Document:

AXIS SPECIALTY LIMITED

OVERBAY, 106 PITTS BAY ROAD

PEMBROKE, HM 08

 

 

D. Andrew Cook

14 Pampas Lane

Smith’s FL05

Bermuda

 

Dear
Andrew:

 

We are delighted that you have
decided to act as an advisor for AXIS Specialty Limited, a Bermuda company (the
“Company”) and wholly owned, indirect subsidiary of AXIS Capital
Holdings Limited, a Bermuda company (the “Parent”). We thought it would
be useful to lay out the terms and conditions of our agreement in this letter
agreement (this “Agreement”). 
This Agreement is dated as of April 2, 2006.

1.                                      Engagement

The Company hereby agrees to engage
you as a finance advisor to the Company. In this capacity, you will assist the
new Chief Financial Officer and the Chief Executive Officer/President of the
Parent or any other appropriate designee as may be directed by him in finance
matters. You will be expected to devote such time as the Company reasonably
deems appropriate to the performance of your duties and responsibilities to the
Company, and shall faithfully and diligently endeavor to promote the business
and best interests of the Company and the Parent.

Compensation and Benefits

(a)           During your engagement
hereunder with the Company, your total fee shall be $163,125.00 (the “Consulting
Fee”) and shall be payable in three monthly installments of $54,375.00 in
accordance with the Company’s customary payroll practices.

(b)           During your engagement
hereunder by the Company, you will not be entitled to participate in any
benefit plans or other fringe benefits made available to employees of the
Company

(c)            During your engagement
hereunder by the Company, the Company will reimburse you for all reasonable
business expenses upon presentation of statements of such expenses in
accordance with the Company’s policies and procedures now in force or as such
policies and procedures may be modified.

 

2.                                      Term of Engagement

(a)           The engagement period shall
commence on April 2, 2006 and shall terminate on June 30, 2006. Notwithstanding
the foregoing, your engagement hereunder will be terminated upon the earliest
to occur of the following events:

(i)                                    Death.  Your engagement hereunder shall automatically
terminate upon your death.

(ii)                                Cause.  The Company may terminate your engagement
hereunder for Cause, which, for purposes of this Agreement, shall mean (A) the
willful engagement by you in misconduct that is demonstrably injurious to the
Company (monetarily or otherwise) or its reputation, (B) your material breach
of this Agreement or the Separation Agreement dated as of March 13, 2006
between you and the Company (the “Separation Agreement”) or (C) your conviction
of, or pleading guilty or nolo contendere to, a felony or a crime involving
moral turpitude.

(iii)                            Without Cause.  The Company may terminate your engagement
hereunder at any time without Cause.

(iv)                              Voluntary Resignation.  You may voluntarily terminate your engagement
hereunder at any time.

(b)           In the event that your
engagement hereunder by the Company shall terminate for any reason, except as
otherwise set forth in this Agreement, the Company’s sole obligation under the
Agreement shall be to pay to you any earned but unpaid portion of the
Consulting Fee through the date of termination and an amount equal to such
reasonable and necessary unreimbursed business expenses incurred by you on
behalf of Company on or prior to the date of termination.

(c)            In the event that the
Company terminates your engagement hereunder without Cause in accordance with
the provisions of Section 2(a)(ii) hereof, you shall be entitled to
continuation of your Consulting Fee until June 30, 2006; provided,
however, that you comply with your obligations under Sections 3, 4 and 5
hereof.

3.                                      Assignment of Intellectual
Property Rights

(a)           Assignment.  You hereby assign all of your rights, title
and interest to and in all Intellectual Property Rights (as defined below)
conceived, developed, invented, made by you or otherwise owned by you at any
time during your employment or engagement by the Company and directly or
indirectly relating to the Company’s business and you agree and acknowledge
that, on the date hereof, such rights to and in such Intellectual Property
Rights shall become the sole property of, and belong to, the Company.

2

 

(b)           Intellectual Property
Rights.  For the purposes of this Agreement, the term “Intellectual
Property Right” shall mean all proprietary and other rights in and to: (i)
trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin; (ii) patents,
inventors’ certificates and invention disclosures; (iii) trade secrets and
other confidential or non-public business information, including ideas,
formulae, compositions, inventions, discoveries and improvements, know-how,
manufacturing and production processes and techniques, and research and
development information (whether patentable or not); drawings, specifications,
designs, plans, proposals and technical data; and financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information; (iv) writings and other works of
authorship, whether copyrightable or not, including computer programs, data
bases and documentation therefor, and all copyrights to any of the foregoing;
(v) mask works; (vi) rights, title and interest in know-how, technical
information, processes, practices and systems, whether or not protectable by
patent, copyright or trade secret law; (vii) moral rights; (viii) rights to
limit the use or disclosure of confidential information by any person; (ix) any
similar tangible or intangible intellectual property or proprietary rights,
information and technology; (x) registrations of, and applications to register,
any of the foregoing with any governmental agency or authority and any renewals
or extensions thereof, (xi) the goodwill associated with each of the foregoing
and (xii) any claims or causes of action arising out of or related to any
infringement or misappropriation of any of the foregoing; in each case in any
jurisdiction.

4.                                      Non-Disclosure

(a)           In view of the fact that
your work for the Company will bring you into close contact with many
confidential affairs of and the Company and its affiliates not readily
available to the public, as well as plans for future developments, you agree
during your engagement hereunder by the Company and thereafter:

(i)                                    to keep secret and retain
in the strictest confidence all proprietary or confidential matters or trade
secrets of the Company or any of its subsidiaries and affiliates (which
information will be deemed confidential notwithstanding any prior unauthorized
disclosures), including, but not limited to, data, know-how, formulae,
practices, processes, methodologies, designs, sketches, photographs, plans,
drawings, specifications, samples, reports, member or customer lists, price
lists, business strategies or arrangements, studies, findings, inventions,
ideas, software, source code, business plans and other technical, business or
financial information relating to the Company’s business, whether existing on
the date hereof or hereafter (such material collectively, “Restricted
Material”), and not to disclose such Restricted Material except with the
Company’s permission to such third parties as may be necessary in the furtherance
of the Company’s interests and in the discharge of your duties; and

3

 

(ii)                                to deliver promptly to the
Company upon the termination of your engagement hereunder or at any other time
as the Company may so request, all documents (and all copies thereof), in
whatever form, containing Restricted Material, and all property associated
therewith, which you may then possess or have under your control; provided,
however, that Restricted Material shall not be subject to the confidentiality
restrictions of this Section 4 where you can show that such information is, at
the time of disclosure, generally known to the public.

(b)           In the event that you are
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena or similar process) to disclose any
Restricted Material, you agree to provide the Company with prompt notice of
such request(s) so that the Company may seek an appropriate protective order or
other appropriate remedy and/or waive your compliance with the provisions of
this Agreement. In the event that such protective order or other remedy is not
obtained, or that the Company grants a waiver hereunder, you may furnish that
portion (and only that portion) of the Restricted Material which you are
legally compelled to disclose and will exercise your reasonable best efforts to
obtain reliable assurance that confidential treatment will be accorded any
Restricted Material so furnished.

(c)           Nothing in this Section 4
shall be construed as granting or implying any right to you under any patent or
unpatented intellectual property right of the Company, or your right to use any
invention covered thereby.

5.                                      Non-Competition

Except with
prior written permission of the Company, you shall not, prior to August 1, 2006
directly or indirectly (individually or on behalf of other persons): a) enter
the employ of, or render services to any person, firm or corporation engaged in
the insurance or reinsurance business or any other business in which the
Company is, or has announced intentions to become, engaged in at any time
during your employment with the Company, and within Bermuda (hereinafter,
collectively referred to as the “Business”); b) engage in such Business
on your own account; or c) become interested in such Business, directly or
indirectly, as an owner, partner, shareholder, member, officer, principal,
consultant or in any other senior executive or managerial capacity; provided,
that nothing contained in this section 5 shall be deemed to prohibit you
from acquiring, solely as a passive investment, no more than 5% of the total
outstanding securities of any publicly held corporation.

4

 

6.                                      Enforcement

(a)           The parties hereto hereby
declare that it is impossible to measure in money the damages that will accrue
to the Company by reason of your failure to perform any of your obligations
under Sections 3, 4 and 5. Accordingly, if the Company institutes any action or
proceeding to enforce the provisions hereof, to the extent permitted by
applicable law, you hereby waive the claim or defense that the Company has an
adequate remedy at law, and you shall not urge in any such action or proceeding
the defense that any such remedy exists at law. The foregoing rights shall be
in addition to any other rights and remedies available to the Company under law
or in equity.

(b)           If any of the covenants
contained in Sections 4 and 5 or any part thereof, is construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portion(s). In addition, if any of the covenants contained in Sections 4 and 5
hereof, or any part thereof, is held by any person or entity with jurisdiction
over the matter to be invalid or unenforceable because of duration of such
provision or the geographical area covered thereby, the parties agree that such
person or entity shall have the power to reduce the duration and/or geographical
area of such provision and, in its reduced form, said provisions shall then be
enforceable.

(c)           It is understood and agreed
that no failure or delay by the Company in exercising any right, power or
privilege contained in Sections 4 and 5 shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege contained in
Sections 4 and 5.

7.                                      Miscellaneous

(a)           Any notice or other
communication required or permitted under this Agreement shall be effective
only if it is in writing and shall be deemed to be given when delivered
personally or three days after it is mailed by registered or certified mail,
postage prepaid, return receipt requested or one day after it is sent by a
reputable overnight courier service and, in each case, addressed to the
relevant party at the address provided for such party on the first page hereof,
or to such other address as any party hereto may designate by notice to the other
in accordance with the foregoing.

(b)           This Agreement constitutes
the entire agreement among you and the Company with respect to your engagement
hereunder by the Company, and supersedes and is in full substitution for any
and all prior understandings or agreements with respect to your employment or
engagement by the Company or its affiliates other than the Separation
Agreement, which remains in full force and effect.

(c)           This Agreement may be
amended only by an instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing signed by the
party against whom or which enforcement of such waiver is sought.

5

 

(d)           This Agreement and all
rights and obligations hereunder, including, without limitation, matters of
construction, validity and performance, shall be governed by and construed and
interpreted in accordance with the laws of Bermuda without regard to principles
of conflict of laws.

(e)           This Agreement shall inure
for the benefit of and be an obligation of the Company’s assigns and
successors; provided, however, that you may not assign your duties and
obligations hereunder to any other party.

(f)            The headings in this
Agreement are inserted for convenience of reference only and shall not be a
part of or control or affect the meaning of any provision hereof.  If the terms of this Agreement meet with your
approval, please sign and return one copy to the Company.

Sincerely,

 

AXIS
SPECIALTY LIMITED

 

 

 

By:
/s/ John R. Charman                                     

Name:
John R. Charman

Title:
Chief Executive Officer and President

 

 

 

Accepted
and Agreed

as of the
date first set forth above:

 

 

 

 /s/ Andrew Cook                 

D. Andrew Cook

 

 

6Exhibit 10.1

 

THE UNION LIGHT, HEAT AND POWER COMPANY

 

PURCHASE AGREEMENT

 

 

DATED: March 7, 2006

 

 

KeyBanc Capital Markets, a Division

of McDonald Investments Inc.

127 Public Square

Cleveland, OH  44114

 

LaSalle
Financial Services, Inc.

540 West Madison Street

28th Floor

Chicago, IL 60661

 

Ladies and
Gentlemen:

 

The Union Light, Heat and Power Company, a
Kentucky corporation (hereinafter called the “Company”),
proposes to issue and sell to KeyBanc Capital Markets, a division of McDonald
Investments Inc., and LaSalle Financial Services, Inc. (the “Initial Purchasers”) $50,000,000 principal amount of 5.750%
Debentures due 2016 (the “Series A Debentures”)
and $65,000,000 principal amount of 6.200% Debentures due 2036 (the “Series B Debentures”, and together with the Series A
Debentures, the “Securities”), to be issued
pursuant to the provisions of the First Supplemental Indenture dated as of March
7, 2006 to the Indenture dated as of December 1, 2004 (hereinafter called the “Indenture”), between the Company and Deutsche Bank Trust
Company Americas,  as Trustee
(hereinafter called the “Trustee”).

 

The Securities will be offered without being
registered under the Securities Act of 1933, as amended (together with the
rules and regulations promulgated thereunder, the “Securities
Act”), only to persons in the United States whom the Initial
Purchasers reasonably believe to be “qualified institutional buyers” (“QIBs”) as defined in Rule 144A under the Securities Act, as
such rule may be amended from time to time (“Rule 144A”),
in transactions under Rule 144A.

 

In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum, dated March 7, 2006 (the “Preliminary Memorandum”) and a final offering memorandum, to
be dated March 7, 2006 (the “Offering Memorandum”),
for the information of the Initial Purchasers and for delivery to prospective
purchasers of the Securities. The terms “supplement,” “amendment” and “amend”
as used herein with respect to either the Preliminary or Final Memorandum shall
include all documents deemed to be incorporated by reference into the
Preliminary Memorandum or Final Memorandum that are filed subsequent to the
date thereof with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”).
The time when sales of Securities are first made or confirmed by the several
Initial Purchasers to QIBs is referred to as the “Time of

 

 

Sale,”
and the Preliminary Memorandum, as such may be amended or supplemented prior to
the Time of Sale, together with the other information set forth on Schedule I
hereto, is referred to as the “Time of Sale Information.”

 

I.

 

The Company hereby agrees to sell to each of
the Initial Purchasers, and the Initial Purchasers each, severally and not
jointly, agree, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, to purchase from
the Company the principal amount of Securities set forth opposite their names
below, at a price of 99.290% of the principal amount of the Series A Debentures
and 98.559% of the principal amount of the Series B Debentures (the “Purchase Price”) and accrued interest from March 10, 2006,
to the date of payment and delivery:

 

	
  Name

  	
   

  	
  Principal Amount

  of 10-Year

  Debentures

  	
   

  	
  Principal Amount

  of 30-Year

  Debentures

  	
   

  
	
  KeyBanc Capital Markets, a Division of
  McDonald Investments Inc.

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  $

  	
  52,000,000

  	
   

  
	
  LaSalle Financial Services, Inc.

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  13,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  $

  	
  65,000,000

  	
   

  

 

The Company acknowledges and agrees that the Initial Purchasers are
acting solely in the capacity of an arm’s length contractual counterparty to
the Company with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the offering) and not as
a financial advisor or a fiduciary to, or an agent of, the Company or any other
person.

 

II.

 

The Company understands that the Initial Purchasers intend (i) to make
private offerings pursuant to Rule 144A (“Exempt
Resales”) of their respective portions of the Securities as soon
after this Agreement has become effective as in the judgment of the Initial
Purchasers is advisable and (ii) initially to offer the Securities upon the
terms set forth in the Time of Sale Information.

 

The Company confirms that it has authorized the Initial Purchasers,
subject to the restrictions set forth below, to distribute copies of the Time
of Sale Information in connection with the offering of the Securities. Each
Initial Purchaser hereby severally makes to the Company the following
representations and agreements:

 

2

 

(i)            it
is a QIB and an “accredited investor” within the meaning of Rule 501(a) under
the Securities Act;

 

(ii)           it
has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act; and

 

(iii)          it
has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities as part of their initial offering except
within the United States to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A and in connection with such sale, it has
taken or will take reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance on Rule 144A.

 

III.

 

Payment for the Securities shall be made by
transfer of immediately available funds to an account identified by us in
writing not less than two full business days prior to the date of payment,
against delivery to you for the respective accounts of the Initial Purchasers
of the Securities through The Depositary Trust Company at 10:00 A.M., New York
Time, on March 10, 2006 or at such other time on the same or such other date,
not later than March 15, 2006, as may be designated by you. The time and date
of such payment and delivery are herein referred to as the “Closing Date”. All other documents referred to herein that
are to be delivered at the Closing Date shall be delivered at that time at the
office of Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY 10017.

 

Certificates for the Securities shall be in
global form and registered in such names and in such denominations as you shall
request in writing not later than one full business day prior to the Closing
Date. The certificates evidencing the Securities shall be delivered to you on
the Closing Date for the account of the Initial Purchasers, with any transfer
taxes payable in connection with the transfer of the Securities to the Initial
Purchasers duly paid, against payment of the Purchase Price therefor plus
accrued interest, if any, to the date of payment and delivery.

 

3

 

IV.

 

The obligations of the Company and the
several obligations of the Initial Purchasers hereunder are subject to the
condition that:

 

(a)           an
appropriate order or orders of the Kentucky Public Service Commission necessary
to permit the issue and sale of the Securities as contemplated hereby and
containing no material provision or condition which is unacceptable to the
Company or the Initial Purchasers shall be in effect and no proceedings to
suspend the effectiveness of such order or orders shall be pending or
threatened.

 

The several
obligations of the Initial Purchasers hereunder are subject to the following
further conditions:

 

(b)           There
shall have been no material adverse change (not in the ordinary course of
business) in the condition of the Company from that set forth in or
contemplated by the Offering Memorandum and the Time of Sale Information; and
you shall have received on the Closing Date a certificate, dated the Closing
Date and signed by an executive officer of the Company, to the foregoing
effect.

 

(c)           Subsequent
to the execution and delivery of this Agreement and prior to the Closing Date,
there shall not have occurred any downgrading of, nor shall any notice have
been given of any review with a negative implication with respect to, the
rating accorded any of the Company’s securities by any of Standard & Poor’s
Ratings Services, Moody’s Investors Service or Fitch Ratings (or any of their
successors).

 

(d)           You
shall have received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company, to the effect set forth in the
first paragraph of this Article IV (provided that such certificate may omit any
reference as to the extent to which provisions or conditions in the orders
referred to in the first paragraph of this Article IV are acceptable to the Initial
Purchasers). The officer making such certificate may rely upon the best of his
knowledge as to proceedings pending or threatened.

 

(e)           You
shall have received on the Closing Date the favorable opinion of Thompson Hine
LLP, counsel for the Company, dated the Closing Date, to the effect that:

 

(i)            the
Company is a corporation duly incorporated and existing in good standing under
the laws of the Commonwealth of Kentucky, the Company has due

 

4

 

corporate and governmental authority to carry on the public utility
businesses in which it is engaged and to own and operate the properties in use
in such businesses;

 

(ii)           the
Company is duly qualified to transact business and is in good standing in the
jurisdictions in which the conduct of its businesses or the ownership or
leasing of its properties requires such qualification;

 

(iii)          the
Indenture has been duly authorized, executed and delivered by the Company and
is a valid and binding instrument enforceable in accordance with its terms,
except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally and (B) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability;

 

(iv)          the
Securities, when duly executed by the Company, authenticated by the Trustee and
delivered to and paid for by the Initial Purchasers pursuant to this Agreement,
will be valid and binding obligations of the Company in accordance with their
terms, except as (A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally
and (B) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;

 

(v)           the
order of the Kentucky Public Service Commission authorizing the issuance and
sale of the Securities is in effect on the Closing Date and no further
approval, authorization, consent or order of any other commission or other
governmental authority (other than under state securities or Blue Sky laws, as
to which such counsel are not called upon to express an opinion) is required
for the issuance and sale of the Securities;

 

(vi)          no
registration under the Securities Act of the Securities or qualification of the
Indenture under the Trust Indenture Act, is required for the sale of the
Securities to the Initial Purchasers as contemplated by this Agreement or for
the Exempt Resales, assuming in each case (A) that the purchasers in each case
who buy the Securities in Exempt Resales are QIBs and (B) the accuracy of and
compliance with each of the Company’s and the Initial Purchasers’

 

5

 

representations,
warranties and covenants contained in this Agreement.

 

(vii)         the
statements made in the Time of Sale Information and the Offering Memorandum
under the captions “Description of the Debentures” and “Transfer Restrictions,”
in each case insofar as such statements constitute summaries of the legal
matters referred to therein, fairly summarize the matters referred to therein;
and the provisions of the Indenture and the Securities conform as to legal
matters to the description thereof and to the statements in regard thereto
contained in the Time of Sale Information and the Offering Memorandum;

 

(viii)        this
Agreement has been duly authorized, executed and delivered by the Company;

 

(ix)           such
counsel is (A) of the opinion that each document incorporated by reference in
the Time of Sale Information and the Offering Memorandum (except for the
financial statements and schedules and other financial and statistical data
therein as to which such counsel need not express an opinion) complied when
filed with the Commission as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, together with the
applicable rules and regulations of the Commission thereunder and (B) except
for the financial statements and schedules and other financial and statistical
data therein as to which such counsel need not express a belief, has no reason
to believe that the Preliminary Memorandum, as amended and supplemented, the
Time of Sale Information and the Offering Memorandum at the date of this
Agreement contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Time of Sale Information and the Offering
Memorandum (as amended or supplemented, if applicable) on the Closing Date
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

In regard to clauses (iii), (iv) and (viii)
above, such counsel may state that no opinion is expressed with respect to the
effect of New York law. In regard to clause (ix) above, such counsel may state
that their opinion and belief is based upon their participation in the
preparation of the Time of Sale Information and the

 

6

 

Offering Memorandum and any supplements and amendments
thereto and upon their review and discussion of the contents thereof (including
documents incorporated by reference), but is without independent check or
verification except as specified.

 

(f)            You
shall have received on the Closing Date an opinion of Davis Polk &
Wardwell, counsel for the Initial Purchasers, dated the Closing Date, covering
the matters in (iii), (iv), and clause (B) of (ix) of (e) above, provided that
with respect to clause (B) of (ix) of (e) above, such counsel may state that
their opinion and belief is based upon their participation in the preparation
of the Time of Sale Information and the Offering Memorandum and any amendments and
supplements thereto (other than documents incorporated by reference), and upon
their review and discussion of the contents thereof (including documents
incorporated by reference), but is without independent check or verification
except as specified.

 

(g)           You
shall have received on the date of this Agreement and Closing Date letters,
dated the date of this Agreement and Closing Date, as the case may be, in form
and substance satisfactory to you, from Deloitte & Touche LLP, independent
accountants, containing statements and information of the type ordinarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Time of Sale Information and the Offering Memorandum.

 

V.

 

In further consideration of the agreements of
the Initial Purchasers herein contained the Company covenants as follows:

 

(a)           To
furnish without charge to you as many copies of the Time of Sale Information
and the Offering Memorandum and any amendments and supplements thereto as you
may reasonably request.

 

(b)           Before
amending or supplementing the Time of Sale Information or the Offering Memorandum,
to furnish to each of you a copy of each such proposed amendment or supplement.

 

(c)           Except
as permitted by law, during the period of two years after the Closing Date or,
if earlier, until such time as the Securities are no longer restricted
securities (as defined in Rule 144 under the Securities Act) the Company will
not, and will not permit any of its “affiliates” (as defined in Rule 144 under
the Securities Act)

 

7

 

to, resell any
of the Securities which constitute “restricted securities” under Rule 144 that
have been reacquired by any of them.

 

(d)           The
Company will take reasonable precautions designed to insure that any offer or
sale, direct or indirect, in the United States or to any U.S. person (as
defined in Rule 902 under the Securities Act) of any security issued by the
Company substantially similar to the Securities, within six months subsequent
to the date on which the distribution of the Securities has been completed (as
notified to the Company by the Initial Purchasers), is made under restrictions
and other circumstances reasonably designed not to affect the status of the
offer and sale of the Securities in the United States contemplated by this
Agreement as transactions exempt from the registration provisions of the
Securities Act.

 

(e)           So
long as any of the Securities remain outstanding and during any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of any holder of Securities (each, a “Securities
Holder”), the Company shall promptly furnish to such Securities
Holder or to a prospective purchaser of Securities designated by such
Securities Holder, as the case may be, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act (“Additional
Company Information”) in order to permit compliance by such
Securities Holder with Rule 144A in connection with the resale of such
Securities by such Securities Holder.

 

(f)            If
the Time of Sale Information is being used to solicit offers to buy the
Securities at a time when the Offering Memorandum is not yet available to
prospective purchasers and any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Time of Sale Information in
order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which
the Time of Sale Information conflicts with the information contained in the Offering
Memorandum, or if it is necessary to amend or supplement the Time of Sale Information
to comply with applicable law, forthwith to prepare and furnish, at its own
expense, to the Initial Purchasers and to any dealer upon request, either
amendments or supplements to the Time of Sale Information so that the
statements in the Time of Sale Information as so amended or supplemented will
not, in the light of the circumstances when delivered to a prospective
purchaser, be misleading or so that the Time of Sale Information, as amended or
supplemented, will no longer conflict with the Offering Memorandum.

 

8

 

(g)           To
endeavor to qualify the Securities for offer and sale under the securities or
Blue Sky laws of such jurisdictions as you shall reasonably request and to pay
all expenses (including fees and disbursements of counsel) in connection with
such qualification and in connection with the determination of the eligibility
of the Securities for investment under the laws of such jurisdictions as you
may designate.

 

(h)           The
Company will pay all out-of-pocket expenses incidental to the performance of
its obligations under this Agreement and the Indenture, including (i) the
reasonable fees and expenses of the Trustee and its professional advisors, (ii)
all expenses in connection with the execution, issue, authentication, packaging
and initial delivery of the Securities, the preparation and distribution of this
Agreement, the Time of Sale Information, the Offering Memorandum and amendments
and supplements thereto, and any other document relating to the issuance,
offer, sale and delivery of the Securities, (iii) any reasonable expenses
(including reasonable fees and disbursements of counsel) incurred in connection
with qualification of the Securities for sale under the laws of such
jurisdictions as the Initial Purchasers designate and the printing of memoranda
relating thereto and (iv) for any fees charged by investment rating agencies
for the rating of the Securities.

 

(i)            During
the period beginning on the date of this Agreement and terminating on the
Closing Date not to offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company substantially similar to the Securities, without
your prior written consent.

 

(j)            To
cause each of the Securities to bear the legend set forth in the form of
Debenture set forth in the Indenture until such legend shall no longer be
necessary or advisable because the Securities are no longer subject to the
restrictions on transfer described therein.

 

VI.

 

The Company represents and warrants to each Initial
Purchaser that:

 

(a)           The
Time of Sale Information and the Offering Memorandum do not, and any supplement
or amendment to them will not, contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this Section 6(a)

 

9

 

shall not
apply to statements in or omissions from the Time of Sale Information or the Offering
Memorandum (or any supplement or amendment thereto) based upon information
relating to the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use therein. No order asserting that any of
the transactions contemplated by this Agreement are subject to the registration
requirements of the Securities Act, has been issued.

 

(b)           When
the Securities are issued and delivered pursuant to this Agreement, the
Securities will not be of the same class (within the meaning of Rule 144A) as
securities which are listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.

 

(c)           None
of the Company or any its affiliates or any person acting on its or their
behalf (other than the Initial Purchasers, as to which the Company makes no
representation) has offered or sold, or will offer or sell, the Securities by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act.

 

(d)           The
Securities satisfy the eligibility requirements of Rule 144(d)(3) under the
Securities Act.

 

(e)           Each
of the Time of Sale Information and the Offering Memorandum, as of its date,
contains all the information specified in, and meeting the requirements of,
Rule 144A(d)(4) under the Securities Act.

 

(f)            None
of the Company or any of its affiliates (as defined in Rule 501(b) of
Regulation D), or, to the best the Company’s knowledge, any person acting on
its or their behalf, directly or indirectly (other than the Initial Purchasers,
as to which the Company makes no representation), has made or will make offers
or sales of any security, or has solicited or will solicit offers to buy any
security, under circumstances that would require the registration of the
Securities under the Securities Act.

 

(g)           No
registration under the Securities Act of the Securities or qualification of the
Indenture under the Trust Indenture Act, is required for the sale of the
Securities to the Initial Purchasers as contemplated by this Agreement or for the
Exempt Resales, assuming in each case that (A) the purchasers who buy the
Securities in the Exempt Resales are Eligible Purchasers and (B) the
accuracy of and compliance with the Initial Purchasers’

 

10

 

representations,
warranties and covenants contained in this Agreement.

 

VII.

 

The Company agrees to indemnify and hold
harmless each Initial Purchaser and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including the fees and expenses of counsel in connection with any
governmental or regulatory investigation or proceeding) caused by any untrue
statement or alleged untrue statement of a material fact contained in the Preliminary
Memorandum, as amended or supplemented, the Time of Sale Information or the Offering
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
furnished in writing to the Company by any Initial Purchaser through you
expressly for use therein.

 

In case any action shall be brought against any
Initial Purchaser or any person controlling such Initial Purchaser, based upon
the Preliminary Memorandum, as amended or supplemented, the Time of Sale Information
or the Offering Memorandum or any amendment or supplement thereto or any preliminary
memorandum and in respect of which indemnity may be sought against the Company,
such Initial Purchaser shall promptly notify the Company in writing, and the
Company, upon the request of such Initial Purchaser, shall assume the defense
thereof on behalf of the Initial Purchaser or controlling person, including the
employment of counsel and payment of all expenses. In any such action, such Initial
Purchaser or any such controlling person shall have the right to employ its own
counsel but the fees and expenses of such counsel shall be at the expense of the
Initial Purchaser or such controlling person unless (i) the employment of such
counsel has been specifically authorized in writing by the Company or (ii) the
named parties to any such action (including any impleaded parties) include both
such Initial Purchaser or such controlling person and the Company and the Initial
Purchaser or controlling person shall have been advised by such counsel that
there maybe one or more legal defenses available to it which are different from
or additional to those available to the Company (it being understood, however,
that the Company shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
one firm of local counsel) for all such Initial Purchaser and controlling
persons, which firm shall be designated in writing by you, and that such fees
and expenses shall be reimbursed as they are incurred). The Company

 

11

 

shall not be liable for indemnification (or
contribution as provided below) with respect to the settlement of any such
action effected without its written consent, but if settled with the written
consent of the Company or if there be a final judgment for the plaintiff in any
such action, the Company agrees to indemnify and hold harmless any Initial
Purchaser and any such controlling person from and against any loss or
liability by reason of such settlement or judgment (or to make contribution as
provided below).

 

Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers and any person controlling the Company to the same extent as the
foregoing indemnity from the Company to the Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished in
writing by such Initial Purchaser expressly for use in the Time of Sale Information
or the Offering Memorandum. In case any action shall be brought against the
Company, any of its directors or any such officer or controlling person based on
the Time of Sale Information or the Offering Memorandum and in respect of which
indemnity may be sought against any Initial Purchaser, such Initial Purchaser
shall have the rights and duties given to the Company, and the Company, its
directors or any such officer or controlling person shall have the rights and
duties given to the Initial Purchaser, by the preceding paragraph of this
Article VII.

 

If the indemnification provided for in the
second paragraph of this Article VII is unavailable to any Initial Purchaser or
other indemnified party in respect of any losses, claims, damages or
liabilities referred to therein, then the Company, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other from the offering of the Securities 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 of the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the Initial
Purchasers, in each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company and of the Initial Purchasers
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the Company or by the Initial Purchasers
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

 

12

 

If the indemnification provided for in this
Article VII is sought solely by the Company under the fourth paragraph hereof
and there is no claim for indemnification by any Initial Purchaser or any
person controlling such Initial Purchaser arising out of the same misstatement
or omission and if such indemnification is unavailable to the Company in
respect of any losses, claims, damages or liabilities referred to in such fourth
paragraph, then each Initial Purchaser, in lieu of indemnifying the Company,
shall contribute to the amount paid or payable by the Company as a result of
such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Initial Purchasers on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Initial
Purchaser and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.

 

The Company and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this
Article VII were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the two immediately preceding paragraphs. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in such paragraphs shall be deemed to include, subject to the
limitations set forth above, 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 Article VII, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total Purchase Price of the Securities purchased by it exceeds the
amount of any damages which such Initial Purchaser has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities) shall be entitled to contribution
from any person who is not guilty of such fraudulent misrepresentation. The Initial
Purchasers’ obligations to contribute pursuant to this Article VII are several
in proportion to their respective underwriting percentages (as defined in the
Agreement Among Initial Purchasers relating to the Securities) and not joint.

 

The indemnity and contribution agreements
contained in this Article VII and the representations and warranties of the
Company set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser or by or on behalf of the

 

13

 

Company, its directors or officers or any
person controlling the Company and (iii) acceptance of and payment for any of
the Securities.

 

VIII.

 

This Agreement shall be subject to
termination in your absolute discretion, by notice given to the Company, if (a)
prior to the Closing Date (i) trading in securities on the New York Stock
Exchange or the American Stock Exchange shall have been suspended or materially
limited, (ii) trading in any securities of the Company shall have been
suspended on any national securities exchange in the United States or in any
over-the-counter market in the United States, (iii) a general moratorium on
banking activities in New York shall have been declared by Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in the financial markets or other calamity or
crisis, any of which is material and adverse and (b) in the case of any of the
events specified in clauses (a)(i) through (iv), such event either singly or
together makes it, in your reasonable judgment, impracticable to market the
Securities. Any termination of this Agreement pursuant to this Article VIII
shall be without liability on the part of the Company to the Initial Purchasers,
or the Initial Purchasers to the Company.

 

IX.

 

This Agreement shall become effective upon
signature.

 

If any one or more of the Initial Purchasers shall fail or refuse to
purchase Securities which it or they have agreed to purchase hereunder, and the
aggregate principal amount of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of Securities, the other Initial
Purchasers shall be obligated severally in the proportions which the principal
amount of Securities set forth opposite their names in Article I bears to the
aggregate principal amount of Securities so set forth opposite the names of all
such non-defaulting Initial Purchasers, or in such other proportions as you may
specify, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase; provided that in no event
shall the principal amount of Securities which any Initial Purchaser has agreed
to purchase pursuant to Article I hereof be increased pursuant to this Article IX
by an amount in excess of one-ninth of such principal amount of Securities
without the written consent of such Initial Purchaser. If any Initial Purchaser
or Initial Purchaser shall fail or refuse to purchase Securities and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities
and arrangements satisfactory to you and the Company for the purchase of such
Securities are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Initial Purchaser
or of the Company. In any such case which does not result in such a
termination, either you or the Company shall have the right to

 

14

 

postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if
any, in the Offering Memorandum or in any other documents or arrangements may
be effected. Any action taken under this paragraph shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such Initial
Purchaser under this Agreement.

 

If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of
this Agreement or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Initial
Purchasers or such Initial Purchasers as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel), reasonably incurred by the
Initial Purchasers in connection with this Agreement or the offering
contemplated hereunder.

 

This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

15

 

This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  THE UNION LIGHT, HEAT AND

  POWER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wendy L. Aumiller

  
	
   

  	
   

  	
  Name: Wendy L. Aumiller

  
	
   

  	
   

  	
  Title: Vice President & Treasurer

  

 

 

	
  Accepted: March 7, 2006

  
	
   

  
	
   

  
	
   

  	
  KEYBANC CAPITAL MARKETS,

  a Division of McDonald Investments 

  Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Nida Raza

  	
   

  	
   

  
	
   

  	
  Name: Nida Raza

  	
   

  
	
   

  	
  Title: Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LASALLE FINANCIAL 

  SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jim Stewart

  	
   

  	
   

  
	
   

  	
  Name: Jim Stewart

  	
   

  
	
   

  	
  Title: Managing Director, Head of US Fixed Income Capital Markets

  	
   

  

 

 

Schedule 1

 

Time of Sale Information

 

 

$115 million Union Light Heat
& Power Senior Notes 5.75%  due 2016
and 6.20% due 2036

 

Proposed Terms and Conditions

 

	
  Issuer:

  	
  Union Light Heat & Power

  	
   

  
	
   

  	
   

  	
   

  
	
  Market Type:

  	
  Senior Unsecured Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  Ratings:

  	
  Baa1/BBB (stable/negative)

  	
   

  
	
  Trade Date:

  	
  March 7, 2006

  	
   

  
	
   

  	
   

  	
   

  
	
  Settlement Date:

  	
  March 10, 2006 (T+3)

  	
   

  
	
   

  	
   

  	
   

  
	
  Coupon Payment Dates:

  	
  March 10 and September 10

  	
   

  
	
   

  	
   

  	
   

  
	
  First Payment Date:

  	
  September 10, 2006

  	
   

  
	
   

  	
   

  	
   

  
	
  Final Maturity:

  	
  March 10, 2016

  	
  March 10, 2036

  
	
   

  	
   

  	
   

  
	
  Principal Amount:

  	
  US$50,000,000

  	
  US$65,000,000

  
	
  Treasury Benchmark:

  	
  UST4.500% Feb-16

  	
  UST5.375% Feb-31

  
	
  Treasury Price:

  	
  98–6+

  	
  108-4

  
	
   

  	
   

  	
   

  
	
  Treasury Yield:

  	
  4.728%

  	
  4.812%

  
	
  Spread:

  	
  + 103 basis points

  	
  + 143 basis points

  
	
  Yield:

  	
  5.758%

  	
  6.242%

  
	
  Coupon:

  	
  5.750%

  	
  6.200%

  
	
  Issue Price:

  	
  99.940%

  	
  99.434%

  
	
  Underwriting Fee:

  	
  0.65%

  	
  0.875%

  
	
  Price to Issuer:

  	
  99.290%

  	
  98.559%

  
	
   

  	
   

  	
   

  
	
  Proceeds to Issuer:

  	
  US$49,645,000

  	
  US$64,063,350

  
	
   

  	
   

  	
   

  
	
  CUSIP:

  	
  906888 AR 3

  	
  906888 AS 1

  
	
  Day Count:

  	
  30/360

  	
   

  
	
  Payment Frequency:

  	
  Semi-Annual

  	
   

  
	
  Denominations:

  	
  $1,000 x 1,000

  	
   

  
	
  Sole Book-Running Manager:

  	
  KeyBanc Capital Markets, a Division of McDonald

  Investments Inc. (80%)

  
	
  Co-Managers:

  	
  LaSalle Financial Services, Inc. (20%)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]