dividend requirement and the aggregate amount payable in a voluntary liquidation of the Preferred Stock to be issued do not exceed the respective amounts for the Preferred Stock which is to be purchased, redeemed or otherwise acquired. Preferred Stock may also be issued beyond amounts permitted under the Earnings Ratio with the approval of at least two-thirds of the votes entitled to be cast by the holders of the total number of shares of outstanding Preferred Stock. Dividend Rights: The Company's ability to pay dividends on its Preferred Stock is dependent upon, among other factors, action by the Company's Board of Directors, the Company's financial condition, its ability to comply with provisions of the Certificate of Incorporation and the availability of retained earnings, future earnings and cash. Dividends on each series of the New Preferred Stock will be payable quarterly at the annual rate set forth in their title, accruing from the date of original issue, on the dates set forth in the Prospectus Supplement relating to such series of New Preferred Stock. Dividends on the shares of all series of Preferred Stock are cumulative, payable in cash, when and if declared by the Board of Directors out of funds legally available therefor, in preference to dividends on the Common Stock or any other stock ranking junior to the Preferred Stock. If stated dividends are not paid in full, the shares of all series of Preferred Stock share ratably in the payment of dividends. The Company's First Mortgage restricts dividends and other distributions on, and certain purchases and redemptions of, capital stock to an amount no greater than Net Income (as defined therein) since June 30, 1950. 22 25 Conversion Rights: The New Preferred Stock will not have any conversion rights. The only outstanding series of Preferred Stock which has conversion rights is the Series I Convertible Preferred Stock. Liquidation Rights: Unless otherwise set forth in the applicable Prospectus Supplement, upon voluntary dissolution, liquidation or winding up of the Company, the holders of the New Preferred Stock are entitled to receive an amount equal to the applicable optional redemption price of each share plus accrued dividends. Upon involuntary dissolution, liquidation or winding up of the Company, the holders of the New Preferred Stock are entitled to receive an amount equal to the par value of each share plus accrued dividends, in either case in preference to any stock ranking junior to it. If amounts payable on either voluntary or involuntary liquidation are not paid in full, the shares of all series of Preferred Stock share ratably in any distribution of assets. Optional Redemption: Unless otherwise set forth in the applicable Prospectus Supplement, the New Preferred Stock will be redeemable at the optional redemption price or prices and on the date or dates set forth in the applicable Prospectus Supplement, plus, in each case, accrued dividends to the date of redemption, on not less than 30 nor more than 60 days' notice. If less than all of the shares of any series of the New Preferred Stock are to be redeemed, the shares to be redeemed shall be selected pro rata among the holders thereof or by lot, as determined by the Company's Board of Directors. At the option of the Company, the Preferred Stock of all currently outstanding series may be redeemed or refunded at any time, in whole or in part (except that the Series L, R, AA, CC, GG, NN, QQ and UU Preferred Stock are subject to certain restrictions regarding redemption). The Certificate of Incorporation and existing law do not restrict the redemption or purchase of Preferred Stock by reason of any default in dividends, except for the provisions mentioned above requiring ratable dividend and liquidation payments on Preferred Stock, and except that no partial redemption of Series L, R, NN and UU Preferred Stock may be made unless full cumulative dividends on such series of Preferred Stock have been paid or declared and set apart for payment. Restrictions on Payments on Junior Stock and Sinking Fund Payments on Other Stock: The Company may not declare or pay any dividend on, or make any other payment or distribution in respect of, the Company's Common Stock or any other stock ranking junior to the Preferred Stock, unless full cumulative required sinking fund redemptions of the Preferred Stock have been made. No redemptions or purchases of shares of any other series of Preferred Stock or other shares ranking on a parity with the New Preferred Stock may be made pursuant to any sinking or analogous fund requirement if any required redemption of the New Preferred Stock is in arrears unless the redemptions or purchases of the New Preferred Stock and such other shares are made pro rata according to the amounts in arrears in redemptions or purchases required for the respective requirements. 23 26 The only series of previously issued Preferred Stock entitled to a sinking fund are the Series L, R, NN and UU Preferred Stock. Voting Rights: Except as indicated below or provided by applicable law, holders of Preferred Stock have no voting rights. The consent of two-thirds of the votes entitled to be cast by holders of the outstanding Preferred Stock is required for (a) amending the Certificate of Incorporation in a manner adversely affecting the Preferred Stock otherwise than by increasing the authorized number of shares thereof, but, if less than all the series of Preferred Stock are affected, only the consent of two- thirds of the votes entitled to be cast by holders of shares of all affected series is required; (b) creating any class of stock, or securities convertible into shares of stock, senior to the Preferred Stock or (c) with certain exceptions, issuing any shares of, or ranking on a parity with, the Preferred Stock unless the Earnings Ratio is met. The consent of a majority of the votes entitled to be cast by holders of the outstanding Preferred Stock is required to (1) sell, lease, exchange, assign, transfer or convey all or substantially all the property or business of the Company or, unless the status and preferences of the Preferred Stock survive, to merge or consolidate into or with any other company or (2) increase the authorized number of shares thereof. If and when any four quarterly dividends on any Preferred Stock are in default, and until all dividends in default have been paid or declared and set aside for payment, the holders of the Preferred Stock are entitled, as a class, to elect the smallest number of Directors constituting a majority of the full Board of Directors. The terms of office of all persons who may be Directors of the Company will terminate upon the election of a majority of the Board of Directors by the holders of the Preferred Stock and the holders of the Company's Common Stock will have the right to elect the remaining Directors of the Company. If and when all dividends then in default on the shares of Preferred Stock then outstanding shall be paid or declared and set aside for payment, the right of the holders of the Preferred Stock to elect Directors will terminate, subject to the future vesting of such right if dividends on any shares of Preferred Stock are in default as set forth above. Upon the termination of any such special voting right, the terms of the Directors elected by the holders of the Preferred Stock will terminate and the resulting vacancies will be filled by the vote of a majority of the remaining Directors. Whenever holders of Preferred Stock vote as a class, the holders of the $100 Par Value Preferred Stock are entitled to one vote for each share held and the holders of the $25 Par Value Preferred Stock are entitled to one-quarter of one vote for each share held. Income Tax: Dividends on the New Preferred Stock will be eligible for the dividends-received deduction afforded to corporate holders by Section 243 of the Internal Revenue Code as presently in effect, to the extent that the 24 27 dividends are paid from the "current or accumulated earnings and profits" of the Company for federal income tax purposes. For additional income tax information, see the previous discussion under the heading "Equity Securities". Transfer Agent and Registrar: The transfer agent and registrar for the New Preferred Stock will be The Bank of New York, Shareholder Services Dept., 11th Floor, 101 Barclay Street, New York, New York 10286-1258. Common Stock General: The Company is presently authorized under the Certificate of Incorporation to issue 150,000,000 shares of Common Stock. Of those authorized shares, 112,332,490 shares of Common Stock were issued and outstanding at December 31, 1993. Dividends: The Company has paid dividends on its Common Stock in each quarter beginning October 1, 1989. Dividends per share declared on the Common Stock during the last five years were as follows:
1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- $1.76 $1.72 $1.60 $1.25 $0.50
Although the Company contemplates the continuation of quarterly dividend payments, the payment of future dividends is dependent upon, among other factors, action by the Company's Board of Directors, the Company's financial condition, future earnings and the availability of cash. Dividend Limitations: No dividends may be declared on Common Stock unless all past and current dividends on outstanding Preferred Stock and Preference Stock have been paid or declared and set apart for payment and all requisite sinking fund redemptions have been made on the Series L, R, NN and UU Preferred Stock. There are presently no shares of Preference Stock outstanding. Other Common Stock dividend limitations contained in the First Mortgage securing the First Mortgage Bonds are not material. For information regarding the treatment for federal income tax purposes of dividends either as ordinary income or return of capital, see the discussion above under the heading "Description of the Securities -- Equity Securities." Voting Rights: Ordinarily, the holders of the Company's Common Stock have sole voting power to elect Directors based on the cumulative voting method. The Company's Certificate of Incorporation provides, however, that when dividends payable on any series of Preferred Stock shall be in default in an amount equivalent to or exceeding four full quarterly dividends, the holders of shares of Preferred Stock, voting separately as a class and regardless of series, are entitled to elect at a Special Meeting called upon demand of a holder of Preferred Stock and at each Annual Meeting thereafter 25 28 until Preferred Stock dividends are paid or declared and funds set aside for payment, the smallest number of Directors necessary to constitute a majority of the full Board of Directors. For a further discussion of voting rights of holders of Preferred Stock, see "Description of the Securities -- Preferred Stock Voting Rights." In addition, the assent of varying proportions of the votes which the holders of the Preference Stock are entitled, as a class, to elect two Directors to the Board of Directors, which right does not terminate until full dividends have been provided for all past periods and for the current period. In addition, the assent of varying proportions of the votes which the holders of shares of Preference Stock are entitled to cast is required for certain action: (i) two-thirds to amend the Certificate of Incorporation adversely to the Preference Stock; (ii) two-thirds to create a class of shares or securities convertible into shares senior to Preference Stock and (iii) a majority to increase the authorized number of shares of Preference Stock. None of the 7,500,000 authorized shares of Preference Stock are outstanding. Preemptive Rights: Holders of the Company's Common Stock do not have preemptive rights to purchase additional shares of Common Stock or securities convertible into such shares. From time to time, however, the Company may, at its option, offer shares of Common Stock in a rights offering so that shareowners may purchase additional shares of Common Stock in amounts proportionate to their holdings. Other Rights: In the event of liquidation, the holders of the Common Stock are entitled to all assets that remain after satisfaction of creditors and the liquidation preferences of outstanding Preferred Stock and, if any, outstanding Preference Stock. The outstanding shares of Common Stock are, and the additional shares of Common Stock which may be offered hereby upon issuance will be, fully paid and non-assessable. The number, designation, relative rights, preferences and limitations of the shares of the Preferred Stock (including the adjustment provisions of the Convertible Preferred Stock), of the Preference Stock, if any, and of the Common Stock of the Company are stated in full in the Company's Certificate of Incorporation. Transfer Agent and Registrar: Unless otherwise provided in a Prospectus Supplement relating thereto, the transfer agent and registrar for the Common Stock is The Bank of New York, Shareholder Services Dept., 11th Floor, 101 Barclay Street, New York, New York 10286-1258. 26 29 EXPERTS The financial statements of the Company appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1993 have been audited by Ernst & Young, Independent Auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. None of the experts or counsel referred to herein as having prepared or certified any part of the Registration Statement was employed on a contingent basis or, at the time of such preparation or certification or at any time thereafter, had or has a substantial interest in the Company or its subsidiaries or was or is connected with the Company or its subsidiaries as a promoter, underwriter, voting trustee, director, officer or employee, except Robert J. Grey, Esq., General Counsel. At February 28, 1994, Mr. Grey owned 55 shares of the Common Stock of the Company. Mr. Grey is an indemnitee of the Company, being a party to an Indemnification Agreement. Under the provisions of that agreement, Mr. Grey is indemnified for any losses associated with rendering the legality opinion referred to under the heading "Legality" to the extent permitted under Section 721 of the New York Business Corporation Law (the "BCL"). LEGALITY Legal matters in connection with the issuance of the Securities offered hereby will be passed upon for the Company by Mr. Grey and for the Underwriters by Milbank, Tweed, Hadley & McCloy, New York, New York. 27 30 PLAN OF DISTRIBUTION The Securities will be sold through underwriters, including Lehman Brothers Inc., pursuant to one or more Underwriting Agreements. Each Underwriting Agreement will provide that the obligations of the Underwriters are subject to certain conditions precedent, and that the Underwriters will be obligated to purchase all of the Securities offered by any Prospectus Supplement if any of the Securities are purchased, provided that under certain circumstances involving defaults of one or more of the Underwriters which aggregate in excess of ten percent of the aggregate principal amount or the number of shares of such Securities, the Company may either terminate such Underwriting Agreement or require each non-defaulting Underwriter to purchase the amount of Debt Securities or the number of shares of Equity Securities set forth in such Prospectus Supplement plus an amount equal to one-ninth thereof, in which case less than all of the Securities may be sold. The Company has been advised that the several Underwriters propose initially to offer the Securities to the public at the public offering price set forth on the cover page of the applicable Prospectus Supplement, and to certain dealers at such price less a concession to be set forth in such Prospectus Supplement. Underwriters may allow, and such dealers may re-allow, a concession to be set forth in such Prospectus Supplement to certain other dealers. After the initial public offering of the Securities, the public offering price and concessions may be changed. Each Underwriting Agreement will provide that the Company indemnify the several Underwriters against certain civil liabilities including liabilities arising under the Securities Act of 1933, as amended. Lehman Brothers Inc. has served as managing underwriter for public offerings of securities of the Company on numerous occasions since 1981. In addition, during the past seven years such firm has performed financial advisory services for the Company, including acting as its financial advisor in the 1988 and 1989 Settlements, and has served as Remarketing Agent of certain long-term tax-exempt securities of the New York State Energy Research and Development Authority, the proceeds of which have been used for Company projects. 28 31 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Filing Fees -- Securities and Exchange Commission.......... $ 172,414 *Accounting Fees............................................ 200,000 *Fees of Trustee, and their counsel......................... 310,000 *Fees of Rating Agencies.................................... 338,000 *Printing Expenses.......................................... 213,000 *Miscellaneous Expenses..................................... 200,000 ---------- *SubTotal Expenses........................................ 1,433,414 **Mortgage Recording Tax and related fees.................... 5,850,000 ***New York Stock Exchange listing fees....................... 32,200 ***Organizational taxes....................................... 115,000 ---------- *Total Expenses........................................... $7,430,614 - ------------------ ==========
* Estimated. ** Required only if the Securities are issued as New Bonds. *** Required only if Equity Securities are issued. - ------------------ Item 15. Indemnification of Directors and Officers. Sections 721-726 of Article 7 of the BCL provide for the indemnification and advancement of expenses to officers and directors. Section 721 provides that indemnification and advancement pursuant to the BCL are not exclusive of any other rights an officer or director may be entitled to, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Section 722 provides that a corporation may indemnify an officer or director, in the case of third party actions, against judgments, fines, amounts paid in settlement and reasonable expenses and, in the case of derivative actions, against amounts paid in settlement and reasonable expenses, provided that the director or officer acted in good faith, for a purpose which he reasonably believed to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe his conduct was unlawful. In addition, statutory indemnification may not be provided in derivative actions (i) which are settled or otherwise disposed of or (ii) in which the director or officer is adjudged liable to the corporation, unless and only to the extent a court determines that the person is fairly and reasonably entitled to indemnity. Section 723 provides that statutory indemnification is mandatory where the director or officer has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding. Section 723 also provides that expenses of defending a civil or criminal action or proceeding II-1 32 may be advanced by the corporation upon receipt of an undertaking to repay them if and to the extent the recipient is ultimately found not to be entitled to indemnification. Section 725 provides for repayment of such expenses when the recipient is ultimately found not to be entitled to indemnification. Section 726 provides that a corporation may obtain indemnification insurance indemnifying itself and its directors and officers. The Company has in effect insurance policies providing both directors and officers liability coverage and corporate reimbursement coverage. Section 402(b) of the BCL provides that a corporation may include in its certificate of incorporation a provision limiting or eliminating, with certain exceptions, the personal liability of directors to a corporation or its shareowners for damages for any breach of duty in such capacity. The shareowners approved an amendment to the Company's Certificate of Incorporation eliminating the personal liability of Directors to the extent permitted by New York law. The Company's By-laws provide generally that the Company shall, except to the extent expressly prohibited by the BCL, indemnify each of its officers and directors made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that such person is or was a director or officer of the Company against judgments, fines, penalties, amounts paid in settlement and reasonable expenses, including attorney's fees, incurred in connection with such action or proceeding, or any appeal therein. The Company's By-laws further provide for advancement and reimbursement of such expenses incurred by an officer or director in defending any action or proceeding in advance of the final disposition thereof upon receipt of an undertaking by such person to repay such amount if, and to the extent that, such person is ultimately found not to be entitled to indemnification. The Company's By-laws also provide that the Company may enter into agreements with its officers and directors with respect to indemnification and advancement of expenses, and the Company has entered into such agreements with its directors and certain of its officers. The agreements provide for indemnification and advancement of expenses to the extent provided for in the Company's By-laws. The Company has established a grantor trust to fund the Company's obligations under the agreements. Item 16. List of Exhibits. (See "Exhibit Index") Item 17. Undertakings. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each report filed by the Company pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 33 Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered under this Registration Statement, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 34 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN HICKSVILLE, IN THE TOWN OF OYSTER BAY AND THE STATE OF NEW YORK, ON THE 4TH DAY OF APRIL 1994. LONG ISLAND LIGHTING COMPANY By ANTHONY NOZZOLILLO+ ------------------------ ANTHONY NOZZOLILLO (Senior Vice President, Chief Financial Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURES TITLE DATE ---------- ----- ---- WILLIAM J. CATACOSINOS Principal Executive Officer ) - ------------------------------- and Director ) *WILLIAM J. CATACOSINOS ) (Chairman of the Board, Chief ) Executive Officer, President) ) ) ANTHONY NOZZOLILLO+ Principal Financial Officer ) - ------------------------------ ) ANTHONY NOZZOLILLO ) (Senior Vice President, ) Chief Financial Officer) ) ) /s/THOMAS J. VALLELY, III Principal Accounting Officer ) - ------------------------------- ) THOMAS J. VALLELY, III ) (Controller) ) ) April 4, 1994 ) A. JAMES BARNES, GEORGE BUGLIARELLO, ) RENSO L. CAPORALI, PETER O. CRISP, ) WINFIELD E. FROMM, VICKI L. FULLER, ) KATHERINE D. ORTEGA, BASIL A. ) PATERSON, RICHARD L. SCHMALENSEE, *Directors ) GEORGE J. SIDERIS, JOHN H. TALMAGE, ) PHYLLIS S. VINEYARD ) ) ) By ANTHONY NOZZOLILLO+ ) ------------------------------ ) *ANTHONY NOZZOLILLO (Attorney- ) in-fact for each of the ) persons indicated) ) /s/ANTHONY NOZZOLILLO --------------------------------- +ANTHONY NOZZOLILLO (On behalf of the issuer, individually, as an officer and as attorney-in-fact for each of the persons indicated) --------------------------
ORIGINAL POWERS OF ATTORNEY, AUTHORIZING KATHLEEN A. MARION, ANTHONY NOZZOLILLO AND ROBERT J. GREY AND EACH OF THEM, TO SIGN THE REGISTRATION STATEMENT AND ANY AMENDMENTS THERETO, AS ATTORNEY-IN-FACT FOR THE DIRECTORS AND OFFICERS OF THE COMPANY, AND A CERTIFIED COPY OF THE RESOLUTION OF THE BOARD OF DIRECTORS OF THE COMPANY AUTHORIZING SAID PERSONS AND EACH OF THEM TO SIGN THE REGISTRATION STATEMENT AND AMENDMENTS THERETO AS ATTORNEY-IN-FACT FOR ANY OFFICERS SIGNING ON BEHALF OF THE COMPANY, ARE BEING FILED OR WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. II-4 35 EXHIBIT INDEX *1(a) Form of Underwriting Agreement for General and Refunding Bonds. *1(b) Form of Underwriting Agreement for Debentures. *1(c) Form of Underwriting Agreement for Common Stock. *1(d) Form of Underwriting Agreement for Preferred Stock. 3(a) Restated Certificate of Incorporation of the Company dated November 11, 1993 (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1993 and incorporated herein by reference). *3(b) Proposed form of Certificate of Amendment of the Restated Certificate of Incorporation of the Company for the New Preferred Stock. 4(a) General and Refunding Indenture dated as of June 1, 1975 (G&R Indenture), and First through Twenty-first supplements thereto (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1987), Twenty-second supplement (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1990), Twenty-third supplement and Twenty-fourth supplement (filed as Exhibits to the Company's Form 10-K for the Year Ended December 31, 1991), and Twenty-fifth supplement and Twenty-sixth supplement (filed as Exhibits to the Company's Form 10-K for the Year ended December 31, 1992), all of which are incorporated herein by reference, as follows: G&R Indenture dated as of June 1, 1975. First Supplemental Indenture to G&R Indenture dated as of June 1, 1975. Second Supplemental Indenture to G&R Indenture dated as of September 1, 1975. Third Supplemental Indenture to G&R Indenture dated as of June 1, 1976. Fourth Supplemental Indenture to G&R Indenture dated as of December 1, 1976. Fifth Supplemental Indenture to G&R Indenture dated as of May 1, 1977.
- ---------------------------------- *Filed herewith. EI-1 36 Sixth Supplemental Indenture to G&R Indenture dated as of April 1, 1978. Seventh Supplemental Indenture to G&R Indenture dated as of March 1, 1979. Eighth Supplemental Indenture to G&R Indenture dated as of February 1, 1980. Ninth Supplemental Indenture to G&R Indenture dated as of March 1, 1981. Tenth Supplemental Indenture to G&R Indenture dated as of July 1, 1981. Eleventh Supplemental Indenture to G&R Indenture dated as of July 1, 1981. Twelfth Supplemental Indenture to G&R Indenture dated as of December 1, 1981. Thirteenth Supplemental Indenture to G&R Indenture dated as of December 1, 1981. Fourteenth Supplemental Indenture to G&R Indenture dated as of June 1, 1982. Fifteenth Supplemental Indenture to G&R Indenture dated as of October 1, 1982. Sixteenth Supplemental Indenture to G&R Indenture dated as of April 1, 1983. Seventeenth Supplemental Indenture to G&R Indenture dated as of May 1, 1983. Eighteenth Supplemental Indenture to G&R Indenture dated as of September 1, 1984. Nineteenth Supplemental Indenture to G&R Indenture dated as of October 1, 1984. Twentieth Supplemental Indenture to G&R Indenture dated as of June 1, 1985. Twenty-first Supplemental Indenture to G&R Indenture dated as of April 1, 1986. Twenty-second Supplemental Indenture to G&R Indenture dated as of February 1, 1991. Twenty-third Supplemental Indenture to G&R Indenture dated as of May 1, 1991.
EI-2 37 Twenty-fourth Supplemental Indenture to G&R Indenture dated as of July 1, 1991. Twenty-fifth Supplemental Indenture to G&R Indenture dated as of May 1, 1992. Twenty-sixth Supplemental Indenture to G&R Indenture dated as of July 1, 1992. *Form of Supplemental Indenture to G&R Indenture. 4(b) Indenture of Mortgage and Deed of Trust dated as of September 1, 1951 (Indenture of Mortgage) and First through Forty- fourth Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1987) and Forty- fifth through Forty-seventh Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1991) and Forty-eighth through Forty-ninth Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1992), all of which are incorporated herein by reference, as follows: Indenture of Mortgage dated as of September 1, 1951. First Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1951. Second Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1952. Third Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1953. Fourth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1954. Fifth Supplemental Indenture to the Indenture of Mortgage dated as of November 1, 1955. Sixth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1956. Seventh Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1958. Eighth Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1959. Ninth Supplemental Indenture to the Indenture of Mortgage dated as of August 1, 1961. Tenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1963.
- ---------------------------------- *Filed herewith. EI-3 38 Eleventh Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1964. Twelfth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1965. Thirteenth Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1966. Fourteenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1967. Fifteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1969. Sixteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1970. Seventeenth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1971. Eighteenth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1971. Nineteenth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1972. Twentieth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1973. Twenty-first Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1974. Twenty-second Supplemental Indenture to the Indenture of Mortgage dated as of November 1, 1974. Twenty-third Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1975. Twenty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1975. Twenty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1976. Twenty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1976. Twenty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1977. Twenty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1978. Twenty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1979.
EI-4 39 Thirtieth Supplemental Indenture to the Indenture of Mortgage dated as of February 1, 1980. Thirty-first Supplemental Indenture to the Indenture of Mortgage dated as of March 1, 1981. Thirty-second Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1981. Thirty-third Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1981. Thirty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1981. Thirty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of December 1, 1981. Thirty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1982. Thirty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1982. Thirty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1983. Thirty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1983. Fortieth Supplemental Indenture to the Indenture of Mortgage dated as of February 29, 1984. Forty-first Supplemental Indenture to the Indenture of Mortgage dated as of September 1, 1984. Forty-second Supplemental Indenture to the Indenture of Mortgage dated as of October 1, 1984. Forty-third Supplemental Indenture to the Indenture of Mortgage dated as of June 1, 1985. Forty-fourth Supplemental Indenture to the Indenture of Mortgage dated as of April 1, 1986. Forty-fifth Supplemental Indenture to the Indenture of Mortgage dated as of February 1, 1991. Forty-sixth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1991. Forty-seventh Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1991. Forty-eighth Supplemental Indenture to the Indenture of Mortgage dated as of May 1, 1992.
EI-5 40 Forty-ninth Supplemental Indenture to the Indenture of Mortgage dated as of July 1, 1992. *Form of Supplemental Indenture to the Indenture of Mortgage (included as an Exhibit to and filed with 4(a)). 4(c) Debenture Indenture dated as of November 1, 1986 by and between Long Island Lighting Company and The Connecticut Bank and Trust Company, National Association, as Trustee, and First Supplement (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1986), Second through Third Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1989), Fourth through Fifth Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1992), and Sixth through Seventh Supplements (filed as an Exhibit to the Company's Form 10-K for the Year Ended December 31, 1993), all of which are incorporated herein by reference, as follows: First Supplemental Indenture dated as of November 1, 1986. Second Supplemental Indenture dated as of April 1, 1989. Third Supplemental Indenture dated as of July 1, 1989. Fourth Supplemental Indenture dated as of July 1, 1992. Fifth Supplemental Indenture dated as of November 1, 1992. Sixth Supplemental Indenture dated as of June 1, 1993. Seventh Supplemental Indenture dated as of July 1, 1993. *Form of Supplemental Indenture to Debenture Indenture. 4(d) Debenture Indenture dated as of November 1, 1992 by and between Long Island Lighting Company and Chemical Bank, as Trustee, and First through Fourth Supplements (filed as Exhibits to the Company's Form 10-K for the Year Ended December 31, 1992), all of which are incorporated herein by reference, as follows: First Supplemental Indenture dated as of January 1, 1993.
- ---------------------------------- *Filed herewith. EI-6 41 Second Supplemental Indenture dated as of March 1, 1993. Third Supplemental Indenture dated as of March 1, 1993. Fourth Supplemental Indenture dated as of March 1, 1993. *Form of Supplemental Indenture to Debenture Indenture (included as an Exhibit to and filed with 4(c)). *5 Opinion of Robert J. Grey, Esq., General Counsel of the Company, with respect to the legality of the securities being registered. *12(a) Computation of Ratio of Earnings to Fixed Charges. *12(b) Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends. *12(c) Computation of Interest Coverage computed pursuant to the Company's General and Refunding Indenture. *23 Consent of Ernst & Young, Independent Auditors. *24(a) Powers of Attorney executed by certain Directors and Officers of the Company. *24(b) Certificate as to Corporate Power of Attorney. *24(c) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney. 24(d) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney (filed as an Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-60744) and incorporated herein by reference). 24(e) Certified copy of Resolutions of Board of Directors authorizing signature pursuant to Power of Attorney (filed as an Exhibit to the Company's Registration Statement on Form S-3 (File No. 33-45834) and incorporated herein by reference). *25(a) Form T-1 with respect to General and Refunding Bonds with United States Trust Company of New York, as Trustee. *25(b) Form T-1 with respect to Debentures with State Street Bank and Trust Company, as Trustee. *25(c) Form T-1 with respect to Debentures with Chemical Bank, as Trustee.
- ---------------------------------- *Filed herewith. EI-7 EX-1.A 2 FORM OF UNDERWRITING AGREEMENT, GEN. & REFUNDING 1 Exhibit 1(a) $__,000,000 LONG ISLAND LIGHTING COMPANY General and Refunding Bonds UNDERWRITING AGREEMENT ____________, 199_ Lehman Brothers Inc. [Names of other Representatives] As Representatives of the several Underwriters c/o Lehman Brothers Inc. 3 World Financial Center New York, New York 10285-1100 Dear Sirs: The undersigned, Long Island Lighting Company (the "Company"), hereby confirms its agreement with each of the several underwriters, hereinafter named, as follows: 1. Underwriters and Representatives. The term "Underwriters" as used herein shall be deemed to mean the several firms or corporations named in Schedule II hereto and any underwriter substituted as provided in Section 6. The term "Representatives" as used herein shall be deemed to mean Lehman Brothers Inc., [names of other Representatives] who represent that they have been authorized by the Underwriters to execute this Agreement on their behalf and to act for them in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. Any action under or in respect of this Agreement taken by the Representatives will be binding upon all the Underwriters. 2. Description of General and Refunding Bonds. The Company proposes to issue and sell to the Underwriters the principal amount of its General and Refunding Bonds identified in Schedule I hereto (the "Bonds") in one or more series under a General and Refunding Indenture, dated as of June 1, 1975, as amended and supplemented by ___________ indentures supplemental thereto and as to be amended and supplemented by a ____________ Supplemental Indenture thereto, dated as of ___________, (the "Indenture"), between the Company and United States Trust Company of New York, as successor Trustee (the "Trustee"). The Company is obligated to issue and deposit with the Trustee pursuant to Section 5.14 of the Indenture certain First Mortgage Bonds ("Pledged Bonds") under an Indenture of Mortgage and Deed of 2 2 Trust, dated as of September 1, 1951, as amended and supplemented by ___________ indentures supplemental thereto and as to be amended and supplemented by a ____________ Supplemental Indenture thereto, dated as of ___________, (the "First Mortgage Indenture"), between the Company and IBJ Schroder Bank & Trust Company, as successor Trustee. 3. Representations and Warranties of the Company. The Company represents and warrants to each of the Underwriters, as of the date hereof and as of the Closing Date (as hereinafter defined), that: (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 33-_____) under the Securities Act of 1933, as amended (the "Act"), for the registration of the Bonds under the Act. The various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained therein at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective, is hereinafter called the "Registration Statement" and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any document filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement. The Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to the Registration Statement, to the Representatives for each of the other Underwriters, if any, have been declared effective by the Commission in such form. No other document with respect to the Registration Statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the prospectus relating to the Bonds, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the 3 3 case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the Bonds in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing. The Company will not file any amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus or Prospectus, or file any document under the Exchange Act before the termination of the offering of the Bonds by the Underwriters if such document would be deemed to be incorporated by reference into such Preliminary Prospectus or Prospectus, of which the Representatives shall not previously have been advised and provided with a copy or to which the Representatives shall reasonably object in writing or which shall be disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as counsel on behalf of the Underwriters. (b) The Registration Statement and the Prospectus and any amendment or supplement thereto as of their respective effective or issue dates, and as of the closing date, (1) contained or will contain, as applicable, all statements of material fact required to be stated therein in accordance with the Act and the Rules and Regulations (as defined below); (2) conformed or will conform, as applicable, in all material respects to the requirements of the Act and the Rules and Regulations and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules, regulations and releases of the Commission thereunder; and (3) do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements or omissions in such documents based upon written information furnished to the Company by any Underwriter specifically for use therein or to any statements in or omissions from the statement of eligibility and qualification on Form T-1, or amendments thereto, of the Trustee under the Indenture. Any reference to "Rules and Regulations" shall mean the rules, regulations and releases adopted by the Commission under either the Act or the Exchange Act, as applicable. (c) The financial statements and schedules (including the related notes and supporting schedules) included or 4 4 incorporated by reference in the Registration Statement or Prospectus as amended or supplemented present fairly the financial condition and operations of the Company at the respective dates or for the respective periods to which they apply except as otherwise indicated in the Registration Statement or Prospectus as amended or supplemented; such financial statements have been prepared in each case in accordance with generally accepted accounting principles consistently applied throughout the periods involved except as otherwise indicated in the Registration Statement and Prospectus as amended or supplemented. Ernst & Young, who have examined the audited financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented and whose report appears or is incorporated by reference in the Prospectus as amended or supplemented, are independent public accountants as required by the Act and the Rules and Regulations. (d) Except as reflected in, or contemplated by, the Registration Statement and the Prospectus as amended or supplemented, since the respective most recent dates as of which information is given in the Registration Statement and the Prospectus as amended or supplemented, there has not been any material adverse change in the business, properties or financial condition or results of operation of the Company, and since such dates there has not been any material transaction entered into by the Company other than transactions contemplated by the Registration Statement and Prospectus as amended or supplemented and transactions in the ordinary course of business. The Company has no material contingent obligation which is not disclosed in the Registration Statement and Prospectus as amended or supplemented. (e) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof on the part of the Company to be fulfilled have been duly authorized by all necessary corporate action of the Company in accordance with the provisions of its Restated and Amended Certificate of Incorporation (the "Charter") and by-laws and applicable law, and the Bonds, when issued and delivered as provided herein, and the Pledged Bonds, if any, when issued and deposited pursuant to the Indenture, will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms except as limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Bonds and the Pledged Bonds conform to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented. 5 5 (f) The issuance and sale of the Bonds, the consummation of the transactions herein contemplated, the fulfillment of the terms hereof and the compliance by the Company with all the terms and provisions of the Indenture and the First Mortgage Indenture will not result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party. (g) The documents which are incorporated by reference in the Prospectus as amended or supplemented or from which information is so incorporated by reference, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations, and any documents so filed and incorporated by reference subsequent to the effective date of the Registration Statement shall, when they are filed with the Commission, conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations. (h) The conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied. 4. Purchase and Sale. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each such Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of the Bonds set forth opposite the name of such Underwriter in Schedule II hereto. 5. Reoffering by Underwriters. Subject to the terms and conditions of this Agreement, it is understood that the Underwriters propose to make a bona fide public offering of the Bonds as soon as practicable after the execution of this Agreement. 6. Time and Place of Closing. Delivery of the Bonds and payment therefor shall be made at the offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York at _____ A.M., New York Time, on ____________, 199__, or such other place, time and date as the Representatives and the Company may agree upon. The hour and date of such delivery and payment are herein called the "Closing Date". Payment for the Bonds shall be by certified or official bank check payable to the order of the Company in New York Clearing House (next day) funds. The Bonds shall be delivered to the Representatives for the respective accounts of the Underwriters registered in such names and in such authorized denominations as the Representatives may 6 6 reasonably request in writing not later than 12:30 P.M., New York Time, on the third business day prior to the Closing Date, or, to the extent not so requested, registered in the names of the respective Underwriters in such authorized denominations as the Company shall determine. For the purpose of expediting the checking of the Bonds by the Representatives on behalf of the Underwriters, the Company agrees to make such Bonds available to the Representatives for such purposes at the corporate trust office of [Manufacturers Hanover Trust Company] not later than 2:00 P.M., New York Time, on the business day preceding the Closing Date, or at such other time and place as may be agreed upon by the Company and the Representatives. If any Underwriter or Underwriters default in its or their obligations to purchase the Bonds which it or they have agreed to purchase hereunder and the aggregate principal amount of Bonds which such defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent or less of the aggregate principal amount of Bonds set forth in Schedule II hereto, the other Underwriters shall be obligated severally, in proportion to their respective commitments to purchase Bonds hereunder, to purchase the Bonds which such defaulting Underwriter or Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of Bonds with respect to which such default or defaults occur is more than ten percent of the aggregate principal amount of Bonds set forth in Schedule II hereto and arrangements satisfactory to you and the Company for the purchase of such Bonds by other persons are not made within thirty-six hours after such default, the Company may, at its option, either (a) terminate this Agreement without liability on the part of any non-defaulting Underwriter or the Company, except for expenses to be paid or reimbursed by the Company pursuant to Section 7, or (b) require each non-defaulting Underwriter to purchase the aggregate principal amount of Bonds which such Underwriter otherwise agreed to purchase plus an amount equal to one-ninth thereof. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. The respective commitments of the several Underwriters for purposes of this paragraph shall be determined without regard to reduction in the respective Underwriters' obligations to purchase the principal amount of Bonds set forth opposite their names in Schedule II hereto. Nothing herein will relieve a defaulting Underwriter from liability for its default. 7 7 7. Covenants of the Company. The Company agrees that: (a) The Company will prepare the Prospectus as amended or supplemented in a form approved by the Representatives and will 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 Agreement or, if applicable, such earlier time as may be required by Rule 424(b). The Company will at or prior to the Closing Date deliver to each of the Representatives and to counsel for the Underwriters one signed copy of the Registration Statement as originally filed and of all amendments or supplements thereto (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, except exhibits incorporated by reference unless specifically requested), including a signed copy of each consent and certificate included therein or filed as an exhibit thereto. As soon as the Company is advised thereof, it will advise the Representatives orally (i) when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission and (ii) of the issuance of any stop order under the Act with respect to the Registration Statement or any suspension of the qualification of the Bonds in any jurisdiction, or the institution of any proceedings therefor of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order or suspension and to secure the prompt removal thereof if issued. The Company will deliver to the Underwriters, in accordance with the Representatives' instructions, as many copies of the Prospectus as amended or supplemented as the Representatives may reasonably request for the purposes contemplated by the Act, and will deliver to the Representatives as soon as practicable sufficient conformed copies of the Registration Statement (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented) and of all amendments thereto (in each case without exhibits) for distribution of one to each Underwriter. (b) The Company will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters for any expenses up to $9,000 (including fees and disbursements of counsel) incurred by them in connection with qualification of the Bonds for sale and the preparation of memoranda as to Blue Sky qualifications and exemptions and as to eligibility of the Bonds for investment under the laws of such jurisdictions as 8 8 you designate. The Company shall not, however, be required to pay any amount for any expenses of the Representatives or any of the Underwriters except as provided in paragraph 4 hereof and except, that in the event this Agreement shall be terminated in accordance with the provisions of paragraph 8 or 9 hereof, the Company will pay the fees and disbursements of counsel for the Underwriters, whose fees and disbursements the Underwriters agree to pay in any other event. The Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits. (c) If at any time when a prospectus relating to the Bonds is required to be delivered under the Act, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Representatives, shall occur, which in the opinion of the Company should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus as amended or supplemented not misleading in the light of the circumstances when it is delivered, or which, in your opinion, may be necessary in connection with the distribution of the Bonds, the Company will forthwith at its expense prepare and furnish to the Representatives a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus as amended or supplemented which will supplement or amend the Prospectus as amended or supplemented or file such documents so that the Prospectus as amended or supplemented will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus as amended or supplemented is delivered, not misleading. The Company will continue to prepare and file with the Commission in a timely manner all documents required to be filed pursuant to the requirements of the Exchange Act and the Rules and Regulations. (d) The Company will make generally available to its security holders (and shall deliver to the Representatives), as soon as practicable but in any event not later than 45 days after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement (as such term is defined in Rule 158 under the Act) (the "Effective Date") occurs, an earnings statement (which need not be audited, unless required so to be under Section 11(a) of the Act) of the Company in reasonable detail covering a period of at least twelve consecutive months beginning after the Effective Date. (e) The Company will use its best efforts promptly to do and perform all things to be done and performed by it 9 9 hereunder prior to the Closing Date and to satisfy all conditions precedent to the delivery by it of the Bonds. (f) The Company will use its best efforts to qualify the Bonds for offer and sale under the Blue Sky laws of such states as the Representatives may designate and will file such statements or reports as are or may be reasonably required by the laws of such states; provided, however, that the Company in complying with this paragraph need not qualify to do business in any state nor execute a general consent to service of process. (g) The Company will effect such filing and recordation with respect to the ____________ Supplemental Indenture to the Indenture and the __________ Supplemental Indenture to the First Mortgage Indenture, at or as soon as practicable after the Closing Date in all places required by law as shall be necessary in order to secure fully the Bonds and the Pledged Bonds under the lien of the Indenture and the First Mortgage Indenture and to furnish the Representatives with an opinion of counsel that such filing and recordation with respect to such indentures have been effected without the intervention of any prior liens, charges or encumbrances except (a) Excepted Encumbrances, as defined in the Indenture, and Permitted Encumbrances, as defined in the First Mortgage Indenture, (b) minor restrictions, exceptions and reservations in conveyances and minor defects of title, which are of the nature ordinarily found in properties of similar character and which do not interfere adversely with the operation of the business of the Company or in any substantial way impair the security afforded by the Indenture and the First Mortgage Indenture, and (c) any lien against property of the Company as to which cash sufficient to pay indebtedness secured by such lien is held irrevocably in trust for such purpose by the trustee under the First Mortgage Indenture. (h) The Company will apply the proceeds of the sale of the Bonds, exclusive of accrued interest, if any, for the purposes set forth in the Prospectus as amended or supplemented. 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase and pay for the Bonds shall be subject to the accuracy of, and compliance with, the representations and warranties of the Company contained herein, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following further conditions: (a) The Prospectus as amended or supplemented in relation to the Bonds shall have been filed with the Commission pursuant to Rule 424(b) within the applicable 10 10 time period prescribed for such filing by the Rules and Regulations; and no stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date. The Representatives shall have received, prior to payment for the Bonds, a certificate dated the Closing Date and signed by the President, any Vice President or the Treasurer of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (b) On the Closing Date there shall be in full force and effect an order of the Public Service Commission of the State of New York authorizing the issuance and sale of debt securities, including the Bonds, and the issuance and deposit of the Pledged Bonds which shall not contain any provision mutually unacceptable to the Representatives and the Company by reason of being materially adverse, it being understood that no order in effect at the date of this Agreement contains any such unacceptable provision. (c) At the Closing Date, the Representatives shall receive a favorable opinion from either Robert J. Grey, Esq., General Counsel of the Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the Company, which opinion shall be satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to the effect that (i) The Company is a corporation duly organized and validly existing, in good standing under the laws of the State of New York, and has power and authority (corporate and other) to own its property, to carry on its business and to issue the Bonds and the Pledged Bonds; (ii) The Agreement has been duly authorized, executed and delivered by the Company; (iii) An order has been adopted by the New York Public Service Commission authorizing the issuance and sale of the Bonds, and the issuance and deposit of the Pledged Bonds and the transactions related thereto as contemplated by the Agreement and said order is still in full force and effect; and no further approval, authorization, consent or other order of any public board or body is legally required for the authorization of the issuance and sale by the Company of the Bonds and the issuance and deposit of the Pledged Bonds under the terms of this Agreement except compliance with the provisions of securities or Blue Sky laws of certain 11 11 states in connection with the sale of the Bonds to the public in such states; (iv) The execution, delivery and performance of this Agreement, the Indenture, the First Mortgage Indenture, the Bonds and the Pledged Bonds by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company pursuant to the terms of, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument known to such counsel to which the Company is a party or to which it or any of its properties is subject, (B) the Charter or by-laws of the Company or (C) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or body applicable to the Company or any of its properties; (v) The Indenture and the First Mortgage Indenture conform to the statements with respect thereto contained in the Registration Statement and Prospectus as amended or supplemented, have been duly authorized by the Company and duly executed and delivered, and are legal, valid and binding agreements of the Company enforceable in accordance with their terms, subject, however, to the qualification that certain of the remedial provisions thereof may be limited by the laws of New York (but such laws do not make the remedies afforded inadequate for the realization of the benefits of the security provided thereby) and, with respect to atomic energy facilities, by the Atomic Energy Act of 1954 and regulations thereunder, and as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The First Mortgage Indenture, as supplemented by the first ___________ supplemental indentures, and the Indenture, as supplemented by the first ___________ supplemental indentures, have been duly filed for record and recorded under the laws of New York as mortgages of real and personal property in each proper office in all counties or other recording districts in New York in which the properties subject to the lien of the First Mortgage Indenture and the Indenture are located, and all necessary filings to date have been made under the New York Uniform Commercial Code, in order to perfect 12 12 and preserve the lien of the First Mortgage Indenture and the Indenture upon the properties intended to be covered thereby, and all mortgage recording or other taxes (other than statutory recording fees and Federal taxes) required to be paid in connection therewith have been paid. Subject to the due recordation of the ____________ Supplemental Indenture to the First Mortgage Indenture and the ____________ Supplemental Indenture to the Indenture and payment of the New York mortgage recording tax, the First Mortgage Indenture and the Indenture constitute, respectively, a valid and enforceable first mortgage lien and a valid and enforceable mortgage lien junior to the lien of the First Mortgage Indenture upon the properties intended to be subject thereto, subject to no liens, charges or encumbrances except (a) Permitted Encumbrances, as defined in the First Mortgage Indenture, and Excepted Encumbrances, as defined in the Indenture, (b) minor restrictions, exceptions and reservations in conveyances and minor defects of title, which are of the nature ordinarily found in properties of similar character and which do not interfere adversely with the operation of the business of the Company or in any substantial way impair the security afforded by the First Mortgage Indenture and the Indenture and (c) any lien against property of the Company as to which cash sufficient to pay indebtedness secured by such lien is held irrevocably in trust for such purpose by the trustee under the First Mortgage Indenture. The Indenture has been duly qualified under the Trust Indenture Act; (vi) The Bonds conform to the terms of this Agreement and to the statements with respect thereto contained in the Registration Statement and Prospectus as amended or supplemented and have been duly authorized; the Bonds have been duly executed, authenticated and delivered and are legal, valid and binding obligations of the Company enforceable in accordance with their terms and are entitled to the benefits and security afforded by the Indenture in accordance with the terms of such Indenture and such Bonds; (vii) The Pledged Bonds conform to the terms of this Agreement and to the statements with respect thereto contained in the Registration Statement and Prospectus as amended or supplemented and have been duly authorized, and, when duly executed, authenticated, issued and deposited with the Trustee pursuant to the Indenture as security for Bonds issued and to be issued thereunder, will be, except as limited by certain terms of the Indenture, entitled to the 13 13 security afforded by the First Mortgage Indenture in accordance with the terms of the First Mortgage Indenture and the terms of the Pledged Bonds; (viii) The Company has good and marketable title in fee simple absolute to all the parcels of real property described in the Indenture and the First Mortgage Indenture as being subject thereto, except such parcels as may have been released or are in process of being released pursuant to the terms thereof, and good title to all other property owned by the Company (other than rights of way for transmission and distribution lines and mains located either within the limits of public highways, or on private property pursuant to easements from apparent owners containing in some instances removal and relocation provisions and time limits, or on private property without easements where such lines and mains, with minor exceptions, are being maintained without objection from the owners of such property) in each case free and clear of all liens, charges and encumbrances except (a) the lien of the Indenture and Excepted Encumbrances as defined therein, and the lien of the First Mortgage Indenture and Permitted Encumbrances as defined therein, (b) minor restrictions, exceptions and reservations in conveyances and minor defects of title, which are of the nature ordinarily found in properties of similar character and which do not interfere adversely with the operation of the business of the Company or in any substantial way impair the security afforded by the Indenture or the First Mortgage Indenture and (c) any lien against property of the Company as to which cash sufficient to pay indebtedness secured by such lien is held irrevocably in trust for such purpose by the Trustee under the Indenture or by the trustee under the First Mortgage Indenture. The properties described in the Indenture and the First Mortgage Indenture are adequately described to constitute the Indenture and the First Mortgage Indenture liens thereon; (ix) The Company, to the best of such counsel's knowledge, possesses all franchises, licenses, permits, consents and orders of governmental and regulatory authorities and political subdivisions required for the maintenance and operation of its properties and business substantially as now conducted and as described in the Registration Statement and the Prospectus as amended or supplemented; or, if the Company does not possess all of such franchises, licenses, permits, consents and orders, the absence of such thereof as the Company does not possess will not, to the best of such counsel's knowledge, affect the 14 14 maintenance and operation of such properties and business as a whole substantially as now conducted; and (x) The Registration Statement has become effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act, the Registration Statement and the Prospectus, and each amendment or supplement thereto (including any document incorporated by reference into the Prospectus as amended or supplemented), as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act, the Exchange Act and the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder; the conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied; such counsel has no reason to believe that either the Registration Statement or the Prospectus, or any such amendment or supplement (including any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), considered as a whole on the effective date of the Registration Statement and on the date hereof, contained or contain any untrue statement of material fact or omitted or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the descriptions in the Registration Statement and the Prospectus as amended or supplemented of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus as amended or supplemented (or required to be filed under the Exchange Act if upon such filing they would be incorporated, in whole or in part, by reference in the Prospectus as amended or supplemented) which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or Prospectus as amended or supplemented or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented. 15 15 (d) At the Closing Date, the Representatives shall receive from Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, such opinion or opinions with respect to the valid existence of the Company, the validity of the Bonds and the Pledged Bonds (if any are to be issued concurrently with the Bonds), the Registration Statement, the Prospectus as amended or supplemented, and other related matters as you may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (e) On the date of this Agreement and on the Closing Date the Representatives shall have received from Ernst & Young a letter (with copies thereof for each of the Underwriters), which letter shall be reasonably satisfactory in form and substance to the Representatives and Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, confirming that they are independent auditors with respect to the Company 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 financial statements and schedules incorporated by reference into the Registration Statement and the Prospectus as amended or supplemented audited by them comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the applicable published rules and regulations of the Commission thereunder with respect to a registration statement on Form S-3; (ii) they have read the minutes of the meetings of the stockholders and the Board of Directors of the Company, as set forth in the minute books or, if not set forth therein, in the form prepared by the Secretary of the Company, through a specified date not more than five business days prior to the date of the closing, read the unaudited financial statements, if any, incorporated by reference into the Registration Statement and Prospectus as amended or supplemented and also the latest available unaudited interim financial statements of the Company and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that: (A) any unaudited Balance Sheet, Statement of Income and Statement of Cash Flows included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented complies as to form in all material respects with the applicable accounting 16 16 requirements of the Act and the Exchange Act and the published rules and regulations of the Commission thereunder, and are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the most recent audited financial statements included or incorporated by reference therein, (B) at the date of the latest available balance sheet read by such accountants, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for shares of preferred stock redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof, or (C) for the twelve months ending on the date of the latest available unaudited interim financial statements of the Company, there were no decreases, as compared with the twelve months ending on the date of the latest audited financial statements in total revenues, operating income, income before interest charges, or in the total amount of net income, except in all instances for decreases which the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, or which are described in such letter, identifying the same and specifying the amount thereof; (iii) they have performed more limited procedures than those set forth in the foregoing clause (ii), consisting merely of the reading of the minutes 17 17 referred to in said clause and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that, with respect to the period from the date of the latest available financial statements of the Company to a specified date not more than five business days prior to the date of such letter, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with the amounts shown in the latest financial statements included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for purchase of preferred shares for series scheduled to be redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof; and (iv) they have compared certain dollar amounts (and percentages and other financial data derived from such dollar amounts) disclosed in, or incorporated by reference into, the Registration Statement and Prospectus as amended or supplemented or in Exhibits to the Registration Statement, with such dollar amounts, percentages and other financial information contained in the general accounting records of the Company or derived directly from such records by analysis or computation, and have found such dollar amounts, percentages and other financial information to be in agreement therewith, except as otherwise specified in such letter. (f) Since the respective most recent dates of which information is given in the Registration Statement and Prospectus as amended or supplemented and up to the Closing Date, there shall have been no material adverse change in the business, properties or financial condition or results of operation of the Company, except as reflected in or contemplated by the Registration Statement and the Prospectus, and any amendments or supplements thereto 18 18 (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and since such dates and up to the Closing Date there shall have been no material transaction entered into by the Company other than transactions disclosed by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and transactions in the ordinary course of business; and at the Closing Date the Representatives shall have received a certificate to such effect, signed by the President, any Vice President or the Treasurer of the Company. (g) All legal proceedings to be taken in connection with the issuance and sale of the Bonds shall have been satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy. In case any of the conditions specified above in this Section 8 shall not have been fulfilled at the Closing Date, this Agreement may be terminated by the Representatives, with the consent of the Underwriters including yourselves who have agreed to purchase in the aggregate fifty percent or more of the Bonds, by mailing or delivering written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 9. Conditions of the Obligation of the Company. The obligation of the Company to deliver the Bonds shall be subject to the conditions set forth in the second clause of the first sentence of paragraph (a) of Section 8 hereof and in paragraph (b) of Section 8 hereof. In case any of the conditions specified in this Section 9 shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 10. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act or any other statute or common law and to reimburse, as incurred, each such Underwriter and controlling person for any legal or other expense (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with preparing to defend or defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon 19 19 any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or 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; provided, however, that the indemnity agreement contained in this paragraph shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of any Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto; and provided, further, that the Company shall not be liable in any case relating to any Preliminary Prospectus or any preliminary prospectus supplement to the extent that any such loss, claim, damage, liability, expense or action arises out of or is based upon the failure of any Underwriter in connection with a sale of any of the Bonds to any person to send or give a copy of the Prospectus, as the same may then be supplemented or amended, to such person with or prior to the written confirmation of the sale involved so long as the Company shall have fully complied with the last sentence of Section 7(a) hereof. The indemnity agreement of the Company contained in this paragraph and the representations and warranties of the Company contained in Section 3 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Bonds. The Underwriters agree promptly to notify the Company of the commencement of any litigation or proceedings against them or any of them, or any such controlling person, in connection with the sale of the Bonds or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (b) Each Underwriter agrees to indemnify and hold harmless the Company, its officers and directors, each other Underwriter, and each person who controls any thereof within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them become subject under the Act or any other statute or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or 20 20 are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or (ii) 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, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of such Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. The indemnity agreement of the respective Underwriters contained in this paragraph shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Company, or any such other Underwriter or any such controlling person, and shall survive the delivery of the Bonds. The Company agrees promptly to notify the Representatives of the commencement of any litigation or proceedings against the Company or any of its officers or directors or against any such controlling person in connection with the sale of the Bonds or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (c) The Company and each of the Underwriters agree that, upon receipt of notice of the commencement of any action against the Company or any person controlling the Company, or against such Underwriter or any person controlling such Underwriter, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party (i) to the extent the indemnifying party was not materially prejudiced by such omission or (ii) otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action; provided, however, 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 21 21 indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of paragraph (a) of this Section 10, representing the indemnified parties under paragraph (a) or (b) of this Section 10, as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. (d) If the indemnification provided for in this Section 10 shall for any reason be unavailable to an indemnified party under paragraphs (a) or (b) of this Section 10 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Bonds or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Bonds (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to such offering, in each case 22 22 as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 10 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 10 shall be deemed to include, for purposes of this Section 10, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Bonds underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this paragraph (d) are several in proportion to their respective underwriting obligations and not joint. (e) The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7 hereof shall survive the delivery of the Bonds. The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7(b) hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 11. Termination. This Agreement may be terminated at any time prior to the Closing Date by the Representatives with the consent of a majority in interest of the Underwriters including yourselves upon notice thereof to the Company, if prior to such time (a) the Company has failed, refused or been unable to perform any agreement on its part to be performed hereunder, (b) any other condition of the Underwriters' obligations hereunder is not fulfilled, (c) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange or there shall have been 23 23 established by the New York Stock Exchange or the American Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court any limitation on prices for such trading or any restrictions on the distribution of securities, (d) a banking moratorium shall have been declared either by federal or New York State authorities, (e) an outbreak or escalation of hostilities involving the United States shall have occurred or there shall have been a declaration by the United States of a national emergency or war or (f) there shall have occurred such a material adverse change in general economic, political or financial conditions, or the effect of international conditions on the financial markets in the United States is such, as to make it impracticable or inadvisable, in the judgment of a majority in interest of the Underwriters, to proceed with the delivery of the Bonds. Any termination hereof pursuant to this Section 11 shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 12. Information Furnished by Underwriters. The statements set forth in the last paragraph on the cover page, the paragraph containing stabilization information on the inside front cover page and the statements under the caption "Underwriting" in any Prospectus as amended or supplemented constitute the only written information furnished by or on behalf of any Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs (a) and (b) of Section 10 hereof. 13. Miscellaneous. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. This Agreement shall inure to the benefit of the Company, the Underwriters and, with respect to the provisions of Section 10 hereof, each controlling person referred to in said Section 10, and their respective successors, assigns, executors and administrators. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Bonds from any of the Underwriters. 14. Notices. All communications hereunder shall be in writing or by telegram and, if to the Underwriters, shall be mailed or delivered to the Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285-1100, attention: Syndicate Department; if to the Company, shall be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York 11801, attention: Treasurer. 24 24 Please sign and return to us ____ counterparts of this letter, whereupon this letter will become a binding agreement between the Company and the Underwriters in accordance with its terms. Very truly yours, LONG ISLAND LIGHTING COMPANY By: ------------------------ The foregoing agreement is hereby confirmed and accepted, as of the date first above written. LEHMAN BROTHERS INC. [Names of other Representatives] As Representatives of the several Underwriters By: LEHMAN BROTHERS INC. By: ----------------------------- 25 25 SCHEDULE I Title, Purchase Price and Description Title: General and Refunding Bonds, ____% Series Due ____ (the "Bonds") Principal amount: $__,000,000 Purchase price: ______% of the aggregate principal amount of the Bonds Underwriters' discount: $_______, being .___% of the aggregate principal amount of the Bonds Concession to Certain Securities Dealers: .___% of the aggregate principal amount of the Bonds Re-allowance to Brokers and Dealers: .___% of the aggregate principal amount of the Bonds Maturity: Interest Rate: Interest Payment Dates: Redemption Provisions: 26 26 SCHEDULE II
Principal Amount of ____ Series Underwriter Bonds - ----------- ----------- Lehman Brothers Inc. . . . . . . . . . . . $ [Names of other Representatives] . . . . . $ Total $
EX-1.B 3 FORM OF UNDERWRITING AGREEMENT, DEBENTURES 1 Exhibit 1(b) $___,000,000 LONG ISLAND LIGHTING COMPANY Debentures UNDERWRITING AGREEMENT ______________, 199_ Lehman Brothers Inc. [Names of other Representatives] As Representatives of the several Underwriters c/o Lehman Brothers Inc. 3 World Financial Center New York, New York 10285-1100 Dear Sirs: The undersigned, Long Island Lighting Company (the "Company"), hereby confirms its agreement with each of the several underwriters, hereinafter named, as follows: 1. Underwriters and Representatives. The term "Underwriters" as used herein shall be deemed to mean the several firms or corporations named in Schedule II hereto and any underwriter substituted as provided in Section 6. The term "Representatives" as used herein shall be deemed to mean Lehman Brothers Inc., [Names of other Representatives], who represent that they have been authorized by the Underwriters to execute this Agreement on their behalf and to act for them in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. Any action under or in respect of this Agreement taken by the Representatives will be binding upon all the Underwriters. 2. Description of Debentures. The Company proposes to issue and sell to the Underwriters the principal amount of its Debentures identified in Schedule I hereto (the "Debentures") in one or more series under an Indenture, dated as of __________, ____, as amended and supplemented by _____ indentures supplemental thereto and as to be amended and supplemented by a ______ Supplemental Indenture thereto, dated as of _______, 199_ (the "Indenture"), between the Company and [Chemical Bank] [State Street Bank and Trust Company (the successor in interest to the 2 2 Connecticut Bank and Trust Company, National Association)], as Trustee (the "Trustee"). 3. Representations and Warranties of the Company. The Company represents and warrants to each of the Underwriters, as of the date hereof and as of the Closing Date (as hereinafter defined), that: (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 33-_____) under the Securities Act of 1933, as amended (the "Act"), for the registration of the Debentures under the Act. The various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained therein at the time such part of such registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective, is hereinafter called the "Registration Statement" and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any document filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement. The Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to the Registration Statement, to the Representatives for each of the other Underwriters, if any, have been declared effective by the Commission in such form. No other document with respect to the Registration Statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the prospectus relating to the Debentures, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of 3 3 such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the Debentures in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing. The Company will not file any amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus or Prospectus, or file any document under the Exchange Act before the termination of the offering of the Debentures by the Underwriters if such document would be deemed to be incorporated by reference into such Preliminary Prospectus or Prospectus, of which the Representatives shall not previously have been advised and provided with a copy or to which the Representatives shall reasonably object in writing or which shall be disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as counsel on behalf of the Underwriters. (b) The Registration Statement and the Prospectus and any amendment or supplement thereto as of their respective effective or issue dates, and as of the closing date, (1) contained or will contain, as applicable, all statements of material fact required to be stated therein in accordance with the Act and the Rules and Regulations (as defined below); (2) conformed or will conform, as applicable, in all material respects to the requirements of the Act and the Rules and Regulations and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules, regulations and releases of the Commission thereunder; and (3) do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements or omissions in such documents based upon written information furnished to the Company by any Underwriter specifically for use therein or to any statements in or omissions from the statement of eligibility and qualification on Form T-1, or amendments thereto, of the Trustee under the Indenture. Any reference to "Rules and Regulations" shall mean the rules, regulations and releases adopted by the Commission under either the Act or the Exchange Act, as applicable. (c) The financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented present fairly the 4 4 financial condition and operations of the Company at the respective dates or for the respective periods to which they apply except as otherwise indicated in the Registration Statement or Prospectus as amended or supplemented; such financial statements have been prepared in each case in accordance with generally accepted accounting principles consistently applied throughout the periods involved except as otherwise indicated in the Registration Statement and Prospectus as amended or supplemented. Ernst & Young, who have examined the audited financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented and whose report appears or is incorporated by reference in the Prospectus as amended or supplemented, are independent public accountants as required by the Act and the Rules and Regulations. (d) Except as reflected in, or contemplated by, the Registration Statement and the Prospectus as amended or supplemented, since the respective most recent dates as of which information is given in the Registration Statement and the Prospectus as amended or supplemented, there has not been any material adverse change in the business, properties or financial condition or results of operation of the Company, and since such dates there has not been any material transaction entered into by the Company other than transactions contemplated by the Registration Statement and Prospectus as amended or supplemented and transactions in the ordinary course of business. The Company has no material contingent obligation which is not disclosed in the Registration Statement and Prospectus as amended or supplemented. (e) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof on the part of the Company to be fulfilled have been duly authorized by all necessary corporate action of the Company in accordance with the provisions of its Restated and Amended Certificate of Incorporation (the "Charter") and by-laws and applicable law, and the Debentures, when issued and delivered as provided herein, will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms except as limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Debentures conform to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented. (f) The issuance and sale of the Debentures, the consummation of the transactions herein contemplated, the 5 5 fulfillment of the terms hereof and the compliance by the Company with all the terms and provisions of the Indenture will not result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party. (g) The documents which are incorporated by reference in the Prospectus as amended or supplemented or from which information is so incorporated by reference, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations, and any documents so filed and incorporated by reference subsequent to the effective date of the Registration Statement shall, when they are filed with the Commission, conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations. (h) The conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied. 4. Purchase and Sale. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each such Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of the Debentures set forth opposite the name of such Underwriter in Schedule II hereto. 5. Reoffering by Underwriters. Subject to the terms and conditions of this Agreement, it is understood that the Underwriters propose to make a bona fide public offering of the Debentures as soon as practicable after the execution of this Agreement. 6. Time and Place of Closing. Delivery of the Debentures and payment therefor shall be made at the offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York at _____ A.M., New York Time, on ________, 199_, or such other place, time and date as the Representatives and the Company may agree upon. The hour and date of such delivery and payment are herein called the "Closing Date". Payment for the Debentures shall be by certified or official bank check payable to the order of the Company in New York Clearing House (next day) funds. The Debentures shall be delivered to the Representatives for the respective accounts of the Underwriters registered in such names and in such authorized denominations as the Representatives may reasonably request in writing not later than 12:30 P.M., New York Time, on the third business day prior to the 6 6 Closing Date, or, to the extent not so requested, registered in the names of the respective Underwriters in such authorized denominations as the Company shall determine. For the purpose of expediting the checking of the Debentures by the Representatives on behalf of the Underwriters, the Company agrees to make such Debentures available to the Representatives for such purposes at the corporate trust office of [Chemical Bank] [State Street Bank and Trust Company] not later than 2:00 P.M., New York Time, on the business day preceding the Closing Date, or at such other time and place as may be agreed upon by the Company and the Representatives. If any Underwriter or Underwriters default in its or their obligations to purchase the Debentures which it or they have agreed to purchase hereunder and the aggregate principal amount of Debentures which such defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent or less of the aggregate principal amount of Debentures set forth in Schedule II hereto, the other Underwriters shall be obligated severally, in proportion to their respective commitments to purchase Debentures hereunder, to purchase the Debentures which such defaulting Underwriter or Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of Debentures with respect to which such default or defaults occur is more than ten percent of the aggregate principal amount of Debentures set forth in Schedule II hereto and arrangements satisfactory to you and the Company for the purchase of such Debentures by other persons are not made within thirty-six hours after such default, the Company may, at its option, either (a) terminate this Agreement without liability on the part of any non-defaulting Underwriter or the Company, except for expenses to be paid or reimbursed by the Company pursuant to Section 7, or (b) require each non-defaulting Underwriter to purchase the aggregate principal amount of Debentures which such Underwriter otherwise agreed to purchase plus an amount equal to one-ninth thereof. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. The respective commitments of the several Underwriters for purposes of this paragraph shall be determined without regard to reduction in the respective Underwriters' obligations to purchase the principal amount of Debentures set forth opposite their names in Schedule II hereto. Nothing herein will relieve a defaulting Underwriter from liability for its default. 7 7 7. Covenants of the Company. The Company agrees that: (a) The Company will prepare the Prospectus as amended or supplemented in a form approved by the Representatives and will 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 Agreement or, if applicable, such earlier time as may be required by Rule 424(b). The Company will at or prior to the Closing Date deliver to each of the Representatives and to counsel for the Underwriters one signed copy of the Registration Statement as originally filed and of all amendments or supplements thereto (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, except exhibits incorporated by reference unless specifically requested), including a signed copy of each consent and certificate included therein or filed as an exhibit thereto. As soon as the Company is advised thereof, it will advise the Representatives orally (i) when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission and (ii) of the issuance of any stop order under the Act with respect to the Registration Statement or any suspension of the qualification of the Debentures in any jurisdiction, or the institution of any proceedings therefor of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order or suspension and to secure the prompt removal thereof if issued. The Company will deliver to the Underwriters, in accordance with the Representatives' instructions, as many copies of the Prospectus as amended or supplemented as the Representatives may reasonably request for the purposes contemplated by the Act, and will deliver to the Representatives as soon as practicable sufficient conformed copies of the Registration Statement (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented) and of all amendments thereto (in each case without exhibits) for distribution of one to each Underwriter. (b) The Company will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters for any expenses up to $9,000 (including fees and disbursements of counsel) incurred by them in connection with qualification of the Debentures for sale and the preparation of memoranda as to Blue Sky qualifications and exemptions and as to eligibility of the 8 8 Debentures for investment under the laws of such jurisdictions as you designate. The Company shall not, however, be required to pay any amount for any expenses of the Representatives or any of the Underwriters except as provided in paragraph 4 hereof and except, that in the event this Agreement shall be terminated in accordance with the provisions of paragraph 8 or 9 hereof, the Company will pay the fees and disbursements of counsel for the Underwriters, whose fees and disbursements the Underwriters agree to pay in any other event. The Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits. (c) If at any time when a prospectus relating to the Debentures is required to be delivered under the Act, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Representatives, shall occur, which in the opinion of the Company should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus as amended or supplemented not misleading in the light of the circumstances when it is delivered, or which, in your opinion, may be necessary in connection with the distribution of the Debentures, the Company will forthwith at its expense prepare and furnish to the Representatives a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus as amended or supplemented which will supplement or amend the Prospectus as amended or supplemented or file such documents so that the Prospectus as amended or supplemented will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus as amended or supplemented is delivered, not misleading. The Company will continue to prepare and file with the Commission in a timely manner all documents required to be filed pursuant to the requirements of the Exchange Act and the Rules and Regulations. (d) The Company will make generally available to its security holders (and shall deliver to the Representatives), as soon as practicable but in any event not later than 45 days after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement (as such term is defined in Rule 158 under the Act) (the "Effective Date") occurs, an earnings statement (which need not be audited, unless required so to be under Section 11(a) of the Act) of the Company in reasonable detail covering a period of at least twelve consecutive months beginning after the Effective Date. 9 9 (e) The Company will use its best efforts promptly to do and perform all things to be done and performed by it hereunder prior to the Closing Date and to satisfy all conditions precedent to the delivery by it of the Debentures. (f) The Company will use its best efforts to qualify the Debentures for offer and sale under the Blue Sky laws of such states as the Representatives may designate and will file such statements or reports as are or may be reasonably required by the laws of such states; provided, however, that the Company in complying with this paragraph need not qualify to do business in any state nor execute a general consent to service of process. (g) The Company will apply the proceeds of the sale of the Debentures, exclusive of accrued interest, if any, for the purposes set forth in the Prospectus as amended or supplemented. 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase and pay for the Debentures shall be subject to the accuracy of, and compliance with, the representations and warranties of the Company contained herein, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following further conditions: (a) The Prospectus as amended or supplemented in relation to the Debentures shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the Rules and Regulations; and no stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date. The Representatives shall have received, prior to payment for the Debentures, a certificate dated the Closing Date and signed by the President, any Vice President or the Treasurer of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (b) On the Closing Date there shall be in full force and effect an order of the Public Service Commission of the State of New York authorizing the issuance and sale of debt securities, including the Debentures, which shall not contain any provision mutually unacceptable to the Representatives and the Company by reason of being materially adverse, it being understood that no order in 10 10 effect at the date of this Agreement contains any such unacceptable provision. (c) At the Closing Date, the Representatives shall receive a favorable opinion from either Robert J. Grey, Esq., General Counsel of the Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the Company, which opinion shall be satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to the effect that (i) The Company is a corporation duly organized and validly existing, in good standing under the laws of the State of New York, and has power and authority (corporate and other) to own its property, to carry on its business and to issue the Debentures; (ii) The Agreement has been duly authorized, executed and delivered by the Company; (iii) An order has been adopted by the New York Public Service Commission authorizing the issuance and sale of the Debentures and the transactions related thereto as contemplated by the Agreement and said order is still in full force and effect; and no further approval, authorization, consent or other order of any public board or body is legally required for the authorization of the issuance and sale by the Company of the Debentures under the terms of this Agreement except compliance with the provisions of securities or Blue Sky laws of certain states in connection with the sale of the Debentures to the public in such states; (iv) The execution, delivery and performance of this Agreement, the Indenture and the Debentures by the Company and the consummation by the Company of the transactions contemplated hereby and thereby will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company pursuant to the terms of, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument known to such counsel to which the Company is a party or to which it or any of its properties is subject, (B) the Charter or by-laws of the Company or (C) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or body applicable to the Company or any of its properties; 11 11 (v) The Indenture conforms to the statements with respect thereto contained in the Registration Statement and Prospectus as amended or supplemented, has been duly authorized by the Company and duly executed and delivered, and is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, subject, however, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Indenture has been duly qualified under the Trust Indenture Act; (vi) The Debentures conform to the terms of this Agreement and to the statements with respect thereto contained in the Registration Statement and Prospectus as amended or supplemented and have been duly authorized; the Debentures have been duly executed, authenticated and delivered and are legal, valid and binding obligations of the Company enforceable in accordance with their terms and are entitled to the benefits and security afforded by the Indenture in accordance with the terms of such Indenture and such Debentures; (vii) The Company, to the best of such counsel's knowledge, possesses all franchises, licenses, permits, consents and orders of governmental and regulatory authorities and political subdivisions required for the maintenance and operation of its properties and business substantially as now conducted and as described in the Registration Statement and the Prospectus as amended or supplemented; or, if the Company does not possess all of such franchises, licenses, permits, consents and orders, the absence of such thereof as the Company does not possess will not, to the best of such counsel's knowledge, affect the maintenance and operation of such properties and business as a whole substantially as now conducted; and (viii) The Registration Statement has become effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act, the Registration Statement and the Prospectus, and each amendment or supplement thereto (including any document incorporated by reference into the Prospectus as amended or supplemented), as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act, the 12 12 Exchange Act and the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder; the conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied; such counsel has no reason to believe that either the Registration Statement or the Prospectus, or any such amendment or supplement (including any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), considered as a whole on the effective date of the Registration Statement and on the date hereof, contained or contain any untrue statement of material fact or omitted or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the descriptions in the Registration Statement and the Prospectus as amended or supplemented of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus as amended or supplemented (or required to be filed under the Exchange Act if upon such filing they would be incorporated, in whole or in part, by reference in the Prospectus as amended or supplemented) which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or Prospectus as amended or supplemented or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented. (d) At the Closing Date, the Representatives shall receive from Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, such opinion or opinions with respect to the valid existence of the Company, the validity of the Debentures, the Registration Statement, the Prospectus as amended or supplemented, and other related matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (e) On the date of this Agreement and on the Closing Date the Representatives shall have received from Ernst & Young a letter (with copies thereof for each of the Underwriters), which letter shall be reasonably satisfactory 13 13 in form and substance to the Representatives and Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, confirming that they are independent auditors with respect to the Company 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 financial statements and schedules incorporated by reference into the Registration Statement and the Prospectus as amended or supplemented audited by them comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the applicable published rules and regulations of the Commission thereunder with respect to a registration statement on Form S-3; (ii) they have read the minutes of the meetings of the stockholders and the Board of Directors of the Company, as set forth in the minute books or, if not set forth therein, in the form prepared by the Secretary of the Company, through a specified date not more than five business days prior to the date of the closing, read the unaudited financial statements, if any, incorporated by reference into the Registration Statement and Prospectus as amended or supplemented and also the latest available unaudited interim financial statements of the Company and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that: (A) any unaudited Balance Sheet, Statement of Income and Statement of Cash Flows included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented complies 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 of the Commission thereunder, and are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the most recent audited financial statements included or incorporated by reference therein, (B) at the date of the latest available balance sheet read by such accountants, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in 14 14 net current assets or Common Shareowners' Equity as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for shares of preferred stock redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof, or (C) for the twelve months ending on the date of the latest available unaudited interim financial statements of the Company, there were no decreases, as compared with the twelve months ending on the date of the latest audited financial statements, in total revenues, operating income, income before interest charges, or in the total amount of net income, except in all instances for decreases which the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, or which are described in such letter, identifying the same and specifying the amount thereof; (iii) they have performed more limited procedures than those set forth in the foregoing clause (ii), consisting merely of the reading of the minutes referred to in said clause and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that, with respect to the period from the date of the latest available financial statements of the Company to a specified date not more than five business days prior to the date of such letter, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with the amounts shown in the latest financial statements included or incorporated by 15 15 reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for purchase of preferred shares for series scheduled to be redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof; and (iv) they have compared certain dollar amounts (and percentages and other financial data derived from such dollar amounts) disclosed in, or incorporated by reference into, the Registration Statement and Prospectus as amended or supplemented or in Exhibits to the Registration Statement, with such dollar amounts, percentages and other financial information contained in the general accounting records of the Company or derived directly from such records by analysis or computation, and have found such dollar amounts, percentages and other financial information to be in agreement therewith, except as otherwise specified in such letter. (f) Since the respective most recent dates of which information is given in the Registration Statement and Prospectus as amended or supplemented and up to the Closing Date, there shall have been no material adverse change in the business, properties or financial condition or results of operation of the Company, except as reflected in or contemplated by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and since such dates and up to the Closing Date there shall have been no material transaction entered into by the Company other than transactions disclosed by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and transactions in the ordinary course of business; and at the Closing Date the Representatives shall have received a certificate to such 16 16 effect, signed by the President, any Vice President or the Treasurer of the Company. (g) All legal proceedings to be taken in connection with the issuance and sale of the Debentures shall have been satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy. In case any of the conditions specified above in this Section 8 shall not have been fulfilled at the Closing Date, this Agreement may be terminated by the Representatives, by mailing or delivering written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 9. Conditions of the Obligation of the Company. The obligation of the Company to deliver the Debentures shall be subject to the conditions set forth in the second clause of the first sentence of paragraph (a) of Section 8 hereof and in paragraph (b) of Section 8 hereof. In case any of the conditions specified in this Section 9 shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 10. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act or any other statute or common law and to reimburse, as incurred, each such Underwriter and controlling person for any legal or other expense (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with preparing to defend or defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or 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; PROVIDED, HOWEVER, that the indemnity agreement contained in this paragraph shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement or any such omission or alleged omission, if such statement or omission was made in reliance upon 17 17 information furnished herein or in writing to the Company by or on behalf of any Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto; and PROVIDED, FURTHER, that the Company shall not be liable in any case relating to any Preliminary Prospectus or any preliminary prospectus supplement to the extent that any such loss, claim, damage, liability, expense or action arises out of or is based upon the failure of any Underwriter in connection with a sale of any of the Debentures to any person to send or give a copy of the Prospectus, as the same may then be supplemented or amended, to such person with or prior to the written confirmation of the sale involved so long as the Company shall have fully complied with the last sentence of Section 7(a) hereof. The indemnity agreement of the Company contained in this paragraph and the representations and warranties of the Company contained in Section 3 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Debentures. The Underwriters agree promptly to notify the Company of the commencement of any litigation or proceedings against them or any of them, or any such controlling person, in connection with the sale of the Debentures or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (b) Each Underwriter agrees to indemnify and hold harmless the Company, its officers and directors, each other Underwriter, and each person who controls any thereof within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them become subject under the Act or any other statute or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or (ii) 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, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of such Underwriter, through the 18 18 Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. The indemnity agreement of the respective Underwriters contained in this paragraph shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Company, or any such other Underwriter or any such controlling person, and shall survive the delivery of the Debentures. The Company agrees promptly to notify the Representatives of the commencement of any litigation or proceedings against the Company or any of its officers or directors or against any such controlling person in connection with the sale of the Debentures or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (c) The Company and each of the Underwriters agree that, upon receipt of notice of the commencement of any action against the Company or any person controlling the Company, or against such Underwriter or any person controlling such Underwriter, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party (i) to the extent the indemnifying party was not materially prejudiced by such omission or (ii) otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal or other expenses 19 19 subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of paragraph (a) of this Section 10, representing the indemnified parties under paragraph (a) or (b) of this Section 10, as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. (d) If the indemnification provided for in this Section 10 shall for any reason be unavailable to an indemnified party under paragraphs (a) or (b) of this Section 10 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Debentures or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Debentures (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to such offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if 20 20 contributions pursuant to this Section 10 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 10 shall be deemed to include, for purposes of this Section 10, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Debentures underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this paragraph (d) are several in proportion to their respective underwriting obligations and not joint. (e) The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7 hereof shall survive the delivery of the Debentures. The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7(b) hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 11. Termination. This Agreement may be terminated at any time prior to the Closing Date by the Representatives with the consent of a majority in interest of the Underwriters including yourselves upon notice thereof to the Company, if prior to such time (a) the Company has failed, refused or been unable to perform any agreement on its part to be performed hereunder, (b) any other condition of the Underwriters' obligations hereunder is not fulfilled, (c) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange or there shall have been established by the New York Stock Exchange or the American Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court any limitation on prices for such trading or any restrictions on the distribution of securities, (d) a banking moratorium shall have been declared either by federal or New York State authorities, (e) an outbreak or escalation of hostilities involving the United States shall have 21 21 occurred or there shall have been a declaration by the United States of a national emergency or war or (f) there shall have occurred such a material adverse change in general economic, political or financial conditions, or the effect of international conditions on the financial markets in the United States is such, as to make it impracticable or inadvisable, in the judgment of a majority in interest of the Underwriters, to proceed with the delivery of the Debentures. Any termination hereof pursuant to this Section 11 shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 12. Information Furnished by Underwriters. The statements set forth in the last paragraph on the cover page, the paragraph containing stabilization information on the inside front cover page and the statements under the caption "Underwriting" in any Prospectus as amended or supplemented constitute the only written information furnished by or on behalf of any Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs (a) and (b) of Section 10 hereof. 13. Miscellaneous. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. This Agreement shall inure to the benefit of the Company, the Underwriters and, with respect to the provisions of Section 10 hereof, each controlling person referred to in said Section 10, and their respective successors, assigns, executors and administrators. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Debentures from any of the Underwriters. 14. Notices. All communications hereunder shall be in writing or by telegram and, if to the Underwriters, shall be mailed or delivered to the Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285-1100, attention: Syndicate Department; if to the Company, shall be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York 11801, attention: Treasurer. 22 22 Please sign and return to us _______ counterparts of this letter, whereupon this letter will become a binding agreement between the Company and the Underwriters in accordance with its terms. Very truly yours, LONG ISLAND LIGHTING COMPANY By: ------------------------- The foregoing agreement is hereby confirmed and accepted, as of the date first above written. LEHMAN BROTHERS INC. [Names of other Representatives] As Representatives of the several Underwriters By: LEHMAN BROTHERS INC. By: ------------------------------- 23 SCHEDULE I ____ Series Debentures Title: Debentures, ____% Series Due ____ (the "____ Series Debentures") Aggregate principal amount: $___________ Price to Public: ______% of the aggregate principal amount ofthe ____ Series Debentures Underwriting Discounts and Commissions: $_________, being ____% of the aggregate principal amount of the ____ Series Debentures Concession to Certain Securities Dealers: .__% of the aggregate principal amount of the ____ Series Debentures Re-allowance to Brokers and Dealers: .__% of the aggregate principal amount of the ____ Series Debentures Maturity: Interest Rate: Interest Payment Dates: Redemption Provisions: Sinking Fund Provisions: 24 SCHEDULE II
Principal Amount of ____ Series Underwriter Debentures - ----------- ----------- Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . $ [Names of other Representatives] . . . . . . . . . . . . . $ Total $
EX-1.C 4 FORM OF UNDERWRITING AGREEMENT, COMMON STOCK 1 Exhibit 1(c) _______ Shares LONG ISLAND LIGHTING COMPANY Common Stock (Par Value $5 per share) UNDERWRITING AGREEMENT _______, 199_ Lehman Brothers Inc. [Names of other Representatives] As Representatives of the several Underwriters c/o Lehman Brothers Inc. 3 World Financial Center New York, New York 10285-1100 Dear Sirs: The undersigned, Long Island Lighting Company (the "Company"), hereby confirms its agreement with each of the several underwriters, hereinafter named, as follows: 1. Underwriters and Representatives. The term "Underwriters" as used herein shall be deemed to mean the several firms or corporations named in Schedule II hereto and any underwriter substituted as provided in Section 6. The term "Representatives" as used herein shall be deemed to mean Lehman Brothers Inc., [names of other Representatives] who represent that they have been authorized by the Underwriters to execute this Agreement on their behalf and to act for them in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. Any action under or in respect of this Agreement taken by the Representatives will be binding upon all the Underwriters. 2. Description of Common Stock. The Company proposes to issue and sell to the Underwriters certain shares (the "Firm Stock") of its Common Stock, par value $5 per share (the "Common Stock"). In addition, the Company proposes to grant to the Underwriters an option to purchase up to an additional _____ shares of the Common Stock on the terms and for the purposes set forth in Section 4 (the "Option Stock"). The Firm Stock and the 2 2 Option Stock, if purchased, are hereinafter collectively called the "Stock." Schedule I hereto specifies the aggregate number of shares of the Stock, the initial per share public offering price of the Stock, the per share purchase price to the Underwriters, any concession from the initial public offering price to be allowed to dealers or to brokers and any additional terms of the Stock. 3. Representations and Warranties of the Company. The Company represents and warrants to each of the Underwriters, as of the date hereof and as of each Delivery Date (as hereinafter defined), that: (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 33-_____) under the Securities Act of 1933, as amended (the "Act"), for the registration of the Stock under the Act. The various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained therein at the time such part of the registration statement became effective, each as amended at the time such part of the registration statement became effective, is hereinafter called the "Registration Statement" and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any document filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement. The Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to the Registration Statement, to the Representatives for each of the other Underwriters, if any, have been declared effective by the Commission in such form. No other document with respect to the Registration Statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. Any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) of the Rules and Regulations (as defined below) of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the prospectus relating to the Stock, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such 3 3 Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the Stock in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing). Any reference to "Rules and Regulations" shall mean the rules, regulations and releases adopted by the Commission under either the Act or the Exchange Act, as applicable. The Company will not file any amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus or Prospectus, or file any document under the Exchange Act before the termination of the offering of the Stock by the Underwriters if such document would be deemed to be incorporated by reference into such Preliminary Prospectus or Prospectus, of which the Representatives shall not previously have been advised and provided with a copy or to which the Representatives shall reasonably object in writing or which shall be disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as counsel on behalf of the Underwriters. (b) The Registration Statement and the Prospectus and any amendment or supplement thereto as of their respective effective or issue dates or the date on which they were filed with the Commission, as the case may be, and as of each Delivery Date (1) contained or will contain, as applicable, all statements of material fact required to be stated therein in accordance with the Act and the Rules and Regulations (as defined below); (2) conformed or will conform, as applicable, in all material respects to the requirements of the Act and the Rules and Regulations; and (3) do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements or omissions in such documents based upon written information furnished to the Company by any Underwriter specifically for use therein. (c) The Company and each of its subsidiaries (as defined in Section 20) have been duly incorporated and are validly existing as corporations in good standing under the 4 4 laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged; and none of the subsidiaries of the Company is a "significant subsidiary", as such term is defined in Rule 405 of the Rules and Regulations. (d) The Company has and will have an authorized capitalization as set forth in the Prospectus and the Prospectus as amended or supplemented, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims. (e) The financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented present fairly the financial condition and operations of the Company at the respective dates or for the respective periods to which they apply except as otherwise indicated in the Registration Statement or Prospectus as amended or supplemented; such financial statements have been prepared in each case in accordance with generally accepted accounting principles consistently applied throughout the periods involved except as otherwise indicated in the Registration Statement and Prospectus as amended or supplemented. Ernst & Young, who have examined the audited financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented and whose report appears or is incorporated by reference in the Prospectus as amended or supplemented, are, and were during the periods covered by the financial statements on which they reported, independent public accountants as required by the Act and the Rules and Regulations. (f) Except as reflected in, or contemplated by, the Registration Statement and the Prospectus as amended or supplemented, since the respective most recent dates as of which information is given in the Registration Statement and the Prospectus as amended or supplemented, there has not 5 5 been any material adverse change in the business, properties or financial condition or results of operation of the Company, and since such dates there has not been any material transaction entered into by the Company other than transactions contemplated by the Registration Statement and Prospectus as amended or supplemented and transactions in the ordinary course of business, and (ii) there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries might have a material adverse effect on the consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries; and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. The Company has no material contingent obligation which is not disclosed in the Registration Statement and Prospectus as amended or supplemented. (g) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof on the part of the Company to be fulfilled have been duly authorized by all necessary corporate action of the Company in accordance with the provisions of its Restated and Amended Certificate of Incorporation (the "Charter") and by-laws and applicable law, and the shares of Stock have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and nonassessable and will have the rights set forth in the Charter. The Stock when issued will conform to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented. (h) The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the Charter or by-laws of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets; and except for the order of the Public Service Commission of the 6 6 State of New York which has been received by the Company, the registration of the Stock under the Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase and distribution of the Stock by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby. (i) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act. (j) There are no contracts or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Act or by the Rules and Regulations which have not been described in the Prospectus or filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Rules and Regulations. (k) The documents which are incorporated by reference in the Prospectus as amended or supplemented or from which information is so incorporated by reference, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations, and none of such documents 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; and any documents so filed and incorporated by reference subsequent to the effective date of the Registration Statement shall, when they are filed with the Commission, conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (l) The conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied. 7 7 4. Purchase and Sale. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each such Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the number of shares of Firm Stock set forth opposite the name of such Underwriter in Schedule II hereto. In addition, the Company grants to the Underwriters an option to purchase the number of shares of Option Stock set forth in Schedule I hereto. Such option is granted solely for the purpose of covering over-allotments in the sale of Firm Stock and is exercisable as provided in Section 6 hereof. Shares of Option Stock shall be purchased severally for the account of the Underwriters in proportion to the number of shares of Firm Stock set forth opposite the name of such Underwriters in Schedule II hereto. The respective purchase obligations of each Underwriter with respect to the Option Stock shall be adjusted by the Representatives so that no Underwriter shall be obligated to purchase Option Stock other than in 100 share amounts. The purchase price of both the Firm Stock and any Option Stock is set forth in Schedule I hereto. The Company shall not be obligated to deliver any of the Stock to be delivered on the First Delivery Date or the Second Delivery Date (as hereinafter defined) except upon payment for all the Stock to be purchased on such Delivery Date as provided herein. 5. Offering of Stock by Underwriters. Subject to the terms and conditions of this Agreement, it is understood that the Underwriters propose to make a bona fide public offering of the Stock as soon as practicable after the execution of this Agreement. 6. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock shall be made at the office of Lehman Brothers Inc., [address], at 10:00 A.M., New York City time, on the fifth full business day following the date of this Agreement or at such other date or place as shall be determined by agreement between the Representatives and the Company. This date and time are sometimes referred to as the "First Delivery Date." On the First Delivery Date, the Company shall deliver or cause to be delivered certificates representing the Firm Stock to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by certified or official bank check or checks payable in New York Clearing House (next-day) funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such names and in such denominations as the 8 8 Representatives shall request in writing not less than two full business days prior to the First Delivery Date. For the purpose of expediting the checking and packaging of the certificates for the Firm Stock, the Company shall make the certificates representing the Firm Stock available for inspection by the Representatives in New York, New York, not later than 2:00 P.M., New York City time, on the business day prior to the First Delivery Date. At any time on or before the thirtieth day after the date of this Agreement the option granted in Section 4 may be exercised by written notice being given to the Company by the Representatives. Such notice shall set forth the aggregate number of shares of Option Stock as to which the option is being exercised, the names in which the shares of Option Stock are to be registered, the denominations in which the shares of Option Stock are to be issued and the date and time, as determined by the Representatives, when the shares of Option Stock are to be delivered; provided, however, that this date and time shall not be earlier than the First Delivery Date nor earlier than the second business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised or at such other date or place as shall be determined by agreement between the Representatives and the Company. The date and time the shares of Option Stock are delivered are sometimes referred to as the "Second Delivery Date" and the First Delivery Date and the Second Delivery Date are sometimes each referred to as a "Delivery Date". Delivery of and payment for the Option Stock shall be made at the office of Lehman Brothers Inc., [address] (or at such other place as shall be determined by agreement between the Representatives and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date. On the Second Delivery Date, the Company shall deliver or cause to be delivered the certificates representing the Option Stock to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by certified or official bank check or checks payable in New York Clearing House (next-day) funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall be registered in such names and in such denominations as the Representatives shall request in the aforesaid written notice. For the purpose of expediting the checking and packaging of the certificates for the Option Stock, the Company shall make the certificates representing the Option Stock available for inspection by the Representatives in New York, New York, not later than 2:00 P.M., New York City time, on the business day prior to the Second Delivery Date. 9 9 If, on either Delivery Date, any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Underwriters shall be obligated to purchase the Stock which the defaulting Underwriter agreed but failed to purchase on such Delivery Date in the respective proportions which the number of shares of the Firm Stock set forth opposite the name of each remaining non-defaulting Underwriter in Schedule II hereto bears to the total number of shares of the Firm Stock set forth opposite the names of all the remaining non-defaulting Underwriters in Schedule II hereto; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Stock on such Delivery Date if the total number of shares of the Stock which the defaulting Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total number of shares of the Stock to be purchased on such Delivery Date, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of shares of the Stock which it agreed to purchase on such Delivery Date pursuant to the terms of Section 4. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all the Stock to be purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to the Representatives do not elect to purchase the shares which the defaulting Underwriter or Underwriters agreed but failed to purchase on such Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the obligation of the Underwriters to purchase, and of the Company to sell the Option Stock) shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth in Section 7(b). As used in this Agreement, the term "Underwriter" includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule II hereto who, pursuant to this Section, purchases Stock which a defaulting Underwriter agreed but failed to purchase. Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company for damages caused by its default. If other underwriters are obligated or agree to purchase the Stock of a defaulting or withdrawing Underwriter, either the Representatives or the Company may postpone the First Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, the Prospectus or in any other document or arrangement. 10 10 7. Covenants of the Company. The Company agrees that: (a) The Company will prepare the Prospectus as amended or supplemented in a form approved by the Representatives and will 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 Agreement or, if applicable, such earlier time as may be required by Rule 424(b). The Company will at or prior to the First Delivery Date deliver to each of the Representatives and to counsel for the Underwriters one signed copy of the Registration Statement as originally filed and of all amendments or supplements thereto (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, except exhibits incorporated by reference unless specifically requested), including a signed copy of each consent and certificate included therein or filed as an exhibit thereto. As soon as the Company is advised thereof, it will advise the Representatives orally (i) when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission and (ii) of the issuance of any stop order under the Act with respect to the Registration Statement or any suspension of the qualification of the Common Stock in any jurisdiction, or the institution of any proceedings therefor of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order or suspension and to secure the prompt removal thereof if issued. The Company will deliver to the Underwriters, in accordance with the Representatives' instructions, as many copies of the Prospectus as amended or supplemented as the Representatives may reasonably request for the purposes contemplated by the Act, and will deliver to the Representatives as soon as practicable sufficient conformed copies of the Registration Statement (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented) and of all amendments thereto (in each case without exhibits) for distribution of one to each Underwriter. (b) The Company will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters for any expenses up to $9,000 (including fees and disbursements of counsel) incurred by them in connection with qualification of the Stock for sale and the preparation of memoranda as to Blue Sky 11 11 qualifications and exemptions and as to eligibility of the Stock for investment under the laws of such jurisdictions as you designate. The Company shall not, however, be required to pay any amount for any expenses of the Representatives or any of the Underwriters except as provided in paragraph 4 hereof and except, that in the event this Agreement shall be terminated in accordance with the provisions of Section 8 or 9 hereof, the Company will pay the fees and disbursements of counsel for the Underwriters, whose fees and disbursements the Underwriters agree to pay in any other event. The Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits. (c) If at any time when a prospectus relating to the Stock is required to be delivered under the Act, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Representatives, shall occur, which in the opinion of the Company should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus as amended or supplemented not misleading in the light of the circumstances when it is delivered, or which, in your opinion, may be necessary in connection with the distribution of the Stock, the Company will forthwith at its expense prepare and furnish to the Representatives a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus as amended or supplemented which will supplement or amend the Prospectus as amended or supplemented or file such documents so that the Prospectus as amended or supplemented will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus as amended or supplemented is delivered, not misleading. The Company will continue to prepare and file with the Commission in a timely manner all documents required to be filed pursuant to the requirements of the Exchange Act and the Rules and Regulations. (d) The Company will make generally available to its security holders (and shall deliver to the Representatives), as soon as practicable but in any event not later than 45 days after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement (as such term is defined in Rule 158 under the Act) (the "Effective Date") occurs, an earnings statement (which need not be audited, unless required so to be under Section 11(a) of the Act) of the Company in reasonable detail covering a period of at least twelve consecutive months beginning after the Effective Date. 12 12 (e) For a period of 180 days from the date of the Prospectus as amended or supplemented, the Company will not offer for sale, sell or otherwise dispose of, directly or indirectly, any shares of Common Stock (other than the Stock and shares issued pursuant to the Company's Employee Stock Purchase Plan, Automatic Dividend Reinvestment Plan, employee benefit plans, qualified stock option plans or other employee compensation plans existing on the date hereof or pursuant to currently outstanding options, warrants or rights), or sell or grant options, rights or warrants with respect to any shares of Common Stock (other than the grant of options pursuant to options plans existing on the date hereof), without the prior written consent of the Representatives. (f) The Company will use its best efforts promptly to do and perform all things to be done and performed by it hereunder prior to each Delivery Date and to satisfy all conditions precedent to the delivery by it of the Stock. (g) The Company will use its best efforts to qualify the Stock for offer and sale under the Blue Sky laws of such states as the Representatives may designate and will file such statements or reports as are or may be reasonably required by the laws of such states; provided, however, that the Company in complying with this paragraph need not qualify to do business in any state nor execute a general consent to service of process. (h) The Company will apply the proceeds of the sale of the Stock for the purposes set forth in the Prospectus as amended or supplemented. 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase and pay for the Stock shall be subject to the accuracy, when made and on each Delivery Date, of, and compliance with, the representations and warranties of the Company contained herein, to the performance by the Company of its obligations to be performed hereunder prior to each Delivery Date, and to the following further terms and conditions: (a) The Prospectus as amended or supplemented in relation to the Stock shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the Rules and Regulations; and no stop order suspending the effectiveness of the Registration Statement shall be in effect on each Delivery Date and no proceedings for that purpose shall be pending before, or threatened by, the Commission on each Delivery Date; and any request of the Commission for inclusion of additional information in the Registration 13 13 Statement or the Prospectus or otherwise shall have been complied with. The Representatives shall have received, prior to any payment for the Stock, a certificate dated the respective Delivery Date and signed by the President, any Vice President or the Treasurer of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (b) No Underwriter shall have discovered and disclosed to the Company on or prior to such Delivery Date that the Registration Statement or the Prospectus or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) On each Delivery Date there shall be in full force and effect an order of the Public Service Commission of the State of New York authorizing the issuance and sale of the Stock which shall not contain any provision mutually unacceptable to the Representatives and the Company by reason of being materially adverse, it being understood that no order in effect at the date of this Agreement contains any such unacceptable provision. (d) At each Delivery Date, the Representatives shall receive a favorable opinion from either Robert J. Grey, Esq., General Counsel of the Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the Company, which opinion shall be satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to the effect that -- (i) The Company and each of its subsidiaries is a corporation duly organized and validly existing, in good standing under the laws of the State of New York, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their business requires such qualifications, with power and authority (corporate and other) to own their property, to carry on their business and to issue the Stock; (ii) The Agreement has been duly authorized, executed and delivered by the Company; 14 14 (iii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company, including the shares of Stock being delivered on such Delivery Date, have been duly and validly authorized and issued, are fully paid and nonassessable and conform to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented; (iv) There are no preemptive or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any shares of the Stock pursuant to the Company's Charter or by-laws or any agreement or other instrument known to such counsel; (v) An order has been adopted by the Public Service Commission of the State of New York authorizing the issuance and sale of the Stock and the transactions related thereto as contemplated by the Agreement and said order is still in full force and effect; and no further approval, authorization, consent or other order of any court, governmental agency, public board or body is legally required for the authorization of the issuance and sale by the Company of the Stock under the terms of this Agreement except compliance with the provisions of securities or Blue Sky laws of certain states in connection with the sale of the Stock to the public in such states; (vi) The Company has good and marketable title in fee simple to all real property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Prospectus or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company; and all real property and buildings held under lease by the Company are held by them under valid, subsisting and enforceable leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company. In giving the above opinion, such counsel may state that no examination of record titles for the purpose of such opinion has been made, and that he is relying upon a general review of the titles of the Company, upon opinions of local counsel and abstracts, reports and policies of title companies rendered or issued at or subsequent to the time of acquisition of such property by the Company, upon opinions of counsel to the lessors of such property and, in respect of matters of fact, upon certificates of officers of the Company, provided that such counsel 15 15 shall state that he believes that both the Underwriters and he are justified in relying upon such opinions, abstracts, reports, policies and certificates; (vii) The execution, delivery and performance of this Agreement and the Stock by the Company and the consummation by the Company of the transactions contemplated hereby will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company pursuant to the terms of, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument known to such counsel to which the Company is a party or to which it or any of its properties is subject, (B) the Charter or by-laws of the Company or (C) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or body applicable to the Company or any of its properties; (viii) The Company, to the best of such counsel's knowledge, possesses all franchises, licenses, permits, consents and orders of governmental and regulatory authorities and political subdivisions required for the maintenance and operation of its properties and business substantially as now conducted and as described in the Registration Statement and the Prospectus as amended or supplemented; or, if the Company does not possess all of such franchises, licenses, permits, consents and orders, the absence of such thereof as the Company does not possess will not, to the best of such counsel's knowledge, affect the maintenance and operation of such properties and business as a whole substantially as now conducted; and (ix) The Registration Statement has become effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act, the Registration Statement and the Prospectus, and each amendment or supplement thereto (including any document incorporated by reference into the Prospectus as amended or supplemented), as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act and the Exchange Act and the Rules and Regulations; the conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied; such 16 16 counsel has no reason to believe that either the Registration Statement or the Prospectus, or any such amendment or supplement (including any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), considered as a whole on the effective date of the Registration Statement and on the date hereof, contained or contain any untrue statement of material fact or omitted or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the descriptions in the Registration Statement and the Prospectus as amended or supplemented of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus as amended or supplemented (or required to be filed under the Exchange Act if upon such filing they would be incorporated, in whole or in part, by reference in the Prospectus as amended or supplemented) which are not described as required, nor of any contracts or documents of a character required to be described in the Registration Statement or Prospectus as amended or supplemented or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented; [(x) The statements contained in the Prospectus under the caption ___, insofar as they describe federal statutes, rules and regulations, constitute a fair summary thereof and the opinion of such counsel filed as Exhibit 8 to the Registration Statement is confirmed and the Underwriters may rely upon such opinion as if it were addressed to them;] and (xi) To the best of such counsel's knowledge, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act. 17 17 (e) At each Delivery Date, the Representatives shall receive from Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, such opinion or opinions with respect to the valid existence of the Company, the validity of the Stock, the Registration Statement, the Prospectus as amended or supplemented, and other related matters as you may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (f) On the date of this Agreement and on each Delivery Date the Representatives shall have received from Ernst & Young a letter (with copies thereof for each of the Underwriters), which letter shall be reasonably satisfactory in form and substance to the Representatives and Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, confirming that they are independent auditors with respect to the Company 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 financial statements and schedules incorporated by reference into the Registration Statement and the Prospectus as amended or supplemented audited by them comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the applicable published rules and regulations of the Commission thereunder with respect to a registration statement on Form S-3; (ii) they have read the minutes of the meetings of the stockholders and the Board of Directors of the Company, as set forth in the minute books or, if not set forth therein, in the form prepared by the Secretary of the Company, through a specified date not more than five business days prior to the Delivery Date, read the unaudited financial statements, if any, incorporated by reference into the Registration Statement and Prospectus as amended or supplemented and also the latest available unaudited interim financial statements of the Company and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that: (A) any unaudited Balance Sheet, Statement of Income and Statement of Cash Flows included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented complies as to form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and 18 18 the published rules and regulations of the Commission thereunder, and are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the most recent audited financial statements included or incorporated by reference therein, (B) at the date of the latest available balance sheet read by such accountants, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for shares of preferred stock redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof, or (C) for the twelve months ending on the date of the latest available unaudited interim financial statements of the Company, there were no decreases, as compared with the twelve months ending on the date of the latest audited financial statements, in total revenues, operating income, income before interest charges, or in the total amount of net income, except in all instances for decreases which the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, or which are described in such letter, identifying the same and specifying the amount thereof; (iii) they have performed more limited procedures than those set forth in the foregoing clause (ii), consisting merely of the reading of the minutes referred to in said clause and inquired of certain 19 19 officials of the Company responsible for financial and accounting matters, and that such officials have stated that, with respect to the period from the date of the latest available financial statements of the Company to a specified date not more than five business days prior to the date of such letter, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with the amounts shown in the latest financial statements included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for purchase of preferred shares for series scheduled to be redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof; and (iv) they have compared certain dollar amounts (and percentages and other financial data derived from such dollar amounts) disclosed in, or incorporated by reference into, the Registration Statement and Prospectus as amended or supplemented or in Exhibits to the Registration Statement, with such dollar amounts, percentages and other financial information contained in the general accounting records of the Company or derived directly from such records by analysis or computation, and have found such dollar amounts, percentages and other financial information to be in agreement therewith, except as otherwise specified in such letter. (g) Since the respective most recent dates as of which information is given in the Registration Statement and Prospectus as amended or supplemented and up to such Delivery Date, there shall have been no material adverse change in the business, properties or financial condition or results of operation of the Company, except as reflected in or contemplated by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and since such dates and up to such Delivery Date there shall have been no material transaction entered into by the Company other than transactions disclosed by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and 20 20 deemed to be incorporated by reference into the Prospectus as amended or supplemented), and transactions in the ordinary course of business; and at such Delivery Date the Representatives shall have received a certificate to such effect, signed by the President, any Vice President or the Treasurer of the Company. (h) Subsequent to the execution and delivery of this Agreement and prior to each Delivery Date (i) no downgrading shall have occurred in the rating accorded the Company's debt securities or preferred stock by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities or preferred stock. (i) All legal proceedings to be taken and all opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement in connection with the issuance and sale of the Stock shall have been satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy. In case any of the conditions specified above in this Section 8 shall not have been fulfilled at each Delivery Date, this Agreement may be terminated by the Representatives, with the consent of the Underwriters including yourselves who have agreed to purchase in the aggregate fifty percent or more of the Stock, by mailing or delivering written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 9. Conditions of the Obligation of the Company. The obligation of the Company to deliver the Stock shall be subject to the conditions set forth in the second clause of the first sentence of paragraph (a) of Section 8 hereof and in paragraph (c) of Section 8 hereof. In case any of the conditions specified in this Section 9 shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 21 21 10. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act or any other statute or common law and to reimburse, as incurred each such Underwriter and controlling person for any legal or other expense (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with preparing to defend or defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or (ii) 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; provided, however, that the indemnity agreement contained in this paragraph shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of any Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto; and provided, further, that the Company shall not be liable in any case relating to any Preliminary Prospectus or any preliminary prospectus supplement to the extent that any such loss, claim, damage, liability, expense or action arises out of or is based upon the failure of any Underwriter in connection with a sale of any of the Stock to any person to send or give a copy of the Prospectus, as the same may then be supplemented or amended, to such person with or prior to the written confirmation of the sale involved so long as the Company shall have fully complied with the last sentence of Section 7(a) hereof. The indemnity agreement of the Company contained in this paragraph and the representations and warranties of the Company contained in Section 3 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Stock. The Underwriters agree promptly to notify the Company of the commencement of any litigation or proceedings against them or any of them, or any such controlling person, in connection with the sale of the Stock or with any Preliminary Prospectus, any preliminary prospectus supplement, 22 22 the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its officers and directors, each other Underwriter, and each person who controls any thereof within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them become subject under the Act or any other statute or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or (ii) 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, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of such Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. The indemnity agreement of the respective Underwriters contained in this paragraph shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Company, or any such other Underwriter or any such controlling person, and shall survive the delivery of the Stock. The Company agrees promptly to notify the Representatives of the commencement of any litigation or proceedings against the Company or any of its officers or directors or against any such controlling person in connection with the sale of the Stock or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (c) The Company and each of the Underwriters agree that, upon receipt of notice of the commencement of any action against the Company or any person controlling the Company, or against such Underwriter or any person controlling such Underwriter, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying 23 23 party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party (i) to the extent the indemnifying party was not materially prejudiced by such omission or (ii) otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the indemnified party or parties who shall be defendant or defendants in such action; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of paragraph (a) of this Section 10, representing the indemnified parties under paragraph (a) or (b) of this Section 10, as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. (d) If the indemnification provided for in this Section 10 shall for any reason be unavailable to an indemnified party under paragraphs (a) or (b) of this Section 10 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one 24 24 hand and the Underwriters on the other from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Stock (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to such offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 10 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 10 shall be deemed to include, for purposes of this Section 10, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Stock underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this paragraph (d) are several in proportion to their respective underwriting obligations and not joint. (e) The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7 hereof shall survive the delivery of the Stock. The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in 25 25 Section 7(b) hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 11. Termination. This Agreement may be terminated at any time prior to each Delivery Date by the Representatives with the consent of a majority in interest of the Underwriters including yourselves upon notice thereof to the Company, if prior to such time (a) the Company has failed, refused or been unable to perform any agreement on its part to be performed hereunder, (b) any other condition of the Underwriters' obligations hereunder is not fulfilled, (c) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange or there shall have been established by the New York Stock Exchange or the American Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court any limitation on prices for such trading or any restrictions on the distribution of securities, (d) a banking moratorium shall have been declared either by federal or New York State authorities, (e) an outbreak or escalation of hostilities involving the United States shall have occurred or there shall have been a declaration by the United States of a national emergency or war or (f) there shall have occurred such a material adverse change in general economic, political or financial conditions, or the effect of international conditions on the financial markets in the United States is such, as to make it impracticable or inadvisable, in the judgment of a majority in interest of the Underwriters, to proceed with the delivery of the Stock. Any termination hereof pursuant to this Section 11 shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 12. Information Furnished by Underwriters. The statements set forth in the last paragraph on the cover page, the paragraph containing stabilization information on the inside front cover page and the statements under the caption "Underwriting" in any Prospectus as amended or supplemented constitute the only written information furnished by or on behalf of any Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs (a) and (b) of Section 10 hereof. 13. Miscellaneous. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. This Agreement shall inure to the benefit of the Company, the Underwriters and, with respect to the provisions of Section 10 hereof, each controlling person referred to in said Section 10, and their respective successors, assigns, executors and administrators. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. The term "successors" as used in this Agreement shall not include any 26 26 purchaser, as such purchaser, of any of the Stock from any of the Underwriters. 14. Notices. All communications hereunder shall be in writing or by telegram or telecopy and, if to the Underwriters, shall be mailed or delivered to the Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285-1100, Attention: Syndicate Department (Fax: 212-528-8822); if to the Company, shall be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York 11801, Attention: Treasurer. Please sign and return to us _____ counterparts of this letter, whereupon this letter will become a binding agreement between the Company and the Underwriters in accordance with its terms. Very truly yours, LONG ISLAND LIGHTING COMPANY By: ------------------------ The foregoing agreement is hereby confirmed and accepted, as of the date first above written. LEHMAN BROTHERS INC. [Names of other Representatives] As Representatives of the several Underwriters By: LEHMAN BROTHERS INC. By: ------------------------------ 27 27 SCHEDULE I Purchase Price and Description of Stock Aggregate Number of Firm Shares: _______ Aggregate Number of Option Shares: _______ Initial Per Share Public Offering Price: $___ per share Per Share Purchase Price to the Underwriters: $______ per share Allowance to Certain Securities Dealers: __c. Allowance to Brokers and Dealers: __c. Additional Terms: 28 28 SCHEDULE II
Number of Underwriter Firm Shares ----------- ----------- Lehman Brothers Inc. . . . . . . . . . . [Names of other Representatives] . . . . ----------- Total ===========
EX-1.D 5 FORM OF UNDERWRITING AGREEMENT, PREFERRED STOCK 1 Exhibit 1(d) _________ Shares LONG ISLAND LIGHTING COMPANY Preferred Stock, ____%, Series __ (Cumulative, Par Value $__ Per Share) UNDERWRITING AGREEMENT ____________, 199_ Lehman Brothers Inc. [Names of other Representatives] As Representatives of the several Underwriters c/o Lehman Brothers Inc. 3 World Financial Center New York, New York 10285-1100 Dear Sirs: The undersigned, Long Island Lighting Company (the "Company"), hereby confirms its agreement with each of the several underwriters, hereinafter named, as follows: 1. Underwriters and Representatives. The term "Underwriters" as used herein shall be deemed to mean the several firms or corporations named in Schedule II hereto and any underwriter substituted as provided in Section 6. The term "Representatives" as used herein shall be deemed to mean Lehman Brothers Inc., [Names of other Representatives], who represent that they have been authorized by the Underwriters to execute this Agreement on their behalf and to act for them in the manner herein provided. All obligations of the Underwriters hereunder are several and not joint. Any action under or in respect of this Agreement taken by the Representatives will be binding upon all the Underwriters. 2. Description of Preferred Stock. The Company proposes to issue and sell to the Underwriters certain shares of its Preferred Stock (the "Stock"). Schedule I hereto specifies the title of the Stock, the dividend rate of the Stock, the aggregate number of shares of the Stock, the initial per share public offering price of the Stock, the per share purchase price to the Underwriters, any concession from the initial public offering price to be allowed to dealers or to brokers and any additional terms of the Stock. 2 2 3. Representations and Warranties of the Company. The Company represents and warrants to each of the Underwriters, as of the date hereof and as of the Closing Date (as hereinafter defined), that: (a) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 33-_____) under the Securities Act of 1933, as amended (the "Act"), for the registration of the Stock under the Act. The various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained therein at the time such part of such registration statement became effective, each as amended at the time such part of the registration statement became effective, are hereinafter called the "Registration Statement"; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any document filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement). The Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to the Registration Statement, to the Representatives for each of the other Underwriters, if any, have been declared effective by the Commission in such form. No other document with respect to the Registration Statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the prospectus relating to the Stock, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or 3 3 supplemented in relation to the Stock in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act, including any documents incorporated by reference therein as of the date of such filing). The Company will not file any amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus or Prospectus, or file any document under the Exchange Act before the termination of the offering of the Stock by the Underwriters if such document would be deemed to be incorporated by reference into such Preliminary Prospectus or Prospectus, of which the Representatives shall not previously have been advised and provided with a copy or to which the Representatives shall reasonably object in writing or which shall be disapproved by Messrs. Milbank, Tweed, Hadley & McCloy, who are acting as counsel on behalf of the Underwriters. (b) The Registration Statement and the Prospectus and any amendment or supplement thereto as of their respective effective or issue dates, and as of the closing date, (1) contained or will contain, as applicable, all statements of material fact required to be stated therein in accordance with the Act and the Rules and Regulations (as defined below); (2) conformed or will conform, as applicable, in all material respects to the requirements of the Act and the Rules and Regulations; and (3) do not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements or omissions in such documents based upon written information furnished to the Company by any Underwriter specifically for use therein. Any reference to "Rules and Regulations" shall mean the rules, regulations and releases adopted by the Commission under either the Act or the Exchange Act, as applicable. (c) The financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented present fairly the financial condition and operations of the Company at the respective dates or for the respective periods to which they apply except as otherwise indicated in the Registration 4 4 Statement or Prospectus as amended or supplemented; such financial statements have been prepared in each case in accordance with generally accepted accounting principles consistently applied throughout the periods involved except as otherwise indicated in the Registration Statement and Prospectus as amended and supplemented. Ernst & Young, who have examined the audited financial statements and schedules (including the related notes and supporting schedules) included or incorporated by reference in the Registration Statement or Prospectus as amended or supplemented and whose report appears or is incorporated by reference in the Prospectus as amended or supplemented, are independent public accountants as required by the Act and the Rules and Regulations. (d) Except as reflected in, or contemplated by, the Registration Statement and the Prospectus as amended or supplemented, since the respective most recent dates as of which information is given in the Registration Statement and the Prospectus as amended or supplemented, there has not been any material adverse change in the business, properties or financial condition or results of operation of the Company, and since such dates there has not been any material transaction entered into by the Company other than transactions contemplated by the Registration Statement and Prospectus as amended or supplemented and transactions in the ordinary course of business. The Company has no material contingent obligation which is not disclosed in the Registration Statement and Prospectus as amended or supplemented. (e) The consummation of the transactions herein contemplated and the fulfillment of the terms hereof on the part of the Company to be fulfilled have been duly authorized by all necessary corporate action of the Company in accordance with the provisions of its Restated and Amended Certificate of Incorporation (the "Charter") and by-laws and applicable law, and the Stock, when issued and delivered as provided herein, will be duly issued, fully paid and nonassessable and will have the rights set forth in the Charter. The Stock conforms to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented. (f) The issuance and sale of the Stock, the consummation of the transactions herein contemplated and the fulfillment of the terms hereof will not result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company is now a party, or the Charter. (g) [The aggregate amount of annual dividends payable on shares of the Stock to be issued and the aggregate amount payable on such shares in the case of voluntary dissolution shall not exceed said respective amounts payable on shares of the preferred stock of the Company which are to be purchased, redeemed or otherwise acquired with the proceeds of the Stock.] [The net earnings of the Company available for the payment of interest charges on the Company's interest bearing indebtedness, determined after provision for depreciation and all taxes, and in accordance with sound 5 5 accounting practice, was at least one and one-half times the aggregate of the annual interest charges on the interest bearing indebtedness of the Company and annual dividend requirements on all shares of, or ranking on a parity with, Preferred Stock to be outstanding immediately after the proposed issue of the Stock, for twelve consecutive calendar months within the fifteen calendar months immediately preceding the month within which the Stock shall be issued.] (h) The documents which are incorporated by reference in the Prospectus as amended or supplemented or from which information is so incorporated by reference, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations, and any documents so filed and incorporated by reference subsequent to the effective date of the Registration Statement shall, when they are filed with the Commission, conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the Rules and Regulations. (i) The conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied. 4. Purchase and Sale. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each such Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the number of shares of Stock set forth opposite the name of such Underwriter in Schedule II hereto. 5. Reoffering by Underwriters. Subject to the terms and conditions of this Agreement, it is understood that the Underwriters propose to make a bona fide public offering of the Stock as soon as practicable after the execution of this Agreement. 6. Time and Place of Closing. Delivery of the certificates representing the Stock (the "Certificates") and payment therefor shall be made at the offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York at _____ A.M., New York Time, on _______, 199_, or such other place, time and date as the Representatives and the Company may agree upon. The hour and date of such delivery and payment are herein called the "Closing Date". Payment for the Stock shall be by certified or official bank check payable to the order of the Company in New York Clearing House (next day) funds. The Certificates shall be delivered to the Representatives for the respective accounts of the Underwriters registered in such names and in such authorized denominations as the Representatives may 6 6 reasonably request in writing not later than 12:30 P.M., New York Time, on the third business day prior to the Closing Date, or, to the extent not so requested, registered in the names of the respective Underwriters in such authorized denominations as the Company shall determine. For the purpose of expediting the checking of the Certificates by the Representatives on behalf of the Underwriters, the Company agrees to make the Certificates available to the Representatives for such purposes at the office of The Bank of New York not later than 2 P.M., New York Time, on the business day preceding the Closing Date, or at such other time and place as may be agreed upon by the Company and the Representatives. If any Underwriter or Underwriters default in its or their obligations to purchase the Stock which it or they have agreed to purchase hereunder and the aggregate number of shares of Stock which such defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent or less of the aggregate number of shares of Stock set forth in Schedule II hereto, the other Underwriters shall be obligated severally, in proportion to their respective commitments to purchase Stock hereunder, to purchase the Stock which such defaulting Underwriter or Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate number of shares of Stock with respect to which such default or defaults occur is more than ten percent of the aggregate number of shares of Stock set forth in Schedule II hereto and arrangements satisfactory to you and the Company for the purchase of such Stock by other persons are not made within thirty-six hours after such default, the Company may, at its option, either (a) terminate this Agreement without liability on the part of any non-defaulting Underwriter or the Company, except for expenses to be paid or reimbursed by the Company pursuant to Section 7, or (b) require each non-defaulting Underwriter to purchase the aggregate number of shares of Stock which such Underwriter otherwise agreed to purchase plus an amount equal to one-ninth thereof. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. The respective commitments of the several Underwriters for purposes of this paragraph shall be determined without regard to reduction in the respective Underwriters' obligations to purchase the number of shares of Stock set forth opposite their names in Schedule II hereto. Nothing herein will relieve a defaulting Underwriter from liability for its default. 7 7 7. Covenants of the Company. The Company agrees that: (a) The Company will prepare the Prospectus as amended or supplemented in a form approved by the Representatives and will 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 Agreement or, if applicable, such earlier time as may be required by Rule 424(b). The Company will at or prior to the Closing Date deliver to each of the Representatives and to counsel for the Underwriters one signed copy of the Registration Statement as originally filed and of all amendments or supplements thereto (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), heretofore or hereafter made, including any post-effective amendment (in each case including all exhibits filed therewith, except exhibits incorporated by reference unless specifically requested), including a signed copy of each consent and certificate included therein or filed as an exhibit thereto. As soon as the Company is advised thereof, it will advise the Representatives orally (i) when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission and (ii) of the issuance of any stop order under the Act with respect to the Registration Statement or any suspension of the qualification of the Stock in any jurisdiction, or the institution of any proceedings therefor of which the Company shall have received notice, and will use its best efforts to prevent the issuance of any such stop order or suspension and to secure the prompt removal thereof if issued. The Company will deliver to the Underwriters, in accordance with the Representatives' instructions, as many copies of the Prospectus as amended or supplemented as the Representatives may reasonably request for the purposes contemplated by the Act, and will deliver to the Representatives as soon as practicable sufficient conformed copies of the Registration Statement (including conformed copies of any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented) and of all amendments thereto (in each case without exhibits) for distribution of one to each Underwriter. (b) The Company will pay all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters for any expenses up to $9,000 (including fees and disbursements of counsel) incurred by them in connection with qualification of the Stock for sale and the preparation of memoranda as to Blue Sky qualifications and exemptions and as to eligibility of the Stock for investment under the laws of such jurisdictions as 8 8 you designate. The Company shall not, however, be required to pay any amount for any expenses of the Representatives or any of the Underwriters except as provided in paragraph 4 hereof and except, that in the event this Agreement shall be terminated in accordance with the provisions of paragraph 8 or 9 hereof, the Company will pay the fees and disbursements of counsel for the Underwriters, whose fees and disbursements the Underwriters agree to pay in any other event. The Company shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits. (c) If at any time when a prospectus relating to the Stock is required to be delivered under the Act, any event relating to or affecting the Company, or of which the Company shall be advised in writing by the Representatives, shall occur, which in the opinion of the Company should be set forth in a supplement to or an amendment of the Prospectus in order to make the Prospectus as amended or supplemented not misleading in the light of the circumstances when it is delivered, or which, in your opinion, may be necessary in connection with the distribution of the Stock, the Company will forthwith at its expense prepare and furnish to the Representatives a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus as amended or supplemented which will supplement or amend the Prospectus as amended or supplemented or file such documents so that the Prospectus as amended or supplemented will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus as amended or supplemented is delivered, not misleading. The Company will continue to prepare and file with the Commission in a timely manner all documents required to be filed pursuant to the requirements of the Exchange Act and the Rules and Regulations. (d) The Company will make generally available to its security holders (and shall deliver to the Representatives), as soon as practicable but in any event not later than 45 days after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement (as such term is defined in Rule 158 under the Act) (the "Effective Date") occurs, an earnings statement (which need not be audited, unless required so to be under Section 11(a) of the Act) of the Company in reasonable detail covering a period of at least twelve consecutive months beginning after the Effective Date. (e) The Company will use its best efforts promptly to do and perform all things to be done and performed by it 9 9 hereunder prior to the Closing Date and to satisfy all conditions precedent to the delivery by it of the Stock. (f) The Company will use its best efforts to qualify the Stock for offer and sale under the Blue Sky laws of such states as the Representatives may designate and will file such statements or reports as are or may be reasonably required by the laws of such states; provided, however, that the Company in complying with this paragraph need not qualify to do business in any state nor execute a general consent to service of process. (g) The Company will apply the proceeds of the sale of the Stock for the purposes set forth in the Prospectus as amended or supplemented. 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase and pay for the Stock shall be subject to the accuracy of, and compliance with, the representations and warranties of the Company contained herein, to the performance by the Company of its obligations to be performed hereunder prior to the Closing Date, and to the following further conditions: (a) The Prospectus as amended or supplemented in relation to the Stock shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the Rules and Regulations; and no stop order suspending the effectiveness of the Registration Statement shall be in effect on the Closing Date and no proceedings for that purpose shall be pending before, or threatened by, the Commission on the Closing Date. The Representatives shall have received, prior to payment for the Stock, a certificate dated the Closing Date and signed by the President, any Vice President or the Treasurer of the Company to the effect that no such stop order is in effect and that no proceedings for such purpose are pending before, or to the knowledge of the Company threatened by, the Commission. (b) On the Closing Date there shall be in full force and effect an order of the Public Service Commission of the State of New York authorizing the issuance and sale of the Stock which shall not contain any provision mutually unacceptable to the Representatives and the Company by reason of being materially adverse, it being understood that no order in effect at the date of this Agreement contains any such unacceptable provision. (c) At the Closing Date, the Representatives shall receive a favorable opinion from either Robert J. Grey, Esq., General Counsel of the Company, or Herbert M. Leiman, Esq., Assistant General Counsel of the Company, which 10 10 opinion shall be satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, to the effect that -- (i) The Company is a corporation duly organized and validly existing, in good standing under the laws of the State of New York, with power and authority (corporate and other) to own its property, to carry on its business and to issue the Stock; (ii) The Agreement has been duly authorized, executed and delivered by the Company; (iii) The Stock has been duly authorized and issued, is fully paid and nonassessable and conforms to the description thereof contained in the Registration Statement and the Prospectus as amended or supplemented; (iv) An order has been adopted by the Public Service Commission of the State of New York authorizing the issuance and sale of the Stock and the transactions related thereto as contemplated by the Agreement and said order is still in full force and effect; and no further approval, authorization, consent or other order of any public board or body is legally required for the authorization of the issuance and sale by the Company of the Stock under the terms of this Agreement except compliance with the provisions of securities or Blue Sky laws of certain states in connection with the sale of the Stock to the public in such states; (v) The execution, delivery and performance of this Agreement and the Stock by the Company and the consummation by the Company of the transactions contemplated hereby will not conflict with or result in a breach or violation by the Company of any of the terms or provisions of, constitute a default by the Company under, or result in the creation or imposition of any lien, charge, security interest or encumbrance upon any of the assets of the Company pursuant to the terms of, (A) any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument known to such counsel to which the Company is a party or to which it or any of its properties is subject, (B) the Restated and Amended Certificate of Incorporation or By-laws of the Company or (C) any statute, rule or regulation or, to the best of such counsel's knowledge, any judgment, decree or order of any court or governmental agency or body applicable to the Company or any of its properties; 11 11 (vi) The Company, to the best of such counsel's knowledge, possesses all franchises, licenses, permits, consents and orders of governmental and regulatory authorities and political subdivisions required for the maintenance and operation of its properties and business substantially as now conducted and as described in the Registration Statement and the Prospectus as amended or supplemented; or, if the Company does not possess all of such franchises, licenses, permits, consents and orders, the absence of such thereof as the Company does not possess will not, to the best of such counsel's knowledge, affect the maintenance and operation of such properties and business as a whole substantially as now conducted; and (vii) The Registration Statement has become effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act, the Registration Statement and the Prospectus, and each amendment or supplement thereto (including any document incorporated by reference into the Prospectus as amended or supplemented), as of their respective effective or issue dates, complied as to form in all material respects with the requirements of the Act and the Exchange Act and the Rules and Regulations; the conditions for use of Form S-3, set forth in the General Instructions thereto, have been satisfied; such counsel has no reason to believe that either the Registration Statement or the Prospectus, or any such amendment or supplement (including any document filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), considered as a whole on the effective date of the Registration Statement and on the date hereof contained or contain any untrue statement of material fact or omitted or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; the descriptions in the Registration Statement and the Prospectus as amended or supplemented of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Prospectus as amended or supplemented (or required to be filed under the Exchange Act if upon such filing they would be incorporated, in whole or in part, by reference in the Prospectus as amended or supplemented) which are not described as required, nor of any contracts or 12 12 documents of a character required to be described in the Registration Statement or Prospectus as amended or supplemented or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented. (d) At the Closing Date, the Representatives shall receive from Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, such opinion or opinions with respect to the valid existence of the Company, the validity of the Stock, the Registration Statement, the Prospectus as amended or supplemented, and other related matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (e) On the date of this Agreement and on the Closing Date the Representatives shall have received from Ernst & Young a letter (with copies thereof for each of the Underwriters), which letter shall be reasonably satisfactory in form and substance to the Representatives and Messrs. Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, confirming that they are independent auditors with respect to the Company 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 financial statements and schedules incorporated by reference into the Registration Statement and the Prospectus as amended or supplemented audited by them comply as to form in all material respects with the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the applicable published rules and regulations of the Commission thereunder with respect to a registration statement on Form S-3; (ii) they have read the minutes of the meetings of the stockholders and the Board of Directors of the Company, as set forth in the minute books or, if not set forth therein, in the form prepared by the Secretary of the Company, through a specified date not more than five business days prior to the date of the closing, read the unaudited financial statements, if any, incorporated by reference into the Registration Statement and Prospectus as amended or supplemented and also the latest available unaudited interim financial statements of the Company and inquired of certain officials of the Company responsible for financial and 13 13 accounting matters, and that such officials have stated that: (A) any unaudited Balance Sheet, Statement of Income and Statement of Cash Flows included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented complies 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 of the Commission thereunder, and are in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the most recent audited financial statements incorporated by reference therein, (B) at the date of the latest available balance sheet read by such accountants, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with amounts shown on the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for shares of preferred stock redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof, or (C) for the twelve months ending on the date of the latest available unaudited interim financial statements of the Company, there were no decreases, as compared with the twelve months ending on the date of the latest audited financial statements, in total revenues, operating income, income before interest charges, or in the total amount of net income, except in all instances for 14 14 decreases which the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, or which are described in such letter, identifying the same and specifying the amount thereof; (iii) they have performed more limited procedures than those set forth in the foregoing clause (ii), consisting merely of the reading of the minutes referred to in said clause and inquired of certain officials of the Company responsible for financial and accounting matters, and that such officials have stated that, with respect to the period from the date of the latest available financial statements of the Company to a specified date not more than five business days prior to the date of such letter, there was no change in the capital stock (including Common Stock, Preferred Stock and Premium on Capital Stock but excluding Capital Stock Expense) or long-term debt of the Company or any decrease in net current assets or Common Shareowners' Equity as compared with the amounts shown in the latest balance sheet included or incorporated by reference in the Registration Statement and Prospectus as amended or supplemented, except in all instances (i) for changes or decreases that the Registration Statement and Prospectus as amended or supplemented discloses have occurred or may occur, (ii) for payment of maturing installments of long-term debt, (iii) for conversions of convertible preferred stock, (iv) for shares of common stock issued pursuant to the Company's Employee Stock Purchase Plan, (v) for amounts withheld from employees in connection with the Employee Stock Purchase Plan, (vi) for the acquisition of long-term debt for sinking fund purposes, (vii) for purchase of preferred shares for series scheduled to be redeemed by way of sinking funds, or (viii) for changes or decreases which are described in such letter, identifying the same and specifying the amount thereof; and (iv) they have compared certain dollar amounts (and percentages and other financial data derived from such dollar amounts) disclosed in, or incorporated by reference into, the Registration Statement and Prospectus as amended or supplemented or in Exhibits to the Registration Statement, with such dollar amounts, percentages and other financial information contained in the general accounting records of the Company or derived directly from such records by analysis or computation, and have found such dollar amounts, percentages and other financial information to be in agreement therewith, except as otherwise specified in such letter. 15 15 (f) Since the respective most recent dates as of which information is given in the Registration Statement and Prospectus as amended or supplemented and up to the Closing Date, there shall have been no material adverse change in the business, properties or financial condition or results of operation of the Company, except as reflected in or contemplated by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and since such dates and up to the Closing Date there shall have been no material transaction entered into by the Company other than transactions disclosed by the Registration Statement and the Prospectus, and any amendments or supplements thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus as amended or supplemented), and transactions in the ordinary course of business; and at the Closing Date the Representatives shall have received a certificate to such effect, signed by the President, any Vice President or the Treasurer of the Company. (g) All legal proceedings to be taken in connection with the issuance and sale of the Stock shall have been satisfactory in form and substance to Messrs. Milbank, Tweed, Hadley & McCloy. In case any of the conditions specified above in this Section 8 shall not have been fulfilled at the Closing Date, this Agreement may be terminated by the Representatives, by mailing or delivering written notice thereof to the Company. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 9. Conditions of the Obligation of the Company. The obligation of the Company to deliver the Stock shall be subject to the conditions set forth in the second clause of the first sentence of paragraph (a) of Section 8 hereof and in paragraph (b) of Section 8 hereof. In case any of the conditions specified in this Section 9 shall not have been fulfilled, this Agreement may be terminated by the Company by mailing or delivering written notice thereof to the Representatives. Any such termination shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 10. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person who controls any Underwriter within the meaning of Section 15 of the Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act or any other statute or common law and to reimburse, as incurred, each such Underwriter and controlling 16 16 person for any legal or other expense (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with preparing to defend or defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or 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; PROVIDED, HOWEVER, that the indemnity agreement contained in this paragraph shall not apply to any such losses, claims, damages, liabilities, expenses or actions arising out of or based upon any such untrue statement or alleged untrue statement or any such omission or alleged omission, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of any Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto; and PROVIDED, FURTHER, that the Company shall not be liable in any case relating to any Preliminary Prospectus or any preliminary prospectus supplement to the extent that any such loss, claim, damage, liability, expense or action arises out of or is based upon the failure of any Underwriter in connection with a sale of any of the Stock to any person to send or give a copy of the Prospectus, as the same may then be supplemented or amended, to such person with or prior to the written confirmation of the sale involved so long as the Company shall have fully complied with the last sentence of Section 7(a) hereof. The indemnity agreement of the Company contained in this paragraph and the representations and warranties of the Company contained in Section 3 hereof shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any such controlling person, and shall survive the delivery of the Stock. The Underwriters agree promptly to notify the Company of the commencement of any litigation or proceedings against them or any of them, or any such controlling person, in connection with the sale of the Stock or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (b) Each Underwriter agrees to indemnify and hold harmless the Company, its officers and directors, each other Underwriter, and each person who controls any thereof within the meaning of Section 15 of the Act, against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them become subject under the Act or any other statute 17 17 or common law and to reimburse each of them for any legal or other expenses (including, to the extent hereinafter provided, reasonable counsel fees) incurred by them in connection with investigating any such losses, claims, damages or liabilities or in connection with defending any actions, insofar as such losses, claims, damages, liabilities, expenses or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto (if any amendments or supplements thereto shall have been furnished) or 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, if such statement or omission was made in reliance upon information furnished herein or in writing to the Company by or on behalf of such Underwriter, through the Representatives, expressly for use in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. The indemnity agreement of the respective Underwriters contained in this paragraph shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Company, or any such other Underwriter or any such controlling person, and shall survive the delivery of the Stock. The Company agrees promptly to notify the Representatives of the commencement of any litigation or proceedings against the Company or any of its officers or directors or against any such controlling person in connection with the sale of the Stock or with any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented or any amendment or supplement thereto. (c) The Company and each of the Underwriters agree that, upon receipt of notice of the commencement of any action against the Company or any person controlling the Company, or against such Underwriter or any person controlling such Underwriter, in respect of which indemnity may be sought on account of any indemnity agreement contained herein, it will promptly give written notice of the commencement thereof to the party or parties against whom indemnity shall be sought hereunder, but the omission so to notify such indemnifying party or parties of any such action shall not relieve such indemnifying party or parties from any liability which it or they may have to the indemnified party (i) to the extent the indemnifying party was not materially prejudiced by such omission or (ii) otherwise than on account of such indemnity agreement. In case such notice of any such action shall be so given such indemnifying party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume (in conjunction with any other indemnifying parties) the defense of such action, in which event such defense shall be conducted by counsel chosen by such indemnifying party (or parties) and satisfactory to the 18 18 indemnified party or parties who shall be defendant or defendants in such action; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 10 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation unless (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Representatives in the case of paragraph (a) of this Section 10, representing the indemnified parties under paragraph (a) or (b) of this Section 10, as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. (d) If the indemnification provided for in this Section 10 shall for any reason be unavailable to an indemnified party under paragraphs (a) or (b) of this Section 10 in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on 19 19 the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Stock (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters with respect to such offering, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 10 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 10 shall be deemed to include, for purposes of this Section 10, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Stock underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or becomes liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this paragraph (d) are several in proportion to their respective underwriting obligations and not joint. (e) The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7 hereof shall survive the delivery of the Stock. The agreements contained in this Section 10, the representations and warranties of the Company in Section 3 hereof and the agreements of the Company in Section 7(b) hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party. 11. Termination. This Agreement may be terminated at any time prior to the Closing Date by the Representatives with the consent of a majority in interest of the Underwriters including yourselves upon notice thereof to the Company, if prior to such time (a) the Company has failed, refused or been unable 20 20 to perform any agreement on its part to be performed hereunder, (b) any other condition of the Underwriters' obligations hereunder is not fulfilled, (c) there shall have occurred any general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange or there shall have been established by the New York Stock Exchange or the American Stock Exchange or by the Commission or by any federal or state agency or by the decision of any court any limitation on prices for such trading or any restrictions on the distribution of securities, (d) a banking moratorium shall have been declared either by federal or New York State authorities, (e) an outbreak or escalation of hostilities involving the United States shall have occurred or there shall have been a declaration by the United States of a national emergency or war or (f) there shall have occurred such a material adverse change in general economic, political or financial conditions, or the effect of international conditions on the financial markets in the United States is such, as to make it impracticable or inadvisable, in the judgment of a majority in interest of the Underwriters, to proceed with the delivery of the Stock. Any termination hereof pursuant to this Section 11 shall be without liability of any party to any other party except as otherwise provided in Section 7 hereof. 12. Information Furnished by Underwriters. The statements set forth in the last paragraph on the cover page, the paragraph containing stabilization information on the inside front cover page and the statements under the caption "Underwriting" in any Prospectus as amended or supplemented constitute the only written information furnished by or on behalf of any Underwriter referred to in paragraph (b) of Section 3 hereof and in paragraphs (a) and (b) of Section 10 hereof. 13. Miscellaneous. The validity and interpretation of this Agreement shall be governed by the laws of the State of New York. This Agreement shall inure to the benefit of the Company, the Underwriters and, with respect to the provisions of Section 10 hereof, each controlling person referred to in said Section 10, and their respective successors, assigns, executors and administrators. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provisions herein contained. The term "successors" as used in this Agreement shall not include any purchaser, as such purchaser, of any of the Stock from any of the Underwriters. 14. Notices. All communications hereunder shall be in writing or by telegram and, if to the Underwriters, shall be mailed or delivered to the Representatives c/o Lehman Brothers Inc., 3 World Financial Center, New York, New York 10285-1100, attention: Syndicate Department; if to the Company, shall be mailed or delivered to it at 175 East Old Country Road, Hicksville, New York 11801, attention: Treasurer. 21 21 Please sign and return to us ______ counterparts of this letter, whereupon this letter will become a binding agreement between the Company and the Underwriters in accordance with its terms. Very truly yours, LONG ISLAND LIGHTING COMPANY By: ------------------------ The foregoing agreement is hereby confirmed and accepted, as of the date first above written. LEHMAN BROTHERS INC. [Names of other Representatives] As Representatives of the several Underwriters By: LEHMAN BROTHERS INC. By: ------------------------------ 22 22 SCHEDULE I Title, Purchase Price and Description of Preferred Stock, ____%, Series __ Title: Preferred Stock, ____%, Series __ (Cumulative, Par Value $__ Per Share) Aggregate Number of Shares: _________ Initial Per Share Public Offering Price: $_____ per share Per Share Purchase Price to the Underwriters: $________ per share, plus accrued dividends, if any, from the date of original issue to the date of delivery Allowance to Certain Securities Dealers: __c. Allowance to Brokers and Dealers: __c. Redemption: [The Stock will be redeemable at the option of the Company at any time on not less than 30 days' notice at $_____ per share on or before ____________; at $_______ per share thereafter and on or before _____________; at $_____ per share thereafter and on or before _____________; at $____ per share thereafter and on or before ____________; and at $____ per share thereafter, plus, in each case, accrued dividends to the date of redemption. The Stock will be fully redeemed on or before __________.] [The Stock will not be redeemable.] 23 23 SCHEDULE II
Underwriter Number of Shares - ----------- ---------------- Lehman Brothers Inc. . . . . . . . . . . . . . [Names of other Representatives] . . . . . . . ----------- Total ===========
EX-3.B 6 PROPOSED FORM OF CERTIFICATE OF AMENDMENT 1 Filed in the Office of the Secretary of State on , 199 CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF LONG ISLAND LIGHTING COMPANY UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW We, and , [Vice] President and [Assistant] Secretary, respectively, of LONG ISLAND LIGHTING COMPANY, a New York corporation, DO HEREBY CERTIFY that: FIRST. The name of the Corporation is LONG ISLAND LIGHTING COMPANY, under which name it was formed. SECOND. The Certificate of Incorporation was filed in the Office of the Secretary of State on December 31, 1910. THIRD. The Certificate of Incorporation, as amended and supplemented by any certificate filed pursuant to law, is hereby further amended by the addition of provisions stating the number, designation, relative rights, preferences and limitations of the shares of a series (to consist of shares) of the Preferred Stock of the par value of $ per share of the Corporation, as fixed by the Board of Directors of the Corporation before issuance of such series as follows: "( ) SERIES PREFERRED STOCK (1) NUMBER AND DESIGNATION OF SERIES. A series consisting initially of shares of the Preferred Stock of the par value of $ per share is designated `Preferred Stock, $ , Series ' (hereinafter called the `Series Preferred Stock'). (2) DIVIDEND RATE. The dividend rate per annum of the shares of Series Preferred Stock is $ per share. Dividends shall be calculated on the basis of a 30-day month and a year of 360 days. (3) DIVIDEND PAYMENT DATES. The dividend payment dates for the shares of Series Preferred Stock are the days of , , and ; the initial dividend period for such shares shall commence on the day when such shares are issued and thereafter the dividend periods for such shares shall be the quarterly periods beginning on such dates commencing , 199 . 2 2 (4) OPTIONAL REDEMPTION. [The Series Preferred Stock will not be subject to optional redemption.] [Subject to the restrictions set forth in section (6) of this subdivision ( ), at the option of the Board of Directors of the Corporation, the Corporation may redeem the whole or any part of the Series Preferred Stock at any time outstanding, at any time or from time to time, at the then applicable optional redemption price (hereinafter called the "optional redemption price"), plus accrued and unpaid dividends to the date of redemption. The optional redemption price at which Series Preferred Stock shall be redeemable is $ per share if redeemed on or before , 19 ; $ per share if redeemed thereafter and on or before , 19 ; $ per share if redeemed thereafter and on or before , 19 ; $ per share if redeemed thereafter and on or before , 19 ; and $ per share if redeemed thereafter. The applicable optional redemption price at which the shares of Series Preferred Stock shall be redeemable as specified in this section (4) shall be deemed to be the "applicable redemption price" of Series Preferred Stock payable to the holders thereof for the purposes of optional redemptions, as specified in paragraph (d) of Subparagraph "2" of Subdivision "A" of Section "III" of Paragraph "FIFTH" of the Restated Certificate of Incorporation.] (5) [MANDATORY REDEMPTION. [The Series Preferred Stock will not be subject to mandatory redemption.] Subject to the restrictions set forth in section (6) of this subdivision ( ), the Corporation shall redeem on or before , , at such time or times as the Corporation shall determine, all of the outstanding shares of Series Preferred Stock at the redemption price or prices which would be applicable at the date of redemption to optional redemptions pursuant to section (4) of this subdivision ( ), plus accrued and unpaid dividends to the date of redemption. In the case of a redemption of Series Preferred Stock as specified in this section (5), the Company shall take the action and provide the notice specified in paragraph (d) of Subparagraph "2" of Subdivision "A" of Section "III" of Paragraph "FIFTH" of the Restated Certificate of Incorporation, with respect to optional redemption of Preferred Stock.] [SINKING FUND. [The Series Preferred Stock will not be subject to a sinking fund]. As a sinking fund for the redemption of Series Preferred Stock, subject to the provisions of section (6) of this subdivision ( ), on , and on each thereafter, the Corporation shall redeem shares of the Series Preferred Stock (or the number of shares of the Series Preferred Stock then outstanding if less than ), in each case at a price of $ per share, plus, in each case, 3 3 accrued and unpaid dividends to the date of redemption. Notwithstanding the provisions of section (6) of this subdivision ( ), the foregoing obligation of the Corporation to redeem Series Preferred Stock annually shall be cumulative. In addition, the Corporation shall have the noncumulative option on or any thereafter, to increase by up to the number of shares of Series Preferred Stock otherwise required by this section (5) of this subdivision ( ) to be redeemed on such . At its option, the Corporation may credit against any sinking fund redemption required by this section (5) of this subdivision ( ) any shares of Series Preferred Stock redeemed pursuant to section (4) of this subdivision ( ), redeemed pursuant to the next preceding sentence or acquired pursuant to section (10) of this subdivision ( ) below. All shares of Series Preferred Stock redeemed pursuant to section (4) of this subdivision ( ) or this section (5) of this subdivision ( ) and all shares of Series Preferred Stock credited against any sinking fund redemption obligation pursuant to this Section (5) of this subdivision ( ) shall be cancelled.] [(6) RESTRICTIONS ON OPTIONAL [AND MANDATORY] REDEMPTION [AND SINKING FUND REDEMPTION]. Unless full cumulative dividends for all past dividend periods and for the then current dividend period shall have been paid or declared and set apart for payment on the then outstanding Series Preferred Stock other than shares of Series Preferred Stock previously or then to be called for redemption, the Corporation shall not redeem pursuant to section[s] (4) [or (5)] of this subdivision ( ) less than all of the then outstanding shares of Series Preferred Stock. The obligation of the Corporation to redeem shares as provided in section [(5)] of this subdivision ( ) shall be subject to any restrictions now existing in the Corporation's Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, as heretofore supplemented (including any extension of said existing restrictions in said Indenture of Mortgage and Deed of Trust for the benefit of any series of Bonds hereafter issued thereunder) and to any applicable restrictions of law.] [(7)] RESTRICTIONS ON PAYMENTS ON JUNIOR STOCK. The Corporation shall not declare or pay or set apart any dividend for the Common Stock or any other class of stock ranking junior to the Series Preferred Stock, or make any payment on account of, or set apart money for a sinking or analogous fund for, the purchase, redemption or other retirement of the Common Stock or any other class of stock ranking junior to the Series Preferred Stock, or make any distribution in respect thereof, either directly or indirectly, and whether in cash or property or obligations or stock of the Corporation, 4 4 unless at the date of declaration in the case of any such dividend, or at the date of any such other payment, setting apart or distribution, full cumulative dividends for all past dividend periods and for the then current dividend period shall have been paid or declared and set apart for payment on the then outstanding Series Preferred Stock, other than shares of Series Preferred Stock previously or then to be called for redemption. [(8)] [Conversion Rights. The Series Preferred Stock will not be convertible into shares of any other class or series of stock of the Corporation.] [(9)] RESTRICTIONS ON SINKING FUND PAYMENTS ON OTHER STOCK. The Corporation shall not redeem or purchase any shares ranking on a parity with the Series Preferred Stock as to assets or dividends, pursuant to any sinking fund requirement (which terms shall include any analogous requirement) for the redemption or purchase of such shares, and shall not set apart money for any such requirement, at any time when the redemption required by section [(5)] of this subdivision ( ) shall be in arrears; except that, at any time when the redemption required by section [(5)] [(6)] of this subdivision ( ) shall be in arrears and when arrears exist in respect of any sinking fund or analogous requirement for any shares ranking as aforesaid on a parity with the Series Preferred Stock, the Corporation may redeem or purchase for the respective requirements shares of Series Preferred Stock and such other shares, pro rata, as nearly as practicable, according to the amounts in dollars of the arrears in the redemptions or purchases required for the respective requirements. [(10)] ACQUISITION OF SERIES PREFERRED STOCK. Except as hereinbefore provided, the Corporation may, at its option, purchase, redeem or otherwise acquire any shares of Series Preferred Stock. [(11)] REDEMPTION UPON VOLUNTARY DISSOLUTION, LIQUIDATION, OR WINDING UP OF THE CORPORATION. The applicable redemption price payable upon any voluntary dissolution, liquidation, or winding up of the Corporation as specified in the second paragraph of paragraph (c) of Subparagraph "2" of Subdivision "A" of Section "III" of Paragraph "FIFTH" of the Restated Certificate of Incorporation shall be the par value of the Series Preferred Stock. FOURTH. This amendment was authorized by the Board of Directors of the Corporation at a meeting duly held. 5 5 IN WITNESS WHEREOF, we have made and subscribed this Certificate and affirm the same as true under the penalties of perjury this day of 199 . --------------------- [Vice] President --------------------- [Assistant] Secretary EX-4.A 7 FORM OF SUPPLEMENTAL INDENTURE TO G&R INDENTURE 1 ================================================================================ LONG ISLAND LIGHTING COMPANY TO UNITED STATES TRUST COMPANY OF NEW YORK, SUCCESSOR TRUSTEE --------- SUPPLEMENTAL INDENTURE DATED AS OF 1, --------- SUPPLEMENTAL TO THE GENERAL AND REFUNDING INDENTURE DATED AS OF JUNE 1, 1975 --------- GENERAL AND REFUNDING BONDS ================================================================================ 2 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture SUPPLEMENTAL INDENTURE, dated as of 1, , betweenLONG ISLAND LIGHTING COMPANY, a New York corporation (hereinafter called the "Company"), having its principal office at 175 East Old Country Road in Hicksville, County of Nassau, State of New York, and UNITED STATES TRUST COMPANY OF NEW YORK, a national banking association (hereinafter called the "Trustee" or the "Successor Trustee"), having its principal corporate trust office at 114 West 47th Street in the City, County and State of New York. WHEREAS, the Company has executed and delivered to Manufacturers Hanover Trust Company, as Trustee (hereinafter called the "Original Trustee"), a General and Refunding Indenture dated as of June 1, 1975 (hereinafter called the "Original General and Refunding Indenture"), securing the principal of and the interest and premium (if any) on the Company's General and Refunding Bonds (the "Bonds") at any time issued and Outstanding thereunder, to declare the terms and conditions upon which Bonds are to be issued thereunder and to subject to the Lien thereof certain property therein described; WHEREAS, the Company has also executed and delivered to the Original Trustee supplemental indentures dated as of the dates set forth below, creating series of General and Refunding Bonds and, in each instance, subjecting to the Lien of the Original General and Refunding Indenture certain property of the Company, as follows: DATED AS OF SERIES CREATED ----------- --------------
Original Indenture . . . . . . . . . . . . June 1, 1975 Supplemental Indentures: First . . . . . . . . . . . . . . . . . . June 1, 1975 91/4 Due 1983 Second . . . . . . . . . . . . . . . . . Sept. 1, 1975 97/8% Due 1984 Third . . . . . . . . . . . . . . . . . . June 1, 1976 95/8% Due 2006 Fourth . . . . . . . . . . . . . . . . . Dec. 1, 1976 85/8% Due 2006 Fifth . . . . . . . . . . . . . . . . . . May 1, 1977 85/8% Due 2007 Sixth . . . . . . . . . . . . . . . . . . April 1, 1978 9.20% Due 2008 Seventh . . . . . . . . . . . . . . . . . March 1, 1979 9.75% Due 1999 Eighth . . . . . . . . . . . . . . . . . Feb. 1, 1980 141/4% Due 2010 Ninth . . . . . . . . . . . . . . . . . . March 1, 1981 153/4% Due 1991 Tenth . . . . . . . . . . . . . . . . . . July 1, 1981 173/8% Due 2011 Eleventh . . . . . . . . . . . . . . . . July 1, 1981 163/4% Due 1991 Twelfth . . . . . . . . . . . . . . . . . Dec. 1, 1981 18% Due 2011
3 2 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture
DATED AS OF SERIES CREATED ----------- -------------- Supplemental Indentures: Thirteenth . . . . . . . . . . . . . . . Dec. 1, 1981 17% Due 1991 Fourteenth . . . . . . . . . . . . . . . June 1, 1982 17 1/8 Due 2012 Fifteenth . . . . . . . . . . . . . . . . Oct. 1, 1982 15 1/4% Due 2012 Sixteenth . . . . . . . . . . . . . . . . April 1, 1983 12 5/8% Due 1992 Seventeenth . . . . . . . . . . . . . . . May 1, 1983 13 1/2% Due 2013;
WHEREAS, the Original General and Refunding Indenture and the aforesaid Supplemental Indentures have been recorded as follows:
IN THE OFFICE OF IN THE NASSAU THE REGISTER OF COUNTY CLERK'S THE CITY OF OFFICE NEW YORK -------------- (QUEENS COUNTY) --------------- LIBER OF MORTGAGES PAGE REEL PAGE --------- ---- ---- ---- Original Indenture . . . . . . . . . . . 9517 1 840 761 Supplemental Indentures: First . . . . . . . . . . . . . . . . . 9517 462 840 1224 Second . . . . . . . . . . . . . . . . 9570 407 862 546 Third . . . . . . . . . . . . . . . . . 9675 1 911 495 Fourth . . . . . . . . . . . . . . . . 9778 1 953 460 Fifth . . . . . . . . . . . . . . . . . 9814 493 985 707 Sixth . . . . . . . . . . . . . . . . . 9919 1 1063 1052 Seventh . . . . . . . . . . . . . . . . 10032 1 1143 1060 Eighth . . . . . . . . . . . . . . . . 10169 1 1239 1751 Ninth . . . . . . . . . . . . . . . . . 10285 1 1323 762 Tenth . . . . . . . . . . . . . . . . . 10322 1 1351 186 Eleventh . . . . . . . . . . . . . . . 10322 67 1351 254 Twelfth . . . . . . . . . . . . . . . . 10379 1 1392 1675 Thirteenth . . . . . . . . . . . . . . 10379 113 1392 1629 Fourteenth . . . . . . . . . . . . . . 10423 106 1432 1137 Fifteenth . . . . . . . . . . . . . . . 10471 407 1466 1713 Sixteenth . . . . . . . . . . . . . . . 10542 705 1518 884 Seventeeth . . . . . . . . . . . . . . 10571 1 1537 720
4 3 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture
IN THE SUFFOLK IN THE OFFICE OF COUNTY CLERK'S THE REGISTRAR OF OFFICE SUFFOLK COUNTY -------------- ------------------ LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Original Indenture . . . . . . . . . 7358 1 231529 Supplemental Indentures: First . . . . . . . . . . . . . . . 7358 461 231530 Second . . . . . . . . . . . . . . 7445 82 234029 Third . . . . . . . . . . . . . . . 7622 87 239417 Fourth . . . . . . . . . . . . . . 7773 55 244097 Fifth . . . . . . . . . . . . . . . 7882 500 247932 Sixth . . . . . . . . . . . . . . . 8149 58 256464 Seventh . . . . . . . . . . . . . . 8402 1 263861 Eighth . . . . . . . . . . . . . . 8688 530 271652 Ninth . . . . . . . . . . . . . . . 8950 66 278933 Tenth . . . . . . . . . . . . . . . 9034 465 281159 Eleventh . . . . . . . . . . . . . 9034 408 281158 Twelfth . . . . . . . . . . . . . . 9169 50 284685 Thirteenth . . . . . . . . . . . . 9169 122 284687 Fourteenth . . . . . . . . . . . . 9271 285 287512 Fifteenth . . . . . . . . . . . . . 9374 235 290221 Sixteenth . . . . . . . . . . . . . 9519 516 293587 Seventeenth . . . . . . . . . . . . 9578 231 294811;
WHEREAS, the Company and Manufacturers Hanover Trust Company, as Original Trustee, pursuant to Article Nine of the Uniform Commercial Code, have executed a Financing Statement which was filed in the State of New York on June 19, 1975, in the Department of State of the State of New York as File No. 51,391 and a Continuation Statement executed by Manufacturers Hanover Trust Company has been filed in the State of New York on May 23, 1980, in the Department of State of the State of New York as File No. 73,661; WHEREAS, the Original General and Refunding Indenture, as the same has been or may be amended or supplemented from time to time by indentures supplemental thereto, is hereinafter referred to as the "General and Refunding Indenture;" WHEREAS, an Instrument of Resignation, Appointment and Acceptance dated as of April 19, 1984, pursuant to which Manufacturers Hanover Trust Company resigned as Trustee, the Company appointed Sterling National Bank & Trust Company of New York as Successor Trustee under the General and Refunding Indenture and Sterling National Bank & Trust Company of New York accepted such 5 4 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture appointment, has been executed by the Company, Manufacturers Hanover Trust Company and Sterling National Bank & Trust Company of New York and recorded as follows: In the Nassau County Clerk's office in Liber 9549 of Deeds, Page 523 on April 23, 1984; in the Office of the Register of The City of New York (Queens County) on Reel 1671, Page 702 on April 24, 1984; in the Suffolk County Clerk's Office in Liber 9550 of Deeds, Page 87 on April 24, 1984; and in the Office of the Registrar of Suffolk County as Document No. 302443 on April 24, 1984; WHEREAS, Sterling National Bank & Trust Company of New York, as Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has executed an Assignment Statement which was filed in the State of New York on April 27, 1984, in the Department of State of the State of New York as File No. 92,389; WHEREAS, the Company has executed and delivered to Sterling National Bank & Trust Company of New York supplemental indentures dated as of the dates set forth below, creating series of General and Refunding Bonds and, in each instance, subjecting to the lien of the Original General and Refunding Indenture certain property of the Company, as follows:
DATED AS OF SERIES CREATED ----------- -------------- Supplemental Indentures: Eighteenth . . . . . . . . . . . . September 1, 1984 17 1/2% Due 1989 Nineteenth . . . . . . . . . . . . October 1, 1984 1/2% Due 1993 Twentieth . . . . . . . . . . . . . June 1, 1985 13 1/4% Due 1995 Twenty-first . . . . . . . . . . . April 1, 1986 11 1/4% Due 1996 11 7/8% Due 2015;
6 5 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture WHEREAS, the aforesaid Supplemental Indentures have been recorded as follows:
IN THE OFFICE OF THE REGISTER OF IN THE THE CITY OF NASSAU COUNTY NEW YORK CLERK'S OFFICE (QUEENS COUNTY) -------------- --------------- LIBER OF MORTGAGES PAGE REEL PAGE --------- ---- ---- ---- Supplemental Indentures: Eighteenth . . . . . . . . . . . . . 10945 550 1742 623 Nineteenth . . . . . . . . . . . . . 10988 696 1772 1416 Twentieth . . . . . . . . . . . . . . 11159 1 1877 684 Twenty-first . . . . . . . . . . . . 11487 1 2072 1946
IN THE IN THE OFFICE OF SUFFOLK COUNTY THE REGISTRAR OF CLERK'S OFFICE SUFFOLK COUNTY -------------- ---------------- LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Eighteenth . . . . . . . . . . . . . . 10356 301 306373 Nineteenth . . . . . . . . . . . . . . 10465 1 307995 Twentieth . . . . . . . . . . . . . . . 10849 81 313989 Twenty-first . . . . . . . . . . . . . 11550 95 323438
IN THE OSWEGO COUNTY CLERK'S OFFICE -------------- BOOK OF MORTGAGES PAGE --------- ---- Twenty-first . . . . . . . . . . . . . 869 27;
WHEREAS, Sterling National Bank & Trust Company of New York, as Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has executed a Continuation Statement which was filed in the State of New York on May 28, 1985, in the Department of State of the State of New York as File No. 123,587, and an Amendment thereto as File No. 123,588; WHEREAS, an Instrument of Resignation, Appointment and Acceptance dated as of January 16, 1987, pursuant to which Sterling National Bank & Trust Company 7 6 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture of New York resigned as Successor Trustee, the Company appointed United States Trust Company of New York as Successor Trustee under the General and Refunding Indenture and United States Trust Company of New York accepted such appointment, has been executed by the Company, Sterling National Bank & Trust Company of New York and United States Trust Company of New York and recorded as follows: In the Oswego County Clerk's Office in Book 935 of Mortgages, Pages 295 to 308 on March 5, 1987; in the Office of the Register of The City of New York for the County of Queens in Reel 2320P of Records, Pages 663 to 682 on March 18, 1987; in the Suffolk County Clerk's Office in Liber 10285 of Deeds, Pages 296 to 307A on April 2, 1987; in the Office of the Registrar of Suffolk County as Document No. 347901 on December 18, 1987; and in the Nassau County Clerk's Office in Liber 9809 of Deeds, Pages 582 to 594 on May 1, 1987; WHEREAS, Sterling National Bank & Trust Company of New York, as Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has executed an Assignment Statement which was filed in the State of New York on January 26, 1987, in the Department of State of the State of New York as File No. 24,939; WHEREAS, United States Trust Company of New York, as Successor Trustee, pursuant to Article Nine of the Uniform Commercial Code, has executed a Continuation Statement which was filed in the State of New York on April 23, 1990, in the Department of State of the State of New York as File No. 83,191; WHEREAS, the Company has executed and delivered to United States Trust Company of New York supplemental indentures dated as of the dates set forth below, creating series of General and Refunding Bonds and, in each instance, subjecting to the lien of the Original General and Refunding Indenture certain property of the Company, as follows:
DATED AS OF SERIES CREATED ----------- -------------- Supplemental Indentures: Twenty-second . . . . . . . . . . . . . . February 1, 1991 83/4% Due 1997 Twenty-third . . . . . . . . . . . . . . May 1, 1991 83/4% Due 1996 93/4% Due 2021 Twenty-fourth . . . . . . . . . . . . . . July 1, 1991 95/8% Due 2024 Twenty-fifth . . . . . . . . . . . . . . May 1, 1992 7.85% Due 1999 8.50% Due 2006 Twenty-sixth . . . . . . . . . . . . . . July 1, 1992 7.90% Due 2008;
WHEREAS, the aforesaid Supplemental Indentures have been recorded as follows: 8 7 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture
IN THE OFFICE OF THE REGISTER OF IN THE THE CITY OF NASSAU COUNTY NEW YORK CLERK'S OFFICE (QUEENS COUNTY) -------------- --------------- LIBER OF MORTGAGES PAGE REEL PAGE --------- ---- ---- ---- Supplemental Indentures: Twenty-second . . . . . . . . . . . . . 13715 1 3121 1938 Twenty-third . . . . . . . . . . . . . 13782 1 3149 500 Twenty-fourth . . . . . . . . . . . . . 13859 1 3185 1109 Twenty-fifth . . . . . . . . . . . . . 14060 1 3319 2396 Twenty-sixth . . . . . . . . . . . . . 14113 1 3365 649
IN THE IN THE OFFICE OF SUFFOLK COUNTY THE REGISTRAR OF CLERK'S OFFICE SUFFOLK COUNTY -------------- ---------------- LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Twenty-second . . . . . . . . . . . . . 16594 498 388388 Twenty-third . . . . . . . . . . . . . 16737 25 390446 Twenty-fourth . . . . . . . . . . . . . 16923 154 392729 Twenty-fifth . . . . . . . . . . . . . 17664 77 401507 Twenty-sixth . . . . . . . . . . . . . 17933 80 404358
IN THE OSWEGO COUNTY CLERK'S OFFICE -------------- BOOK OF MORTGAGES PAGE --------- ---- Twenty-second . . . . . . . . . . . . . . 1227 19 Twenty-third . . . . . . . . . . . . . . 1242 49 Twenty-fourth . . . . . . . . . . . . . . 1264 24 Twenty-fifth . . . . . . . . . . . . . . 1334 130 Twenty-sixth . . . . . . . . . . . . . . 1357 116;
WHEREAS, the Company, in accordance with the provisions of the Original General and Refunding Indenture, desires by this Supplemental Indenture to create one series of Bonds to be issued under the Original General and Refunding Indenture (such series to be designated as "General and Refunding Bonds, % Series Due " and being hereinafter sometimes referred to as " Series") and to describe, insofar as the same is permitted by the Original General and Refunding Indenture, the form of and certain other matters with respect to the series of Bonds (hereinafter 9 8 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture sometimes called " Series Bonds"), and to provide for the issue thereof as fully registered bonds without coupons; WHEREAS, by the provisions of Article XVII of the Original General and Refunding Indenture, indentures supplemental to the Original General and Refunding Indenture may be executed and delivered for the purpose of setting forth the terms, provisions and form of additional series of Bonds and supplementing the Original General and Refunding Indenture in a manner which is not inconsistent with the provisions thereof and does not adversely affect the interests nor modify the rights of Outstanding Bonds and for the other purposes therein more fully set forth; WHEREAS, the Company desires to subject specifically to the Lien of the General and Refunding Indenture certain property of the Company; WHEREAS, as required by Section 5.14 of the Original General and Refunding Indenture, the Company is creating one series of its First Mortgage Bonds to be issued pursuant to a Supplemental Indenture to the Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, between the Company and the Trustee thereunder (said Indenture of Mortgage and Deed of Trust, as the same may be amended or supplemented from time to time by indentures supplemental thereto, is hereinafter referred to as the "First Mortgage Bond Indenture"), which Supplemental Indenture is to be substantially in the form set forth as Exhibit 1 hereto; WHEREAS, by the provisions of Article XVII of the Original General and Refunding Indenture, indentures supplemental to the Original General and Refunding Indenture may be executed and delivered for any purpose which is not inconsistent with the provisions of the Original General and Refunding Indenture and which shall not adversely affect the interests of the Holders of the Bonds; WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original General and Refunding Indenture and pursuant to appropriate action of its Board of Directors, has fully resolved and determined to make, execute and deliver to the Trustee this Supplemental Indenture in the form hereof for the purposes herein provided; and WHEREAS, the Company represents that all conditions and requirements necessary to make this Supplemental Indenture, in the form and upon the terms hereof, a valid, binding and legal instrument, in accordance with its terms, and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery hereof, in the form and upon the terms hereof, have been in all respects duly authorized; 10 9 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture NOW, THEREFORE, in consideration of the premises and of the sum of $1 paid to the Company by the Trustee at or before the execution and delivery hereof, the receipt whereof is hereby acknowledged and of other good and valuable considerations, the Company does hereby acknowledge and confirm that it has granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged and confirmed, and by these presents the Company does hereby grant, bargain, sell, release, convey, assign, transfer, mortgage, pledge and confirm unto the Trustee all property, real, personal or mixed, rights, privileges and franchises (other than Excepted Property), of every kind and description and wheresoever situate, as specified in Granting Clauses First, Second, Third and Fourth of the Original General and Refunding Indenture. TO HAVE AND TO HOLD all such property, rights, privileges and franchises as part of the Mortgaged Property with like effect as though originally included therein. SUBJECT, HOWEVER, to the restrictions, exceptions, reservations, conditions, limitations, interests and other matters, if any, referred to in the Original General and Refunding Indenture, including, without limitation, the Prior Lien of the First Mortgage Bond Indenture given to secure the Company's First Mortgage Bonds issued thereunder, to the extent that such First Mortgage Bond Indenture covers property hereby mortgaged, and other Excepted Encumbrances. IN TRUST NEVERTHELESS for the same purposes and upon the same terms, trusts and conditions, and subject to and with the same provisos and covenants, as are set forth in the Original General and Refunding Indenture, with the same force and effect as though such property had been particularly described in the Granting Clauses of the Original General and Refunding Indenture. The Company does hereby covenant and agree with the Trustee as follows: ARTICLE I CREATION, DESCRIPTION AND FORM OF THE SERIES BONDS. SECTION 1.01. The Company hereby creates a series of Bonds to be issued under and secured by the General and Refunding Indenture, which shall be designated as "General and Refunding Bonds, % Series Due " and which shall be executed, authenticated and delivered in accordance with the provisions of and shall in all respects be subject to all the terms, conditions and covenants of the General and Refunding Indenture. 11 10 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture SECTION 1.02. An aggregate principal amount of Million Dollars ($ ,000,000) of Series Bonds may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the filing or recording hereof) to or upon the order of the designated officer or officers of the Company upon receipt by the Trustee of the cash, resolutions, certificates, opinions and documents required to be delivered upon the issue of Bonds as provided in the General and Refunding Indenture. SECTION 1.03. Each Series Bond shall be dated the date of its authentication and shall bear interest at the rate of per centum ( %) per annum, from the date specified in such Bond as below provided as the commencement date of the first interest period, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually on and in each year, commencing on , , until its Maturity according to its terms or on prior redemption or by declaration or otherwise, and at the same rate, from such date of Maturity until paid or the payment thereof shall have been duly provided for, and any overdue installment of interest shall (to the extent that payment of such interest is enforceable under applicable law) bear interest at the same rate. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name a particular Series Bond (or any Series Bond evidencing the same debt) is registered at the close of business on the Regular Record Date for such interest which shall be the first day (whether or not a business day) of or in each year. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date, and may be paid to the Person in whose name a particular Series Bond (or any Series Bond evidencing the same debt) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Series Bonds not less than 10 days prior to such Special Record Date, or may be paid, at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Series Bonds may be listed, and upon such notice as may be required by such exchange, all as more fully provided in Section 2.02 of the Original General and Refunding Indenture. Payments of principal thereon shall be made at the office or agency of the Company in the Borough of Manhattan, The City of New York, and such payments shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Checks for the payment of interest thereon shall be mailed to the registered Holder at the address shown in the Bond register or registers of the Company. 12 11 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture SECTION 1.04. The Series Bonds may not be redeemed prior to , , except as provided in Section 1.05 below. On or after , , the Series Bonds may be redeemed, at the option of the Company, as a whole or from time to time in part, after notice given as provided in Section 8.02 of the Original General and Refunding Indenture not less than thirty days and not more than sixty days before such redemption date, at the redemption prices (expressed in percentages of the principal amount) specified in the form set forth herein for the Series Bonds under "Regular Redemption Price," together with accrued interest to the date of redemption. SECTION 1.05. The Series Bonds may be redeemed on any date prior to Maturity, as a whole but not in part, after notice given as provided in Section 8.07 of the Original General and Refunding Indenture not less than thirty days and not more than ninety days before such redemption date, at a redemption price of one hundred per centum (100%) of the then principal amount, together with accrued interest to the date of redemption, in the event (a) that all the outstanding common stock of the Company shall be acquired by some governmental body or instrumentality and the Company shall elect to redeem all the Bonds of all series, the redemption date in any such event to be not more than one hundred twenty days after the date on which all said stock is so acquired, or (b) that all or substantially all of the Mortgaged Property constituting Bondable Property which at the time shall be subject to the Lien of the General and Refunding Indenture shall be released from the Lien of the General and Refunding Indenture pursuant to Section 9.04 or Section 9.05 thereof, or both, and available moneys in the hands of the Trustee, including any moneys deposited by the Company for the purpose, are sufficient to redeem all the Bonds of all series at the redemption prices (together with accrued interest to the date of redemption) specified therein applicable to the redemption thereof upon the happening of such event. SECTION 1.06. The Series Bonds shall be issuable only as fully registered Bonds in denominations of $1,000 and any integral multiple of $1,000. The Series Bonds shall be exchangeable (upon payment of any tax or taxes or other governmental charges payable under Section 2.04 of the Original General and Refunding Indenture) at the option of the Holders thereof, for a like aggregate principal amount of Series Bonds of other authorized denominations. 13 12 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture SECTION 1.07. The Series Bonds shall be substantially in the following form: [FORM OF FACE OF SERIES BONDS] LONG ISLAND LIGHTING COMPANY (Incorporated under the laws of the State of New York) GENERAL AND REFUNDING BOND % SERIES DUE Number . . . . . . . . $ . . . . . . . . LONG ISLAND LIGHTING COMPANY, a corporation organized and existing under the laws of the State of New York (hereinafter called the "Company"), for value received, hereby promises to pay to or registered assigns, Dollars on , and to pay interest hereon at the rate of per centum ( %) per annum, from the date of the initial issuance of the General and Refunding Bonds of this Series, or from the most recent interest payment date to which interest has been paid or duly provided for, semi-annually on the day of and in each year, commencing on , , until this bond shall mature, according to its terms or on prior redemption or by declaration or otherwise, and at the same rate, from such date of maturity of this bond until this bond shall be paid or the payment hereof shall have been duly provided for, and (to the extent that payment of such interest is enforceable under applicable law) to pay interest on any overdue installment of interest at the same rate. The interest so payable, and punctually paid or duly provided for, on any interest payment date will, as provided in the General and Refunding Indenture hereinafter mentioned, be paid to the person in whose name this bond (or any bond or bonds evidencing the same debt) is registered at the close of business on the regular record date for such interest which shall be the first day (whether or not a business day) of or in each year. Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the registered holder on such regular record date, and may be paid to the person in whose name this bond (or any bond or bonds evidencing the same debt) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to holders of bonds not less than 10 days prior to such special record date, or may be paid, at any time, in any other lawful manner not inconsistent with the requirements of any securities exchange on which the bonds may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the General and Refunding Indenture hereinafter mentioned. Payments of principal hereon shall be made at the office or agency of the Company in the Borough of Manhattan, The City of New York, and such payments 14 13 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Checks for the payment of interest hereon shall be mailed to the registered holder at the address shown in the bond register or registers of the Company. Reference is hereby made to the further provisions of this bond set forth on the reverse hereof. Such further provisions shall for all purposes have the same effect as though fully set forth at this place. The lien on the properties of the Company provided by the General and Refunding Indenture hereinafter mentioned is subject to certain liens prior to the lien of the General and Refunding Indenture hereinafter mentioned, including the lien of the Company's Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, as supplemented, securing the First Mortgage Bonds of the Company issued thereunder. This bond shall not become valid or obligatory for any purpose until United States Trust Company of New York, or its successor, as Trustee under the General and Refunding Indenture hereinafter mentioned, or an authenticating agent appointed by the Trustee, shall have signed the certificate of authentication endorsed hereon. IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this bond to be duly executed under its corporate seal. Dated: LONG ISLAND LIGHTING COMPANY By ------------------------- President Attest: ------------------------ Secretary 15 14 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the General and Refunding Bonds described in the within mentioned General and Refunding Indenture. UNITED STATES TRUST COMPANY OF NEW YORK, as Successor Trustee By --------------------------- Authorized Officer [or By --------------------------- As Authenticating Agent for the Trustee By --------------------------- Authorized Officer]* * To be used if Trustee appoints an authenticating agent or agents pursuant to Section 14.23 of the General and Refunding Indenture. 16 15 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture [FORM OF REVERSE SIDE OF SERIES BONDS] LONG ISLAND LIGHTING COMPANY (Incorporated under the laws of the State of New York) GENERAL AND REFUNDING BOND % SERIES DUE This bond is one of an issue of bonds of the Company (herein referred to as the "General and Refunding Bonds"), not limited in principal amount except as provided in the General and Refunding Indenture hereinafter mentioned, issuable in series, which different series may mature at different times, may bear interest at different rates, and may otherwise vary as provided in the General and Refunding Indenture hereinafter mentioned, and is one of a series known as its General and Refunding Bonds, % Series Due , created by a Supplemental Indenture dated as of 1, , all General and Refunding Bonds of all series issued and to be issued under and being equally and ratably secured (except in so far as any sinking or analogous fund, established in accordance with the provisions of the General and Refunding Indenture hereinafter mentioned, may afford additional security for the General and Refunding Bonds of any particular series) by a General and Refunding Indenture dated as of June 1, 1975, executed and delivered by the Company and Manufacturers Hanover Trust Company, Trustee (hereinafter referred to as the "Trustee" which term includes any successor trustee) (hereinafter, together with all indentures supplemental thereto, including the Supplemental Indenture hereinabove referred to, called the "General and Refunding Indenture") to which General and Refunding Indenture reference is made for a description of the property mortgaged, the nature and the extent of the security, the rights of the holders of the General and Refunding Bonds and of the Company in respect thereof, the rights, duties and immunities of the Trustee, and the terms and conditions upon which the General and Refunding Bonds are, and are to be, issued and secured. The General and Refunding Indenture contains provisions permitting the holders of not less than a majority in principal amount of all the General and Refunding Bonds at the time outstanding, determined and evidenced as provided in the General and Refunding Indenture, on behalf of the holders of all the General and Refunding Bonds, to waive any past default under the General and Refunding Indenture and its consequences except a completed default, as defined in the General and Refunding Indenture, in respect of the payment of the principal of, premium, if any, or interest on any General and Refunding Bond or except a default arising from the creation of any lien, other than those permitted by the General and Refunding Indenture, ranking prior to or equal with the lien of the General and Refunding Indenture on any of the mortgaged property. 17 16 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture The General and Refunding Indenture also contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than the specified percentages described below in principal amount of the General and Refunding Bonds at the time outstanding, in each case determined and evidenced as provided in the General and Refunding Indenture, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the General and Refunding Indenture or modifying in any manner the rights of the holders of the General and Refunding Bonds, subject, however, to certain limitations described below. With respect to any of the foregoing, there shall be required the consent of the holders of not less than sixty-six and two-thirds per centum (662/3%) in principal amount of all the General and Refunding Bonds at the time outstanding; however, in case the rights under the General and Refunding Indenture of the holders of General and Refunding Bonds of one or more, but less than all, of the series of General and Refunding Bonds outstanding shall be similarly affected, then the consent of the holders of not less than sixty-six and two-thirds per centum (662/3%) in principal amount of the outstanding General and Refunding Bonds of such one or more series affected is required, except that if any such action would similarly affect the General and Refunding Bonds of two or more series, the holders of not less than sixty-six and two-thirds per centum (662/3%) in principal amount of outstanding General and Refunding Bonds of such two or more series, which need not include sixty-six and two-thirds per centum (662/3%) in principal amount of each of such series, is required. No such supplemental indenture shall, however, (i) extend the fixed maturity of any General and Refunding Bonds, or reduce the rate or extend the time of payment of interest thereon, or any premium payable on redemption thereof, or reduce the principal amount thereof, or, subject to the provisions of the General and Refunding Indenture, limit the right of a bondholder to institute suit for the enforcement of payment of principal, premium, if any, or interest in accordance with the terms of the General and Refunding Bonds, without the consent of the holder of each General and Refunding Bond so affected, or (ii) reduce the aforesaid percentage of General and Refunding Bonds, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all General and Refunding Bonds then outstanding, or (iii) permit the creation of any lien, other than those permitted by the terms of the General and Refunding Indenture, ranking prior to or equal with the lien of the General and Refunding Indenture on any of the mortgaged property without the consent of the holders of all General and Refunding Bonds then outstanding, or (iv) in any respect materially reduce his security and deprive the holder of any outstanding General and Refunding Bond of the lien of the General and Refunding Indenture on any of the mortgaged property without his consent. Any such waiver or consent by the holder of this General and Refunding Bond (unless effectively revoked as provided in the General and Refunding Indenture) shall be conclusive and binding upon such holder and upon all future holders of this General and Refunding Bond, or General and Refunding Bonds issued in exchange for or upon the transfer 18 17 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture of this General and Refunding Bond, irrespective of whether or not any notation of such waiver or consent is made upon this General and Refunding Bond. No reference herein to the General and Refunding Indenture and no provision of this General and Refunding Bond or of the General and Refunding Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this General and Refunding Bond at the time and place and at the rate and in the coin or currency herein prescribed. The General and Refunding Bonds of this Series are issuable only as fully registered bonds in denominations of $1,000 and any integral multiple of $1,000. General and Refunding Bonds of this Series may be exchanged for a like aggregate principal amount of General and Refunding Bonds of this Series of other authorized denominations without charge except for any tax or taxes or other governmental charges incident to such exchange, such exchange to be made at any office or agency to be maintained by the Company for such purposes and in the manner and subject to the limitations provided in the General and Refunding Indenture. The General and Refunding Bonds of this Series may not be redeemed prior to , , except as herein provided. On or after , , the General and Refunding Bonds of this Series may be redeemed, at the option of the Company, during the periods provided below, as a whole, or from time to time in part, after the notice given as provided in the General and Refunding Indenture not less than thirty days and not more than sixty days before such redemption date, at the redemption prices (expressed in percentages of the principal amount) set forth in the following table under "Regular Redemption Price," together with accrued interest to the date of redemption: IF REDEEMED IF REDEEMED DURING DURING 12 MONTH 12 MONTH PERIOD REGULAR SPECIAL PERIOD REGULAR SPECIAL BEGINNING REDEMPTION REDEMPTION BEGINNING REDEMPTION REDEMPTION , PRICE % PRICE % , PRICE % PRICE % ----------- ---------- ---------- ----------- ---------- ----------
19 18 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture Redemption as a whole of the General and Refunding Bonds of this Series, but not in part, may be effected prior to maturity, after notice given as provided in the General and Refunding Indenture not less than thirty days and not more than ninety days before such redemption date, at a redemption price of one hundred per centum (100%) of the then principal amount, together with accrued interest to the date of redemption, as more fully provided in Section 8.07 of the General and Refunding Indenture, in the event (a) that all the outstanding common stock of the Company shall be acquired by some governmental body or instrumentality and the Company elects to redeem all the General and Refunding Bonds of all series, the redemption date in any such event to be not more than one hundred twenty days after the date on which all said stock is so acquired, or (b) that all or substantially all of the mortgaged property which at the time shall be subject to the lien of the General and Refunding Indenture shall be released from the lien of the General and Refunding Indenture pursuant to the provisions thereof, and available moneys in the hands of the Trustee, including any moneys deposited by the Company for the purpose, are sufficient to redeem all the General and Refunding Bonds of all series at the redemption prices (together with accrued interest to the date of redemption) specified therein applicable to the redemption thereof upon the happening of such event. The General and Refunding Indenture provides that any notice of redemption of General and Refunding Bonds may state that it is subject to the receipt of the redemption moneys by the Trustee before the date fixed for redemption and such notice shall be of no effect unless such moneys are received before such date. The General and Refunding Indenture provides that if the Company shall deposit with the Trustee, in trust for the purpose, funds sufficient to pay the principal of all the General and Refunding Bonds of any series, or such of the General and Refunding Bonds of any series as have been or are to be called for redemption (including any portions, constituting $1,000 or an integral multiple thereof, of fully registered General and Refunding Bonds of this Series) and premium, if any, thereon, and all interest payable on such General and Refunding Bonds (or portions) to the date on which they become due and payable at maturity or upon redemption or otherwise, and complies with the other provisions of the General and Refunding Indenture in respect thereof, then from the date of such deposit such General and Refunding Bonds (or portions) shall no longer be secured by the lien of the General and Refunding Indenture. The General and Refunding Indenture provides that, upon any partial redemption of a fully registered General and Refunding Bond, and upon surrender thereof, new General and Refunding Bonds of the same series and of authorized denominations in principal amount equal to the unredeemed portion of such fully registered General and Refunding Bond will be delivered without charge in exchange therefor. 20 19 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture The principal hereof may be declared or may become due prior to the express date of the maturity hereof on the conditions, in the manner and at the time set forth in the General and Refunding Indenture, upon the occurrence of a completed default as provided in the General and Refunding Indenture. This General and Refunding Bond is transferable in the manner and subject to the limitations prescribed in the General and Refunding Indenture by the registered holder hereof in person, or by his duly authorized attorney, at the principal corporate trust office of the Trustee or at such other office or agency established for that purpose, upon surrender of this General and Refunding Bond, and upon payment, if the Company shall require it, of any tax or taxes or other governmental charges incident to such exchange or transfer, payable in connection therewith, and thereupon, a new General and Refunding Bond or Bonds of authorized denominations of the same series and for the same aggregate principal amount will be issued to the transferee in exchange herefor as provided in the General and Refunding Indenture. Except as otherwise provided herein with respect to the payment of interest, the Company and the Trustee, any paying agent, any bond registrar and any other of the Company's agents may deem and treat the person in whose name this General and Refunding Bond is registered as the absolute owner hereof, whether or not this General and Refunding Bond shall be overdue, for the purpose of receiving payment and for all other purposes and neither the Company nor the Trustee nor any paying agent nor any bond registrar nor any other of the Company's agents shall be affected by any notice to the contrary. No recourse under or upon any obligation, covenant or agreement contained in the General and Refunding Indenture, or in any General and Refunding Bond thereby secured, or because of any indebtedness thereby secured, shall be had against any incorporator, or against any past, present or future shareholder, officer or director, as such, of the Company or of any successor corporation under any rule of law, statute or constitution, or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise; it being expressly agreed and understood that the General and Refunding Indenture, and the obligations thereby secured, are solely corporate obligations, and that no personal liability whatever shall attach to, or be incurred by, such incorporators, shareholders, officers or directors, as such, of the Company or of any successor corporation, or any of them because of the incurring of the indebtedness thereby authorized or under or by reason of any of the obligations, covenants or agreements contained in the General and Refunding Indenture or in any of the General and Refunding Bonds thereby secured, or implied therefrom. [END OF REVERSE SIDE OF FORM OF SERIES BONDS] 21 20 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture ARTICLE II CONCERNING THE TRUSTEE. SECTION 2.01. The Trustee shall not be responsible in any manner for or with respect to the validity or sufficiency of this Supplemental Indenture, or the due execution hereof by the Company, or for or with respect to the recitals and statements made solely by the Company. SECTION 2.02. The Trustee hereby accepts the properties hereby mortgaged and conveyed to it upon the trusts hereinbefore referred to and agrees to perform the same upon the terms and conditions set forth in the General and Refunding Indenture. ARTICLE III MISCELLANEOUS. SECTION 3.01. For all purposes hereof, except as the content may otherwise require, (a) all terms contained herein shall have the meanings given such terms in, and (b) all references herein to sections of the Original General and Refunding Indenture shall be deemed to be to such sections of, the Original General and Refunding Indenture as the same heretofore has been or hereafter may be amended by an indenture or indentures supplemental thereto. SECTION 3.02. This Supplemental Indenture may be executed in several counterparts, and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. SECTION 3.03. Attached hereto as Exhibit 1 is the form of the Supplemental Indenture to the First Mortgage Bond Indenture providing for the issuance of First Mortgage Bonds in accordance with the provisions of Section 5.14 of the Original General and Refunding Indenture. Pursuant to Section 259 of the Tax Law of the State of New York, the Company hereby states that the amount which, at the time of the execution and delivery of this Supplemental Indenture, including Exhibit 1 hereto, has been advanced or has accrued hereon or has become and is secured hereby is the sum of $ ,000,000. 22 21 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this instrument to be signed in its corporate name by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary and, in token of its acceptance of the Trusts created hereunder, UNITED STATES TRUST COMPANY OF NEW YORK has caused this instrument to be signed in its corporate name by one of its Vice Presidents and Trust Officers and its corporate seal to be affixed and attested by one of its authorized officers, all as of the day and year first above written. LONG ISLAND LIGHTING COMPANY [CORPORATE SEAL] By ------------------------- ANTHONY NOZZOLILLO Senior Vice President and Chief Financial Officer Attest: - ------------------------ KATHLEEN A. MARION Corporate Secretary UNITED STATES TRUST COMPANY OF NEW YORK [CORPORATE SEAL] By ------------------------- LOUIS P. YOUNG Assistant Vice President Attest: - ------------------------ Assistant Vice President 23 22 Long Island Lighting Company - Supplemental Indenture to the General and Refunding Indenture STATE OF NEW YORK) ) SS. COUNTY OF NASSAU ) On the day of , in the year , before me personally came ANTHONY NOZZOLILLO, to me known, who, being by me duly sworn, did depose and say that he resides at ; that he is a Senior Vice President and Chief Financial Officer of LONG ISLAND LIGHTING COMPANY, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. --------------------------- Notary Public STATE OF NEW YORK ) ) SS. COUNTY OF NEW YORK) On the day of , in the year , before me personally came LOUIS P. YOUNG, to me known, who, being by me duly sworn, did depose and say that he resides at 6 Island Street, Plainview, New York 11803; that he is an Assistant Vice President of UNITED STATES TRUST COMPANY OF NEW YORK, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. --------------------------- Notary Public 24 23 EXHIBIT 1 SUPPLEMENTAL INDENTURE, dated as of 1, , between LONG ISLAND LIGHTING COMPANY, a New York corporation ("the Company"), having its principal office at 175 East Old Country Road, in Hicksville, County of Nassau, State of New York, and IBJ SCHRODER BANK & TRUST COMPANY, a bank and trust company organized under the laws of the State of New York (hereinafter called "the Trustee" or "the Successor Trustee"), having its corporate trust office at One State Street, in the Borough of Manhattan, City, County and State of New York. WHEREAS, the Company has executed and delivered to City Bank Farmers Trust Company (subsequently converted into First National City Trust Company, which was merged into First National City Bank, now named Citibank, N.A.), as Trustee (hereinafter called "the Original Trustee"), an Indenture of Mortgage and Deed of Trust dated as of September 1, 1951 ("the Original Indenture") securing the Company's First Mortgage Bonds ("the Bonds"), unlimited in aggregate principal amount except as therein otherwise provided, and creating the Company's First Mortgage Bonds, Series A, B and C; and WHEREAS, thereafter the Company executed and delivered to the Trustee, or its predecessor as Trustee, a First Supplemental Indenture, dated as of December 1, 1951, a Second Supplemental Indenture, dated as of October 1, 1952, a Third Supplemental Indenture, dated as of September 1, 1953, a Fourth Supplemental Indenture, dated as of December 1, 1954, a Fifth Supplemental Indenture, dated as of November 1, 1955, a Sixth Supplemental Indenture, dated as of December 1, 1956, a Seventh Supplemental Indenture, dated as of May 1, 1958, an Eighth Supplemental Indenture, dated as of July 1, 1959, a Ninth Supplemental Indenture, dated as of August 1, 1961, a Tenth Supplemental Indenture, dated as of April 1, 1963, an Eleventh Supplemental Indenture, dated as of June 1, 1964, a Twelfth Supplemental Indenture, dated as of June 1, 1965, a Thirteenth Supplemental Indenture, dated as of March 1, 1966, a Fourteenth Supplemental Indenture, dated as of April 1, 1967, a Fifteenth Supplemental Indenture, dated as of September 1, 1969, creating the Company's First Mortgage Bonds, Series D, E, F, G, H, I, J, K, L, M, N, O, P, Q and R, a Sixteenth Supplemental Indenture, dated as of September 1, 1970, creating the Company's First Mortgage Bonds, Series S and T, a Seventeenth Supplemental Indenture, dated as of April 1, 1971, an Eighteenth Supplemental Indenture, dated as of December 1, 1971, a Nineteenth Supplemental Indenture, dated as of September 1, 1972, a Twentieth Supplemental Indenture, dated as of December 1, 1973, a Twenty-first Supplemental Indenture, dated as of June 1, 1974, a Twenty-second Supplemental Indenture, dated as of November 1, 1974, a Twenty-third Supplemental Indenture, dated as of June 1, 1975, a Twenty-fourth 25 24 Supplemental Indenture, dated as of September 1, 1975, a Twenty-fifth Supplemental Indenture, dated as of June 1, 1976, a Twenty-sixth Supplemental Indenture, dated as of December 1, 1976, a Twenty-seventh Supplemental Indenture, dated as of May 1, 1977, a Twenty-eighth Supplemental Indenture, dated as of April 1, 1978, a Twenty-ninth Supplemental Indenture, dated as of March 1, 1979, a Thirtieth Supplemental Indenture, dated as of February 1, 1980, a Thirty-first Supplemental Indenture, dated as of March 1, 1981, a Thirty-second Supplemental Indenture, dated as of July 1, 1981, a Thirty-third Supplemental Indenture, dated as of July 1, 1981, a Thirty-fourth Supplemental Indenture, dated as of December 1, 1981, a Thirty-fifth Supplemental Indenture, dated as of December 1, 1981, a Thirty-sixth Supplemental Indenture, dated as of June 1, 1982, a Thirty-seventh Supplemental Indenture, dated as of October 1, 1982, a Thirty-eighth Supplemental Indenture, dated as of April 1, 1983, and a Thirty-ninth Supplemental Indenture, dated as of May 1, 1983, creating the Company's First Mortgage Bonds, Series U, V, W, X, Y, Z, AA, BB, CC, DD, EE, FF, GG, HH, II, JJ, KK, LL, MM, NN, OO, PP and QQ, and confirming the lien of the Indenture on certain property, rights, privileges and franchises acquired since the execution and delivery of the Original Indenture; and WHEREAS, the Original Indenture and the aforesaid Supplemental Indentures have been recorded as follows:
IN THE OFFICE OF THE REGISTER OF IN THE NASSAU THE CITY OF COUNTY CLERK'S NEW YORK OFFICE (QUEENS COUNTY) -------------- --------------- Liber of Liber of Mortgages Page Mortgages Page --------- ---- --------- ---- Original Indenture . . . . 4450 1 6475 1 Supplemental Indentures: First . . . . . . . . . . 4464 69 6484 377 Second . . . . . . . . . 4724 389 6638 171 Third . . . . . . . . . . 5041 428 6799 141 Fourth . . . . . . . . . 5405 370 6966 422 Fifth . . . . . . . . . . 5703 64 7110 648 Sixth . . . . . . . . . . 6007 521 7273 281 Seventh . . . . . . . . . 6273 326 7451 458
26 25
IN THE OFFICE OF THE REGISTER OF IN THE NASSAU THE CITY OF COUNTY CLERK'S NEW YORK OFFICE (QUEENS COUNTY) -------------- --------------- Liber of Liber of Mortgages Page Mortgages Page --------- ---- --------- ---- Supplemental Indentures: Eighth . . . . . . . . . 6532 251 7612 211 Ninth . . . . . . . . . . 6950 79 7884 530 Tenth . . . . . . . . . . 7322 1 8158 387 Eleventh . . . . . . . . 7538 61 8416 388 Twelfth . . . . . . . . . 7717 342 8639 323 Thirteenth . . . . . . . 7872 464 55* 90 Fourteenth . . . . . . . 8079 364 383* 438 Fifteenth . . . . . . . . 8529 283 349** 429 Sixteenth . . . . . . . . 8671 129 427** 242 Seventeeth . . . . . . . 8744 104 468** 1768 Eighteenth . . . . . . . 8889 237 535** 1618 Nineteenth . . . . . . . 9027 144 601** 1250 Twentieth . . . . . . . . 9291 274 725** 1786 Twenty-first . . . . . . 9365 240 766** 1373 Twenty-second . . . . . . 9439 30 799** 1072 Twenty-third . . . . . . 9517 524 840** 1275 Twenty-fourth . . . . . . 9570 458 862** 584 Twenty-fifth . . . . . . 9675 63 911** 544 Twenty-sixth . . . . . . 9778 58 953** 505 Twenty-seventh . . . . . 9814 558 985** 759 Twenty-eighth . . . . . . 9919 64 1063** 1103 Twenty-ninth . . . . . . 10032 78 1143** 1125 Thirtieth . . . . . . . . 10169 75 1239* 1812 Thirty-first . . . . . . 10285 74 1323** 816 Thirty-second . . . . . . 10322 44 1351** 230 Thirty-third . . . . . . 10322 105 1351** 293 Thirty-fourth . . . . . . 10379 68 1392** 1729 Thirty-fifth . . . . . . 10379 172 1392** 1604 Thirty-sixth . . . . . . 10423 170 1432** 1106 Thirty-seventh . . . . . 10471 471 1466** 1683 Thirty-eighty . . . . . . 10542 769 1518** 938 Thirty-ninth . . . . . . 10571 57 1537** 767 - ---------------
*Liber of Records. **Reel. 27 26
IN THE SUFFOLK IN THE OFFICE OF COUNTY CLERK'S THE REGISTRAR OF OFFICE SUFFOLK COUNTY -------------- ----------------- LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Original Indenture . . . . . . . 1884 1 29050 Supplemental Indentures: First . . . . . . . . . . . . 1889 569 29279 Second . . . . . . . . . . . . 2006 74 35843 Third . . . . . . . . . . . . . 2143 211 43709 Fourth . . . . . . . . . . . . 2326 488 52211 Fifth . . . . . . . . . . . . . 2539 317 59824 Sixth . . . . . . . . . . . . . 2773 327 68422 Seventh . . . . . . . . . . . . 3015 86 78200 Eighth . . . . . . . . . . . . 3251 5 88155 Ninth . . . . . . . . . . . . . 3678 380 106597 Tenth . . . . . . . . . . . . . 4081 14 122751 Eleventh . . . . . . . . . . . 4390 72 134155 Twelfth . . . . . . . . . . . . 4664 366 143894 Thirteenth . . . . . . . . . . 4890 405 151648 Fourteenth . . . . . . . . . . 5130 543 160481 Fifteenth . . . . . . . . . . . 5682 431 179778 Sixteenth . . . . . . . . . . . 5891 14 187577 Seventeenth . . . . . . . . . . 6006 544 191628 Eighteenth . . . . . . . . . . 6236 195 198008 Nineteenth . . . . . . . . . . 6473 299 204868 Twentieth . . . . . . . . . . . 6956 378 219354 Twenty-first . . . . . . . . . 7104 80 223591 Twenty-second . . . . . . . . . 7221 17 226961 Twenty-third . . . . . . . . . 7358* 510 231531 Twenty-fourth . . . . . . . . . 7445* 120 234028 Twenty-fifth . . . . . . . . . 7622* 61 239418 Twenty-sixth . . . . . . . . . 7773* 100 244098 Twenty-seventh . . . . . . . . 7882* 552 247933 Twenty-eighth . . . . . . . . . 8149* 30 256465 Twenty-ninth . . . . . . . . . 8401* 574 263862 Thirtieth . . . . . . . . . . . 8689 1 271653 - ---------------
* Volume of Mortgages. 28 27
IN THE SUFFOLK IN THE OFFICE OF COUNTY CLERK'S THE REGISTRAR OF OFFICE SUFFOLK COUNTY -------------- ------------------ LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Supplemental Indentures: Thirty-first . . . . . . . . 8950 38 278932 Thirty-second . . . . . . . . 9034 385 281160 Thirty-third . . . . . . . . 9034 446 281157 Thirty-fourth . . . . . . . . 9169 97 284686 Thirty-fifth . . . . . . . . 9169 161 284688 Thirty-sixth . . . . . . . . 9271 423 287513 Thirty-seventh . . . . . . . 9374 279 290222 Thirty-eighth . . . . . . . . 9519 563 293588 Thirty-ninth . . . . . . . . 9578 272 294810;
WHEREAS, the Company and First National City Bank (now Citibank, N.A.), as Trustee, pursuant to Article Nine of the Uniform Commercial Code, have executed a Financing Statement which was filed in the State of New York on June 2, 1965, in the Department of State of the State of New York as File No. 65-124,203, and Continuation Statements numbered 48,738, 40,081, 73,660 and 123,589, which were filed, respectively, in the State of New York on April 21, 1970, May 15, 1975, May 23, 1980 and May 28, 1985, in the Department of State of the State of New York; and WHEREAS, a Fortieth Supplemental Indenture, dated as of February 29, 1984, wherein the Company accepts the resignation of Citibank, N.A., as Original Trustee under the Indenture, appoints J. Henry Schroder Bank & Trust Company as Successor Trustee under the Indenture and J. Henry Schroder Bank & Trust Company accepts such appointment, has been executed by the Company, Citibank, N.A. and J. Henry Schroder Bank & Trust Company and recorded as follows: In the Nassau County Clerk's Office in Liber 9538 of Deeds, Page 581 on March 1, 1984; in the Office of the Register of The City of New York (Queens County) on Reel 1647, Page 40 on March 5, 1984; in the Suffolk County Clerk's Office in Liber 9992 of Mortgages, Page 418 on March 5, 1984; and in the Office of the Registrar of Suffolk County as Document No. 301270 on March 5, 1984; and WHEREAS, the Company and First National City Bank (now Citibank, N.A.), as Trustee, pursuant to Article Nine of the Uniform Commercial Code, have executed an Amendment to the Financing Statement which was filed in 29 28 the State of New York on May 28, 1985, in the Department of State of the State of New York as File No. 123,590, and an Assignment Statement on May 28, 1985 numbered 123,591 to J. Henry Schroder Bank & Trust Company, and on April 23, 1990 the Company and J. Henry Schroder Bank & Trust Company filed a Continuation Statement numbered 83,189 and an Amendment Statement numbered 83,190; and WHEREAS, thereafter the Company executed and delivered to the Successor Trustee a Forty-first Supplemental Indenture, dated as of September 1, 1984, a Forty-second Supplemental Indenture, dated as of October 1, 1984, a Forty-third Supplemental Indenture, dated as of June 1, 1985, a Forty-fourth Supplemental Indenture, dated as of April 1, 1986, a Forty-fifth Supplemental Indenture, dated as of February 1, 1991, a Forty-sixth Supplemental Indenture, dated as of May 1, 1991, a Forty-seventh Supplemental Indenture, dated as of July 1, 1991, a Forty-eighth Supplemental Indenture, dated as of May 1, 1992, and a Forty-ninth Supplemental Indenture dated as of July 1, 1992, creating the Company's First Mortgage Bonds, Series RR, SS, TT, UU, VV, WW, XX, YY, ZZ, AAA, BBB and CCC, respectively, and confirming the lien of the Indenture on certain property, rights, privileges and franchises acquired since the execution and delivery of the Original Indenture; and WHEREAS, the aforesaid Supplemental Indentures have been recorded as follows:
IN THE OFFICE OF THE REGISTER OF IN THE THE CITY OF NASSAU COUNTY NEW YORK CLERK'S OFFICE (QUEENS COUNTY) -------------- --------------- LIBER OF MORTGAGES PAGE REEL PAGE --------- ---- ---- ---- Supplemental Indentures: Forty-first . . . . . . . . . . 10945 622 1742 680 Forty-second . . . . . . . . . 10988 758 1772 1463 Forty-third . . . . . . . . . . 11159 60 1877 735 Forty-fourth . . . . . . . . . 11487 95 2073 1 Forty-fifth . . . . . . . . . . 13715 178 3121 1996 Forty-sixth . . . . . . . . . . 13782 196 3149 569 Forty-seventh . . . . . . . . . 13859 167 3185 1156 Forty-eighth . . . . . . . . . 14060 193 3319 2469 Forty-ninth . . . . . . . . . . 14113 170 3365 698
30 29
IN THE IN THE OFFICE OF SUFFOLK COUNTY THE REGISTRAR OF CLERK'S OFFICE SUFFOLK COUNTY -------------- --------------- LIBER OF MORTGAGES PAGE DOCUMENT NO. --------- ---- ------------ Supplemental Indentures: Forty-first . . . . . . . . . . . 10357 1 306374 Forty-second . . . . . . . . . . 10465 165 307994 Forty-third . . . . . . . . . . . 10849 202 313990 Forty-fourth . . . . . . . . . . 11550 227 323439 Forty-fifth . . . . . . . . . . . 16595 1 388389 Forty-sixth . . . . . . . . . . . 16737 201 390447 Forty-seventh . . . . . . . . . . 16923 299 392730 Forty-eighth . . . . . . . . . . 17664 247 401508 Forty-ninth . . . . . . . . . . . 17933 227 404359
IN THE OSWEGO COUNTY CLERK'S OFFICE -------------- BOOK OF ------- MORTGAGES PAGE --------- ---- Supplemental Indentures: Forty-fourth . . . . . . . . . . 869 106 Forty-fifth . . . . . . . . . . . 1227 77 Forty-sixth . . . . . . . . . . . 1242 85 Forty-seventh . . . . . . . . . . 1264 71 Forty-eighth . . . . . . . . . . 1334 168 Forty-ninth . . . . . . . . . . . 1357 175; and
WHEREAS, the Organization Certificate of J. Henry Schroder Bank & Trust Company, filed in the Office of the Superintendent of Banks of the State of New York, was amended, effective January 1, 1987, to provide that J. Henry Schroder Bank & Trust Company be named IBJ Schroder Bank & Trust Company; and WHEREAS, the Original Indenture, together with the aforesaid forty-nine supplemental indentures and this Supplemental Indenture, is hereinafter called "the Indenture;" and 31 30 WHEREAS, as required by Section 5.14 of the General and Refunding Indenture dated as of June 1, 1975 between the Company and Manufacturers Hanover Trust Company, as Trustee ("the General and Refunding Indenture"), the Company desires by this Supplemental Indenture to create one series of Bonds to be issued under the Indenture, to designate or otherwise distinguish such series, to specify the particulars necessary to describe and define the same, and to specify such other terms, provisions and agreements in respect thereto as are in the Indenture provided or permitted; and WHEREAS, since the execution and delivery of the Original Indenture, the Company has acquired certain property, rights, privileges and franchises which by the terms of the Original Indenture are subject to the lien of the Indenture, and the Company desires to confirm the lien of the Indenture on said property, rights, privileges and franchises so acquired in accordance with the provisions of the Indenture; and WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture when duly executed a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed have been done, performed and fulfilled, and the execution and delivery of this Supplemental Indenture have in all respects been duly authorized by resolution of the Board of Directors of the Company; NOW, THEREFORE, in consideration of the premises and of the sum of $1 paid to the Company by the Trustee at or before the execution and delivery hereof, the receipt whereof is hereby acknowledged, and of other good and valuable considerations, the Company does hereby acknowledge and confirm that it has granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged and confirmed, and by these presents the Company does hereby grant, bargain, sell, release, convey, assign, transfer, mortgage, pledge and confirm unto the Trustee all property, real, personal or mixed, rights, privileges and franchises (other than Excepted Property as defined in the Indenture), of every kind and description and wheresoever situate, acquired by the Company since the execution and delivery of the Original Indenture. TO HAVE AND TO HOLD all such property, rights, privileges and franchises as part of the Trust Estate (as defined in the Indenture) with like effect as though originally included therein. IN TRUST NEVERTHELESS for the same purposes and upon the same terms, trusts and conditions, and subject to and with the same provisos and 32 31 covenants, as are set forth in the Indenture, with the same force and effect as though such property had been particularly described in the Granting Clauses of the Original Indenture. The Company does hereby covenant and agree with the Trustee as follows: ARTICLE I FIRST MORTGAGE BONDS, SERIES DUE SECTION 1. There is hereby created a series of Bonds to be issued under and secured by the Indenture to be designated as "First Mortgage Bonds, Series % Due " of the Company ("the Bonds of Series "), and the form thereof shall be substantially as hereinafter recited. The principal amount of Bonds of Series which may be authenticated and delivered under this Supplemental Indenture shall be limited to Million Dollars ($ ,000,000), except for Bonds of Series authenticated and delivered upon transfer of, or in exchange for, or in lieu of other Bonds of Series pursuant to the provisions of the Original Indenture, as from time to time amended and supplemented, or of this Supplemental Indenture. An aggregate principal amount of Million Dollars ($ ,000,000) of the Bonds of Series may forthwith be executed by the Company and delivered to the Trustee for authentication and delivery. From time to time, so long as the aggregate principal amount of the Bonds of Series authenticated and delivered does not exceed the limitation hereinabove set forth, and subject to the terms and conditions of the Indenture relative to the authentication and delivery of Bonds, Bonds of Series additional to the initial issue thereof may be executed by the Company and delivered to the Trustee for authentication and delivery. The Bonds of Series shall be registered Bonds without coupons in denominations of $1,000 or any multiple thereof, and of such amount of each denomination as may be executed by the Company and delivered to the Trustee for authentication and delivery. The Bonds of Series shall mature , and shall bear interest at the rate of per centum ( %) per annum, payable semi-annually on and in each year, commencing on the date specified in such Bond as below provided as the commencement date of the first interest period, until the principal thereof shall have become due and payable. Interest shall be payable on overdue principal of the Bonds of 33 32 Series and (to the extent that payment of such interest is enforceable under applicable law) on overdue instalments of interest of Bonds of Series at the rate of six per centum (6%) per annum. Both the principal of and interest on the Bonds of Series shall be paid at the office or agency of the Company in the Borough of Manhattan in The City of New York, in any coin or currency of the United States of America which at the time of payment shall be legal tender for public and private debts. SECTION 2. The provisions of the second paragraph of Section 2.05 of the Indenture shall not be applicable to the Bonds of Series . All Bonds of Series shall be dated the date of their authentication, and shall bear interest from the date specified in such Bond as below provided as the commencement of the first interest period, or from the most recent interest date to which interest has been paid or duly provided for. Interest on any Bond of Series which is payable, and is punctually paid or duly provided for, on any interest date shall be paid to the person in whose name that Bond (or one or more Bonds of Series evidencing all or a portion of the same debt) is registered at the close of business on the Regular Record Date for such interest which shall be the day of or , as the case may be, next preceding such interest date whether or not such day of or is a day which is not a day on which banking institutions in The City of New York are authorized or required by law or executive order to be closed (hereinafter a "Business Day"). SECTION 3. Any interest on any Bond of Series which is payable, but is not punctually paid or duly provided for, on any interest date (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered holder on the relevant Regular Record Date by virtue of having been such holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or Clause (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the persons in whose names the Bonds of Series (or the respective Bonds of Series evidencing all or a portion of the same debt) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Bond of Series and the date of the proposed payment, and at the same time the Company shall make arrangements satisfactory to the Trustee for the deposit with the Trustee of an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest 34 33 which shall be not more than 15 nor less than 5 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each holder of a Bond of Series at his address as it appears in the Bond register, not less than 10 days prior to such Special Record Date. The Trustee may, in its discretion, in the name and at the expense of the Company, cause a similar notice to be published at least once in a daily newspaper in the Borough of Manhattan in The City of New York, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the Bonds of Series (or the respective Bonds of Series evidencing all or a portion of the same debt) are registered on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Bonds of Series may be listed, and upon such notice as may be required by such exchange, if after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. SECTION 4. The Bonds of Series shall be redeemable at a redemption price of one hundred per centum (100%) of their principal amount, together with accrued interest thereon from the interest date to which interest has previously been paid or made available for payment to the date fixed for redemption, upon the application of Trust Moneys pursuant to the last paragraph of Section 9.04, and Sections 9.10 and 9.11 of the Indenture. Bonds of Series shall be redeemed in accordance with their terms and Article Eleven of the Indenture. SECTION 5. In order to prevent the application of the provisions of Section 9.10 of the Indenture requiring the redemption of Bonds pursuant to said Section, the Company shall use its best efforts to take such action as may be necessary so that at no time shall there have been on deposit at all times during the preceding three years Trust Moneys in an amount in excess of $25,000. 35 34 The Company shall, in the manner provided in Sections 9.04A and 12.01 of the Indenture, use its best efforts to make alternative directions and designations so that it shall not be required by the provisions of said Sections to purchase or redeem any Bonds of Series . SECTION 6. No payment by way of principal or interest on any Bond of Series shall be made if the Trustee shall have received written notice signed on behalf of the registered holder of such Bond of Series stating that the same has been waived by such registered holder and such waiver shall not have been revoked, all in the manner and at the times hereinafter specified. With respect to principal of any Bond of Series becoming due and payable on any date, said notice shall be on file with the Trustee at the close of business on said due date if said due date is a Business Day, or, if said due date is not a Business Day, then on the Business Day next following said due date. With respect to any instalment of interest on any Bond of Series , said notice shall be on file with the Trustee at the close of business on the date which is the 30th day after the date fixed for payment of such instalment or, if said 30th day is not a Business Day, on the Business Day next preceding said 30th day. The above-mentioned notices of waiver may be revoked by written notice signed and filed with the Trustee in the same manner specified herein for a notice of waiver. Unless a waiver is so revoked, (a) at the close of business on the date when any principal of any Bond of Series with respect to which a waiver was on file with the Trustee as aforesaid shall become due and payable or, if said due date is not a Business Day, on the Business Day next following said due date, such principal shall cease to be payable, and interest shall thereupon cease to accrue thereon, and (b) at the close of business on the date which is the 30th day after the date fixed for payment of any instalment of interest with respect to which a waiver was on file with the Trustee as aforesaid or, if said 30th day is not a Business Day, on the Business Day next preceding said 30th day, such instalment shall cease to be payable. Said notice shall specify the certificate numbers and denominations of Bonds of Series to which it applies and the principal or instalments of interest being thereby waived and shall state that the person signing or on whose behalf it is signed is the registered holder of said Bonds of Series , that said Bonds of Series are in said registered holder's possession and, if required by the Trustee, will be promptly produced for inspection by the Trustee, that payment of the principal of or instalments of interest specified therein are thereby waived, that said notice is being delivered to the Trustee for the purpose of being relied on by the Trustee in the administration of the trust under the Indenture, that the Trustee may so rely and that the person(s) signing are thereunto duly authorized. 36 35 Where the person on whose behalf a notice is given is a corporation, said notice shall be signed by the President or any Vice President, Cashier, Controller, Treasurer, Trust Officer or Assistant Vice President, and by an Assistant Cashier, Assistant Controller, Assistant Treasurer or Assistant Trust Officer. The Trustee shall be entitled to rely upon and shall be fully protected in relying upon written notices delivered to it in accordance with this Section 6. SECTION 7. The Company covenants that the annual interest charges on the Bonds of Series which would be payable except for the waiver of such payment described in Section 6 hereof shall be included as annual interest charges upon the Company's Secured Debt (as defined in the Indenture) for the purpose of any Gross Income Certificate under the Indenture. SECTION 8. All Bonds of Series shall, upon surrender to the Trustee at its corporate trust office, be exchangeable for other Bonds of Series of a different authorized denomination or denominations, as requested by the holder surrendering the same, but of a like aggregate principal amount. The Company will execute and the Trustee shall authenticate and deliver registered Bonds of Series whenever the same shall be required for any such exchange. For any exchange of Bonds of Series (other than exchanges expressly provided in the Indenture to be made at the Company's own expense or without expense or without charge to Bondholders) or for any transfer of any Bond of Series , the Company, at its option, may require the payment by the Bondholder of a sum sufficient to reimburse it for any stamp tax and/or any other governmental charge incident thereto, but, notwithstanding the provisions of the last paragraph of Section 2.08 of the Indenture, no other charge shall be made by the Company for any such exchange or transfer. The right reserved by the Company in the first paragraph of Section 2.06 of the Indenture not to make any transfers or exchanges of Bonds for a period of 10 days next preceding any interest payment date shall not be applicable to transfers or exchanges of Bonds of Series . Except as hereinabove provided in this Section, exchanges of Bonds of Series shall be subject to Sections 2.06 and 2.08 of the Indenture. The Trustee is hereby appointed Registrar of the Bonds of Series for the purpose of registering and transferring Bonds of Series as provided in the Indenture. 37 36 SECTION 9. The form of the Bonds of Series and the certificate of authentication of the Trustee to be executed thereon are to be substantially in the following forms, respectively, with such variations as are permitted in the Indenture for registered Bonds without coupons: [FORM OF BONDS OF SERIES FACE SIDE] LONG ISLAND LIGHTING COMPANY Registered Registered FIRST MORTGAGE BOND SERIES % DUE $ $ NUMBER 38 37 LONG ISLAND LIGHTING COMPANY, a corporation of the State of New York (hereinafter called "the Company"), for value received, hereby promises to pay to or registered assigns, at the close of business on , , if said due date is a day (herein called a "Business Day") which is not a day on which banking institutions in The City of New York are authorized or required by law or executive order to be closed, or, if said due date is not a Business Day, then on the Business Day next following said due date, Dollars, and to pay interest thereon from the date of the initial issuance of the Bonds of this Series, or from the most recent interest date to which interest has been paid or duly provided for, at the rate of per centum ( %) per annum, semi-annually at the close of business on and in each year, commencing on , or, if said or is not a Business Day, on the Business Day next following said date, until the principal hereof shall have become due and payable, and to pay interest on any overdue principal and (to the extent enforceable under applicable law) on any overdue instalment of interest at the rate of six per centum (6%) per annum. The principal hereof and interest hereon shall be payable at the office or agency of the Company in the Borough of Manhattan in The City of New York, in any coin or currency of the United States of America which at the time of payment shall be legal tender for public and private debts. The provisions of this Bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. This Bond shall not be valid until the certificate of authentication hereon shall have been signed by the Trustee under the Indenture hereinafter mentioned. 39 38 IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this Bond to be executed in its corporate name with the facsimile signature of its President or one of its Vice Presidents and its corporate seal, or a facsimile thereof, to be impressed or imprinted hereon, attested by the facsimile signature of its Secretary or of an Assistant Secretary. Dated: LONG ISLAND LIGHTING COMPANY By ------------------------------- President Attest: - ---------------------------------------------- Secretary [Form of the Trustee's Certificate of Authentication] This is one of the Bonds, of the Series designated therein, described in the within mentioned Indenture. IBJ SCHRODER BANK & TRUST COMPANY, AS TRUSTEE By ------------------------------- Authorized Officer 40 39 [FORM OF BOND OF SERIES -- REVERSE SIDE] LONG ISLAND LIGHTING COMPANY FIRST MORTGAGE BOND SERIES % DUE (Continued) The interest so payable, and punctually paid or duly provided for, on any interest date will, as provided in the Indenture hereinafter mentioned, be paid to the person in whose name this Bond (or any Bond or Bonds evidencing all or a portion of the same debt) is registered at the close of business on the Regular Record Date for such interest which shall be the day of or , as the case may be (whether or not a Business Day), next preceding such interest date. Any such interest not punctually paid or duly provided for shall forthwith cease to be payable to the registered holder on such Regular Record Date, and may be paid to the person in whose name this Bond (or any Bond or Bonds evidencing all or a portion of the same debt) is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to the registered holder hereof not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Bond may be listed, and upon such notice as may be required by such exchange, all as more fully provided for in the Indenture hereinafter mentioned. If an Event of Default, as defined in the Indenture hereinafter mentioned, shall occur, the principal of this Bond may become or be declared due and payable, in the manner and with the effect provided in the Indenture hereinafter mentioned. This Bond is one of an authorized issue of Bonds of the Company known as its "First Mortgage Bonds", not limited in principal amount except as in the Indenture hereinafter mentioned provided, issued and to be issued in one or more series under, and all equally and ratably secured (except as any sinking or other fund may afford additional special security for the Bonds of any particular series) by, an Indenture of Mortgage and Deed of Trust dated as of September 1, 1951, executed by the Company to City Bank Farmers Trust Company (subsequently converted into First National City Trust Company, which was merged into First National City Bank, now named Citibank, N.A.), as Trustee (hereinafter referred to as "the Trustee" which term includes any successor trustee) (herein, together 41 40 with all indentures supplemental thereto, called "the Indenture") to which Indenture reference is hereby made for a description of the properties thereby mortgaged and conveyed, the nature and extent of the security, the rights of the holders of said Bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said Bonds are and are to be authenticated and delivered. As provided in the Indenture, said Bonds are issuable in series which may vary as to maturity, interest and otherwise as in the Indenture provided or permitted. This Bond is one of a series entitled "First Mortgage Bonds, Series % Due " created by a Supplemental Indenture dated as of , as provided for in the Indenture. As provided in, and to the extent permitted by, the Indenture, the rights and obligations of the Company and of the holders of said Bonds may be modified by the Company with the consent of the holders of not less than seventy-five per centum (75%) in principal amount of all the Bonds of all series then outstanding which are affected by such modification (excluding Bonds disqualified from voting by reason of the Company's interest therein as provided in the Indenture). The Indenture provides, among other things, that, without the consent of the holder hereof, no such modification shall effect the reduction, or the extension of the stated time of payment, of the principal hereof, or of the interest hereon, or permit the creation of any lien on the properties so mortgaged and conveyed prior to or on a parity with the lien of the Indenture (except as therein expressly permitted) or deprive the holder hereof of the lien created by the Indenture on said properties. The holders of not less than sixty-six and two-thirds per centum (662/3%) in principal amount of all Bonds of all series then outstanding (excluding Bonds disqualified as aforesaid) may on behalf of the holders of all such Bonds waive any past default under the Indenture and its consequences, except a default in the payment of the principal of, or premium or interest on, any of the Bonds as and when the same shall become due by the terms of such Bonds or a call for redemption. No recourse shall be had for the payment of the principal of or the interest or premium on this Bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, as such, past, present or future, of the Company or of any predecessor or successor corporation, either directly or through the Company or any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or by any legal or equitable proceeding or otherwise howsoever; all such liability being, by the acceptance hereof and as a part of the consideration for the issuance hereof, expressly waived and released by every holder hereof; provided, however, that nothing herein or in the Indenture contained shall be taken to prevent recourse to and the enforcement of the liability, if any, of any stockholder or subscriber to capital stock upon or in respect of shares of capital stock not fully paid. 42 41 This Bond is transferable by the registered owner hereof, in person or by attorney authorized in writing, at the corporate trust office of the Trustee, and at such other offices or agencies as may be required to be maintained for such purpose to comply with the rules of any securities exchange on which the Bonds of this Series may at the time be listed, upon surrender of this Bond, and upon any such transfer of a new Bond or Bonds, of the same series for the same aggregate principal amount, will be issued to the transferee in exchange herefor, without payment of any charge other than stamp taxes and other governmental charges incident thereto. The Company and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof, whether or not this Bond shall be overdue, for the purpose of receiving payment as herein provided and for all other purposes. The Bonds of this Series are issuable as registered Bonds without coupons in denominations of $1,000 and/or any multiple thereof authorized by the Company. As provided in the Indenture, Bonds of this Series are exchangeable for other Bonds of this Series of a different authorized denomination or denominations, as requested by the holder surrendering the same, without payment of any charge other than stamp taxes and other governmental charges incident thereto. The Company shall not be required to make any transfer or exchange of this Bond for a period of 10 days next preceding the mailing of notice of redemption of any Bonds of this Series. The Bonds of this Series are subject to redemption upon prior notice given as provided in the Indenture, upon payment of one hundred per centum (100%) of the principal amount so redeemed together with interest accrued thereon to the date fixed for redemption in the event that all or substantially all of the Electric Property or all or substantially all of the Gas Property of the Company shall be released or substantially all of the Trust Estate (with certain exceptions) shall be taken by eminent domain or sold in anticipation of such taking. Bonds for whose redemption and payment provision is made in accordance with the Indenture shall thereupon cease to be entitled to the lien of the Indenture and shall cease to bear interest from and after the date fixed for redemption. 43 42 [END OF REVERSE SIDE OF FORM OF BOND OF SERIES ] ARTICLE II THE TRUSTEE The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company; or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company. ARTICLE III MISCELLANEOUS PROVISIONS SECTION 1. Except insofar as herein otherwise expressly provided, all the provisions, terms and conditions of the Original Indenture as heretofore supplemented shall be deemed to be incorporated in, and made a part of, this Supplemental Indenture; and the Original Indenture as heretofore supplemented by this Supplemental Indenture is in all respects ratified and confirmed; and the Original Indenture as heretofore supplemented and this Supplemental Indenture shall be read, taken and construed as one and the same instrument. SECTION 2. This Supplemental Indenture may be executed in any number of counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Company and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. 44 43 IN WITNESS WHEREOF, LONG ISLAND LIGHTING COMPANY has caused this Supplemental Indenture to be signed in its corporate name by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary and, in token of its acceptance of the trusts created hereunder, IBJ SCHRODER BANK & TRUST COMPANY, as Trustee as aforesaid, has caused this Supplemental Indenture to be signed in its corporate name by a Vice President or an Assistant Vice President and its corporate seal to be affixed and attested by a Secretary or an Assistant Secretary, all as of the day and year first above written. LONG ISLAND LIGHTING COMPANY [CORPORATE SEAL] BY ------------------------- Attest: - ---------------------------- IBJ SCHRODER BANK & TRUST COMPANY, as Trustee as aforesaid [CORPORATE SEAL] By ------------------------- Attest: - ---------------------------- 45 44 STATE OF NEW YORK) ) SS. COUNTY OF NASSAU ) On the day of , in the year , before me personally came , to me known, who being by me duly sworn, did depose and say that he resides at , New York ; that he is a of LONG ISLAND LIGHTING COMPANY, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. --------------------- NOTARY PUBLIC STATE OF NEW YORK) ) SS. COUNTY OF ) On the day of , in the year , before me personally came , to me known, who being by me duly sworn, did depose and say that she resides at ; that she is a of IBJ SCHRODER BANK & TRUST COMPANY, one of the corporations described in and which executed the above instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that she signed her name thereto by like authority. --------------------- NOTARY PUBLIC 46 44 STATE OF NEW YORK) ) SS. COUNTY OF NASSAU ) On the day of , in the year , before me personally came , to me known, who being by me duly sworn, did depose and say that he resides at , New York ; that he is a of LONG ISLAND LIGHTING COMPANY, one of the corporations described in and which executed the above instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he signed his name thereto by like order. ---------------------- NOTARY PUBLIC STATE OF NEW YORK) ) SS. COUNTY OF ) On the day of , in the year , before me personally came , to me known, who being by me duly sworn, did depose and say that she resides at ; that she is a of IBJ SCHRODER BANK & TRUST COMPANY, one of the corporations described in and which executed the above instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that she signed her name thereto by like authority. ---------------------- NOTARY PUBLIC 47 45 RECORDING DATA The Supplemental Indenture to the General and Refunding Indenture was filed for record and recorded in the State of New York on , as follows: In the Office of the County Clerk of Nassau County in Liber of Mortgages, Page ; in the Office of the County Clerk of Suffolk County in Liber of Mortgages, Page ; in the Office of the Registrar of Suffolk County as Document No. ; in the Office of the Register of the City of New York for the County of Queens with Document No. in Reel of Records, Page ; and in the Office of the County Clerk of Oswego County on , in Book of Mortgages, Page . 48 ================================================================================ LONG ISLAND LIGHTING COMPANY and [CHEMICAL BANK/STATE STREET BANK AND TRUST COMPANY] as Trustee -------------------- DEBENTURES Series Due -----% ---- -------------------- Supplemental Indenture ---------- Dated as of , 199-- ---------- ------------------ ================================================================================ 49 ---------- SUPPLEMENTAL INDENTURE, dated as of ----------, 199-- (herein called the "---------- Supplemental Indenture"), between LONG ISLAND LIGHTING COMPANY, a corporation duly organized and existing under the laws of the State of New York (hereinafter called the "Company"), party of the first part, and [CHEMICAL BANK/STATE STREET BANK AND TRUST COMPANY], a corporation duly organized and existing under the laws of the [State of New York/State of Massachusetts (the successor in interest to the Connecticut Bank and Trust Company, National Association)], as Trustee under the Original Indenture referred to below (hereinafter called the "Trustee"), party of the second part. WITNESSETH: WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of [November 1, 1992/November 1, 1986] (hereinafter called the "Original Indenture"; the Original Indenture, as supplemented or amended from time to time, including by this ----- Supplemental Indenture, is hereinafter sometimes referred to as the "Indenture"), to provide for the issuance from time to time of certain of its unsecured debentures, notes or other evidences of indebtedness (hereinafter called the "Securities"), the form and terms of which are to be established as set forth in Sections 201 and 301 of the Original Indenture; and WHEREAS, Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee 50 2 may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of the Securities of any series as permitted in Sections 201 and 301 of the Original Indenture; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of up to $------------ to be designated the "Debentures, -----% Series Due ----" (the "Debentures") and all action on the part of the Company necessary to authorize the issuance of the Debentures under the Original Indenture and this ---------- Supplemental Indenture has been duly taken; and WHEREAS, all acts and things necessary to make the Debentures when executed by the Company and completed, authenticated and delivered by the Trustee as in the Original Indenture and this ---------- Supplemental Indenture provided, the valid and binding obligations of the Company and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, THIS ---------- SUPPLEMENTAL INDENTURE WITNESSETH: That in consideration of the premises and of the acceptance and purchase of the Debentures by the holders thereof, 51 3 and of the acceptance of this trust by the Trustee, the Company covenants and agrees with the Trustee, for the equal benefit of holders of the Debentures, as follows: ARTICLE ONE DEFINITIONS The use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of Debenture attached hereto as Exhibit A. ARTICLE TWO TERMS AND ISSUANCE OF THE DEBENTURES Section 201. Issue of Debentures. A series of Securities which shall be designated the "Debentures, -----% Series Due ----" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture and this ---------- Supplemental Indenture (including the form of Debenture set forth in Exhibit A hereto). The aggregate principal amount of Debentures of the series created hereby which may be authenticated and delivered under the Indenture shall not, except as permitted by the provisions of the Indenture, exceed $------------. 52 4 Section 202. Form of Debentures; Incorporation of Terms. The form of the Debentures shall be substantially in the form of Exhibit A attached hereto, the terms of which are herein incorporated by reference and which are part of this ---------- Supplemental Indenture. Section 203. Place of Payment. The Place of Payment will be initially the office of [Chemical Bank in New York City which, at the date hereof, is located at 450 West 33rd Street, New York, New York 10001/State Street Bank and Trust Company, National Association in New York City which, at the date hereof, is located at 61 Broadway, Concourse Level, 15th Floor, New York, New York 10006.] ARTICLE THREE MISCELLANEOUS Section 301. Execution as Supplemental Indenture. This - ---------- Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this ---------- Supplemental Indenture forms a part thereof. Section 302. Conflict With Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust 53 5 Indenture Act of 1939, as amended, such imposed duties shall control. Section 303. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 304. Successors and Assigns. All covenants and agreements in this ---------- Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 305. Separability Clause. In case any provision in this ---------- Supplemental Indenture or in the Debentures shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 306. Benefits of Supplemental Indenture. Nothing in this ---------- Supplemental Indenture or in the Debentures, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the holders, any benefit or any legal or equitable right, remedy or claim under this ---------- Supplemental Indenture. Section 307. Governing Law. This ---------- Supplemental Indenture and each Debenture shall be deemed to be a contract made under the laws of the State of New York, and for 54 6 all purposes shall be governed by and construed in accordance with the laws of said State. Section 308. Execution and Counterparts. This ---------- Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 55 7 IN WITNESS WHEREOF, the parties hereto have caused this - ---------- Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. [Corporate Seal] LONG ISLAND LIGHTING COMPANY By: ------------------------ [Name:] [Title:] Attest: - ---------------------- [Title:] [Corporate Seal] [CHEMICAL BANK/STATE STREET BANK AND TRUST COMPANY], as Trustee By: ------------------------ [Name:] [Title:] Attest: - ---------------------- [Title:] 56 STATE OF --------- ) ) ss.: COUNTY OF -------- ) On the ---- day of ----------, 199--, before me personally came - -----------------, to me known, who, being by me duly sworn, did depose and say that he is a ------------------ of Long Island Lighting Company, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. -------------------------------- Notary Public STATE OF ------------ ) ) ss.: COUNTY OF ----------- ) On the ---- day of -----------, 199--, before me personally came - -----------------, to me known, who, being by me duly sworn, did depose and say that he is a --------------------- of Chemical Bank, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. -------------------------------- Notary Public 57 EXHIBIT A [Form of Face of Security] LONG ISLAND LIGHTING COMPANY DEBENTURE ------% Series Due ---- No. ---------- $---------- LONG ISLAND LIGHTING COMPANY, a corporation duly organized and existing under the laws of the State of New York (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to - ---------------------- -----------------------------------, or registered assigns, the principal sum of ---------------------------------- Dollars on - -------------- [If the Security is to bear interest prior to Maturity, insert - --, and to pay interest thereon from the date of the initial issuance or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on -------------- and -------------- in each year, commencing --------------, at the rate per annum provided in the title hereof, until the principal hereof is paid or made available for payment [If applicable, insert --, and, subject to the terms of the Indenture, at the rate per annum provided in the title hereof on any overdue principal and premium, if any, and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest payment, which shall be the - -------------- or -------------- (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, in which event notice whereof shall be given to Holders of Securities of this series not less than 10 58 2 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture]. [If the Security is not to bear interest prior to Maturity, insert -- The principal of this Security shall not bear interest except in the case of a default in payment of principal or premium, if any, upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and premium, if any, of this Security shall bear interest at the rate of [yield to maturity]% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal and premium, if any, has been made or duly provided for. Interest on any overdue principal and premium, if any, shall be payable on demand. Any such interest on any overdue principal and premium, if any, that is not so paid on demand shall bear interest at the rate of [yield to maturity]% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.] Payment of the principal of (and premium, if any) and interest, if any, on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, or an Authenticating Agent, by manual signature of one of its authorized officers, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 59 3 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: ------------ [Seal] LONG ISLAND LIGHTING COMPANY By: ------------------------------ [Title:] By: ------------------------------ [Title:] [Form of Trustee's Certificate of Authentication] This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. [CHEMICAL BANK/STATE STREET BANK AND TRUST COMPANY], as Trustee By: ---------------------------------- [Title:] 60 4 [Form of Reverse of Security] LONG ISLAND LIGHTING COMPANY DEBENTURE ------% Series Due ---- This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of [November 1, 1992/November 1, 1986] (herein called the "Indenture"), between the Company and Chemical Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $-----------. [If applicable, insert -- [The Securities of this series are not subject to any sinking fund.] [The Securities of this series may not be redeemed at the option of the Company prior to Maturity.]] [If applicable, insert -- [The Securities of this series are subject to redemption upon not less than 30 nor more than 60 days' notice by mail to the Holders of such Securities at their addresses in the Security Register for such series, [if applicable, insert -- (1) on ---------- in any year commencing with the year ----- and ending with the year ----- through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after ----------, 19--], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before ------------, ----%, and if redeemed] during the 12-month period beginning -------------, Redemption Redemption Year Price Year Price - ---- ---------- ---- ----------
61 5 and thereafter at a Redemption Price equal to ----% of the principal amount, together in the case of any such redemption [if applicable, insert -- (whether through operation of the sinking fund or otherwise)] with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [If applicable, insert -- [The Securities of this series are subject to redemption upon not less than 30 nor more than 60 days' notice by mail to the Holders of such Securities at their addresses in the Security Register for such series, (1) on ---------- in any year commencing with the year ----- and ending with the year ----- through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ----------, 19--], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning - --------------, Redemption Price For Redemption Redemption Price for Through Operation Redemption Otherwise of the Than Through Operation Year Sinking Fund of the Sinking Fund - ---- ----------------- ----------------------
and thereafter at a Redemption Price equal to ----% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at 62 6 the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to - -------------, redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ----% per annum.] [The sinking fund for this series provides for the redemption on ------------ in each year beginning with the year ---- and ending with the year ---- of [not less than] ------------ [("mandatory sinking fund") and, at the option of the Company, not more than ------------] aggregate principal amount of Securities of this series. [Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made in the order in which they become due.]] [In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.] Interest payments for this Security will be computed on the basis of a 360-day year of twelve 30-day months. If an Interest Payment Date falls on a day that is not a Business Day, such Interest Payment Date will be the following day that is a Business Day. In certain circumstances described in the Indenture, the Company's obligations in respect of the Securities of this series or in respect of certain covenants made for the benefit of Securities of this series, may be discharged prior to payment, upon the deposit with the Trustee of cash and/or U.S. Government Obligations in the required amount and upon compliance with certain other provisions of the Indenture. [If the Security is not an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] 63 7 [If the Security is an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series (the "Acceleration Amount") may be declared due and payable in the manner and with the effect provided in the Indenture. In case of a declaration of acceleration on or before -----------, ---- or on ------------- in any year, the Acceleration Amount per -------- principal amount at Stated Maturity of the Securities shall be equal to the amount set forth in respect of such date below: Acceleration Amount per -------- principal amount Date of declaration at Stated Maturity - ------------------- ------------------- and in case of a declaration of acceleration on any other date, the Acceleration Amount shall be equal to the Acceleration Amount as of the next preceding date set forth in the table above, plus accrued original issue discount (computed in accordance with generally accepted accounting principles in effect on -----------) from such next preceding date to the date of declaration at the yield to maturity. For the purpose of this computation the yield to maturity is ----%. Upon payment (i) of the Acceleration Amount so declared due and payable and (ii) of interest on any overdue principal, overdue premium, if any, and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of, premium, if any, and interest, if any, on the Securities of this series shall terminate.] The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of 66-2/3% in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company 64 8 with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 65 9 No recourse for the payment of the principal of (and premium, if any) or interest, if any, on this Security, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. This Security shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. EX-5 8 OPINION OF ROBERT J. GREY, ESQ. 1 Exhibit 5 [LONG ISLAND LIGHTING COMPANY LETTERHEAD] April 4, 1994 Long Island Lighting Company 175 East Old Country Road Hicksville, New York 11801 Re: Debt and Equity Securities Gentlemen: As General Counsel for Long Island Lighting Company (the "Company"), I am familiar with the proposed issuance by the Company of General & Refunding Bonds, Debentures, Preferred Stock and Common Stock in the aggregate principal amount of up to $803,550,000 (the "Securities"). This amount includes $299,550,000 of Securities previously registered and unissued under Registration No. 33-60744 and $4,000,000 of General and Refunding Bonds previously registered and unissued under Registration No. 33-45834. In connection with the proceedings before the Securities and Exchange Commission with respect hereto, I submit this opinion and hereby consent to its use as Exhibit 5 to the Shelf Registration Statement on Form S-3 for the issuance of up to an additional $500,000,000 of Securities proposed to be filed by the Company under the Securities Act of 1933, as amended (the "New Registration Statement"), and to the use of my name herein and in the Prospectus forming a part thereof (the "Prospectus"). I have examined and am familiar with (i) the Restated Certificate of Incorporation and By-laws of the Company, the Registration Statement and the Prospectus and (ii) with the Petitions dated October 7, 1991, January 22, 1993, and January 6, 1994 that have been filed by the Company with the Public Service Commission of the State of New York (the "PSC") requesting authority to sell and issue the Securities (the "Petitions"); and I have reviewed the proceedings taken with respect to the authorization, issuance and sale of the Securities. Based upon the foregoing and upon my general familiarity with the affairs of the Company, I advise you that in my opinion: I. The Company is a corporation duly organized and validly existing under the laws of the State of New York. II. No State regulatory body or agency, other than the PSC, has jurisdiction over the transactions proposed by the Company or any part thereof. 2 2 III. No federal commission or agency other than the Securities and Exchange Commission, under the Securities Act of 1933, as amended, has jurisdiction over the transactions proposed by the Company or any part thereof. IV. All action necessary to make valid the sale and issuance of the Securities will have been taken when (a) the New Registration Statement relating thereto (and any amendments, post-effective amendments, the Prospectus or any prospectus supplements) shall have become effective; (b) orders have been issued by the PSC authorizing the relief requested in the Petition; (c) the Board of Directors of the Company shall have taken appropriate action to authorize the execution, delivery, issuance and sale of the Securities; (d) if the Securities are issued as General and Refunding Bonds, the proposed Supplemental Indenture to the G&R Indenture shall have been qualified under the Trust Indenture Act of 1939 and duly executed and delivered; (e) if the Securities are issued as Debentures, the proposed Supplemental Indenture to the appropriate Debenture Indenture shall have been qualified under the Trust Indenture Act of 1939 and duly executed and delivered; (f) the Securities shall have been executed by the Company, and, if applicable, authenticated by the Trustee and delivered for value; (g) if the Securities are issued as Preferred Stock, the Company shall have filed with the State of New York, a Certificate of Amendment to the Company's Restated Certificate of Incorporation stating the number, designation, relative rights, preference and limitations of such series of the Preferred Stock with the consent and approval of the PSC endorsed thereunder; and (h) if the Securities are issued as either Preferred Stock or Common Stock, the Company shall have received the full consideration (not less than the par value thereof) for each share. V. When the foregoing steps shall have been taken with respect to the Securities and the Securities have been sold, the Securities will be legally issued, fully paid and non-assessable and will constitute legal, valid and binding obligations of the Company enforceable in accordance with their terms. Very truly yours, /s/ ROBERT J. GREY Robert J. Grey General Counsel /jc [ex5shelf.ds] EX-12.A 9 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12 (a) LONG ISLAND LIGHTING COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In Thousands of Dollars)
For the Year Ended December 31, -------------------------------------------------------------------------- 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- Net Income/(Loss) per Statement of Income $296,563 $301,974 $305,538 $319,637 a ($95,803) Less: Equity in earnings/loss of less than 50% owned subsidiary companies (731) (470) 87 86 80 Add: Distributed income of less than 50% owned subsidiary companies 58 87 58 58 58 ----------- ----------- ----------- ----------- ----------- 297,352 302,531 305,509 319,609 (95,825) Add: Federal income tax 172,276 160,962 181,653 183,281 (1,037,412) Appropriate portion of rentals 4,552 3,504 2,751 2,343 2,730 Interest on long term-debt 466,538 450,621 472,974 467,700 453,267 Amortization of debt discount, expense and premium 52,863 41,950 30,186 24,231 14,743 Other interest 14,671 20,276 20,656 16,379 17,040 ----------- ----------- ----------- ----------- ----------- NET INCOME/(LOSS) AS ADJUSTED $1,008,252 $979,844 $1,013,729 $1,013,543 a ($645,457) =========== =========== =========== =========== =========== Fixed Charges: Appropriate portion of rentals $4,552 $3,504 $2,751 $2,343 $2,730 Interest on long term-debt 466,538 450,621 472,974 467,700 453,267 Amortization of debt discount, expense and premium 52,863 41,950 30,186 24,231 14,743 Other interest 14,671 20,276 20,656 16,379 17,040 ----------- ----------- ----------- ----------- ----------- Total $538,624 $516,351 $526,567 $510,653 $487,780 =========== =========== =========== =========== =========== Ratio of earnings to fixed charges 1.87 1.90 1.93 1.98 b
- ---------------------- a Before cumulative effect of accounting change for unbilled gas revenue. b For the year ended December 31, 1989 earnings were inadequate to cover fixed charges. To attain a one-to-one coverage earnings were deficient by approximately $1.1 billion, primarily due to the discontinuance of accruing AFC and the loss in June 1989 resulting from the effectiveness of the 1989 Settlement and the approval of the Class Settlement. EX-12.B 10 COMPUTATION OF RATIO OF EARNINGS TO CFC & PSD 1 EXHIBIT 12 (b) LONG ISLAND LIGHTING COMPANY COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (In thousands of Dollars)
For the Year Ended December 31, -------------------------------------------------------------------------- 1993 1992 1991 1990 1989 ----------- ----------- ----------- ----------- ----------- Net Income/(Loss) per Statement of Income $296,563 $301,974 $305,538 $319,637 a ($95,803) Less: Equity in earnings/loss of less than 50% owned subsidiary companies (731) (470) 87 86 80 Add: Distributed income of less than 50% owned subsidiary companies 58 87 58 58 58 ----------- ----------- ----------- ----------- ----------- 297,352 302,531 305,509 319,609 (95,825) Add: Federal income tax 172,276 160,962 181,653 183,281 (1,037,412) Appropriate portion of rentals 4,552 3,504 2,751 2,343 2,730 Interest on long term-debt 466,538 450,621 472,974 467,700 453,267 Amortization of debt discount, expense and premium 52,863 41,950 30,186 24,231 14,743 Other interest 14,671 20,276 20,656 16,379 17,040 ----------- ----------- ----------- ----------- ----------- NET INCOME/(LOSS) AS ADJUSTED $1,008,252 $979,844 $1,013,729 $1,013,543 a ($645,457) =========== =========== =========== =========== =========== Fixed Charges: Appropriate portion of rentals $4,552 $3,504 $2,751 $2,343 $2,730 Interest on long term-debt 466,538 450,621 472,974 467,700 453,267 Amortization of debt discount, expense and premium 52,863 41,950 30,186 24,231 14,743 Other interest 14,671 20,276 20,656 16,379 17,040 Preferred stock dividend requirements 56,108 63,954 66,394 68,161 79,232 Tax effect for preferred stock dividend requirements 32,600 34,090 39,481 39,078 40,816 ----------- ----------- ----------- ----------- ----------- Total $627,332 $614,395 $632,442 $617,892 $607,828 =========== =========== =========== =========== =========== Ratio of earnings to combined fixed charges and preferred stock dividends 1.61 1.59 1.60 1.64 b
- -------------------- a Before cumulative effect of accounting change for unbilled gas revenue. b For the year ended December 31, 1989 earnings were inadequate to cover combined fixed charges and preferred stock dividends. To attain a one-to-one coverage, earnings were deficient by approximately $1.3 billion, primarily due to discontinuence of accruing AFC and the loss recorded in June 1989 resulting from the effectiveness of the 1989 Settlement and the approval of the Class Settlement. EX-12.C 11 COMPUTATION OF INTEREST COVERAGE 1 LONG ISLAND LIGHTING COMPANY EXHIBIT 12 (c) COMPUTATION OF INTEREST COVERAGE COMPUTED PURSUANT TO THE COMPANY'S GENERAL AND REFUNDING INDENTURE For the twelve Months Ended December 31, 1993 (Thousands of Dollars) A. Net Earnings: I. Revenues $2,880,995 II. Less: Operating Expenses $1,215,399 Maintenance Expenses 133,852 Provisions for Depreciation, Depletion and Amortization 122,471 Operating Taxes 385,847 1,857,569 ------------ ------------ 1,023,426 III. Other Income and Deductions (Note A) 62,506 ------------ Net Earnings $1,085,932 ============ B. Aggregate Annual Interest Payable: Proposed $707 million principal amount initial series of General and Refunding Bonds at an assumed interest rate of 9.00% per annum (Note B) $63,630 General and Refunding Bonds -- Outstanding at December 31, 1993 151,835 First Mortgage Bonds -- Outstanding at December 31, 1993 6,319 ------------ Total Annual Interest Payable (Note C) $221,784 ============ Interest Earnings Coverage (Note D) 4.90
-------------------------- Note A: Other Income and Deductions, as shown above and in accordance with the General and Refunding Indenture, includes other income and deductions (including allowance for funds used during construction, or the equivalent thereof, accrued by the Company), excluding income tax credit, up to an amount not to exceed 10% of I less II. Note B: Adjusted to reflect the maximum amount currently available to be used as the basis for the issuance of additional General and Refunding Bonds. Note C: Under the provisions of the General and Refunding Indenture, interest on First Mortgage Bonds pledged with the Trustee of the General and Refunding Indenture is excluded from this computation. Note D: Had this calculation included the Rate Moderation Component and all other regulatory amortizations, the resultant Interest Earnings Coverage would have been 4.52. EX-23 12 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23 CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS We consent to the reference to our firm under the heading "Experts" in the Registration Statement on Form S-3 of Long Island Lighting Company for the registration of $500 million and in the combined Prospectus for $803.55 million Long Island Lighting Company Securities, and to the incorporation by reference therein of our report dated February 4, 1994, with respect to the financial statements and schedules of Long Island Lighting Company included in its Annual Report on Form 10-K for the Year Ended December 31, 1993, filed with the Securities and Exchange Commission. ERNST & YOUNG Melville, New York March 28, 1994 EX-24.A 13 POWERS OF ATTORNEY 1 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 21st day of March 1994. W. J. CATACOSINOS ---------------------- WILLIAM J. CATACOSINOS 2 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. PHYLLIS S. VINEYARD ------------------- PHYLLIS S. VINEYARD 3 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of March 1994. JOHN H. TALMAGE --------------- JOHN H. TALMAGE 4 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. WINFIELD E. FROMM ----------------- WINFIELD E. FROMM 5 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. BASIL A. PATERSON ----------------- BASIL A. PATERSON 6 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of March 1994. G. BUGLIARELLO ------------------ GEORGE BUGLIARELLO 7 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of March 1994. GEORGE J. SIDERIS ----------------- GEORGE J. SIDERIS 8 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. A. JAMES BARNES --------------- A. JAMES BARNES 9 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of March 1994. RICHARD L. SCHMALENSEE ---------------------- RICHARD L. SCHMALENSEE 10 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 23rd day of March 1994. RENSO L. CAPORALI ----------------- RENSO L. CAPORALI 11 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. PETER O. CRISP -------------- PETER O. CRISP 12 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 22nd day of March 1994. KATHERINE D. ORTEGA ------------------- KATHERINE D. ORTEGA 13 EXHIBIT 24(a) General and Refunding Bonds, Debentures, Preferred Stock, and Common Stock LONG ISLAND LIGHTING COMPANY POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission one or more Registration Statements, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933, as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity either as a director or officer, or both as the case may be, of said Company, I do hereby appoint KATHLEEN A. MARION, ANTHONY NOZZOLILLO and ROBERT J. GREY, and each of them severally, as my attorneys-in-fact, with power to execute in my name and place and in my capacity as a director, officer, or both, as the case may be, of LONG ISLAND LIGHTING COMPANY, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents in connection therewith, and to file the same with the Securities and Exchange Commission. IN WITNESS WHEREOF, I have executed this Power of Attorney this 28th day of March 1994. VICKI L. FULLER --------------- VICKI L. FULLER EX-24.B 14 CERTIFICATE AS TO CORPORATE POWER OF ATTORNEY 1 EXHIBIT 24(b) LONG ISLAND LIGHTING COMPANY CERTIFICATE AS TO POWER OF ATTORNEY WHEREAS, LONG ISLAND LIGHTING COMPANY, a New York corporation, intends to file with the Securities and Exchange Commission a Registration Statement, including one or more Prospectuses, as prescribed by said Commission pursuant to the Securities Act of 1933 as amended (the "Act"), in compliance with the Act, and the rules and regulations promulgated thereunder, for the registration of up to $500 million of General and Refunding Bonds, Debentures, Preferred Stock and Common Stock. NOW, THEREFORE, in my capacity as Assistant Corporate Secretary of Long Island Lighting Company, I do hereby certify that Anthony Nozzolillo has been appointed by the Board of Directors of Long Island Lighting Company with power to execute on behalf of Long Island Lighting Company, among other documents, the Registration Statements, any amendment or amendments to the Registration Statements and any exhibits and other documents required in connection therewith, and to file the same with the Securities and Exchange Commission. WITNESS my hand and the seal of the Company this 28th day of March 1994. HERBERT M. LEIMAN ----------------------------- HERBERT M. LEIMAN Assistant Corporate Secretary (Corporate Seal) EX-24.C 15 CERTIFIED COPY OF RESOLUTIONS 1 EXHIBIT 24(c) LONG ISLAND LIGHTING COMPANY I, HERBERT M. LEIMAN, Assistant Corporate Secretary of LONG ISLAND LIGHTING COMPANY (the "Company"), a New York corporation, DO HEREBY CERTIFY that annexed hereto is a true, correct and complete copy of a resolution adopted at a meeting of the Executive Committee of the Board of Directors of the Company duly called and held on December 15, 1993 at which meeting a quorum was present and acting throughout. AND I DO FURTHER CERTIFY that the foregoing resolution has not been in any way amended, annulled, rescinded or revoked and that the same is still in full force and effect. WITNESS my hand and the seal of the Company this 28th day of March 1994. HERBERT M. LEIMAN ----------------------------- HERBERT M. LEIMAN Assistant Corporate Secretary (Corporate Seal) 2 LONG ISLAND LIGHTING COMPANY (Resolution adopted December 15, 199 by the Board of Directors) "RESOLVED, that, with respect to (a) certain of the Company's indebtedness, the principal amount of which aggregates $600,000,000, maturing in 1994 (the "Maturing Securities"), consisting of the Company's First Mortgage Bonds, Series N, 4.5/8% in the principal amount of $25,000,000 due June 1, 1994, its Debentures, 10.25% Series due June 15, 1994 in the principal amounts of $400,000,000 and its Debentures, 11.75% due November 15, 1994 in the principal amount of $175,000,000, and (b) certain of the Company's indebtedness, the principal amount of which aggregates $35,058,000, becoming callable on June 15, 1994 (the "Callable Securities"), consisting of the Company's Debentures, 11.375% Series due June 15, 2019 in the principal amount of $4,513,000 and its Debentures, 10.875% due June 15, 1999 in the principal amount of $30,545,000, and (c) the Company's requirements, from time to time, for funds for working capital and other corporate purposes, the proper officers of the Company (acting individually, separately or jointly, as required) are authorized to take all necessary actions to issue debt securities or common stock (collectively, the "New Securities") including, by way of illustration and not by way of limitation, the following actions: (1) determine from time to time the principal amount of New Securities to be sold and issued, in the aggregate, however, not to exceed $650,000,000, all or any part of which may be either secured or unsecured debt, but not more than $200,000,000 of which may be tax-exempt and not more than $150,000,000 of which may be common stock; (2) negotiate, as appropriate, the interest rates and the stated dividends of, and the consideration for, the New Securities, the fixing and approval of which by this Board shall be evidenced by the execution of the relevant contract or contracts among the Company, the investment banks, the commercial banks, the underwriters or the purchasers, as the case may be; (3) file one or more petitions and any amendments with the Public Service Commission of the State of New York; 3 2 (4) determine whether the Order or Orders of the PSC relating to the New Securities contain any provisions unacceptable to the Company; (5) refinance the Maturing Securities and the Callable Securities with the proceeds from the sale of the New Securities or, if the New Securities have been sold to provide funds for working capital or other corporate purposes, to so apply the proceeds; (6) enter into a new indenture, if appropriate, for debt securities and appoint the trustee of and agents under such indenture; (7) enter into one or more supplemental indentures to the new indenture, the existing Debenture Indentures, the Indenture of Mortgage and Deed of Trust dated as of September 1, 1951 (the "First Mortgage") or the General and Refunding Indenture (the "G&R Mortgage") and appoint agents under any such indenture; (8) replace the trustee of either of the Company's existing Debenture Indentures, its First Mortgage or its G&R Mortgage; (9) cancel and restore, from time to time as necessary, any retired shares to the status of authorized but unissued shares of this Company; (10) file one or more Registration Statements and any amendments with the Securities and Exchange Commission; (11) appoint attorneys-in-fact to act on behalf of any of the officers of the Company or on behalf of the Company; (12) determine the compensation to be paid to the investment banks, commercial banks or underwriters for arranging the sale of the New Securities; (13) redeem (or purchase in lieu of redemption) any and all of the Maturing Securities or Callable Securities; if in part, determine whether such redemption such be pro rata or by lot and, if by lot, the manner of such redemption; and take, in connection with any redemptions, at the appropriate time, in accordance with criteria established by the Public Service Commission of the State of New York, all necessary steps required to complete such redemptions; (14) issue any notices of maturity or redemption that may be appropriate or required; 4 3 (15) take all actions necessary or desirable under the Securities or Blue Sky Laws of the various states relating to the New Securities; (16) if appropriate, list the New Securities on the New York Stock Exchange or any other national securities exchange; (17) prepare, execute (manually or by facsimile) and deliver all instruments and documents required to refinance the indebtedness, the execution of which shall be evidence of the approval of this Board; (18) take all actions required to evidence the authorization or approval of this Board of any instrument or document and the adoption by this Board of the forms of any resolutions requested by any entity, instrument or otherwise, if (a) in the opinion of such officers and of the General Counsel or an Assistant General Counsel to the Company the adoption of such resolutions are necessary or advisable and (b) the Secretary or an Assistant Secretary of the Company inserts in the minutes of a meeting of the Board of Directors or of the Executive Committee of the Board of Directors copies of such resolutions which shall then be deemed to have been adopted by this Board with the same force and effect as if presented to this meeting; and (19) take any and all actions as they may deem necessary or desirable in order to carry out the intent and purposes of this resolution; and any action taken and any instrument or document prepared, executed, delivered or filed by the officers prior to the adoption of this resolution to accomplish any of the actions authorized by this resolution is ratified, confirmed and approved." EX-25.A 16 FORM T-1, GENERAL AND REFUNDING BONDS 1 Exhibit 25(a) FORM T-1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ---------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) ---- ---------------- UNITED STATES TRUST COMPANY OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5459866 (Jurisdiction of incorporation (I.R.S. employer if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532 New York, NY (Zip Code) (Address of principal executive offices) ------------------
LONG ISLAND LIGHTING COMPANY (Exact name of obligor as specified in its charter) New York 11-1019782 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.)
175 East Old Country Road Hicksville, New York 11801 (Address of principal executive offices) (Zip Code) ------------------
General and Refunding Bonds (Title of the indenture securities) ================================================================================ 2 GENERAL 1. GENERAL INFORMATION Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York (2nd District), New York, New York (Board of Governors of the Federal Reserve System) Federal Deposit Insurance Corporation, Washington, D.C. New York State Banking Department, Albany, New York (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of the trustee, describe each such affiliation. None 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15. Long Island Lighting Company currently is not in default under any of its outstanding securities for which United States Trust Company of New York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are not required under General Instruction B. 16. LIST OF EXHIBITS. T-1.1 - "Chapter 204, Laws of 1853, An Act to Incorporate the United States Trust Company of New York, as Amended", is incorporated by reference to Exhibit T-1.1 to Form T-1 filed on September 20, 1991 with the Securities and Exchange Commission (the "Commission") pursuant to the Trust Indenture Act of 1939 (Registration No. 2221291). T-1.2 - The trustee was organized by a special act of the New York Legislature in 1853 prior to the time that the New York Banking Law was revised to require a Certificate of authority to commence business. Accordingly, under New York Banking Law, the Charter (Exhibit T-1.1) constitutes an equivalent of a certificate of authority to commence business. T-1.3 - The authorization of the trustee to exercise corporate trust powers is contained in the Charter (Exhibit T- 1.1).
3 16. LIST OF EXHIBITS (Continued) T-1.4 - The By-laws of the United States Trust Company of New York, as amended to date, are incorporated by reference to Exhibit T-1.4 to Form T-1 filed on September 20, 1991 with the Commission pursuant to the Trust Indenture Act of 1939 (Registration No. 2221291). T-1.6 - The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939. T-1.7 - A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority.
NOTE As of March 25, 1994, the trustee had 2,999,020 shares of Common Stock outstanding, all of which are owned by its parent company, U.S. Trust Corporation. The term "trustee" in Item 2, refers to each of United States Trust Company of New York and its parent company, U.S. Trust Corporation. In answering Item 2 in this statement of eligibility as to matters peculiarly within the knowledge of the obligor or its directors, the trustee has relied upon information furnished to it by the obligor and will rely on information to be furnished by the obligor and the trustee disclaims responsibility for the accuracy or completeness of such information. ------------------ Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, United States Trust Company of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 25th day of March, 1994. UNITED STATES TRUST COMPANY OF NEW YORK, Trustee By: Louis P. Young ---------------------------- Louis P. Young Vice President 4 Exhibit T-1.6 The consent of the trustee required by Section 321(b) of the Act. United States Trust Company of New York 114 West 47th Street New York, NY 10036 March 19, 1992 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20549 Gentlemen: Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, and subject to the limitations set forth therein, United States Trust Company of New York ("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. Very truly yours, UNITED STATES TRUST COMPANY OF NEW YORK By: /S/ GERARD F. GANEY ---------------------------- Gerard F. Ganey Senior Vice President 5 EXHIBIT T-1.7 Consolidated Report of Condition of UNITED STATES TRUST COMPANY OF NEW YORK and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1993, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN THOUSANDS Cash and balances due from depository institutions: a. Noninterest bearing balances and currency and coin: $ 176,527 b. Interest bearing balances: 50,000 Securities: 833,859 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: 1,753 a: Federal funds sold: 205,000 b: Securities purchased under agreements to resell: 32,000 Loans and lease financing receivables: a. Loans and leases, net of unearned income: 1,271,077 b. LESS: Allowance for loan and lease losses: 11,928 c. Loans and leases, net of unearned income, allowance and reserve: 1,259,149 Premises and fixed assets (including capitalized leases): 98,896 Other real estate owned: 11,543 Investments in unconsolidated subsidiaries and associated companies: 725 Intangible assets: 856 Other assets: 256,699 ------------ TOTAL ASSETS: $ 2,925,254 ============ LIABILITIES Deposits: a. In domestic offices: $ 2,345,177 (1) Non interest bearing: 1,228,335 (2) Interest bearing: 1,116,842 b. In foreign offices, Edge and Agreement subsidiaries, and IBF's: 5,617 (1) Interest bearing: 5,617 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: a. Federal funds purchased: 211,921 b. Securities sold under agreements to repurchase: 15,016 Demand notes issued to the U.S. Treasury: 33,824 Other Borrowed Money 10 Mortgage indebtedness and obligations under capitalized leases: 2,429 Subordinated notes and debentures: 12,453 Other liabilities: 118,457 ------------ TOTAL LIABILITIES: $ 2,744,904 ============ EQUITY CAPITAL Common Stock: 14,995 Surplus: 41,500 Undivided profits and capital reserves: 123,855 ------------ TOTAL EQUITY CAPITAL: 180,350 ============ TOTAL LIABILITY AND EQUITY CAPITAL: $ 2,925,254 ============
I, Richard E. Brinkman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this report of condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. RICHARD E. BRINKMANN, SVP, Comptroller January 31, 1994 We, the undersigned trustees, attest the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. H. MARSHALL SCHWARZ / FREDERICK S. WONHAM / Trustees DONALD M. ROBERTS / EX-25.B 17 FORM T-1, DEBENTURES WITH STATE STREET BANK 1 Exhibit 25(b) Securities Act of 1933 File No.----------- (If application to determine eligibility of trustee for delayed offering pursuant to Section 305(b) (2)) ------------------------------------------ ------------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM T-l STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------- -------------------- STATE STREET BANK AND TRUST COMPANY (Exact name of trustee as specified in its charter) Massachusetts 04-1867445 - --------------------------- ------------------- (State of incorporation (I.R.S. employer if not a national bank) identification No.)
225 Franklin Street Boston, Massachusetts 02110 - ------------------------ ------------------- (Address of principal (Zip code) executive offices)
-------------------- LONG ISLAND LIGHTING COMPANY ---------------------------- (Exact name of obligor as specified in its charter) New York 11-1019782 - ------------------------------------ ---------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.)
175 East Old Country Road Hicksville, New York 11801 - -------------------------- ---------------- (Address of principal (Zip Code) executive offices)
-------------------- Debentures ---------------------------------- (Title of the indenture securities) ----------------------------------------- ----------------------------------------- 2 GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of Boston Boston, Massachusetts Board of Governors of the Federal Reserve System, Washington, D.C. Federal Deposit Insurance Corporation Washington, D.C. Commissioner of Banks of Massachusetts Boston, Massachusetts (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor and Underwriters. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 3. Voting Securities of the Trustee. Furnish the following information as to each class of voting securities of the trustee: As of March 24, 1994 Col. A Col. B -------------- ------------------ Title of Class Amount Outstanding -------------- ------------------ Not Applicable. Item 4. Trusteeships under Other Indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture. Not Applicable. (b) A brief statement of facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310(b) (1) of the Act arises as a result of the trusteeship under any such other indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Not Applicable. 3 Item 5. Interlocking Directorates and Similar Relationships with the Obligor or Underwriters. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee, or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not Applicable. Item 6. Voting Securities of the Trustee Owned by the Obligor or its Officials. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner and executive officer of the obligor: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Percentage of voting Amount securities repre- Title of owned sented by amount Name of owner Class beneficially given in Col. C ------------- -------- ------------ -----------------
Not Applicable. Item 7. Voting Securities of the Trustee Owned by Underwriters or their Officials. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner and executive officer of each such underwriter: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Percentage of Amount class represented Title of owned by amount Name of owner Class beneficially given in Col. C ------------- ----- ------------ ---------------
Not Applicable. Item 8. Securities of the Obligor Owned or Held by the Trustee. Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Amount owned beneficially Whether the or held as securities collateral Percentage of are voting security for class represented Title of or non-voting obligations by amount given class securities in default in Col. C -------- ------------- ------------------ -----------------
Not Applicable. 4 Item 9. Securities of Underwriters Owned or Held by the Trustee. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Amount owned beneficially or held as colla- Name of teral security Percentage of issuer and for obligations class represented Title of Amount in default by amount given class outstanding by trustee in Col. C -------------------- ----------- ---------------- -----------------
Not Applicable. Item 10. Ownership or Holdings by the Trustee of Voting Securities of Certain Affiliates or Security Holders of the Obligor. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Amount owned beneficially or held as colla- Name of teral security Percentage of issuer and for obligations class represented Title of Amount in default by amount given class outstanding by trustee in Col. C --------------- ----------- --------------------- -------------------------
Not Applicable. Item 11. Ownership or Holdings by the Trustee of any Securities of a Person Owning 50 Percent or More of the Voting Securities of the Obligor. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the trustee: As of March 24, 1994
Col. A Col. B Col. C Col. D ------ ------ ------ ------ Amount owned beneficially or held as colla- Name of teral security Percentage of issuer and for obligations class represented Title of Amount in default by amount given class outstanding by trustee in Col. C ----------------------- ----------- --------------------- --------------------------
Not Applicable. 5 Item 12. Indebtedness of the Obligor to the Trustee. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: As of March 24, 1994
Col. A Col. B Col. C ------ ------ ------ Nature of Indebtedness Amount Outstanding Date due ---------------------- ------------------ --------
Not Applicable. Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. None. (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. None. Item 14. Affiliations with the Underwriters. If any underwriter is an affiliate of the trustee, describe each such affiliation. Not Applicable. Item 15. Foreign Trustee. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not Applicable. Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. T-1.1. A copy of the Articles of Association of the trustee as now in effect. A copy of the Articles of Association of the trustee, as now in effect, is on file with the Securities and Exchange Commission as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee (Form T-l) filed with Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. T-l.2. A copy of the certificate of authority of the trustee to commence business, if not contained in the articles of association. A copy of a Statement from the Commissioner of Banks of Massachusetts that no certificate of authority for the trustee to commence business was necessary or issued is on file with the Securities and Exchange Commission as Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee 6 (Form T-l) filed with Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. T-1.3. A copy of the authorization of the trustee to exercise corporate trust powers, if such authorization is not contained in the documents specified in paragraph (1) or (2) above. A copy of the authorization of the trustee to exercise corporate trust powers is on file with the Securities and Exchange Commission as Exhibit 3 to Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee (Form T-l) filed with Registration Statement of Morse Shoe, Inc. (File No. 22-17940) and is incorporated herein by reference thereto. T-1.4. A copy of the existing by-laws of the trustee. A copy of the By-Laws of the trustee, now in effect, is on file with the Securities and Exchange Commission as Exhibit 4 to the Statement of Eligibility and Qualification of Trustee (Form T-l) filed with Registration Statement of Eastern Edison Company (File No. 33-37823) and is incorporated herein by reference thereto. T-1.5. A copy of each Indenture referred to in Item 4. Not Applicable. T-1.6. Consent of the Trustee required by Section 321(b) of the Act. The consent of the trustee required by Section 321(b) of the Act is annexed hereto as Exhibit T-1.6 and made a part hereof. T-1.7. A copy of the latest report of condition of the trustee, published pursuant to law or the requirements of its supervising or examining authority. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority is annexed hereto as Exhibit T-1.7 and made a part hereof. T-1.8. A copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not applicable. T-1.9. Foreign trustees are required to furnish a consent to service of process. Not applicable. 7 NOTE Inasmuch as this Form T-l is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Items 2 and 13, the answers to said Items are based upon incomplete information. Items 2 and 13 may, however, be considered correct unless amended by an amendment to this Form T-1. In answering any items in this Statement of Eligibility which relate to matters peculiarly within the knowledge of the obligor, or its directors or officers, or an underwriter for the obligor, the trustee is relying upon information furnished to it by the obligor and such underwriter and the trustee disclaims responsibility for the accuracy or completeness of such information. 8 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, State Street Bank and Trust Company, a Massachusetts banking corporation organized and existing under the laws of The Commonwealth of Massachusetts, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Hartford, and State of Connecticut, on the 24th day of March, 1994. STATE STREET BANK AND TRUST COMPANY By /s/ W. JEFFREY KRAMER ------------------------------------- Name: W. Jeffrey Kramer Title: Assistant Vice President 9 EXHIBIT T-1.6 CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(B) OF THE TRUST INDENTURE ACT OF 1939 The undersigned, as trustee under the Indenture dated as of November 1, 1986, as supplemented, entered into between Long Island lighting Company, as Obligor, and State Street Bank and Trust Company, succesor in interest to The Connecticut Bank and Trust Company, National Association, as Indenture Trustee; does hereby consent that, pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, reports of examinations with respect to the undersigned, by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. STATE STREET BANK AND TRUST COMPANY By /S/ W. JEFFREY KRAMER ---------------------------------- Name: W. Jeffrey Kramer Title: Assistant Vice President Dated: March 24, 1994
10 Exhibit T-1.7 Consolidated Report of Condition of State Street Bank and Trust Company of Boston, Massachusetts and foreign and domestic subsidiaries, a state banking institution organized and operating under the banking laws of this commonwealth and a member of the Federal Reserve System, at the close of business December 31, 1993, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act and in accordance with a call made by the Commissioner of Banks under General Laws, Chapter 172, Section 22(a).
Thousands of dollars ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,503,460 Interest-bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,147,768 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,671,500 Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,420,547 Loans and lease financing receivables: Loans and leases, net of unearned income . . . . . . . . . . . . . . . 2,698,085 Allowance for loan and lease losses . . . . . . . . . . . . . . . . . . 54,316 Loans and leases, net of unearned income and allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,643,769 Assets held in trading accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159,526 Premises and fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351,598 Other real estate owned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,073 Investments in unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,729 Customers' liability to this bank on acceptances outstanding . . . . . . . . . . . . . . . . . . . . . . . . . 65,643 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,316 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,949 ---------- Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,783,877 ========== LIABILITIES Deposits: In domestic offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,538,389 Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . 5,397,932 Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . 2,140,457 In foreign offices and Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,455,750 Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . 28,519 Interest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . 5,427,231 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,281,465 Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000 Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,749 Bank's liability on acceptances executed and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,928 Notes and debentures subordinated to deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,211 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481,207 ---------- Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,716,719 ---------- EQUITY CAPITAL Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,043 Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,286 Undivided profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 888,829 ---------- Total equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,067,158 ---------- Total liabilities and equity capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,783,877 ==========
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Rex S. Schuette We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve and is true and correct. David A. Spina Marshall N. Carter Truman S. Casner EX-25.C 18 FORM T-1, DEBENTURES WITH CHEMICAL BANK 1 Exhibit 25(c) ------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE -------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---- -------------------------------- CHEMICAL BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) --------------------------------------------------------- Long Island Lighting Co. (Exact name of obligor as specified in its charter) New York 11-1019782 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 175 East Old Country Road Hicksville, N.Y. 11801 (Address of principal executive offices) (Zip Code) ------------------------------------------- Debt Securities (Title of the indenture securities) -------------------------------------------------- 2 GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., and Federal Reserve Bank of New York, District No. 2, 33, Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. - 2 - 3 Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 33-46892, which is incorporated by reference). 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, Chemical Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 21ST day of MARCH, 1994. CHEMICAL BANK By /s/ Glenn Booth ------------------------- Glenn Booth Assistant Vice President - 3 - 4 Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF Chemical Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 1993, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS ------ -------------- Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin . . . . . . . . . . . . . . . . . . . $ 4,371 Interest-bearing balances . . . . . . . . . . . . . . . . 5,829 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 21,834 Federal Funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds sold . . . . . . . . . . . . . . . . . . . 2,125 Securities purchased under agreements to resell . . . . . 900 Loans and lease financing receivables: Loans and leases, net of unearned income $60,826 Less: Allowance for loan and lease losses 2,326 Less: Allocated transfer risk reserve 121 ------ Loans and leases, net of unearned income, allowance, and reserve . . . . . . . . . . . . . . . . . 58,379 Assets held in trading accounts . . . . . . . . . . . . . . . . 8,556 Premises and fixed assets (including capitalized leases) . . . . . . . . . . . . . . . . . . . . . . . . . 1,238 Other real estate owned . . . . . . . . . . . . . . . . . . . . 713 Investments in unconsolidated subsidiaries and associated companies . . . . . . . . . . . . . . . . . . 112 Customer's liability to this bank on acceptance outstanding . . . . . . . . . . . . . . . . . . . . . . . 1,063 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . 526 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . 9,864 ----- TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $115,510 ======== - 4 - 5 LIABILITIES Deposits In domestic offices . . . . . . . . . . . . . . . . $51,611 Noninterest-bearing . . . . . . . . . . . . . . . . $19,050 Interest-bearing . . . . . . . . . . . . . . . . . 32,561 ------ In foreign offices, Edge and Agreement subsidiaries, and IBF's . . . . . . . . . . . . . . 24,886 Noninterest-bearing . . . . . . . . . . . . . . . . $ 136 Interest-bearing . . . . . . . . . . . . . . . . . 24,750 ------ Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's Federal funds purchased . . . . . . . . . . . 8,496 Securities sold under agreements to repurchase . . 514 Demand notes issued to the U.S. Treasury . . . . . . . . 1,501 Other Borrowed money . . . . . . . . . . . . . . . . . . 8,538 Mortgage indebtedness and obligations under capitalized leases . . . . . . . . . . . . . . . . . . . . . . 20 Bank's liability on acceptances executed and outstanding 1,084 Subordinated notes and debentures . . . . . . . . . . . . 3,500 Other liabilities . . . . . . . . . . . . . . . . . . . . 7,419 TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . 107,569 ------- EQUITY CAPITAL Common stock . . . . . . . . . . . . . . . . . . . . . . 620 Surplus . . . . . . . . . . . . . . . . . . . . . . . . . 4,501 Undivided profits and capital reserves . . . . . . . . . 2,663 Less: Net unrealized loss on marketable equity securities . . . . . . . . . . . . . . . . . . . (159) Cumulative foreign currency translation adjustments . . . (2) TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . 7,941 TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND EQUITY CAPITAL . . . . . . . . . . . . . $115,510 . . . . . . . . . . . . . . . . . . . . . . . . . ========== I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in confor- mance with the instructions and is true and correct. WALTER V. SHIPLEY ) EDWARD D. MILLER )DIRECTORS WILLIAM B. HARRISON ) - 5 - -----END PRIVACY-ENHANCED MESSAGE-----