<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1999
REGISTRATION NO. 333-72251
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CONECTIV
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C>
DELAWARE 51-0377417
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
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800 KING STREET
WILMINGTON, DE 19899-0231
ATTN: JOHN C. VAN RODEN, JR.
(302) 429-3525
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
<TABLE>
<S> <C>
PETER F. CLARK, ESQUIRE JOHN C. VAN RODEN, JR.
GENERAL COUNSEL SENIOR VICE PRESIDENT AND
CONECTIV CHIEF FINANCIAL OFFICER
800 KING STREET CONECTIV
WILMINGTON, DE 19899 800 KING STREET
(302) 429-3311 WILMINGTON, DE 19899
(302) 429-3525
</TABLE>
(NAMES, ADDRESSES, INCLUDING ZIP CODES, AND TELEPHONE NUMBERS, INCLUDING
AREA CODES, OF AGENTS FOR SERVICE)
------------------------
IT IS RESPECTFULLY REQUESTED THAT THE COMMISSION SEND COPIES OF ALL NOTICES,
ORDERS AND COMMUNICATIONS TO:
J. ANTHONY TERRELL, ESQUIRE
THELEN REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
(212) 603-2000
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. A
REGISTRATION STATEMENT RELATING TO THESE DOCUMENTS HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY , 1999
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY , 1999)
CONECTIV LOGO
$250,000,000
MEDIUM-TERM NOTES, SERIES A
DUE FROM NINE MONTHS TO 15 YEARS FROM DATE OF ISSUE
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Conectiv may offer from time to time up to $250,000,000 in aggregate principal
amount of its Medium-Term Notes, Series A. The terms of each Note will be
determined at the time of sale and, if different from the terms described in the
accompanying prospectus or this prospectus supplement, will be specified in a
pricing supplement. These terms will include:
- - The stated maturity, which will be between 9 months and 15 years from date of
issue
- - The interest rate, which will be fixed
- - Interest payment dates, if other than May 1 and December 1
- - Any redemption provisions
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
OR ANY PRICING SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
PER NOTE TOTAL
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<S> <C> <C>
Public Offering Price................... 100% $250,000,000
Agent's Discounts and Commissions....... .125% - .750% $312,500 - $1,875,000
Proceeds to Conectiv.................... 99.875% - 99.250% $247,812,500 - $249,687,500
</TABLE>
The Notes are being offered from time to time on behalf of Conectiv by Lehman
Brothers Inc., Banc One Capital Markets, Inc., Credit Suisse First Boston and
First Union Capital Markets Corp. (as Agents). Each Agent has agreed to use its
reasonable efforts to solicit offers to purchase the Notes. Conectiv has
reserved the right to sell Notes directly to investors, and no commissions would
be paid on any such sale. Conectiv may also sell Notes to an Agent acting as
principal for its own account. Conectiv or any Agent that solicits an offer to
purchase Notes may reject that offer in whole or in part. Conectiv reserves the
right to withdraw, cancel or modify its offering of the Notes without notice.
The Notes will not be listed on any securities exchange, and there can be no
assurance that the Notes will be sold or that there will be a secondary market
for the Notes.
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LEHMAN BROTHERS
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS CORP.
May , 1999
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT
Recent Developments......................................... S-2
Use of Proceeds............................................. S-3
Description of the Medium-Term Notes........................ S-3
Supplemental Plan of Distribution........................... S-9
PROSPECTUS
About this Prospectus....................................... 1
Where You Can Find More Information......................... 1
The Company................................................. 3
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges.......................... 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 10
Legal Matters............................................... 11
Experts..................................................... 11
</TABLE>
RECENT DEVELOPMENTS
The Company announced on May 11, 1999, due to changes in the regulatory
environment in the electric utility industry, it is undertaking several
strategic initiatives designed to maximize stockholder value and position
Conectiv for future growth. These initiatives include: (1) a recapitalization of
Conectiv through a share buyback in order to employ a more efficient capital
structure appropriate for a competitive environment; (2) a reduction in the
quarterly dividend on the Company's Common Stock, par value $0.01 per share (the
"Shares"), designed to balance total shareholder return between stock
appreciation and dividend yield (the "Dividend Policy Change"); (3) a
realignment of Conectiv's generation business by pursuing the potential sale of
approximately 2,200 megawatts of nuclear and non-strategic baseload fossil
generation, with safeguards to assure continued energy reliability; (4) a focus
on value creation through growth of Conectiv's regulated electric and gas
delivery business, energy and the telecommunications business; and (5) the
implementation of a new productivity improvement and cost reduction program
aimed at positioning the Company to have a more competitive cost structure
without any reduction in quality and service.
Conectiv is offering to purchase up to 14 million Shares (including the
associated preferred stock purchase rights) at a price not greater than $25.50
nor less than $23.50 per Share in cash, as specified by tendering stockholders,
upon the terms and subject to the conditions set forth in the Issuer Tender
Offer Statement on Schedule 13E-4 to be filed with the Securities and Exchange
Commission. Assuming that the Company purchases 14 million Shares pursuant to
the offer at the maximum specified purchase price of $25.50 per Share, the
Company expects the maximum aggregate cost, including all fees and expenses
applicable to the offer, to be approximately $360,000,000.
Conectiv's Board of Directors intends to reduce per share dividends on the
Shares to an amount equal to 40% to 60% of the Company's earnings per Share,
which is expected to result in a quarterly dividend of $0.22 per Share as
compared to the previous quarterly dividend level of $.385 per Share, subject to
declaration by the Company's Board of Directors and evaluation from time to time
based on the results of operations, financial condition, capital requirements
and other relevant considerations. The Company's Board of Directors intends that
the quarterly dividend on shares of Class A Common Stock will remain $0.80 per
share ($3.20 annualized rate) until March 31, 2001, subject to, among other
things, declaration by Conectiv's Board of Directors and the obligations of the
Board of Directors to consider the financial condition and regulatory
environment of the Company and the results of its operations.
S-2
<PAGE> 4
The summary unaudited consolidated pro forma financial information,
incorporated by reference from the Company's Form 8-K filed May 11, 1999, gives
effect to the purchase of Shares pursuant to the offer described above,
including the related incurrence of indebtedness, and the Dividend Policy
change, based on certain assumptions described therein and in the related notes.
USE OF PROCEEDS
We intend to use the net proceeds from the issuance and sale of the offered
Notes, in part, to repay indebtedness outstanding under our five-year revolving
credit facility which was incurred for investments in our non-utility
businesses, and in part to fund our Share repurchase offer described above and
in the Incorporated Documents. At April 30, 1999, approximately $165,000,000 in
aggregate principal amount of indebtedness was outstanding under the five year
revolving facility, approximately $105,000,000 in aggregate principal amount of
which matures on June 7, 1999 with an interest rate of 5.23% per annum, and
approximately $60,000,000 principal amount of which matures on June 10, 1999
with an interest rate of 5.23% per annum. This revolving credit facility will
remain available to Conectiv after the application of the net proceeds of the
Notes to reduce the outstanding amounts, as discussed above, and we intend to
borrow under this facility to obtain funds necessary to fund our common stock
repurchase offer. In the event that the Share repurchase does not occur, we
intend to use the net proceeds from issuance and sale of the Notes for general
corporate purposes.
DESCRIPTION OF THE MEDIUM-TERM NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith supersedes, the description of the
general terms and provisions of the Debt Securities set forth under "Description
of Debt Securities" in the accompanying prospectus. Certain capitalized terms
used but not defined in this prospectus supplement shall have the meanings given
to them in the accompanying prospectus, the Notes or the Indenture, as the case
may be. The particular terms of the Notes, and provisions of the Notes that vary
from the general provisions of the Notes described below and the general
provisions of the Debt Securities described in the accompanying prospectus, will
be described in the applicable pricing supplement.
GENERAL
Conectiv will issue from time to time up to $250,000,000 in aggregate
principal amount of its Medium-Term Notes, Series A (the "Notes"). The Notes
will be issued under an Indenture dated as of , 1999 from Conectiv
to First Union Trust Company, National Association, as Trustee, which is more
fully described in the accompanying prospectus. Conectiv has initially
designated First Union Trust Company, National Association as its Paying Agent
and Security Registrar for the Notes.
The Notes will be issued in fully registered form only in denominations of
$1,000 and any larger amount that is an integral multiple of $1,000.
Each Note will mature on a date from nine months to 15 years from its date
of issue, as specified in the applicable pricing supplement. Each Note may also
be subject to redemption at Conectiv's option prior to its stated maturity date,
as specified in the applicable pricing supplement.
Interest on each Note will accrue from its date of issue and, except in the
limited circumstances described in this prospectus supplement or as otherwise
specified in the applicable pricing supplement, will be payable semiannually in
arrears on May 1 and December 1 of each year and at maturity. The interest rate
applicable to each Note and the other variable terms of each Note will be
established by Conectiv on the date of issue of such Note and will be specified
in the applicable pricing supplement.
Interest rates on the Notes may differ depending upon, among other factors,
the aggregate principal amount of Notes purchased in any single transaction. We
may also offer Notes with different variable terms to different investors
concurrently. We may change interest rates and other terms of Notes from
S-3
<PAGE> 5
time to time, but no such change will affect any Note previously issued or as to
which we have accepted an offer to purchase.
Each Note will be issued initially in book-entry form only (a Note so
represented, a "Book-Entry Note"). Each Book-Entry Note will be represented by
one or more fully registered global Notes (the "Global Notes") deposited with or
on behalf of The Depository Trust Company ("DTC"), or such other depositary as
may be identified in the applicable pricing supplement, as depositary. Except in
limited circumstances described below, Book-Entry Notes will not be exchangeable
for Notes in certificated form.
The pricing supplement relating to each Note will describe the following
terms:
- the date on which such Note will be issued;
- the stated maturity date of such Note;
- the fixed rate per annum at which such Note will bear interest, the
interest payment dates for such Note and any record dates for the
interest payable on any interest payment dates;
- the percentage of the principal amount at which such Note will be issued;
- whether such Note may be redeemed at the option of Conectiv prior to its
stated maturity date and, if so, the provisions relating to such
redemption;
- any other terms of such Note not inconsistent with the provisions of the
Indenture; and
- any sinking fund provisions or other mandatory redemption provisions
applicable to such Note.
PAYMENT OF PRINCIPAL AND ANY PREMIUM AND INTEREST
We will pay interest on the Notes, other than interest payable at maturity,
by check mailed to the address of the person in whose name such Notes are
registered in the security register (the "Holder") of such Notes as of the
regular record date relating to each interest payment date; provided, however,
that
- if the original issue date of a Note is after a regular record date and
before the corresponding interest payment date, interest for the period
from and including the original issue date for such Note to but excluding
such interest payment date will be paid on the next succeeding interest
payment date to the Holder of such Note on the related regular record
date;
- if and to the extent Conectiv defaults in the payment of the interest due
on any Note on any interest payment date, such defaulted interest will be
paid as described under "Description of Debt Securities -- Payment of
Debt Securities" in the accompanying prospectus;
- in the case where the registered Holder is the depositary or its nominee
(as would be the case for Book-Entry Notes), such payment may be made in
accordance with any other arrangements then in effect among Conectiv, the
Trustee or other Paying Agent and such Holder; and
- a registered Holder of $10,000,000 or more in aggregate principal amount
of Notes (whether having identical or different terms and provisions)
will be entitled to receive interest payments, if any, on any interest
payment date other than at maturity by wire transfer of immediately
available funds if appropriate wire transfer instructions have been
received in writing by Conectiv and the Paying Agent not less than 15
days prior to such interest payment date. Any such wire transfer
instructions received by Conectiv and the Paying Agent shall remain in
effect until revoked by such Holder.
Payment of principal, any premium and interest due on the Notes at maturity
will be made upon presentation of such Notes at the office of the Paying Agent.
So long as the depositary is the registered owner of any Global Note, the
depositary, or its nominee, as the case may be, will be considered the sole
Holder of the Book-Entry Notes represented by such Global Note for all purposes
under the Indenture, including payments. Accordingly, so long as the depositary
is the registered owner of any Global Note, payments of principal and any
premium and interest
S-4
<PAGE> 6
on Book-Entry Notes represented by such Global Note will be made to the
Beneficial Owners (as defined herein) of such Notes, as described below under
"-- Book-Entry Notes."
Unless otherwise specified in the applicable pricing supplement:
- each Note will bear interest from its original issue date at the rate per
annum on the face thereof until the principal thereof is paid or made
available for payment;
- interest on each Note will be payable semi-annually in arrears on each
interest payment date and at maturity;
- the first payment of interest on any such Note originally issued between
a regular record date and the related interest payment date will be made
on the interest payment date immediately following the next succeeding
regular record date to the Holder of such Note on such next succeeding
regular record date; and
- the regular record date with respect to any interest payment date for a
Note will be April 15 and November 15 (whether or not a Business Day (as
defined below)) immediately preceding the related interest payment date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
If any interest payment date, any redemption date or the stated maturity of
a Note falls on a day that is not a Business Day, the related payment of
principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such interest
payment date, redemption date or stated maturity, as the case may be, to the
date of such payment on the next succeeding Business Day.
Unless otherwise specified in the applicable pricing supplement, "Business
Day" means any day, other than a Saturday or Sunday or a day on which banking
institutions are not required to be open in the State of New York, the State of
Delaware or the State of North Carolina.
REDEMPTION
The pricing supplement relating to each Note will indicate either that such
Note cannot be redeemed at the election of Conectiv prior to the stated maturity
date or that such Note will be redeemable, at the election of Conectiv, in whole
or in part, on any date on or after the date designated as the "Initial
Redemption Date" in such pricing supplement, at the applicable redemption price
plus accrued interest to the date fixed for redemption. If such Note is so
redeemable, the redemption price will initially be a percentage of the principal
amount of such Note to be redeemed equal to the "Initial Redemption Price"
specified in such pricing supplement for the twelve-month period commencing on
the Initial Redemption Date and shall decline for the twelve-month period
commencing on each anniversary of the Initial Redemption Date by a percentage of
principal amount to be redeemed equal to the "Reduction Percentage" specified in
such pricing supplement until the redemption price is 100% of such principal
amount.
Unless otherwise specified in the applicable pricing supplement, the Notes
will not be subject to any sinking fund or other mandatory redemption
provisions.
Additional information concerning redemption is contained under
"Description of Debt Securities -- Redemption" in the accompanying prospectus.
Conectiv may also, at any time, purchase Notes at any price or prices in
the open market or otherwise. Notes so purchased by Conectiv may, at its
discretion, be held, resold or surrendered to the Trustee for cancellation.
S-5
<PAGE> 7
LIMITATION ON SECURED DEBT
So long as any of the Notes remain outstanding, Conectiv will not create,
issue, incur or assume any Secured Debt (as hereinafter defined) without the
consent of the Holders of a majority in principal amount of the outstanding
Securities of all series (including the Notes) and tranches with respect to
which this covenant is made (all such Securities being hereinafter called
"Benefitted Securities"), considered as one class; provided, however, that the
foregoing covenant will not prohibit the creation, issuance, incurrence or
assumption of any Secured Debt if either
- Conectiv shall make effective provision whereby all Benefitted Securities
then outstanding will be secured equally and ratably with such Secured
Debt; or
- Conectiv delivers to the Trustee bonds, notes or other evidences of
indebtedness secured by the Lien (as hereinafter defined) which secures
such Secured Debt in aggregate principal amount equal to the aggregate
principal amount of the Benefitted Securities then outstanding and
meeting certain other requirements set forth in the Indenture.
"Debt", with respect to any person, means
- indebtedness of such person for borrowed money evidenced by a bond,
debenture, note or other written instrument or agreement by which such
person is obligated to repay such borrowed money and
- any guaranty by such person of any such indebtedness of another person.
"Debt" does not include, among other things,
- indebtedness of such person under any installment sale or conditional
sale agreement or any other agreement relating to indebtedness for the
deferred purchase price of property or services,
- obligations of such person under any lease agreement (including any lease
intended as security), whether or not such obligations are required to be
capitalized on the balance sheet of such person under generally accepted
accounting principles, or
- liabilities secured by any Lien on any property owned by such person if
and to the extent that such person has not assumed or otherwise become
liable for the payment thereof.
"Lien" means any lien, deed of trust, pledge or security interest.
"Secured Debt", with respect to any person, means Debt created, issued,
incurred or assumed by such person which is secured by a Lien upon any shares of
stock of Delmarva Power & Light Company or Atlantic City Electric Company,
whether owned at the date of the initial authentication and delivery of the
Notes or thereafter acquired.
RELEASE OF PRIMARY LIABILITY
Conectiv may be released and discharged from all obligation on the Notes
and under the Indenture in respect of the Notes if:
- no Event of Default, or event which with the passage of time or the
giving of required notice or both would become an Event of Default, has
occurred and is continuing;
- a subsidiary of Conectiv assumes such obligations by delivering to the
Trustee and to Conectiv an assumption agreement and a supplemental
indenture pursuant to which such subsidiary
- assumes, on a full recourse basis, Conectiv's obligations on the Notes
and the obligations under the Indenture relating to the Notes, and
- agrees that any covenants made by Conectiv with respect to such Notes
will become solely covenants of, and shall relate to, such subsidiary;
and
S-6
<PAGE> 8
- at the time of such assumption Conectiv executes a guaranty pursuant to
which Conectiv will fully and unconditionally guarantee the payment of
the obligations of the assuming subsidiary under the Notes and under the
Indenture relating to the Notes, including without limitation, payment,
as and when due, of the principal of, premium, if any, and interest on
the Notes.
BOOK-ENTRY NOTES
DTC will act as securities depositary for the Book-Entry Notes. The
Book-Entry Notes will be issued only as fully registered securities registered
in the name of Cede & Co. (DTC's nominee). One or more fully-registered global
certificates for the Notes, representing the aggregate principal amount of
Notes, will be issued and will be deposited with DTC.
The following is based on information furnished by DTC:
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. "Direct Participants" in
DTC include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to
others, such as securities brokers and dealers, banks and trust companies
that clear transactions through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on
file with the Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Notes on DTC's
records. The ownership interest of each actual purchaser of each Note
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Notes are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Notes, except in the event
that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Notes with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Notes are
credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of
their customers.
The delivery of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
S-7
<PAGE> 9
Redemption notices shall be sent to Cede & Co. If less than all of the
Notes are being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Notes. Under its usual procedures, DTC would mail an Omnibus Proxy to
Conectiv as soon as possible after the applicable record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Notes are credited on the applicable
record date (identified in a listing attached to the Omnibus Proxy).
Payments on the Notes will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payment on such date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the
accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such Participant and not of DTC, the Paying
Agent or Conectiv, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payments to DTC will be the
responsibility of Conectiv and the Paying Agent, disbursement of such
payments to Direct Participants will be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct Participants and Indirect Participants.
Management of DTC is aware that some computer applications, systems
and the like for processing data ("Systems") that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed Direct Participants and
Indirect Participants and other members of the financial community (the
"Industry") that it has developed and is implementing a program so that its
Systems, as the same relate to the timely payment of distributions
(including principal and interest payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC ("Depositary Services"),
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed
within appropriate time frames.
However, DTC's ability to perform properly its services is also
dependent upon other parties, including, but not limited to, issuers and
their agents, as well as DTC's Direct Participants and Indirect
Participants, third party vendors from whom DTC licenses software and
hardware, and third party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers, among others. DTC has informed the Industry that it is
contacting (and will continue to contact) third party vendors from whom DTC
acquires services to: (1) impress upon them the importance of such services
being Year 2000 compliant; and (2) determine the extent of their efforts
for Year 2000 remediation (and, as appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as
it deems appropriate.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to the Industry for informational purposes
only and is not intended to serve as a representation, warranty, or
contract modification of any kind.
DTC may discontinue providing its services as securities depository with
respect to the Notes at any time by giving reasonable notice to Conectiv or the
Paying Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, certificates for the Notes will be delivered to the
Beneficial Owners.
Conectiv may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
certificates for the Notes will be delivered to the Beneficial Owners.
S-8
<PAGE> 10
The information in this section concerning DTC and DTC's system has been
obtained from sources that Conectiv believes to be reliable, but Conectiv takes
no responsibility for the accuracy thereof.
None of Conectiv, any Agents, the Trustee, any Paying Agent or any Security
Registrar for the Notes will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in the Notes or for maintaining, supervising or reviewing any records
relating thereto.
Except as provided herein, a Beneficial Owner of an interest in a Global
Note will not be entitled to receive physical delivery of Notes. Accordingly,
each Beneficial Owner must rely on the procedures of DTC to exercise any rights
under the Notes.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Under the terms of a Distribution Agreement dated , 1999,
the Notes are offered on a continuing basis by Conectiv through the Agents,
which have agreed to use their best efforts to solicit purchases of the Notes.
Conectiv will pay each Agent a commission of from .125% to .750% of the
principal amount of each Note, depending on its stated maturity, sold through
such Agent. Conectiv will have the sole right to accept offers to purchase notes
and may reject any such offer, in whole or in part. Each Agent will have the
right, in its discretion reasonably exercised, without notice to Conectiv, to
reject any offer to purchase notes received by it, in whole or in part. Conectiv
also may sell Notes to each Agent, acting as principal, at or above par or at a
discount to be agreed upon at the time of sale, for resale to one or more
investors or to one or more broker-dealers (acting as principal for purposes of
resale) at varying prices related to prevailing market prices at the time of
such resale, as determined by such Agent or, if so agreed, at a fixed public
offering price. Unless otherwise specified in the applicable pricing supplement,
any Note sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereto less a percentage equal to
the commission applicable to an agency sale of a note of identical stated
maturity. Conectiv has reserved the right to sell Notes directly on its own
behalf in those jurisdictions where it is authorized to do so or as otherwise
provided in the applicable pricing supplement. In such circumstances, Conectiv
will have the sole right to accept offers to purchase Notes and may reject any
offer to purchase Notes in whole or in part. In the case of sales made directly
by Conectiv, no commissions will be paid.
An Agent purchasing Notes as principal may resell such Notes to dealers,
unless Conectiv and such Agent agree otherwise. Any such sales may be at a
discount, which will not exceed the amount set forth in the applicable pricing
supplement.
The Agents may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Conectiv has agreed to indemnify the Agents
against and contribute toward certain liabilities, including liabilities under
such Act. Conectiv has agreed to reimburse the Agents for certain expenses,
including, but not limited to, the fees and expenses of counsel to such Agents.
In the ordinary course of their respective businesses, certain of the
Agents and their affiliates have engaged, and may in the future engage, in
commercial banking and/or investment banking transactions with, and the
provision of services to, Conectiv and its affiliates. First Union Capital
Markets Corp. is an affiliate of First Union Trust Company, National
Association, which is acting as the Trustee under the Indenture and as the
Paying Agent and the Security Registrar in connection with the Notes. In
addition, First Union National Bank, an affiliate of First Union Capital Markets
Corp., and First National Bank of Chicago, an affiliate of Banc One Capital
Markets, Inc., are lenders under Conectiv's five-year revolving credit facility
and will receive their respective shares of any repayment of the five-year
revolving credit facility made from the proceeds of this offering. See "Use of
Proceeds." Accordingly, the offering is being made in compliance with the
requirements of Rule 2710(c)(8) of the National Association of Securities
Dealers, Inc. Conduct Rules.
Conectiv has been advised by the Agents that, in connection with the
offering made hereby, the Agents may purchase and sell the Notes in the open
market. These transactions may include over-
S-9
<PAGE> 11
allotment and stabilizing transactions and purchases to cove short positions
created by the Agents in connection with the offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or retarding
a decline in the market price of the Notes, and short positions created by the
Agents involve the sale by the Agents of a greater aggregate principal amount of
Notes than they are required to purchase from Conectiv. The Agents also may
impose a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the notes sold in the offering may be reclaimed by the Agents if such
notes are repurchased by the Agents in stabilizing or covering transactions.
These activities may stabilize, maintain or otherwise affect the market price of
the Notes, which may be higher than the price that might otherwise prevail in
the open market; and these activities, if commenced, may be discontinued at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
S-10
<PAGE> 12
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, PROSPECTUS DATED MAY 11, 1999
[CONECTIV LOGO] PROSPECTUS
CONECTIV
800 KING STREET
WILMINGTON, DELAWARE 19899
(302) 429-3525
$250,000,000
DEBT SECURITIES
We may offer from time to time unsecured debt securities consisting of
senior notes and debentures, subordinated notes and debentures and/or other
unsecured evidences of indebtedness in one or more series. The aggregate initial
offering price of the securities that are offered will not exceed $250,000,000.
We will offer the securities in an amount and on terms to be determined by
market conditions at the time of the offering.
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OF THE SECURITIES TO BE ISSUED UNDER THIS PROSPECTUS OR
DETERMINED IF THIS PROSPECTUS IS ACCURATE OR ADEQUATE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1999
<PAGE> 13
TABLE OF CONTENTS
<TABLE>
<S> <C>
About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
The Company................................................. 3
Use of Proceeds............................................. 4
Ratio of Earnings to Fixed Charges.......................... 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 10
Legal Matters............................................... 11
Experts..................................................... 11
</TABLE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Conectiv ("we" or
"Conectiv") filed with the Securities and Exchange Commission (the "SEC")
utilizing a shelf registration process. Under this shelf process, we may sell
Debt Securities in a cumulative amount up to $250,000,000 in one or more
offerings through December 31, 1999. This prospectus provides you with a general
description of the Debt Securities we may offer. Whenever we sell Debt
Securities under this registration statement, we will provide supplements to
this prospectus which will contain specific information about the terms of that
particular transaction. The prospectus supplement or pricing supplement may also
add, update or change information contained in this prospectus. Although we will
try to include all information that we believe may be material to investors,
certain details that may be important to you may have been excluded. To obtain
more detailed information, you should read the exhibits filed by us with this
registration statement or our other SEC filings. You also should read this
prospectus and any prospectus supplement together with the additional
information described under the heading "WHERE YOU CAN FIND MORE INFORMATION."
We also regularly file with the SEC documents that include information
about our financial statements and our company, including information on matters
that might affect our future financial results. Our principal subsidiaries,
Delmarva Power & Light Company ("Delmarva") and Atlantic City Electric Company
("ACE"), also periodically file documents with the SEC. It is important for you
to read these documents, this Prospectus and the applicable Prospectus
Supplement before you invest.
WHERE YOU CAN FIND MORE INFORMATION
AVAILABLE INFORMATION
We file annual, quarterly and special reports, and other information with
the SEC. You may read and copy any document we file at the SEC's Public
Reference Room located at 450 Fifth Street, N. W., Room 1024 Washington, D. C.
20549 or at the SEC's other public reference facilities located at the New York
Regional Office 7 World Trade Center, Suite 1300, New York, New York 10048 and
Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Please call the SEC at 1-800-SEC-0330 to obtain
information about the operation of the public reference facilities. The
Company's Common Stock and Class A Common Stock are listed on the New York Stock
Exchange (NYSE: CIV and CIV.A, respectively).
Our SEC filings are also available for inspection at the offices of the New
York Stock Exchange at 20 Broad Street, New York, New York 10005. Please call
the New York Stock Exchange at (212) 656-5060 to learn how to obtain copies. The
SEC also maintains an Internet world wide web site that contains annual and
quarterly reports, proxy statements and other information about issuers. Our SEC
filings are available to the public over the Internet at the SEC's website at
http://www.sec.gov. Our SEC filings can also be reviewed at Conectiv's Internet
web site at http://www.conectiv.com. Please click on
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<PAGE> 14
"InvestorInfo" on the home page to access our SEC filings. The information
contained at our Internet web site (other than the SEC filings referred to
below) is not incorporated in this prospectus by reference and you should not
consider it a part of this prospectus.
INCORPORATION BY REFERENCE
We incorporate by reference the information we file with the SEC, which
means we can disclose important information to you by referring you to another
document filed separately with the SEC. The information incorporated by
reference is an important part of this prospectus, and information that we file
with the SEC at a later date will automatically update this prospectus. We
incorporate by reference the documents listed below and any future filings with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 (the "Incorporated Documents"), until all the Debt Securities are sold:
- Annual Report of Conectiv on Form 10-K for the year ended December 31,
1998;
- Quarterly Report of Conectiv on Form 10-Q for the period ended March 31,
1999;
- Current Report of Conectiv on Form 8-K/A dated March 9, 1998;
- Current Reports of Conectiv on Form 8-K dated January 26, 1999, February
17, 1999, April 14, 1999 and May 11, 1999; and
- Current report of Atlantic Energy, Inc. on Form 8-K dated March 3, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary -- Assistant Secretary
CONECTIV
800 King Street
Wilmington, Delaware 19899
(302) 429-3935
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We may only use this
prospectus to sell Debt Securities if it is accompanied by a prospectus
supplement. We are only offering these Debt Securities in states where the offer
is permitted. You should not assume that the information in this prospectus or
any applicable prospectus supplement is accurate as of any date other than the
date on the front of those documents.
2
<PAGE> 15
THE COMPANY
Conectiv is a registered public utility holding company under the Public
Utility Holding Company Act of 1935, as amended ("PUHCA") and is headquartered
in Wilmington, Delaware. On March 1, 1998, through a combination of Delmarva and
Atlantic, Delmarva and its direct subsidiaries and Atlantic's direct
subsidiaries, including ACE, became direct subsidiaries of Conectiv and Atlantic
was merged out of existence. Delmarva was incorporated under the laws of the
State of Delaware in 1909 and under the laws of the Commonwealth of Virginia in
1979. Delmarva's primary business includes producing, purchasing, delivering and
selling electricity; purchasing, transporting and selling natural gas; and
providing other services which are primarily energy-related. Delmarva provides
electric service in Delaware, Maryland and Virginia and gas service in Delaware.
ACE is a public utility company organized under the laws of the State of New
Jersey in 1924 by the merger and consolidation of several utility companies. ACE
is engaged in the generation, transmission, distribution, and sale of electric
energy in the southern part of New Jersey.
Conectiv provides vital services (energy, telecommunications, heating,
cooling and plumbing) to homes and businesses in the mid Atlantic region. We
currently have 950,000 regulated retail energy customers and 175,000
nonregulated retail energy, services and telecommunications customers in
Delaware, southern New Jersey, and parts of Virginia, Maryland and southeastern
Pennsylvania.
Conectiv is organized in three business groups: Energy, Power Delivery and
Services. Energy is a multi-fueled, asset-backed energy (electric, natural gas,
oil) provider to regulated and unregulated customers throughout the mid Atlantic
region. Power Delivery delivers electricity and natural gas in four regulated
franchise jurisdictions. Services include Conectiv Communications Inc. ("CCI"),
Conectiv Services Inc. ("CSI") and Conectiv Thermal Inc. ("CTS"). CCI was formed
in November 1997 and provides facilities-based local and long distance
telecommunications services. CSI commenced operations in 1996 as a full-service
heating, ventilation and air-conditioning ("HVAC") business and has expanded its
operation through acquisitions of other established HVAC businesses. CTS began
operation in 1995 and provides thermal energy services to large commercial and
industrial customers, including casinos, hotels and office complexes, primarily
in New Jersey.
The information above concerning Conectiv and its subsidiaries is only a
summary. For additional information concerning the Company and its subsidiaries,
you should refer to the information described in "Where You Can Find More
Information."
The principal executive offices of Conectiv are located at 800 King Street,
Wilmington, DE 19899 and the telephone number for Conectiv information is
1-800-424-8401.
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<PAGE> 16
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, we
anticipate adding the net proceeds to be received from the sale of the offered
Debt Securities to our general funds, which may be used to:
- repay short-term debt;
- finance capital expenditures of non-regulated subsidiary companies;
- repurchase shares of our common stock; and
- provide working capital.
Until all of the net proceeds are used, they may be temporarily invested in
short-term interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the periods
indicated are as follow:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.38 2.63 2.83 2.92 2.85
</TABLE>
For purposes of computing the ratio, earnings are net income plus income taxes
and fixed charges, less nonutility capitalized interest. Fixed charges consist
of interest on long- and short-term debt, amortization of debt discount, premium
and expense, preferred stock dividend requirements of subsidiaries and interest
on leases. Preferred dividend requirements for purposes of computing the ratio
have been increased to an amount representing the pre-tax earnings that would be
required to cover such dividend requirements.
DESCRIPTION OF DEBT SECURITIES
The following description states the general terms and provisions of our
unsecured debt securities. In this prospectus, "Debt Securities" means the
debentures, notes, bonds and other evidences of indebtedness that we will issue
and the Trustee will authenticate and deliver under an Indenture to be entered
into between us and the trustee, First Union Trust Company, National
Association. The prospectus supplement will describe the specific terms of the
Debt Securities offered through that prospectus supplement and any general terms
outlined in this section that will not apply to those Debt Securities.
We have summarized certain terms and provisions of the Indenture in this
section. The summary is not complete. Also, we have filed the form of the
Indenture as an exhibit to this registration statement. You should read the form
of Indenture for additional information before you buy any Debt Securities. The
Indenture will be qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). You should refer to the Trust Indenture Act for
provisions that apply to the Debt Securities. In the summary, we have included
references to section numbers of the Indenture so that you can more easily
locate these provisions. This summary also is subject to and qualified by
reference to the description of the particular terms of the Debt Securities
described in the applicable prospectus supplement or supplements and pricing
supplement or supplements. Capitalized terms used but not defined in this
summary have the meanings specified in the Indenture.
GENERAL
We may issue an unlimited amount of Debt Securities or other securities
under the Indenture. The Debt Securities will be our direct, senior, unsecured
obligations and will rank equally with any other senior, unsecured debt of
Conectiv. Debt Securities issued under the Indenture will be issued as part of a
series that has been established pursuant to a supplemental indenture, a Board
Resolution or an Officer's
4
<PAGE> 17
Certificate designating the specific terms of the series of Debt Securities
(Section 2.01). These terms will be described in a prospectus supplement and
will include, among other things, the following:
- The title of the Debt Securities of the series;
- The denominations in which the Debt Securities can be issued if other
than denominations of $1,000 or any integral multiple thereof;
- Any limit upon the aggregate principal amount of the Debt Securities;
- The date or dates on which the principal and premium, if applicable, of
the Debt Securities will be payable;
- The interest rate or rates which the Debt Securities will bear, the
interest payment dates for the Debt Securities and any record dates for
the interest payable on any interest payment dates;
- The place or places where the principal of and premium, if any, and
interest, if any, on any of the Debt Securities will be payable;
- The percentage of the principal amount at which the Debt Securities will
be issued and any provisions that would permit the Debt Securities to be
payable prior to their final maturity at the election of Conectiv or of
the Holders of the Debt Securities;
- Any sinking fund provisions that would obligate us to repurchase or to
redeem part or all of the Debt Securities prior to their final maturity;
- Any deletions or modifications of or additions to the Events of Default
or covenants of Conectiv;
- The applicability of the provisions described under the Heading
"Defeasance" to the Debt Securities;
- Whether the Debt Securities will be issued in whole or in part in the
form of a "global security" (meaning a debt security issued under the
Indenture to represent all or part of an entire series of Debt
Securities); and
- Any other terms of the Debt Securities.
Some of the Debt Securities may be issued at a discount below their stated
principal amount bearing no interest or a reduced interest rate. These Debt
Securities are known as "Discount Securities." In such a case, any applicable
United States federal income tax consequences and other special factors
applicable to the Discount Securities should be considered prior to purchasing
such Discount Securities and will be described in a prospectus supplement.
PAYMENT OF DEBT SECURITIES (Sections 2.01 and 2.12)
Unless we state differently in a prospectus supplement, we may make
interest payments on any series of Debt Securities by mailing a check to the
address of the Holder listed on the Security Registrar's books or by wire
transfer to the account of any Holder as of the close of business on the regular
record date relating to such payment. However, we will pay interest payable at
maturity to the person to whom the principal is paid. If we have defaulted in
the payment of interest on any Debt Security, then we shall pay defaulted
interest in any lawful manner. We may pay such defaulted interest to the persons
who are Holders of Debt Securities as of the close of business on a date at
least 5 Business Days prior to the date on which we propose to pay such
defaulted interest.
Unless otherwise specified in the prospectus supplement, we will pay
principal, premium, if any, and interest on the Debt Securities at maturity upon
presentation of the Debt Securities at the corporate trust office of First Union
Trust Company, National Association, One Rodney Square, 920 King Street,
Wilmington, Delaware, 19801, as Paying Agent. In our discretion, we may change
the place of payment on the Debt Securities, and may remove any Paying Agent and
may appoint one or more additional Paying Agents (including ourselves or any of
our affiliates).
5
<PAGE> 18
REGISTRATION AND TRANSFER (Sections 2.05 and 2.08)
You may exchange or transfer Debt Securities at the office of the Trustee.
The Trustee acts as our agent for registering Debt Securities in the names of
Holders and transferring Debt Securities. The Company may appoint or remove
additional agents or may act as its own agent for this purpose. The Company may
at its discretion change the place for registration of transfer of the Debt
Securities.
Except as otherwise provided in a prospectus supplement, there will be no
service charge for the registration of transfer or exchange of any Debt Security
but we may require you to pay any applicable tax or other governmental charge
payable in connection with the registration of transfer or exchange of Debt
Securities. We are not required to execute or to provide for the registration of
transfer of, or the exchange of, (a) Debt Securities during a period of 15 days
prior to giving any notice of redemption of such Debt Securities called for
redemption or (b) any Debt Securities selected for redemption, except the
unredeemed portion of any Debt Securities being redeemed in part.
REDEMPTION (Sections 9.02, 9.03 and 9.04)
The terms for the redemption of Debt Securities will be stated in the
applicable prospectus supplement. Unless the prospectus supplement states
differently and except with respect to Debt Securities redeemable at the option
of the Holder, Debt Securities will be redeemable upon notice by mail to each
Holder of Debt Securities to be redeemed between 30 and 60 days prior to the
redemption date. If less than all of the Debt Securities of any series are to be
redeemed, the Trustee will select the Debt Securities to be redeemed pro rata,
by lot or by another method as the Trustee deems fair and appropriate. Debt
Securities selected by the Trustee shall be redeemed in the amounts of $1,000
or, with respect to Securities of any series issuable in other denominations, in
amounts equal to the minimum principal denomination for such series of Debt
Securities and integral multiples thereof.
Any notice of redemption at the option of Conectiv may state that such
redemption will be conditional upon receipt by the Paying Agent of monies
sufficient to redeem all the Securities called for redemption not later than the
opening of business on the redemption date. If such monies are not deposited by
such date and time, the Paying Agent shall promptly notify the holders of all
Securities called for redemption of such fact and Conectiv shall not be required
to redeem such securities.
Debt Securities will cease to bear interest on the redemption date. Upon
the surrender of your Debt Securities, Conectiv will pay the redemption price
plus any premium and accrued interest. If only part of your Debt Securities is
redeemed, the Trustee will deliver to you a new Debt Security of the same series
for the remaining portion.
CONSOLIDATION, MERGER OR SALE (Sections 4.01 and 4.02)
The Indenture generally permits us to merge, convert or consolidate with or
to sell or lease all or substantially all of our assets to another United States
based company as long as:
- the resulting entity expressly assumes all of our obligations under the
Debt Securities and the Indenture;
- immediately after the transaction, no Event of Default exists;
- Conectiv delivers to the Trustee an officer's certificate and legal
opinion stating that the transaction complies with the Indenture; and
- certain other conditions are met.
If we merge or consolidate with or sell all or substantially all of our
assets to another United States based company, and satisfy the conditions
enumerated above, then we will be relieved of all obligations under the
Indenture and the Debt Securities.
6
<PAGE> 19
EVENTS OF DEFAULT (Section 5.01)
"Event of Default," when used in the Indenture with respect to any series
of Debt Securities, means any of the following:
- failure to pay interest on Debt Securities for 30 days after the same
becomes due;
- failure to pay principal of or premium, if any, on Debt Securities when
due;
- failure to comply with any of our agreements in the Debt Securities or
the Indenture that applies to Debt Securities for 60 days after receiving
written notice of such failure;
- certain events in bankruptcy, insolvency or reorganization of Conectiv;
or
- any other Event of Default described in a prospectus supplement
applicable to that certain series of Debt Securities.
REMEDIES
Acceleration of Maturity (Section 5.02 and 5.04)
If an Event of Default (other than an Event of Default with respect to
certain events in bankruptcy, insolvency or reorganization of Conectiv) occurs
and is continuing, then either the Trustee or the Holders of not less than 33%
in aggregate principal amount of the outstanding Debt Securities may declare the
principal amount (or if any of the Debt Securities are Discount Securities, such
portion of the principal amount thereof as may specified in the terms thereof)
of all such outstanding Debt Securities, together with premium, if any, and
accrued interest, if any, to be due and payable immediately by written notice to
us (and to the Trustee if given by the Holders of Debt Securities).
If any Event of Default with respect to certain events in bankruptcy,
insolvency or reorganization of Conectiv occurs and is continuing, the principal
of, together with premium, if any, and interest, if any, on all the Debt
Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee of any Holders.
With certain exceptions, the Holders of a majority in principal amount of
the outstanding Debt Securities may waive an existing Event of Default. If all
existing Events of Default have been waived or cured, except nonpayment of any
amount that has become due solely because of acceleration, any such acceleration
and its consequences shall be automatically rescinded unless such rescission
would conflict with any judgment or decree.
The prospectus supplement for each series of Debt Securities that are
Discount Securities will describe the particular provisions that relate to the
acceleration of maturity of a portion of the principal amount of such series
when an Event of Default occurs and continues.
Right to Direct Proceedings (Section 5.05)
If an Event of Default occurs and is continuing, the Holders of a majority
in principal amount of the outstanding Debt Securities will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee; provided, however, that (a) such direction does not conflict with any
rule of law or with the Indenture, and could not involve the Trustee in personal
liability in circumstances where indemnity would not, in the Trustee's sole
discretion, be adequate, (b) the Trustee determines that such direction does not
unduly prejudice the rights of the other Holders and (c) the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction.
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<PAGE> 20
Limitation on Right to Institute Proceedings (Section 5.06)
No Holder of Debt Securities shall have the right to pursue any remedy with
respect to the Indenture or the Debt Securities unless:
- the Holder provides the Trustee with written notice of a continuing Event
of Default;
- the Holders of at least 33% in principal amount of the outstanding Debt
Securities make a written request to the Trustee to pursue the remedy and
offer the Trustee reasonable security or indemnity against any loss,
liability or expense;
- the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and
- the Holders of a majority of principal amount of the outstanding Debt
Securities do not give the Trustee a direction inconsistent with the
request during the 60-day period.
No Impairment of Right to Receive Payment (Section 5.07)
Notwithstanding any other provision in the Indenture (including remedies
which are subject to conditions precedent), each Holder of Debt Securities will
have the right, which is absolute and unconditional, to receive payment of the
principal of and premium, if any, and interest, if any, on the Debt Securities
when due and to institute suit for the enforcement of any such payment. Such
rights may not be impaired or affected without the consent of such Holder.
Notice of Default (Section 6.05)
If an Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder of Debt Securities notice of the
Event of Default, within 90 days after it occurs. The Trust Indenture Act
currently permits the Trustee to withhold notices of default (except for certain
payment defaults) if the Trustee in good faith determines that witholding the
notice is in the interests of the Holders.
MODIFICATION OF THE INDENTURE (Sections 5.04, 8.01 and 8.02)
Modification Without Consent
Conectiv and the Trustee may amend and/or supplement the Indenture or the
Debt Securities without notice to or consent of any Holder for any of the
following purposes:
- to cure any ambiguity, omission, defect or inconsistency; or
- to evidence the succession of another entity to Conectiv and the
assumption by any such successor of the covenants of Conectiv in the
Indenture and the Debt Securities; or
- to provide for the procedures required to permit Conectiv to utilize, at
its option, a non-certificated system of registration for all or any
series of the Debt Securities; or
- to provide collateral security for the Debt Securities; or
- to add to the covenants of Conectiv for the benefit of all Holders of the
Debt Securities of one or more specific series or for the benefit of the
holders of the Debt Securities or to surrender any right or power
conferred upon Conectiv by the Indenture; or
- to make any change that does not adversely affect the rights of any
holder of any Debt Securities in any material respect.
Without limiting the generality of the foregoing, if the Trust Indenture
Act is amended after the date of the Indenture so as to require changes to the
Indenture or the incorporation therein of additional provisions or so as to
permit changes to, or the elimination of, provisions which, at the date of the
Indenture or at any time thereafter, were required by the Trust Indenture Act to
be contained in the
8
<PAGE> 21
Indenture, the Indenture will be deemed to have been amended so as to conform to
such amendment or to effect such changes or elimination, and the Company and the
Trustee may, without the consent of any holders of any Debt Securities, enter
into one or more supplemental indentures to evidence or effect such amendment.
Modification With Consent
Conectiv and the Trustee may amend and/or supplement the Indenture or the
Debt Securities without notice to any Holder but with the written consent of the
Holders of more than 50% of the aggregate principal amount of outstanding Debt
Securities of each series affected by the change. Without the consent of each
Holder affected, any amendment may not:
- reduce the amount of outstanding Debt Securities whose Holders must
consent to an amendment;
- reduce the rate of or extend the time for payment of interest on any Debt
Security;
- reduce the principal of or extend the fixed maturity of any Debt
Security;
- reduce the premium payable upon the redemption of any Debt Security or
change the time at which any Debt Security may or shall be redeemed;
- make any Debt Security payable in money other than that stated in the
Debt Security; or
- reduce the number of holders of Debt Securities that are required for any
waiver of default under the Indenture.
We may enter into supplemental indentures for other specified purposes,
including the creation of a new series of Debt Securities, without the consent
of any Holder of Debt Securities.
DEFEASANCE (Section 7.01)
We will be discharged from our obligations on the Debt Securities of any
series, or any portion of the principal amount thereof, at any time that we
irrevocably deposit in trust with the Trustee or any Paying Agent (other than
Conectiv) cash or non-redeemable U.S. Government Obligations, or a combination
of the two, sufficient to pay the principal of, and premium if any, and
interest, if any or other sums due to the maturity date or a redemption date of,
the Debt Securities of the series. If this happens, the Holders of Debt
Securities of the series will not be entitled to the benefits of the Indenture
except for registration of transfer and exchange of Debt Securities and
replacement of lost, stolen or mutilated Debt Securities.
"U.S. Government Obligations" include direct obligations of, or obligations
unconditionally guaranteed by, the United States entitled to the benefit of the
full faith and credit thereof and certificates, depositary receipts or other
instruments which evidence a direct ownership interest in such obligations or in
any specific interest or principal payments due in respect thereof.
DISCHARGE OF INDENTURE (Section 7.02)
The Indenture will cease to be of any effect when:
- all previously issued Debt Securities have been delivered to the Trustee
for cancellation and have been deemed paid; and
- all sums payable by us under the Indenture have been paid.
RESIGNATION AND REMOVAL OF THE TRUSTEE (Section 6.08)
The Trustee may resign at any time by giving written notice thereof to us.
The Holders of a majority in principal amount of the then outstanding Debt
Securities may remove the Trustee or, as long as no Event of Default has
occurred or is continuing, Conectiv may remove the Trustee.
9
<PAGE> 22
No resignation or removal of the Trustee and no appointment of a successor
trustee will become effective until the acceptance of appointment by a successor
trustee in accordance with the requirements of the Indenture.
PLAN OF DISTRIBUTION
We may sell the Debt Securities offered under this prospectus through
underwriters, agents or dealers or directly to purchasers.
UNDERWRITERS
Any agents or underwriters will be identified and their compensation
(including underwriting discount) will be described in the applicable prospectus
supplement. The prospectus supplement will also describe other terms of the
offering, including any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which the offered securities may be
listed.
The distribution of Debt Securities under this prospectus may occur from
time to time in one or more transactions at a fixed price or prices, which may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices.
AGENTS AND DIRECT SALES
If the applicable prospectus supplement indicates, we will authorize
dealers or our agents to solicit offers by certain institutions to purchase
offered Debt Securities from us pursuant to contracts that provide for payment
and delivery on a future date. We must approve all institutions, but they may
include, among others:
- commercial and savings banks;
- insurance companies;
- pension funds;
- investment companies; and
- education and charitable institutions.
The institutional purchaser's obligations under the contract are subject
only to the condition that the purchase of the offered Debt Securities at the
time delivery is allowed by any laws that govern the purchaser. The dealers and
our agents will not be responsible for the validity or performance of the
contracts.
GENERAL INFORMATION
Underwriters, dealers and agents participating in a sale of Debt Securities
may be deemed to be underwriters as defined in the Securities Act, and any
discounts and commissions received by them and any profit realized by them on
resale of the Debt Securities may be deemed to be underwriting discounts and
commissions under the Securities Act. We may have agreements with the agents,
underwriters and dealers to indemnify them against certain civil liabilities,
including liabilities under the Securities Act, or to contribute with respect to
payments which the agents, underwriters or dealers may be required to make as a
result of those certain civil liabilities.
Unless we indicate differently in a prospectus supplement, we will not list
the Debt Securities on any securities exchange. If we sell a security offered
under this prospectus to an underwriter for public offering and sale, the
underwriter may make a market for that security but is not obligated to do so.
Therefore, we cannot give any assurances to you concerning the liquidity of any
security offered under this prospectus.
Agents and underwriters and their affiliates may be customers of, engage in
transactions with, or perform services for us or our subsidiary companies in the
ordinary course of business.
10
<PAGE> 23
LEGAL MATTERS
The validity of the Debt Securities will be passed upon for Conectiv by
Peter F. Clark, General Counsel for Conectiv, and for the underwriters or agents
by Thelen Reid & Priest LLP, New York, New York. Thelen Reid & Priest LLP
represents Conectiv in connection with certain federal income tax matters.
EXPERTS
The consolidated balance sheets of Conectiv and subsidiary companies as of
December 31, 1998 and 1997, and the related consolidated statements of income,
changes in common stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1998, incorporated by reference in this
Registration Statement, have been incorporated herein in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of that firm as experts in accounting and auditing.
The consolidated financial statements of Atlantic Energy, Inc. incorporated
herein by reference from their respective Current Report on Form 8-K dated March
3, 1998 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
Peter F. Clark, General Counsel for Conectiv, has reviewed the statements
made under "Description of Debt Securities" and in the Incorporated Documents as
to matters of law and legal conclusions. Such statements have been made in
reliance upon his authority as an expert.
11
<PAGE> 24
LOGO
CONECTIV LOGO
$250,000,000
Medium-Term Notes, Series A
Due Nine Months to 15 Years
from Date of Issue
-------------------------
PROSPECTUS SUPPLEMENT
, 1999
-------------------------
LEHMAN BROTHERS
BANC ONE CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON
FIRST UNION CAPITAL MARKETS CORP.
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth those expenses to be incurred by Conectiv in
connection with the issuance and distribution of the Debt Securities being
registered, other than underwriting discounts and commissions. All of the
amounts shown are estimates, except the applicable Securities and Exchange
Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fees.............. $ 69,500
Printing Expenses........................................... $ 30,000
Trustee's Fees and Expenses................................. $ 5,000
Legal Fees and Expenses..................................... $ 75,000
Independent Public Accountants' Fees and Expenses........... $ 40,000
Rating Agency Fees.......................................... $ 40,000
Blue Sky Filing Fees and Expenses........................... $ 7,500
Miscellaneous Expenses...................................... $ 5,000
--------
Total Expenses......................................... $272,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Conectiv is a Delaware corporation. Under Section 145 of the General
Corporation Law of the State of Delaware, Conectiv has the power to indemnify
its directors and officers, subject to certain limitations.
The Restated Certificate and Articles of Incorporation of Conectiv provide
that Conectiv shall indemnify, to the full extent that it shall have power to do
so under applicable law, each director and officer against all costs and
liabilities reasonably incurred by or imposed on such persons in connection with
any litigation in which such director or officer may be involved by reason of
being or having been a director or officer of Conectiv. This provision is not
exclusive of other rights to which any director or officer may otherwise be
entitled.
The Restated Certificate and Articles of Incorporation of Conectiv also
provide that a director of the Corporation shall not be personally liable to
Conectiv or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (a) for any breach of the director's duty of
loyalty to Conectiv or its stockholders, (b) for acts or missions not in good
faith or which involve intentional misconduct or a knowing violation of law, (c)
under Section 174 of the Delaware General Corporation Law, or (d) for any
transaction from which the director derived an improper personal benefit. The
Restated Certificate and Articles of Incorporation of Conectiv also provide
that, to the extent the Delaware General Corporation Law is amended to authorize
further eliminating or limiting the personal liability of directors, the
liability of the directors of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law.
Subject to certain exceptions, the directors and all corporate officers of
Conectiv are insured for not less than $75,000,000 for any claim or claims that
may be made against them, including those claims arising under the Securities
Act, and caused by any negligent act, any error, any omission or any breach of
duty while acting in their capacities as such directors or officers, and
Conectiv is insured to the extent that it shall have indemnified the directors
and officers for such loss. The premiums for such director and officer insurance
are paid by Conectiv.
The foregoing summaries are necessarily subject to the complete text of the
statute, certificate of incorporation and insurance policy referred to above and
are qualified in their entirety by reference thereto.
ITEM 16. EXHIBITS
Reference is made to the Exhibit Index filed herein at Page II-5, such
Exhibit Index is being incorporated in this Item 16 by reference.
II-1
<PAGE> 26
ITEM 17. UNDERTAKINGS
(a) 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;
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.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement; and
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 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 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such 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.
4. That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act 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.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against
Conectiv by such director, officer or controlling person in connection with the
securities being registered, the registrant 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 Securities Act and will be governed by
the final adjudication of such issue.
II-2
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Conectiv certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington and State of Delaware on the 11th day of
May, 1999.
CONECTIV
By /s/ J. C. VAN RODEN, JR.
------------------------------------
Name: J. C. van Roden, Jr.
Title: Senior Vice President and
Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on the 11th day of May, 1999 by the
following persons in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ H. E. COSGROVE Chairman of the Board, Chief Executive
- ----------------------------------------------------- Officer, President and Director (Principal
(H. E. Cosgrove) Executive Officer)
/s/ J. C. VAN RODEN, JR. Senior Vice President and Chief Financial
- ----------------------------------------------------- Officer (Principal Financial Officer)
(J. C. van Roden, Jr.)
/s/ J. P. LAVIN Controller (Principal Accounting Officer)
- -----------------------------------------------------
(J. P. Lavin)
</TABLE>
R. D. Burris
A. K. Doberstein
M. B. Emery
S. I. Gore
C. Holley
J. L. Jacobs
R. B. McGlynn
B. J. Morgan
Directors*
* Louis M. Walters, by signing his name hereto on the 11th day of May, 1999,
does hereby sign this document pursuant to powers duly executed by the Directors
named, filed with the Securities and Exchange Commission on behalf of such
Directors, all in the capacities and on the date stated, such persons all being
Directors of the Registrant.
/s/ LOUIS M. WALTERS
--------------------------------------
Louis M. Walters, Attorney-in-Fact
II-3
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C> <C>
1 -- Form of Distribution Agreement (for the offering of
Medium-Term Notes)
4(a) -- Form of Indenture between the Company and First Union Trust
Company, National Association, Trustee
4(b) -- Form of Officer's Certificate (to be used in connection with
the issuance of
Medium-Term Notes)
5 -- Opinion of Peter F. Clark, Esq.
12 -- Statement of Ratio of Earnings to Fixed Charges
(Incorporated by reference to the
Company's filing on Form 10-K for the period ended December
31, 1998)
23 -- Consent of Peter F. Clark, Esq. (Included in Exhibit 5)
23(b) -- Consent of PricewaterhouseCoopers LLP, independent
accountants
23(c) -- Consent of Deloitte & Touche LLP, independent auditors
24* -- Powers of Attorney
25* -- Statement of Eligibility of Trustee
</TABLE>
- ---------------
* Previously filed
II-4
<PAGE> 1
EXHIBIT 1
CONECTIV
$_______
Medium-Term Notes, Series __
DISTRIBUTION AGREEMENT
[insert date]
[insert names and addresses of agents]
Ladies and Gentlemen:
Conectiv, a Delaware corporation (the "Company"), proposes to issue and
sell from time to time its Medium Term Notes, Series __ (the "Securities"), in
an aggregate amount up to [insert aggregate principal amount] and agrees with
each of you (individually, an "Agent", and collectively, the "Agents") as set
forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell Securities directly on its own
behalf, the Company hereby (i) appoints each Agent as an agent of the Company
for the purpose of soliciting and receiving offers to purchase Securities from
the Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent, as principal, it will enter into a separate agreement
(each a "Terms Agreement", a form of which is set forth in Annex I hereto) in
accordance with Section 2(b) hereof.
The Securities will be issued under an Indenture, dated as of [insert
date], as it may be supplemented and amended (the "Indenture"), between the
Company and First Union Trust Company, National Association, as Trustee (the
"Trustee"). The Securities shall have the maturity ranges, interest rates,
redemption provisions and other terms set forth in the Prospectus referred to
below as it may be amended or supplemented from time to time. The Securities
will be issued, and the terms and rights thereof established, from time to time
by the Company in accordance with the Indenture and the Administrative Procedure
set forth in Annex II hereto.
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each Agent that:
(a) A registration statement (No. ), together with amendments
thereto, if any, with respect to the Securities has been
prepared by the Company and filed with the Securities and
Exchange Commission (the "Commission") in conformity with the
rules, regulations and releases of the Commission (the "Rules
and Regulations") under the Securities Act of 1933, as amended
(the "Act"). Such registration statement has been declared
effective by the Commission and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). Copies of such registration
statement,
<PAGE> 2
-2-
together with all amendments thereto, if any, have heretofore
been delivered to each Agent, and copies of any amendments
thereto, including the exhibits filed therewith, which shall
be filed subsequent to the date hereof also will be delivered
to each Agent. Such registration statement, including all
exhibits thereto but excluding the Statement of Eligibility of
Trustee, as amended at the time it became effective, is
hereinafter called the "Registration Statement" (the
prospectus included in the Registration Statement, as such
prospectus may have been amended to the date hereof, being
hereinafter called the "Basic Prospectus"); the Basic
Prospectus, as amended by a prospectus supplement relating to
the Securities and the plan of distribution thereof, in the
form in which such prospectus supplement most recently has
been filed with the Commission pursuant to Rule 424(b) under
the Act on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to
the Registration Statement, the Basic Prospectus or the
Prospectus shall be deemed to refer to and include the
documents filed by the Company under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference therein (the "Incorporated Documents") as of the
date of such Registration Statement, Basic Prospectus or
Prospectus, as the case may be; any reference to any amendment
or supplement to the Basic Prospectus or the Prospectus,
including any supplement to the Prospectus that sets forth
only the terms of a particular issue of the Securities (a
"Pricing Supplement"), shall be deemed to refer to and include
the Incorporated Documents as of the date of such amendment or
supplement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the
Prospectus as then amended or supplemented (including the
applicable Pricing Supplement) in relation to a particular
issue of Securities, in the form filed with the Commission
pursuant to Rule 424(b) under the Act, including any
Incorporated Documents as of the date of such filing.
(b) No stop order suspending the effectiveness of the Registration
Statement nor any order preventing or suspending use of the
Prospectus nor any order directed to the adequacy or accuracy
of any Incorporated Document has been issued by the
Commission, and no proceeding for any such purpose has been
initiated or is pending or, to the knowledge of the Company,
is contemplated by the Commission.
(c) (i) The Registration Statement as amended, as of each applicable
Effective Date (as hereinafter defined), complied and will
comply in all material respects with the applicable provisions
of the Act, the Rules and Regulations and the Trust Indenture
Act and did not 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.
(ii) The Prospectus as amended or supplemented, as of each
applicable Representation Date (as hereinafter defined),
complied and will comply in all material respects with the
applicable provisions of the Act, the Rules and Regulations
and the Trust Indenture Act and did not and will not include
an untrue statement of a material fact
<PAGE> 3
-3-
or omit to state a material fact necessary to make
the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(iii) The documents which constitute Incorporated Documents
as of the date hereof, when they became effective or
were filed with the Commission, complied in all
material respects with the applicable provisions of
the Act, the Rules and Regulations, the Exchange Act,
and/or the rules and regulations of the Commission
under the Exchange Act, and did not contain an untrue
statement of a material fact or (considered together)
omit to state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; and any
documents which become Incorporated Documents after
the date hereof, when they become effective or are
filed with the Commission, as the case may be, will
comply in all material respects with the applicable
provisions of the Act, the Rules and Regulations, the
Exchange Act, and/or the rules and regulations of the
Commission under the Exchange Act and will not
contain an untrue statement of a material fact or
omit to state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
(iv) There are no contracts or documents of the Company or
of any subsidiary which are required to be filed as
exhibits to the Registration Statement by the Act or
by the Rules and Regulations which have not been
filed as required.
(v) The representations and warranties in this subsection
(c) shall not apply to any statements or omissions
made in reliance upon and in conformity with
information furnished in writing to the Company by
any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular
issuance of Securities or to any statement in or
omissions from the Statement of Eligibility of the
Trustee under the Indenture.
(vi) As used herein, (A) "Effective Date" means the later
of the date and time that the Registration Statement
or any post-effective amendment thereto became or
becomes effective or the date and time thereafter of
the filing of the Company's most recent Annual Report
on Form 10-K, and (B) "Representation Date" means
each of (I) the Commencement Date (as defined in
Section 3), (II) each Solicitation Time (as defined
in Section 6), (III) the time of each acceptance of
an offer to purchase Securities hereunder, (IV) the
time of the related issuance, sale and delivery of
such Securities pursuant to each such accepted offer,
(V) the time of the execution and delivery of each
Terms Agreement and (VI) the related Time of Delivery
(as defined in Section 2) under each such Terms
Agreement.
(d) The Company has filed timely all reports and all definitive
proxy and information statements required to be filed by the
Company with the Commission pursuant to the Exchange Act and
the rules and regulations of the Commission thereunder.
<PAGE> 4
-4-
(e) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of Delaware,
with all corporate power and other authority, including
franchises, necessary to own or lease its properties and
conduct its business as described in the Registration
Statement and the Prospectus and to issue and sell the
Securities. The Company is not qualified to do business as a
foreign corporation or in any other jurisdiction and the
conduct of its business or its ownership or leasing of
properties requires no such qualification.
(f) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the
Indenture, this Agreement, the Administrative Procedure (as
defined in Section 2 hereof) and any Terms Agreement, and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, the Indenture or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
to which the Company is a party or by which it is bound or to
which any of its property or assets is subject, or the
Company's Articles of Incorporation or the By-Laws, 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 property.
(g) The Company has full power and lawful authority to authorize,
issue and sell the Securities on the terms and conditions
herein set forth; has taken all corporate action necessary
therefor; and has obtained every consent, approval,
authorization and other order of any regulatory body which is
required for such authorization, issue or sale, except as may
be required under state securities laws; and such consents,
approvals, authorizations and other orders are in full force
and effect and are not subject to appeal.
(h) Since the respective dates as of which information contained
in the Prospectus as amended or supplemented is given, and
except as set forth therein or contemplated thereby, there has
not been any material adverse change in, or any adverse
development which materially affects, the business,
properties, financial condition, results of operations or
business prospects of the Company and its consolidated
subsidiaries taken as a whole.
(i) The Company has an authorized capitalization as set forth in
the financial statements incorporated by reference in the
Prospectus, and all of the outstanding shares of capital stock
of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable.
(j) The financial statements included in the Registration
Statement present fairly the financial position of the Company
and its consolidated subsidiaries, as the case may be, as at
the dates indicated and the results of their operations for
the periods specified; and, except as otherwise stated in the
Registration Statement, such financial statements have been
prepared in conformity with generally accepted accounting
<PAGE> 5
-5-
principles applied on a consistent basis during the periods
involved and the supporting financial schedules included in
the Registration Statement present fairly the information
required to be stated therein. PricewaterhouseCoopers LLP and
Deloitte & Touche LLP, the accountants who certified certain
of such financial statements and financial schedules, are
independent certified public accountants as required by the
Act.
(k) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement,
will have been duly executed, authenticated, issued and
delivered and will constitute valid and legally binding
obligations of the Company entitled to the benefits provided
by the Indenture; the Indenture has been duly authorized and
constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity; and the
Indenture conforms and the Securities of any particular
tranche will conform to the descriptions thereof in the
Prospectus as amended or supplemented to relate to such
tranche of Securities.
(l) Each of the Company's direct and indirect subsidiaries has
been duly incorporated, is validly existing and is in good
standing under the laws of its jurisdiction of incorporation,
and is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its
ownership of properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, and has the
corporate power and authority necessary to own or hold its
respective properties and to conduct the businesses in which
it is engaged.
(m) The Company directly or indirectly has good and marketable
title to all of the common stock of its direct and indirect
subsidiaries which the Registration Statement and Prospectus
disclose as being owned by it, free and clear of all liens and
encumbrances, except such as do not materially affect the
value thereof, and the common stock of each of such
subsidiaries has been duly and validly issued and is fully
paid and nonassessable.
(n) Other than as set forth in or contemplated by the Prospectus
as amended or supplemented, there are no legal or governmental
proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the
Company or any of its subsidiaries is a party or to which any
property of the Company or any of its subsidiaries is subject,
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the consolidated financial
position, stockholders' equity or results of operations 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.
<PAGE> 6
-6-
(o) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(p) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount
of Securities which shall have been issued and sold by the
Company hereunder or under any Terms Agreement will not exceed
the amount of Securities registered under the Act.
(q) This Agreement has been, and any Terms Agreement will have
been, duly authorized and entered into by the Company.
2. Obligations of the Agents and the Company.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of
the Company, to use reasonable efforts to solicit and receive
offers to purchase the Securities from the Company upon the
terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as this Agreement
shall remain in effect with respect to any Agent, the Company
shall not, without the consent of such Agent, solicit or
accept offers to purchase, or sell, any debt securities with a
maturity at the time of original issuance of 9 months to 40
years except pursuant to this Agreement, any Terms Agreement
or a private placement not constituting a public offering
under the Act, or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does
not provide for a continuous offering of medium-term debt
securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale
not resulting from a solicitation made by any Agent, no
commission will be payable with respect to such sale. These
provisions shall not limit Section 4(f) hereof or any similar
provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and the
payment therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by
written agreement between the Agents and the Company (the
"Administrative Procedure"). The provisions of the Administrative
Procedure shall apply to all transactions contemplated hereunder other
than those made pursuant to a written Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations
specifically provided to be performed by each of them in the
Administrative Procedure. The Company will furnish to the Trustee a
copy of the Administrative Procedure as from time to time in effect.
<PAGE> 7
-7-
The Company reserves the right, in its sole discretion, to
reject any offer to purchase Securities, in whole or in part. Each
Agent may, in its discretion reasonably exercised, reject any offer
received by it to purchase Securities, in whole or in part.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the Securities. As
soon as practicable, but in any event not later than one business day,
after receipt of notice from the Company, the Agents will suspend
solicitation of offers to purchase Securities from the Company until
such time as the Company has advised the Agents that such solicitation
may be resumed.
The Company agrees to pay each Agent a commission, at the time
of settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following
applicable percentage of the principal amount of such Security sold
(except that the Company and such Agent may agree in writing to a
higher commission for maturities in excess of 30 years):
<TABLE>
<CAPTION>
COMMISSION
(PERCENTAGE OF
AGGREGATE
PRINCIPAL AMOUNT)
RANGE OF MATURITIES OF SECURITIES SOLD
------------------
<S> <C>
From 9 months to less than 1 year........................................................
From 1 year to less than 18 months.......................................................
From 18 months to less than 2 years......................................................
From 2 years to less than 3 years........................................................
From 3 years to less than 4 years........................................................
From 4 years to less than 5 years........................................................
From 5 years to less than 6 years........................................................
From 6 years to less than 7 years........................................................
From 7 years to less than 10 years.......................................................
From 10 years to less than 15 years......................................................
From 15 years to less than 20 years......................................................
20 years and more........................................................................
</TABLE>
(b) Each sale of Securities to any Agent as principal shall be
made in accordance with the terms of this Agreement and a
Terms Agreement which will provide for the sale of such
Securities to, and the purchase thereof by, such Agent. A
Terms Agreement may be either (i) a written agreement between
one or more of the Agents and the Company, which may be
substantially in the form of Annex I hereto, or (ii) an oral
agreement between any Agent and the Company confirmed in
writing by such Agent. Each Terms Agreement shall contain the
information specified in the Administrative Procedure under
the caption, "Communication of Sale Information to Company by
Agent", and may specify certain terms of the reoffering of the
Securities. The commitment of any Agent to
<PAGE> 8
-8-
purchase Securities as principal pursuant to any Terms
Agreement shall be deemed to have been made on the basis of
the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions
herein set forth.
Each Terms Agreement shall specify the time and date and place
of delivery of and payment for such Securities. Unless otherwise
specified in a Terms Agreement, the procedural details relating to the
issue and delivery of such Securities and payment therefor shall be as
set forth in the Administrative Procedure.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, is referred to herein as a
"Time of Delivery".
Unless otherwise specified in a Terms Agreement, an Agent
purchasing Securities as principal may resell such Securities to
dealers. Any such sales may be at a discount, which shall not exceed
the amount set forth in the Pricing Supplement relating to such
Securities.
3. Commencement. The documents required to be delivered pursuant to
Section 6 hereof on the Commencement Date (as defined below) shall be
delivered to the Agents at the offices of Thelen Reid & Priest LLP at
or before 12:00 noon, New York City time, on the date of this
Agreement, which date and time of such delivery may be postponed by
agreement between the Agents and the Company but in no event shall be
later than the day prior to the date on which solicitation of offers to
purchase Securities is commenced or on which any Terms Agreement is
executed (such time and date being referred to herein as the
"Commencement Date").
4. Covenants of the Company. The Company covenants and agrees with each
Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement
Date, to which any Agent shall reasonably object after
reasonable notice thereof or (B) after the date of any Terms
Agreement by an Agent to purchase Securities as principal and
prior to the related Time of Delivery, to which any Agent
party to such Terms Agreement or so purchasing as principal
shall reasonably object after reasonable notice thereof; (ii)
to prepare, with respect to each particular issue of
Securities to be sold through or to such Agent pursuant to
this Agreement, a Pricing Supplement with respect to such
Securities in a form previously approved by such Agent and to
file such Pricing Supplement pursuant to Rule 424(b) under the
Act; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing
Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and comment on it; (iv) to
file timely all reports and any definitive proxy or
information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale
of the Securities, and during such same period to advise such
Agent, promptly after the Company receives notice thereof, of
the time when any amendment to the Registration Statement has
been filed or has become effective or any supplement to the
Prospectus or
<PAGE> 9
-9-
any amended Prospectus (other than any Pricing Supplement that
relates to Securities not purchased through or by such Agent)
has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amendment
or supplement of the Registration Statement or Prospectus or
for additional information; and (v) in the event of the
issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or
suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly, from time to time, to take such action as such Agent
reasonably may request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as
such Agent may request and to comply with such laws so as to
permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution or sale
of the Securities; provided, however, that in connection
therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction or to submit to any requirements
which it reasonably deems unduly burdensome;
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, and with copies of the
Prospectus as amended or supplemented, other than any Pricing
Supplement (except as provided in the Administrative
Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act, both in such
quantities as such Agent may reasonably request from time to
time; and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities
(including Securities purchased from the Company by such Agent
as principal) and if at such time any event shall have
occurred as a result of which the Prospectus as then amended
or supplemented would include an 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 under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify such Agent and request such Agent, in
its capacity as agent of the Company, to suspend solicitation
of offers to purchase Securities from the Company (and, if so
notified, such Agent shall cease such solicitations as soon as
practicable, but in any event not later than one business day
later); and if the Company shall decide to amend or supplement
the Registration Statement or the Prospectus as then amended
or supplemented, to so advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be
filed promptly with the Commission an amendment or supplement
to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or
omission or effect such compliance; provided, however, that if
during such same period such Agent continues to own Securities
purchased from the
<PAGE> 10
-10-
Company by such Agent as principal or such Agent is otherwise
required to deliver a prospectus in respect of transactions in
the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months
after (i) the effective date of the Registration Statement,
(ii) the effective date of each post-effective amendment to
the Registration Statement, and (iii) the date of each filing
by the Company with the Commission of an Annual Report on Form
10-K that is incorporated by reference in the Registration
Statement, an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the
Company, Rule 158);
(e) For a period of five years from the date any Securities are
sold by the Company pursuant to an offer solicited by such
Agent under this Agreement, to deliver to such Agent (i) as
soon as available, a copy of each report of the Company mailed
to security holders or filed with the Commission and (ii) from
time to time such other information concerning the Company as
such Agent shall reasonably request. If at any time, the
Company shall have a majority-owned subsidiary or subsidiaries
which is or are "significant" within the meaning of Regulation
S-X of the Commission, the financial statements contained in
the documents referred to in (i) shall be furnished in
consolidated form, if such consolidation is required under
such Regulation S-X, for the Company and such subsidiary or
subsidiaries;
(f) That, between the date of any Terms Agreement with an Agent
and the related Time of Delivery, the Company will not,
without the prior written consent of such Agent, offer, sell,
contract to sell or otherwise dispose of any debt securities
of the Company substantially similar to the Securities (other
than (i) Securities that are to be sold pursuant to such Terms
Agreement, (ii) Securities previously agreed to be sold by the
Company and (iii) commercial paper issued in the ordinary
course of business), except as may otherwise be provided in
such Terms Agreement;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder, each execution and delivery by the
Company of a Terms Agreement and each issuance, sale and
delivery by the Company of Securities hereunder or pursuant to
a Terms Agreement shall be deemed to be an affirmation to such
Agent that the representations and warranties of the Company
contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or the date of the
issuance, sale and delivery of Securities pursuant to such
accepted offer, or the date of such Terms Agreement or the
Time of Delivery thereunder, as the case may be, as though
made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented
relating to such Securities);
<PAGE> 11
-11-
(h) The Company shall timely furnish or use all reasonable efforts
to cause to be furnished all the opinions of counsel, letters
of accountants and officers' certificates specified in Section
6 and shall prepare and furnish such papers and information as
shall be reasonably requested in connection herewith.
5. Payment of Expenses. The Company covenants and agrees with each Agent
that the Company will pay or cause to be paid the following: (i) the
fees and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and
all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Basic Prospectus, the
Prospectus and any Pricing Supplement and all other amendments and
supplements thereto and the mailing and delivering of copies thereof to
such Agent; (ii) the fees and expenses of counsel for the Agents in
connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and the
continuing advice and services of such counsel in connection with the
transactions contemplated hereunder; (iii) the cost of printing,
preparing by word processor or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and legal investment surveys and
any other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iv) all expenses in connection with the
qualification of the Securities for offering and sale under state
securities laws as provided in Section 4(b) hereof, including fees and
disbursements of counsel for the Agents in connection with such
qualification and in connection with the Blue Sky and legal investment
surveys; (v) any fees charged by securities rating services for rating
the Securities; (vi) any filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vii) the cost of preparing the Securities;
(viii) the fees and expenses of any Trustee and any agent of any
Trustee and any transfer or paying agent of the Company and the fees
and disbursements of counsel for any Trustee or such agent in
connection with any Indenture and the Securities; (ix) the
out-of-pocket expenses of the Agents incurred in connection with the
implementation of the program for the offer and sale of the Securities;
and (x) all other costs and expenses incident to the performance of the
Company's obligations hereunder which are not otherwise specifically
provided for in this Section. Except as provided in Sections 7 and 8
hereof, each Agent shall pay all other expenses it incurs.
6. Conditions. The obligation of any Agent, as agent of the Company, at
any time ("Solicitation Time") to solicit offers to purchase the
Securities, the obligation of any offeree to purchase Securities
pursuant to an accepted offer or the obligation of any Agent to
purchase Securities as principal pursuant to any Terms Agreement, shall
in each case be subject, in such offeree's or Agent's discretion, to
the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of
an Agent under a Terms Agreement, contained in or incorporated in such
Terms Agreement by reference) are true and correct at and as of the
Commencement Date and any other applicable Representation Date that is
on or prior to such Solicitation Time, the date of such purchase or the
Time of Delivery under such Terms Agreement, as the case may be, and at
and as of such Solicitation Time, the date of such purchase or such
Time of Delivery, as the case may be, the condition that at or prior to
such time the Company shall have performed all of its obligations
<PAGE> 12
-12-
hereunder (or under any applicable Terms Agreement) theretofore to be
performed, and the following additional conditions:
(a) (i) The Prospectus as then amended or supplemented (including
the Pricing Supplement) with respect to such Securities shall
have been filed with the Commission pursuant to Rule 424(b)
under the Act (if and to the extent such filing is required)
within the applicable time period prescribed for such filing
by the Rules and Regulations and in accordance with Section
4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and shall
remain in effect and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and (iii) all
requests for additional information on the part of the
Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(b) Counsel to the Agents shall have furnished to such Agent (i)
such opinion or opinions, dated the Commencement Date, with
respect to such matters as shall have been reasonably
requested by the Agents and (ii) if and to the extent
requested by such Agent, on each date (on or prior to such
Solicitation Time, the date of such purchase pursuant to an
accepted offer or the Time of Delivery under such Terms
Agreement, as the case may be) on which (A) the Registration
Statement or the Prospectus is amended or supplemented (other
than by a Pricing Supplement) or (B) a document is filed under
the Act or the Exchange Act and is incorporated by reference
into the Prospectus or (C) the Company sells Securities under
a Terms Agreement which specifies a condition under this
subsection, a letter, dated such applicable date, to the
effect that such Agent may rely on the opinion or opinions
which were last furnished to such Agent pursuant to this
Section 6(b) to the same extent as though it or they were
dated the date of such letter authorizing reliance (except
that the statements in such letter shall be deemed to relate
to the Registration Statement and the Prospectus as amended
and supplemented to such date) or, in any case, in lieu of
such a letter, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and in each case such
counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such
matters;
(c) General Counsel for the Company, or other counsel for the
Company satisfactory to such Agent, shall have furnished to
such Agent his written opinions, dated the Commencement Date
and each applicable date referred to in subsection (b) above
(other than a date on which a Current Report on Form 8-K ,
which is filed solely for the purpose of filing exhibits
pursuant to Item 601 of Regulation S-K, is filed under the
Exchange Act and is incorporated by reference into the
Prospectus, unless requested by such Agent), in form and
substance satisfactory to such Agent and the Company to the
effect set forth in Annex III hereto;
(d) The independent certified public accountants who have
certified the financial statements of the Company and its
subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to such Agent a
letter, dated the
<PAGE> 13
-13-
Commencement Date and each applicable date referred to in
subsection (b) above (other than a date on which a Current
Report on Form 8-K , which is filed solely for the purpose of
filing exhibits pursuant to Item 601 of Regulation S-K, is
filed under the Exchange Act and is incorporated by reference
into the Prospectus, unless requested by such Agent), in form
and substance satisfactory to such Agent to the effect set
forth in Annex IV hereto;
(e) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company dated the
Commencement Date and each applicable date referred to in
subsection (b) above (read to refer to this subsection) (other
than a date on which a Current Report on Form 8-K , which is
filed solely for the purpose of filing exhibits pursuant to
Item 601 of Regulation S-K, is filed under the Exchange Act
and is incorporated by reference into the Prospectus, unless
requested by such Agent) in such form and executed by such
officers of the Company as shall be satisfactory to such
Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement
Date or such applicable date, as the case may be, as to the
performance by the Company of all of its obligations hereunder
to be performed at or prior to the Commencement Date or such
applicable date, as the case may be, as to the matters set
forth in subsections (a), (f) and (g) of this Section 6, and
as to such other matters as such Agent may reasonably request.
(f) Since the respective dates as of which information in the
Prospectus as amended or supplemented to such Solicitation
Time, the date of such acceptance or the date of such Terms
Agreement, as the case may be, is given, and except as set
forth therein or contemplated thereby, there shall not have
been any change in, or any development which affects, the
business, properties, financial condition, results of
operations or business prospects of the Company and its
consolidated subsidiaries, taken as a whole, which, in the
reasonable judgment of such Agent, is material and adverse and
which, in the reasonable judgment of such Agent, makes it
impracticable or inadvisable to proceed with the solicitation
of offers to purchase the Securities or to proceed with the
purchase of Securities pursuant to such accepted offer or such
Terms Agreement.
(g) Unless known to such Agent prior to such Solicitation Time,
the date of such acceptance or the date of such Terms
Agreement, as the case may be, there shall not have occurred:
(i) suspension or material limitation of trading
generally on or by, as the case may be, the New York
Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the
Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade,
(B) suspension of trading of any securities of the
Company on any exchange or in any over-the-counter
market, (C) declaration of a general moratorium on
commercial banking activities in New York by either
Federal or New York State authorities or (D) any
outbreak or escalation of hostilities or any change
in financial markets or any calamity or crisis that,
in such Agent's reasonable judgment, is material and
adverse and, in the case of
<PAGE> 14
-14-
any of the events described in clauses (A) through
(D), such event, singly or together with any other
such event, makes it, in such Agent's reasonable
judgment, impracticable to market the Securities on
the terms and in the manner contemplated by the
Prospectus, as amended or supplemented at such
Solicitation Time, the date of such acceptance or
Time of Delivery, as the case may be; or
(ii) downgrading in the rating accorded any of the
Company's securities by any "nationally recognized
statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the
Securities Act.
7. Indemnification.
(a) The Company will indemnify and hold harmless each Agent, and
each person, if any, who controls such Agent within the
meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Agent may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement, any preliminary prospectus, the Basic
Prospectus, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
will reimburse such Agent for any legal or other expenses
reasonably incurred by it in connection with investigating or
defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus, the
Registration Statement, the Basic Prospectus, the Prospectus,
the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly
for use therein, and provided, further, that the indemnity
agreement contained in this paragraph shall not inure to the
benefit of any Agent on account of any such losses, claims,
damages or liabilities (or actions in respect thereof) arising
from the sale of the Securities by or through such Agent to
any person if a copy of the Prospectus as it then may be
amended or supplemented (exclusive of the Incorporated
Documents) shall not have been given or sent to such person by
such Agent with or prior to the written confirmation of the
sale involved to the extent that (i) the Prospectus as so
amended or supplemented would have cured the defect in such
document giving rise to such losses, claims, damages or
liabilities, (ii) sufficient quantities of the Prospectus as
so amended or supplemented were timely made available to such
Agent and (iii) such Agent shall not have reasonably objected
to such amendment or supplement pursuant to Section 4(a)
hereof.
<PAGE> 15
-15-
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, the Registration
Statement, the Basic Prospectus, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any preliminary
prospectus, the Prospectus, the Registration Statement, the
Basic Prospectus, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to
the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such
expenses are incurred.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either
paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing;
but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any
indemnified party otherwise than under this Section. In case
any such action is brought against any indemnified party, and
it notifies an indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in,
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, (except in the
circumstances set forth in clauses (i) and (ii) of the next
sentence) to assume the defense thereof, with counsel
satisfactory to such indemnified party. In any such
proceeding, any indemnified party shall have the right to
retain its own counsel, but, after notice from the
indemnifying party to the indemnified party of its election to
assume the defense thereof, the fees and expenses of such
counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interests between them; provided, however, that the
indemnifying party shall only be responsible for the fees of
such counsel to the extent they are reasonably incurred. It is
understood that the indemnifying party shall not, in respect
of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all
such indemnified parties and that all such fees and expenses,
to the extent they are reasonable, shall be reimbursed as they
<PAGE> 16
-16-
are incurred. Such firm shall be designated in writing by the
Agents, in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of
parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss,
claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one
hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and
each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of
Securities (before deducting expenses) received by the Company
bear to the total commissions or discounts received by such
Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact required
to be stated therein or necessary in order to make the
statements therein not misleading relates to information
supplied by the Company on the one hand or by any Agent on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission. The Company and each Agent agree that
it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by per capita allocation
(even if all Agents were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such
indemnified
<PAGE> 17
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party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this
subsection (d), an Agent shall not be required to contribute
any amount in excess of the amount by which the total public
offering price at which the Securities purchased by or through
it were sold exceeds the amount of any damages which such
Agent 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 Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of each of
the Agents under this subsection (d) to contribute are several
in proportion to the respective purchases made by or through
it to which such loss, claim, damage or liability (or action
in respect thereof) relates and are not joint.
(e) The obligations of the Company under this Section 7 shall be
in addition to any liability which the Company may otherwise
have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Agent within the meaning
of the Act; and the obligations of each Agent under this
Section 7 shall be in addition to any liability which such
Agent may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within
the meaning of the Act.
8. Nonperformance. Each Agent, in soliciting offers to purchase Securities
from the Company and in performing the other obligations of such Agent
hereunder (other than in respect of any purchase by an Agent as
principal, pursuant to a Terms Agreement or otherwise), is acting
solely as agent for the Company and not as principal. Each Agent will
make reasonable efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Securities from the Company
was solicited by such Agent and has been accepted by the Company, but
such Agent shall not have any liability to the Company in the event
such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Securities to a purchaser whose
offer it has accepted, the Company shall (i) hold each Agent harmless
against any loss, claim or damage arising from or as a result of such
default by the Company and (ii) notwithstanding such default, pay to
the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
9. Survival of Agreement. The respective indemnities, agreements,
representations, warranties and other statements by any Agent and the
Company set forth in or made pursuant to this Agreement shall remain in
full force and effect regardless of any investigation (or any statement
as to the results thereof) made by or on behalf of any Agent or any
controlling person of any Agent or the Company, or any officer or
director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. Suspension or Termination. The provisions of this Agreement relating to
the solicitation of offers to purchase Securities from the Company may
be suspended or terminated at any time by the Company as to any Agent
or by any Agent as to such Agent upon the giving of written notice of
such suspension or termination to such Agent or the Company, as the
case may be.
<PAGE> 18
-18-
In the event of such suspension or termination with respect to any
Agent, (i) this Agreement shall remain in full force and effect with
respect to any Agent as to which such suspension or termination has not
occurred, (ii) this Agreement shall remain in full force and effect
with respect to the rights and obligations of any party which have
previously accrued or which relate to Securities which are already
issued, agreed to be issued or the subject of a pending offer at the
time of such suspension or termination and (iii) in any event, this
Agreement shall remain in full force and effect insofar as the fifth
paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Notices. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in
writing, and if to _____________________, shall be sufficient in all
respects when delivered or sent by facsimile transmission or registered
mail to ______________________________________________________________,
Attention: _________________________________, Facsimile Transmission
No. _____________, and if to ___________________________, shall be
sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to __________________________________,
Facsimile Transmission No. _______________________, Attention:
_______________________________, and if to the Company shall be
sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to Conectiv, 800 King Street,
Wilmington, Delaware 19899, Facsimile Transmission No. (302) 429-3119,
Attention: Treasurer.
12. Benefit of Agreement. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the
Company, and to the extent provided in Section 7, Section 8 and Section
9 hereof, the officers and directors of the Company and any person who
controls any Agent or the Company, and their respective personal
representatives, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any
Terms Agreement. No purchaser of any of the Securities through or from
any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Definition of Business Day. Time shall be of the essence in this
Agreement and any Terms Agreement. As used herein, the term "business
day" shall mean any day when the office of the Commission in
Washington, D.C. and banks located in the City of New York are normally
open for business.
14. Governing Law. This Agreement and any Terms Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
without regard to the conflict of law provisions thereof.
15. Execution in Counterparts. This Agreement and any written Terms
Agreement may be executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall be an
original, but all of such respective counterparts shall together
constitute one and the same instrument.
<PAGE> 19
-19-
16. Agent's Counsel. The Company and the Agents acknowledge that Thelen
Reid & Priest LLP (a) will act as counsel to the Agents in connection
with this Agreement and the transactions contemplated hereby and (b)
historically has acted, and will continue to act, as counsel to the
Company in connection with federal income tax matters and certain
special projects, and the Company and the Agents consent to such dual
representation.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
CONECTIV
By:________________________________
Title:_____________________________
Accepted in New York, New York, as of the date hereof:
[AGENT]
By:________________________________
Title:_____________________________
[AGENT]
By:________________________________
Title:_____________________________
<PAGE> 20
-20-
[AGENT]
By:________________________________
Title:_____________________________
[AGENT]
By:________________________________
Title:_____________________________
<PAGE> 21
-21-
ANNEX I
CONECTIV
MEDIUM TERM NOTES, SERIES __
TERMS AGREEMENT
___________, 199_
[Agent]
Dear Sirs:
Conectiv (the "Company") proposes, subject to the terms and conditions
stated herein and in the Distribution Agreement, dated __________, 199_ (the
"Distribution Agreement"), between the Company, on the one hand, and
_____________________________________________________(the "Agents") on the
other, to issue and sell to _________________________ the securities specified
in the Schedule hereto (the "Purchased Securities"). Each of the provisions of
the Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be part
of this Agreement to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Distribution Agreement shall
make any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase securities
from the Company, solely by virtue of its execution of this Agreement. Each of
the representations and warranties set forth in the Distribution Agreement shall
be deemed to have been made at and as of the date of this Agreement, except that
each representation and warranty in Section 1 of the Distribution Agreement
which makes reference to the Prospectus shall be deemed to be a representation
and warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to
<PAGE> 22
-22-
____________________________ and ______________________________________ agrees
to purchase from the Company the Purchased Securities, at the time and place, in
the principal amount and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
CONECTIV
By:________________________________
Title:_____________________________
Accepted in New York, New York, as of the date hereof:
[PURCHASING AGENT]
By:________________________________
Title:_____________________________
<PAGE> 23
-23-
SCHEDULE TO ANNEX I
Title of Purchased Securities:
Aggregate Principal Amount:
Price to Public:
Purchase Price:
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of
the Company, in immediately available funds]
[By wire transfer to a bank account specified by the Company in
immediately available funds]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
Interest Payment Dates:
Initial Interest Payment Date:
Redemption Provisions:
Repayment Provisions:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall
be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to
in Section 6(b).]
[(2) The opinion of counsel to the Company referred to in Section
6(c).]
[(3) The accountants' letter referred to in Section 6(d).]
<PAGE> 24
-24-
[(4) The officers' certificate referred to in Section 6(e).]
Other Provisions (including Syndicate Provisions, if applicable):
<PAGE> 25
-25-
ANNEX II
CONECTIV
ADMINISTRATIVE PROCEDURE
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated [insert date] (the "Distribution Agreement"),
between Conectiv (the "Company") and [insert names of agents] (together, the
"Agents"), to which this Administrative Procedure is attached as Annex II.
Defined terms used herein and not defined herein shall have the meanings given
such terms in the Distribution Agreement, the Prospectus as amended or
supplemented or the Indenture.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Such procedures shall also be followed with respect
to sales of Securities by the Company to an Agent, as principal, unless the
Company and such Agent agree to follow different procedures pursuant to a
written Terms Agreement. An Agent, in relation to a purchase of a Security by a
purchaser solicited by such Agent, is referred to herein as the "Selling Agent"
and, in relation to a purchase of a Security by such Agent as principal as the
"Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
General procedures relating to the issuance of all Securities are set
forth in Part I hereof. Additionally, Book-Entry Securities will be issued in
accordance with the procedures set forth in Part II hereof, as adjusted from
time to time in accordance with changes in DTC's operating requirements , and
Certificated Securities will be issued in accordance with the procedures set
forth in Part III hereof. To the extent any procedure set forth below conflicts
with the provisions of the Securities, the Indenture or the Distribution
Agreement, the relevant provisions of the Securities, the Indenture and the
Distribution Agreement, respectively, shall control. Administrative
responsibilities and record-keeping functions not performed by the Trustee or
DTC will be performed by the Company's Treasurer or its Assistant Treasurer.
Part I: ADMINISTRATIVE PROCEDURES OF GENERAL APPLICABILITY
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting") which shall, at all times, be within the limitations set forth by
the
<PAGE> 26
-26-
Company's Board of Directors and in the order of the Securities and Exchange
Commission applicable to the issuance and sale of the Securities. If the Company
decides to change already posted rates, it will promptly advise the Agents to
suspend solicitation of offers until the new posted rates have been established
with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent. The
Company will have the sole right to accept offers to purchase Securities and may
reject any such offer in whole or in part.
The Company will promptly notify the Agent of its acceptance or
rejection of an offer to purchase Securities. If the Company accepts an offer to
purchase Securities, it will confirm such acceptance in writing to the Agent and
the Trustee.
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Agent will
communicate the following details of the terms of such offer (the "Sale
Information") to the Company by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means:
(1) Principal amount of Securities to be purchased;
(2) Interest rate, interest payment dates and initial interest
payment date;
(3) Maturity Date;
(4) Issue Price;
(5) Selling Agent's commission or Purchasing Agent's discount, as
the case may be;
(6) Net proceeds to the Company;
(7) Settlement Date (Original Issue Date);
(8) If a redeemable Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall
decline on each anniversary of the Redemption
Commencement Date;
(9) Name, address and taxpayer identification number of the
registered owner;
(10) Denomination of certificates to be delivered at settlement;
(11) Whether such Security is a Book-Entry Security or a
Certificated Security;
(12) Whether such Agent is acting as Selling Agent or Purchasing
Agent;
(13) If a Book-Entry Security, exact name in which the Book-Entry
Security is to be registered, if other than Cede & Co.; and
<PAGE> 27
-27-
(14) All other information necessary to complete the form of
Security prior to its authentication and delivery.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Security, it will prepare
a Pricing Supplement. The Company will arrange to have ten Pricing Supplements
filed with the Commission not later than the close of business of the Commission
on the third business day following the date on which such Pricing Supplement is
first used, and will promptly deliver at least ten copies of such Pricing
Supplement to the Agent no later than 11:00 a.m. on the day following the Trade
Date via next day mail or telecopy at the following locations:
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Security a written
confirmation of the sale and delivery and payment instructions. In addition, the
Selling Agent will deliver to such purchaser or its agent the Prospectus as
amended or supplemented (including the Pricing Supplement) in relation to such
Security prior to or together with the earlier of the delivery to such purchaser
or its agent of (a) the confirmation of sale or (b) the Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment
for a Security shall constitute "settlement" with respect to such Security. All
offers solicited by a Selling Agent or made by a Purchasing Agent and accepted
by the Company will be settled on a date (the "Settlement Date") which is the
third business day after the date of acceptance of such offer, unless the
Company, the appropriate Agent and the purchaser agree to settlement (a) on any
other business day after the acceptance of such offer or (b) with respect to an
offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance, provided that such day shall be a business day.
Instruction from Company to Trustee for Preparation of Securities, Preparation
and Delivery of Securities by Trustee and Receipt of Payment Therefor:
After receiving the Sale Information from the Agent, the Company will
communicate such Sale Information to the Trustee by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written means. The
Trustee will prepare each Security and appropriate receipts that will serve as
the documentary control of the transaction. Each Security will be represented by
either a Global Security (as defined below) delivered to the Trustee, as agent
for The Depository Trust Company ("DTC"), and recorded in the book-entry system
maintained by DTC (a "Book-Entry Security") or by a certificate(s) issued as a
registered Security or Securities delivered to the holder thereof or a person(s)
designated by such holder(s) (a "Certificated
<PAGE> 28
-28-
Security"). Except as set forth in the Prospectus, as amended or supplemented,
an owner of a Book-Entry Security will not be entitled to receive a Certificated
Security. A holder of a Certificated Security will not be entitled to become in
lieu thereof the owner of a Book Entry Security.
Part II: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY SECURITIES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company and the Trustee to DTC, dated as of[insert date] (the "Letter of
Representation"), and a Medium-Term Note Certificate Agreement between the
Trustee and DTC dated [insert date], and its obligations as a participant in
DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
On any Settlement Date for one or more Book-Entry Securities, the
Company will issue a single global security in fully registered form without
coupons (a "Global Security") representing up to U.S. $250,000,000 principal
amount of all such Securities that have the same Original Issue Date, Maturity
Date and other terms. Each Global Security will be dated and issued as of the
date of its authentication by the Trustee. Each Global Security will bear an
"Interest Accrual Date," which will be (i) with respect to an original Global
Security (or any portion thereof), its original issuance date and (ii) with
respect to any Global Security (or any portion thereof) issued subsequently upon
exchange of a Global Security, or in lieu of a destroyed, lost or stolen Global
Security, the most recent Interest Payment Date to which interest has been paid
or duly provided for on the predecessor Global Security or Securities (or if no
such payment or provision has been made, the original issuance date of the
predecessor Global Security), regardless of the date of authentication of such
subsequently issued Global Security. Book-Entry Securities may be payable only
in U.S. dollars. No Global Security will represent any Certificated Security.
Settlement Procedure
The Trustee will enter a pending deposit message through DTC's
Participant Terminal System providing the following settlement information to
DTC, the Agent and Standard & Poor's Corporation:
1. The Sale Information.
2. Identification numbers of the participant accounts maintained by DTC on
behalf of the Trustee or the Agent, as the case may be.
3. Identification as a Book-Entry Security.
<PAGE> 29
-29-
4. The Initial Interest Payment Date for such Book-Entry Security, the
number of days by which such date succeeds the related DTC Record Date
(which shall be the Record Date as defined in the Security) and, if
known, amount of interest payable on such Initial Interest Payment
Date.
5. The CUSIP number of the Global Security representing such Security.
6. Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time).
By 9:00 a.m. on the Settlement Date, the Trustee will complete and
authenticate the Global Security representing such Security, the form of which
was previously approved by the Company, the Agents and the Trustee. By 10:00
a.m. on the Settlement Date, DTC will credit such Security to the Trustee's
participant account at DTC.
By 2:00 p.m. on the Settlement Date, the Trustee will enter an SDFS
deliver order through DTC's Participant Terminal System instructing DTC to (i)
debit such Book-Entry Security to the Trustee's participant account and credit
such Security to the Agent's participant account and (ii) debit the Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less the Agent's commission, if
any. The entry of such a deliver order shall constitute a representation and
warranty by the Trustee to DTC that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Medium-Term Note Certificate
Agreement between the Trustee and DTC.
Unless the Agent is the end purchaser of such Security, the Agent will
enter an SDFS deliver order through DTC's Participant Terminal System
instructing DTC (i) to debit such Book-Entry Security to the Agent's participant
account and credit such Book-Entry Security to the participant accounts of the
Participants with respect to such Book-Entry Security and (ii) to debit the
settlement accounts of such Participants and credit the settlement account of
the Agent for an amount equal to the price of such Security.
By 4:45 p.m. on the Settlement Date transfers of funds in accordance
with SDFS deliver orders described in the two preceding paragraphs will be
settled in accordance with SDFS operating procedures in effect on the Settlement
Date. This settlement procedure is subject to extension in accordance with any
extension of Fedwire closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the Settlement Date.
By 5:00 p.m. on the Settlement Date, the Trustee will credit to the
account of the Company maintained with the Trustee in funds available for
immediate use in the amount transferred to the Trustee by the Agent.
<PAGE> 30
-30-
Unless the Agent is the end purchaser of such Security, the Agent will
confirm the purchase of such Book-Entry Security to the purchaser either by
transmitting to the Participants with respect to such Book-Entry Security a
confirmation order or orders through DTC's institutional delivery system or by
mailing a written confirmation to such purchaser.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, after receiving notice from the Company or the Agent, will deliver to
DTC, through DTC's Participant Terminal System, a cancellation message to such
effect by no later than 2:00 P.M. on the Business Day immediately preceding the
scheduled Settlement Date. If such failure shall have occurred for any reason
other than default by the Agent in the performance of its obligations hereunder
or under the Distribution Agreement , the Company will reimburse the Agent on an
equitable basis for its loss of the use of funds during the period when they
were credited to the account of the Company.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a
Book-Entry Security, the Company may instruct the Trustee to deliver to DTC,
through DTC's Participant Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit such Book-Entry Security to the Trustee's
participant account. DTC will process the withdrawal message provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled," make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with the procedures of the
CUSIP Service Bureau of Standard & Poor's Corporation, be canceled and not
immediately reassigned. If a withdrawal message is processed with respect to one
or more, but not all, of the Book-Entry Securities represented by a Global
Security, the Trustee will exchange such Global Security for two Global
Securities, one of which shall represent such Book-Entry Security or Securities
for which a withdrawal message has been processed and shall be canceled
immediately after issuance and the other of which shall represent the remaining
Book-Entry Securities previously represented by the surrendered Global Security
with respect to which a withdrawal message has not been processed and shall bear
the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to
the Participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the Agent may
enter SDFS deliver orders through DTC's Participant Terminal System reversing
the orders entered. Thereafter, the Trustee will deliver the withdrawal message
and take the related actions described in the preceding paragraph.
<PAGE> 31
-31-
Notwithstanding the foregoing, upon any failure to settle with respect
to a Book-Entry Security, DTC may take any actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle with respect to one or more, but
not all, of the Book-Entry Securities to have been represented by a Global
Security, the Trustee will provide for the authentication and issuance of a
Global Security representing the Book-Entry Securities to be represented by such
Global Security and will make appropriate entries in its records.
III. ADMINISTRATIVE PROCEDURES FOR CERTIFICATED SECURITIES
In the case of a sale of Certificated Securities to a purchaser
solicited by an Agent, the Company will instruct the Trustee by facsimile
transmission or other acceptable written means to authenticate and deliver the
Certificated Securities no later than 2:15 p.m., New York City time, on the
Settlement Date. Such instruction will be given by the Company prior to 3:00
p.m., New York City time, on the business day prior to the Settlement Date
unless the Settlement Date is the date of acceptance by the Company of the offer
to purchase Securities in which case such instruction will be given by the
Company by 11:00 a.m., New York City time.
The Trustee will, by 2:15 p.m., New York City time, on the Settlement
Date, deliver the Securities to the Selling Agent for the benefit of the
purchaser of such Certificated Securities against delivery by the Selling Agent
of a receipt therefor. On the Settlement Date, the Selling Agent will deliver
payment for such Certificated Securities in immediately available funds to the
Trustee in an amount equal to the issue price of the Certificated Securities
less the Selling Agent's commission; provided that the Selling Agent reserves
the right to withhold payment for which it has not received funds from the
purchaser.
In the case of a sale of Certificated Securities to a Purchasing Agent,
the Trustee will, by 2:15 p.m., New York City time, on the Settlement Date,
deliver the Certificated Securities to the Purchasing Agent against delivery of
payment for such Securities in immediately available funds to the Trustee in an
amount equal to the issue price of the Securities less the Purchasing Agent's
discount.
In either case, promptly upon receipt of such funds from the Agent, the
Trustee will wire an amount equal thereto to, or upon the order of, the Company
in immediately available funds.
Unless otherwise notified by any Agent to the Trustee, the Trustee
shall deliver Certificated Securities in accordance with the procedures set
forth herein to any Agent (as the case may be) at the following addresses:
<PAGE> 32
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[ ]
[ ]
Failure to Settle:
If a purchaser fails to make payment to the Selling Agent for a
Certificated Security, the Selling Agent will promptly notify the Trustee and
the Company thereof by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means. The Selling Agent will
immediately return the Certificated Security to the Trustee. Immediately upon
receipt of such Security by the Trustee, the Trustee will debit the account of
the Company in an amount equal to the amount previously credited thereto in
respect of such Security and will return such funds to the Selling Agent. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds at the then prevailing broker-loan rate during the period when
they were credited to the account of the Company.
The Trustee will cancel the Certificated Security in respect of which
the failure occurred, make appropriate entries in its records and, unless
otherwise instructed by the Company, destroy the Security.
<PAGE> 1
Exhibit 4(a)
CONECTIV
Senior Debt Securities
INDENTURE
Dated as of _________, 1999
First Union Trust Company, National Association
Trustee
<PAGE> 2
CROSS-REFERENCE TABLE
CONECTIV AND FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, TRUSTEE
INDENTURE DATED ___________, 1999
TIA Section Indenture Section
310 (a)(1)..................................................................6.10
(a)(2)..................................................................6.10
(a)(3)..................................................................N.A.
(a)(4)..................................................................N.A.
(b)........................................................6.08, 6.10, 12.02
(c).....................................................................N.A.
311 (a).....................................................................6.11
(b).....................................................................6.11
(c).....................................................................N.A.
312 (a).....................................................................2.07
(b)....................................................................12.03
(c)....................................................................12.03
313 (a).....................................................................6.06
(b).....................................................................6.06
(c)..............................................................6.06, 12.02
(d).....................................................................6.06
314 (a)........................................................3.02, 3.03, 12.02
(b).....................................................................N.A.
(c)(1).................................................................12.05
(c)(2)...........................................................6.02, 12.05
(c)(3)..................................................................N.A.
(d).....................................................................N.A.
(e)....................................................................12.06
(f).....................................................................N.A.
315 (a)..................................................................6.01(b)
(b)..............................................................6.05, 12.02
(c)..................................................................6.01(a)
(d)..................................................................6.01(c)
(e).....................................................................5.11
316 (a)(1)(A)...............................................................5.05
(a)(1)(B)...............................................................5.04
(a)(2)..................................................................N.A.
(b).....................................................................5.07
317 (a)(1)..................................................................5.08
(a)(2)..................................................................5.09
(b).....................................................................2.06
318 (a)....................................................................12.01
2
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TABLE OF CONTENTS
Page
RECITALS.......................................................................1
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions...............................................1
SECTION 1.02. Other Definitions.........................................4
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.........4
SECTION 1.04. Rules of Construction.....................................5
ARTICLE 2
The Securities
SECTION 2.01. Amount; Issuable in Series................................6
SECTION 2.02. Denominations.............................................9
SECTION 2.03. Execution, Authentication and Delivery....................9
SECTION 2.04. Temporary Securities.....................................11
SECTION 2.05. Security Registrar and Paying Agent......................11
SECTION 2.06. Paying Agent to Hold Money in Trust......................12
SECTION 2.07. Securityholder Lists.....................................12
SECTION 2.08. Transfer and Exchange....................................13
SECTION 2.09. Mutilated, Destroyed, Lost or Stolen Securities..........14
SECTION 2.10. Outstanding Securities...................................15
SECTION 2.11. Cancellation.............................................15
SECTION 2.12. Default Interest.........................................15
SECTION 2.13. Computation of Interest..................................16
ARTICLE 3
Covenants
SECTION 3.01. Payment of Securities....................................16
SECTION 3.02. SEC Reports..............................................16
SECTION 3.03. Compliance Certificate...................................16
3
<PAGE> 4
TABLE OF CONTENTS
Page
ARTICLE 4
Successor Company
SECTION 4.01. When Company May Merge or Transfer Assets................17
SECTION 4.02. Successor Entity Substituted.............................17
SECTION 4.03. Limitation...............................................18
ARTICLE 5
Defaults and Remedies
SECTION 5.01. Events of Default........................................18
SECTION 5.02. Acceleration.............................................19
SECTION 5.03. Other Remedies...........................................19
SECTION 5.04. Waiver of Past Defaults..................................20
SECTION 5.05. Control by Majority......................................20
SECTION 5.06. Limitation on Suits......................................20
SECTION 5.07. Rights of Holders To Receive Payment.....................21
SECTION 5.08. Collection Suit by Trustee...............................21
SECTION 5.09. Trustee May File Proofs of Claim.........................21
SECTION 5.10. Priorities...............................................22
SECTION 5.11. Undertaking for Costs....................................22
SECTION 5.12. Waiver of Stay or Extension Laws.........................22
ARTICLE 6
Trustee
SECTION 6.01. Duties of Trustee........................................23
SECTION 6.02. Rights of Trustee........................................24
SECTION 6.03. Individual Rights of Trustee.............................24
SECTION 6.04. Trustee's Disclaimer.....................................25
SECTION 6.05. Notice of Defaults.......................................25
SECTION 6.06. Reports by Trustee to Holders............................25
SECTION 6.07. Compensation and Indemnity...............................25
SECTION 6.08. Replacement of Trustee...................................26
SECTION 6.09. Successor Trustee by Merger..............................27
SECTION 6.10. Eligibility; Disqualification............................27
SECTION 6.11. Preferential Collection of Claims Against Company........27
4
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TABLE OF CONTENTS
Page
ARTICLE 7
Discharge of Securities and Indenture
SECTION 7.01. Satisfaction and Discharge of Securities.................28
SECTION 7.02. Satisfaction and Discharge of Indenture..................30
SECTION 7.03. Application of Trust Money...............................31
ARTICLE 8
Amendments
SECTION 8.01. Without Consent of Holders...............................32
SECTION 8.02. With Consent of Holders..................................33
SECTION 8.03. Compliance with Trust Indenture Act......................34
SECTION 8.04. Revocation and Effect of Consent and Waivers; Fixing of
Record Date..............................................34
SECTION 8.05. Notation on or Exchange of Securities....................34
SECTION 8.06. Trustee To Sign Amendments...............................34
ARTICLE 9
Redemption
SECTION 9.01. Applicability............................................35
SECTION 9.02. Notice to Trustee........................................35
SECTION 9.03. Selection of Securities To Be Redeemed...................35
SECTION 9.04. Notice of Redemption.....................................36
SECTION 9.05. Effect of Notice of Redemption...........................37
SECTION 9.06. Deposit of Redemption Price..............................37
SECTION 9.07. Securities Redeemed in Part..............................37
ARTICLE 10
Sinking Funds
SECTION 10.01. Applicability...........................................37
SECTION 10.02. Satisfaction of Sinking Fund Payment with Securities....38
SECTION 10.03. Redemption of Securities for Sinking Fund...............38
5
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TABLE OF CONTENTS
Page
ARTICLE 11
Meetings of Holders; Actions without Meeting
SECTION 11.01. Purposes for Which Meetings May Be Called...............39
SECTION 11.02. Call, Notice and Place of Meetings......................39
SECTION 11.03. Persons Entitled to Vote at Meetings....................40
SECTION 11.04. Quorum; Action..........................................40
SECTION 11.05. Attendance at Meeting; Determination of Voting Rights;
Conduct and Adjournment of Meetings.....................41
SECTION 11.06. Counting Votes and Recording Action of Meetings.........42
SECTION 11.07. Action without Meeting..................................42
ARTICLE 12
Miscellaneous
SECTION 12.01. Trust Indenture Act Controls............................42
SECTION 12.02. Notices.................................................43
SECTION 12.03. Communication by Holders with Other Holders.............43
SECTION 12.04. Acts of Holders.........................................43
SECTION 12.05. Certificate and Opinion as to Conditions Precedent......45
SECTION 12.06. Statements Required in Certificate or Opinion...........46
SECTION 12.07. When Securities Disregarded.............................46
SECTION 12.08. Rules by Trustee, Paying Agent and Registrar............46
SECTION 12.09. Legal Holidays..........................................47
SECTION 12.10. Governing Law...........................................47
SECTION 12.11. No Recourse Against Others..............................47
SECTION 12.12. Successors..............................................47
SECTION 12.13. Multiple Originals......................................47
SECTION 12.14. Table of Contents; Headings.............................47
SECTION 12.15. Separability Clause.....................................48
SECTION 12.16. Entire Agreement........................................48
TESTIMONIUM...................................................................48
EXECUTION.....................................................................48
ACKNOWLEDGMENTS...............................................................49
6
<PAGE> 7
THIS INDENTURE dated ___________________________ between Conectiv,
a corporation duly organized and existing under the laws of the State of
Delaware (hereinafter called the "Company"), having its principal office at 800
King Street, Wilmington, Delaware 19899, and First Union Trust Company, National
Association, a national banking association, organized and existing under the
laws of the United States of America (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of unsecured debentures,
notes or other evidences of indebtedness (herein called the "Securities"), to be
issued in one or more series as contemplated herein.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all holders of the Securities as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such person directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board of Directors in
respect of matters related to this Indenture.
<PAGE> 8
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which shall be certified by the Secretary or an Assistant
Secretary as being in full force and effect on the date of such certification
and delivered to the Trustee.
"Business Day" means, unless otherwise specified pursuant to Section 2.01,
each day which is not a Legal Holiday.
"Bylaws" means the bylaws of the Company as amended from time to time.
"Company" means Conectiv, a Delaware corporation, unless and until a
successor replaces it pursuant to Article 4 and, thereafter, means the successor
(or any subsequent successor pursuant to said Article) and, for purposes of any
provision contained herein and required by the TIA, each other Obligor on the
Securities.
"Company Request", "Request of the Company", "Company Order" or "Order of
the Company" means a written request or order signed in the name of the Company
by an Officer and delivered to the Trustee.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default as more fully described in Section 5.01 of
this Indenture.
"Discount Security" means any Security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.02.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Holder" or "Securityholder" means the person in whose name a Security is
registered in the Security Register.
"Indenture" means this Indenture, as originally executed and delivered and
as it may from time to time be amended or supplemented by one or more indentures
or other instruments supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of a particular series of
Securities established as contemplated by Section 2.01.
"Interest Payment Date" means the date specified in the Securities as the
fixed date on which interest is due and payable.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, the Controller, any Assistant
Treasurer, any Assistant Secretary, any
2
<PAGE> 9
Assistant Controller, or any officer, agent or attorney-in-fact of the Company
designated by Board Resolution or the Bylaws or named in an Officer's
Certificate.
"Officer's Certificate" means a certificate signed by an Officer.
"Opinion of Counsel" means a written opinion from legal counsel, who may
be an employee of or counsel to the Company (or any Subsidiary or Affiliate) or
other counsel acceptable to the Trustee.
"Place of Payment" when used with respect to the Securities of any series,
means the place or places, specified as contemplated by Section 2.01 or the
fourth paragraph of Section 2.03 in the Terms of such Securities, at which
principal of and premium, if any, and interest, if any, on the Securities of
such series are payable.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended, or,
if at any time after the date of the execution and delivery of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the TIA, then the body, if any, performing such duties at such time.
"Securities" means any unsecured debentures, notes or other evidences of
indebtedness issued under this Indenture.
"Subsidiary" means a corporation or limited liability company of which a
majority of the capital stock, having voting power under ordinary circumstances
to elect directors, is owned by the Company and/or one or more Subsidiaries.
"Terms" means the maturity date, interest rate or method of determining
the interest rate, interest payment dates, redemption provisions (optional or
mandatory) and any other terms of any Securities established pursuant to
Sections 2.01 and 2.03.
"TIA" means, as of any time, the Trust Indenture Act of 1939, or any
successor statute, as in effect at such time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"U.S. Government Obligations" means (a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States entitled to the benefit of the full faith and
credit thereof; and (b) certificates, depository receipts or other instruments
which evidence a direct ownership interest in obligations described in clause
(a)
3
<PAGE> 10
above or in any specific interest or principal payments due in the respect
thereof; provided, however, that the custodian of such obligations or specific
interest or principal payments shall be a bank or trust company (which may
include the Trustee or any Paying Agent) subject to federal or state supervision
or examination with a combined capital and surplus of at least $50,000,000; and
provided, further, that except as may be otherwise required by law, such
custodian shall be obligated to pay to the holders of such certificates,
depository receipts or other instruments the full amount received by such
custodian in respect of such obligations or specific payment and shall not be
permitted to make any deduction therefrom.
SECTION 1.02. Other Definitions
Term Section
- ---- -------
"Act" .................................................................... 12.04
"Commission .............................................................. 1.03
"Event of Default" ....................................................... 5.01
"Legal Holiday" .......................................................... 12.09
"Mandatory Sinking Fund Payment" ......................................... 10.01
"Notice of Default" ...................................................... 5.01
"Obligor" ................................................................ 1.03
"Optional Sinking Fund Payment" .......................................... 10.01
"Paying Agent" ........................................................... 2.05
"Registrar" .............................................................. 2.05
"Security Register" ...................................................... 2.05
"Security Registrar" ..................................................... 2.05
SECTION 1.03. Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA or a provision of
the TIA provides that an indenture to be qualified thereunder shall be deemed to
include such provision, the provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this Indenture have the
following meanings as if fully set forth herein and in any supplement hereto:
"Commission" means the SEC.
"Obligor" on the Securities means the Company and any other obligor on the
Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
4
<PAGE> 11
SECTION 1.04. Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with generally accepted accounting principles in
the United States as in effect from time to time provided, the term
"generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States
at the date of such computation or, at the election of the Company
from time to time, at the date of the execution and delivery of this
Indenture; provided, however, that in determining generally accepted
accounting principles applicable to the Company, effect shall be
given, to the extent required, to any order, rule or regulation of
any administrative agency, regulatory authority or other
governmental body having jurisdiction over the Company;
(3) any term used herein without definition which is defined in the
Uniform Commercial Code as in effect in any jurisdiction in which
any property of the Company is located shall have the meanings
assigned to it therein with respect to such property;
(4) "including" means including, without limitation;
(5) "person" means any individual, corporation, partnership, limited
liability partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
(6) "or" is not exclusive;
(7) the words "herein," hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(8) words in the singular include the plural and words in the plural
include the singular; and
(9) the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date
prepared in accordance with generally accepted accounting principles
and accretion of principal on such security shall not be deemed to
be the issuance of Securities.
5
<PAGE> 12
ARTICLE 2
THE SECURITIES
SECTION 2.01. Amount; Issuable in Series
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series and Securities of the
same series may have different Terms. There shall be established in a Board
Resolution or a supplemental indenture or in an Officer's Certificate pursuant
to a Board Resolution or supplemental indenture, prior to the issuance of
Securities of any series, except as contemplated by the fourth paragraph of
Section 2.03:
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all Securities of other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Sections 2.04, 2.08,
2.09, 8.05 and 9.07);
(3) the date or dates on which the principal and premium, if applicable,
of any of the Securities of the series are payable or the method of
determination thereof;
(4) the rate or rates (including the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates
at which such Securities shall bear interest prior to maturity, and,
if applicable, the rate or rates at which overdue premium or
interest shall bear interest, if any), or the method of
determination thereof, at which any of the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such
interest shall be payable and the regular record date for the
interest payable on any Interest Payment Date;
(5) the place or places where the principal of and premium, if any, and
interest, if any, on any of the Securities of the series shall be
payable and the office or agency for the Securities of the series
maintained by the Company pursuant to Section 2.05;
(6) the period or periods within which, the price or prices at which and
the terms and conditions upon which any of the Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(7) the terms of any sinking fund and the obligation, if any, of the
Company to redeem or purchase Securities of the series pursuant to
any sinking fund or analogous provisions
6
<PAGE> 13
or at the option of a Holder thereof and the period or periods
within which or the date or dates on which, the price or prices at
which and the terms and conditions upon which Securities of the
series shall be redeemed or purchased, in whole or in part;
(8) if other than denominations authorized by Section 2.02, the
denominations in which the Securities of the series shall be
issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of any of the Securities of the series which shall
be payable upon declaration of acceleration of the maturity thereof
pursuant to Section 5.02;
(10) any deletions or modifications of or additions to the Events of
Default set forth in Section 5.01, or covenants of the Company set
forth in Article 3, to be in effect so long as any Securities of the
series remain outstanding;
(11) the currency or currencies, including composite currencies, in which
payment of the principal of and premium, if any, and interest, if
any, on the Securities of such series shall be payable (if other
than in U.S. dollars) and the formulary or other method or other
means by which the equivalent or any such amount in U.S. dollars is
to be determined for any purpose, including for the purpose of
determining the principal amount of such Securities deemed to be
outstanding as any time;
(12) if the principal of or premium, if any, or interest, if any, on the
Securities of such series, are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency other than that
in which the Securities are stated to be payable, the period or
periods within which, and the terms and conditions upon which, such
election may be made;
(13) if the principal of or premium, if any, or interest, if any, on the
Securities of such series are to be payable, or are to be payable at
the election of the Company or a Holder thereof, in securities or
other property, the type and amount of such securities or other
property, or the formulary or other method or other means by which
such amount shall be determined, and the period or periods within
which, and the terms and conditions upon which, any such election
may be made;
(14) if the amount payable in respect of the principal of or premium, if
any, or interest, if any, on the Securities of such series may be
determined with reference to an index or other fact or event
ascertainable outside of this Indenture, the manner in which such
amounts shall be determined (to the extent not established pursuant
to clause (4) of this paragraph);
(15) the forms of the Securities of the series;
7
<PAGE> 14
(16) any exceptions to Section 12.09 or variation in the definition of
Business Day, with respect to the Securities of such series, except
any variations which would eliminate reference to Delaware and North
Carolina in Section 12.09;
(17) whether the Securities of the series shall be issued in whole or in
part in the form of one or more global Securities and, in such case,
(i) the depository for such global Security or Securities, (ii) any
limitations on the rights of the Holder or Holders of such
Securities to transfer or exchange the same or to obtain the
registration of transfer thereof, (iii) any limitations on the
rights of the Holder or Holders thereof to obtain certificates
therefor in definitive form in lieu of temporary form and (iv) any
and all other matters incidental to such Securities;
(18) to the extent not established pursuant to clause (17) of this
paragraph, any limitation on the rights of Holders of Securities of
such series to transfer or exchange such Securities or to obtain the
registration of transfer thereof; and if a service charge will be
made for the registration of transfer or exchange of Securities of
such series, the amount or terms thereof;
(19) if Securities of the series are to be convertible into other
securities, the Terms of such conversion; and
(20) any other Terms of any of the Securities of the series; provided,
however, that any provision in any such Board Resolution,
supplemental indenture, or Officer's Certificate, or in or pursuant
to any Company Order in accordance with Section 2.03, that affects
any right, power, authority, duty, benefit, protection, privilege,
immunity, or indemnity of the Trustee shall not be binding on the
Trustee unless the Trustee shall have consented thereto in writing
(such consent not to be unreasonably delayed or withheld);
All Securities of any one series shall be substantially identical except
as to denomination and other Terms as provided in or pursuant to the Board
Resolution or supplemental indenture or the Officer's Certificate referred to
above, or the Company Order contemplated by the fourth paragraph of Section
2.03.
At the option of the Company, interest on any series that bears interest
may be paid by mailing a check to the address of, or making a wire transfer to
the account of, any Holder as such address shall appear in the register
maintained pursuant to Section 2.05.
The Securities may have notations, legends or endorsements required by
law, stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company).
If any of the Terms of the series are established by action taken pursuant
to a Board Resolution, except as to those contemplated by the fourth paragraph
of Section 2.03, a copy of an
8
<PAGE> 15
appropriate record of such action together with such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the instrument setting
forth the Terms of the series.
SECTION 2.02. Denominations
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 2.01. In the absence of any such
provisions with respect to the Securities of any series, the Securities of such
series shall be issuable in denominations of $1,000 and in any integral multiple
thereof. Securities of each series shall be numbered, lettered or otherwise
distinguished in such manner in accordance with such plan as the Officers of the
Company executing the same may determine with the approval of the Trustee.
SECTION 2.03. Execution, Authentication and Delivery
One Officer shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
At any time after the execution and delivery of this Indenture, the
Company may execute and deliver to the Trustee Securities of any series executed
on behalf of the Company by an Officer, together with the instrument or
instruments establishing the form or forms and Terms of such series and a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities; provided that, if all Securities of a series are not to be
originally issued at one time, the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time in the aggregate
principal amount established for such series pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by Company
Order. The maturity date, original issuance date, interest rate and any other
Terms of the Securities of such series shall be determined by or pursuant to
such Company Order and procedures. If provided for in such procedures, such
Company Order may authorize authentication and delivery pursuant to oral or
electronic instructions from the Company or its duly authorized agents, which
instructions, if given orally, shall be promptly confirmed in writing.
If the forms or Terms of the Securities of the series have been
established as permitted by Section 2.01 or the fourth paragraph of Section
2.03, prior to and as a condition to authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
9
<PAGE> 16
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) that such forms and Terms have been duly authorized by the Company
and have been established in conformity with the provisions of this
Indenture; and
(b) that such Securities, when authenticated and delivered by the
Trustee and issued and delivered by the Company in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, subject, as to
enforceability, to such exceptions with respect to laws or
principles of equity relating to or affecting generally the
enforcement of creditors' rights.
If such forms or Terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties, powers,
authority, benefits, protections, privileges, indemnities or immunities under
the Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 2.01 and of the second preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officer's Certificate, Board
Resolution or supplemental indenture otherwise required pursuant to Section 2.01
or the Company Order otherwise required pursuant to the third preceding
paragraph, or the Opinion of Counsel otherwise required pursuant to such second
preceding paragraph at or prior to the time of authentication of each Security
of such series if such documents are delivered at or prior to the authentication
upon original issuance of the first Security of such series to be issued
(provided that such Opinion of Counsel addresses the authentication and delivery
of all Securities of such series); and that, in lieu of the opinion described in
(b) above, the Opinion of Counsel may state:
(x) when the Terms of such Securities shall have been established pursuant
to a Company Order or Orders or pursuant to such procedures as may be
specified from time to time by a Company Order or Orders, all as
contemplated by and in accordance with the instrument or instruments
delivered to the Trustee as required by the procedures set forth above,
such terms will have been duly authorized by the Company and will have
been established in conformity with the provisions of the Indenture; and
(y) when such Securities shall have been authenticated and delivered by
the Trustee in accordance with this Indenture and the Company Order or
Orders or the specified procedures referred to in paragraph (x) above and
issued and delivered by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, such Securities will
constitute valid obligations of the Company, entitled to the benefits
provided by the Indenture.
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SECTION 2.04. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as the Officers executing such Securities may
determine, as evidenced conclusively by their execution of such Securities. Such
temporary Securities may be in global form.
Except as otherwise specified as contemplated by Section 2.01 or the
fourth paragraph of Section 2.03, if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company
maintained pursuant to Section 2.05 for the purpose of exchanges of Securities
of such series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute and
the Trustee upon Company Order shall authenticate and deliver in exchange
therefor a like aggregate principal amount of definitive Securities of the same
series and of like tenor or authorized denominations and having the same Terms
and conditions.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder.
SECTION 2.05. Security Registrar and Paying Agent
The Company shall cause to be kept in an office or agency, with respect to
the Securities of each series, a register (all registers kept in accordance with
this Section being collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities of such series and the
registration of transfers and exchanges thereof. The Company shall designate one
Person to maintain the Security Register for the Securities of each series, and
such Person is referred to herein, with respect to such series, as the "Security
Registrar."
Anything herein to the contrary notwithstanding, the Company may designate
one or more of its offices as an office in which a Security Register with
respect to the Securities of one or more series shall be maintained, and the
Company may designate itself the Security Registrar with respect to one or more
of such series. The Security Register shall be open for inspection by the
Trustee and the Company at all reasonable times. The Company shall also maintain
an office or agency where Securities may be presented for payment (the "Paying
Agent").
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The Company initially appoints the Trustee as Security Registrar and
Paying Agent in connection with the Securities. All rights, benefits,
privileges, protections, immunities and indemnities of the Trustee shall apply
to Trustee in its capacity as Security Registrar and Paying Agent.
SECTION 2.06. Paying Agent To Hold Money in Trust
On or prior to each due date of the principal of and premium, if any, and
interest, if any, on any Security, the Company shall deposit with the Paying
Agent a sum sufficient to pay such principal and premium or interest when so
becoming due. The Company shall require each Paying Agent (other than the
Company or the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of such principal, premium or interest on the
Securities and shall notify the Trustee of any default by the Company (or any
other obligor on such Securities) in making any such payment. The Company also
shall promptly notify the Trustee of any failure by the Company (or any other
obligor on such Securities) to make any payment of principal of or premium, if
any, or interest, if any, on such Securities. If the Company or any Subsidiary
or Affiliate of the Company acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund for the benefit
of the Securityholder. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
Subject to applicable laws, any money deposited with the Trustee or any
Paying Agent, or then held by the Company, in trust for the payment of the
principal of and premium, if any, or interest, if any, on any Security and
remaining unclaimed for two years after such principal and premium, if any, or
interest, if any, has become due and payable shall be paid to the Company on
Company Request, or, if then held by the Company, shall be discharged from such
trust; and, upon such payment or discharge, the Holder of such Security shall,
as an unsecured general creditor and not as the Holder of an outstanding
Security, look only to the Company for payment of the amount so due and payable
and remaining unpaid, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment to the Company, may
at the expense of the Company cause to be mailed, on one occasion only, notice
to such Holder that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days from the date
of such mailing, any unclaimed balance of such money then remaining will be paid
to the Company.
SECTION 2.07. Securityholder Lists
Semiannually, not later than June 30 and December 31 in each year,
commencing June 30, 1999, and within 30 days of such other times as the Trustee
may request in writing, the Company shall furnish or cause to be furnished to
the Trustee information as to the names and
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addresses of the Holders, as of a date no more than fifteen (15) days prior to
the date such information is so furnished, and the Trustee shall preserve such
information and similar information received by it in any other capacity and
afford to the Holders access to information so preserved by it, all to such
extent, if any, and in such manner as shall be required by the TIA; provided,
however, that no such list need be furnished so long as the Trustee shall be the
Security Registrar.
SECTION 2.08. Transfer and Exchange
Except as otherwise specified as contemplated by Section 2.01 or the
fourth paragraph of Section 2.03 with respect to the Securities of any series,
upon presentment for registration of transfer of any Security at the office or
agency of the Company in a Place of Payment for such series, the Company shall
execute, and the Trustee upon Company Order shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series, of authorized denominations and of like tenor and aggregate
principal amount.
Except as otherwise specified, as contemplated by Section 2.01 or the
fourth paragraph of Section 2.03 with respect to the Securities of any series,
any Security of such series may be exchanged at the option of the Holder, for
one or more new Securities of the same series, of authorized denominations and
of like tenor and aggregate principal amount, upon presentment of the Securities
to be exchanged at any such office or agency. Whenever any Securities are so
presented for exchange, the Company shall execute, and the Trustee upon Company
Order shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities delivered upon any registration of transfer or exchange of
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented for registration of transfer or for exchange
shall (if so required of the Company, the Trustee or the Security Registrar) be
duly endorsed or shall be accompanied by a written instrument of transfer in
form satisfactory to the Company, the Trustee or the Security Registrar, as the
case may be, duly executed by the Holder thereof or his attorney duly authorized
in writing.
Unless otherwise specified as contemplated by Section 2.01 or the fourth
paragraph of Section 2.03 with respect to Securities of any series, no service
charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or transfer or exchange of Securities, other than exchanges
pursuant to Section 2.04, 8.05 or 9.07 not involving any transfer.
The Company shall not be required to execute or to provide for the
registration of transfer of or the exchange of (a) Securities of any series
during a period of 15 days immediately
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preceding the date of the mailing of any notice of redemption of such Securities
called for redemption or (b) any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent or the Security Registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and premium, if any, and interest, if any, on such Security and for
all other purposes whatsoever, whether or not such Security is overdue, and none
of the Company, the Trustee, the Paying Agent or the Security Registrar shall be
affected by notice to the contrary.
SECTION 2.09. Mutilated, Destroyed, Lost and Stolen Securities
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee upon Company Order shall authenticate and deliver in
exchange therefor a new Security of the same series, and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence to
their satisfaction of the ownership of and the destruction, loss or theft of any
Security and (b) such security or indemnity as may be reasonably required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security is held by a
person purporting to be the owner of such Security, the Company shall execute
and the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same series and Tranche, and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
Notwithstanding the foregoing, in case any such mutilated, destroyed, lost
or stolen Security has become or is about to become due and payable, the Company
in its discretion may, but subject to compliance with the foregoing conditions,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Securities shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone other than the Holder
of such new Security, and any such new Security shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other
Securities of such series duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.
If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal, premium (if applicable) and interest payable on that date with
respect to the Securities to be redeemed or maturing, as the case may be, and
the Paying Agent is not prohibited from paying such money to the Securityholders
on that date pursuant to the terms of this Indenture, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
In determining whether the Holders of the requisite principal amount of
outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder the principal amount of a Discount Security
that shall be deemed to be outstanding for such purposes shall be the amount of
the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.02.
SECTION 2.11. Cancellation
The Company at any time may deliver Securities to the Trustee for
cancellation. The Security Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel and destroy
(subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.12. Default Interest
If the Company defaults in a payment of interest on the Securities, the
Company shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful at the rate or rates
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prescribed therefor in the Securities) in any lawful manner. The Company may
also pay the defaulted interest to the persons who are Securityholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date in which case the Company shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Company shall mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.13. Computation of Interest
Except as otherwise specified, as contemplated by Section 2.01 or the
fourth paragraph of Section 2.03 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a three hundred
sixty (360) day year consisting of twelve (12) thirty (30) day months and, with
respect to any period less than a full calendar month, on the basis of the
actual number of days elapsed during such period.
ARTICLE 3
COVENANTS
SECTION 3.01. Payment of Securities
The Company shall promptly pay the principal of and premium, if any, and
interest, if any, on the Securities on the dates and in the manner provided in
the Securities and in this Indenture. Principal and any premium or interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and any premium or interest then due and the Trustee or the Paying
Agent, as the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.
SECTION 3.02. SEC Reports
The Company shall file with the Trustee, within 30 days after it files
them with the SEC, copies of its annual report and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company
shall also comply with the other provisions of TIA Section 314(a)(1),(2) and
(3).
SECTION 3.03. Compliance Certificate
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company a certificate from its principal executive
officer, principal financial officer or principal accounting officer stating
that in the course of the performance by such signer of his
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duties as an officer of the Company he would normally have knowledge of any
Default by the Company or any noncompliance with the conditions and covenants
under the Indenture and whether or not he knows of any Default or any such
noncompliance that occurred during such period. If such officer does, the
certificate shall describe the Default or non-compliance, its status and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this Section 3.03, such noncompliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture.
ARTICLE 4
SUCCESSOR COMPANY
SECTION 4.01. When Company May Merge or Transfer Assets
The Company shall not consolidate, convert or merge with or into, or
convey or otherwise transfer, or lease, its assets as an entirety (or
substantially as an entirety) to, any person, unless:
(i) the resulting, surviving or transferee person (if not the Company)
shall be a person organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction no Default shall
have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, conversion, merger, conveyance, transfer, or lease
and such supplemental indenture comply with this Indenture.
SECTION 4.02. Successor Entity Substituted
Upon any consolidation by the Company with or merger by the Company into
any other person or any conveyance or other transfer, of the assets of the
Company as an entirety (or substantially as an entirety) in accordance with
Section 4.01, the successor person formed by such consolidation or into which
the Company is merged or to which such conveyance or other transfer, is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
person had been named as the Company herein, and thereafter, the predecessor
entity shall be relieved of all obligations and covenants under this Indenture
and the Securities.
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SECTION 4.03. Limitation
Nothing in this Indenture shall be deemed to prevent or restrict: (a) any
consolidation or merger after the consummation of which the Company would be the
surviving or resulting entity or any conveyance or other transfer, or lease of
any part of the properties of the Company which does not constitute the
entirety, or substantially the entirety, thereof; or (b) the approval by the
Company of, or the consent by the Company to, any consolidation or merger to
which any Subsidiary (or any other subsidiary or affiliate of the Company) may
be a party or any conveyance, transfer or lease by any Subsidiary (or any such
other subsidiary or affiliate) of any of its assets.
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. Events of Default
An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security when
the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of or premium, if
any, on any Security when the same becomes due and payable at its
stated maturity, upon declaration or otherwise;
(3) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1) or
(2) above) and such failure continues for 60 days after receipt of the
notice specified below;
(4) the Company pursuant to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case;
(b) consents to the entry of an order for relief against it in an
involuntary case;
(c) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(d) makes a general assignment for the benefit of its creditors; or
(5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
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(a) is for relief against the Company in an involuntary case;
(b) appoints a Custodian of the Company or for any substantial part of
its property; or
(c) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days.
A Default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 33% in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified after receipt of such Notice. Such Notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (3), its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration
If an Event of Default (other than an Event of Default specified in
Section 5.01(4) or (5)) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 33% in aggregate principal amount of the
outstanding Securities by notice to the Company and the Trustee, may declare the
principal amount (or, in connection with Discount Securities, such portion of
the principal amount as may be specified in the terms of such Securities) of all
the outstanding Securities, together with premium, if any, and accrued interest
to be due and payable. Upon such a declaration, such principal (or portion
thereof), together with premium, if any, and accrued interest shall be due and
payable immediately. If an Event of Default specified in Section 5.01(4) or (5)
occurs and is continuing, the principal of, and premium, if any, and interest on
all the Securities shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Securityholders. If all existing Events of Default have been cured or waived,
except nonpayment of principal, premium or interest that has become due solely
because of acceleration, any such acceleration and its consequences shall be
automatically rescinded unless such rescission would conflict with any judgment
or decree. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 5.03. Other Remedies
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of and premium, if any,
or interest on the Securities or to enforce the performance of any provision of
the Securities or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 5.04. Waiver of Past Defaults
The Holders of a majority in principal amount of the outstanding
Securities by notice to the Trustee may waive an existing Default and its
consequences except (1) a Default in the payment of the principal of, or
premium, if any, or interest on a Security or (2) a Default in respect of a
provision that under Section 8.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 5.05. Control by Majority
If an Event of Default shall have occurred and be continuing, the Holders
of a majority in principal amount of the outstanding Securities may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 6.01, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 5.06. Limitation on Suits
A Securityholder may not pursue any remedy with respect to this Indenture
or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an Event
of Default is continuing;
(2) the Holders of at least 33% in Principal Amount of the outstanding
Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense incurred in
compliance with such request;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
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(5) the Holders of a majority of principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 5.07. Rights of Holders To Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and premium, if any, and interest, if
any, on the Securities held by such Holder, on or after the respective due dates
expressed in the Securities (or, in the case of redemption, on the redemption
date), or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 5.08. Collection Suit by Trustee
If an Event of Default specified in Section 5.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount of principal and
premium, if any, and interest remaining unpaid (together with interest on such
unpaid interest, to the extent lawful) and the amounts provided for in Section
6.07.
SECTION 5.09. Trustee May File Proofs of Claim
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company, its
creditors or its property, and to collect and receive any money or other
property payable or deliverable on any such claims and to distribute the same
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 5.10. Priorities
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If the Trustee collects any money pursuant to this Article 5, it shall pay
out the money in the following order:
FIRST: to the Trustee for amounts due under Section 6.07;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for principal and premium, if any, and interest; and in case such proceeds
shall be insufficient to pay in full the whole amount so due and unpaid
upon such Securities, then to the payment of such principal and interest
thereon without preference or priority of any kind, ratably according to
the aggregate amount due and unpaid, with any balance then remaining to
the payment of premium, if any, and, if so specified as contemplated by
Section 2.01 or the fourth paragraph of Section 2.03 with respect to the
Securities of any series, interest, if any, on overdue premium, if any,
and overdue interest, if any, ratably as aforesaid, all to the extent
permitted by applicable law; and;
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 5.11. Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit instituted by the Trustee, a suit
instituted by a Holder pursuant to Section 5.07 or a suit instituted by Holders
of more than 10% in aggregate principal amount of the outstanding Securities.
SECTION 5.12. Waiver of Stay or Extension Laws
The Company (to the extent it may lawfully do so) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
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ARTICLE 6
TRUSTEE
SECTION 6.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by the Trustee, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
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(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any
of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
SECTION 6.02. Rights of Trustee
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
SECTION 6.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or its
affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, or Registrar, may do the same with like rights. However, the Trustee must
comply with Sections 6.10 and 6.11.
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SECTION 6.04. Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in the Indenture or in
any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults
If a Default occurs and is continuing and if it is known to a responsible
officer of the Trustee, the Trustee shall mail to each Securityholder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of, or premium of, if any, or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders. For purposes of this Indenture, a "responsible
officer" of the Trustee is an officer in the Trustee's office at the address set
forth in Section 12.02 who has direct responsibility for the administration of
this Indenture and the performance of the Trustee's duties hereunder.
SECTION 6.06. Reports by Trustee to Holders
Prior to November 1 in each year, the Trustee shall mail to each
Securityholder a brief report dated as of the preceding September 1 that
complies with TIA Section 313(a), if so required by such Section of the TIA. The
Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 6.07. Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its services, including those arising in the Trustee's
performance of its duties under Sections 5.02, 5.03 and 5.08 hereof, and to the
extent permitted by law, Section 5.09 hereof. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Company shall indemnify
the Trustee against any and all loss, liability or expense (including attorneys'
fees) reasonably incurred by it in connection with the administration of this
trust and the performance
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of its duties or the exercise of its rights hereunder. The Trustee shall notify
the Company promptly of any claim for which it believes it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
may have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense to the extent incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of, and
premium, if any, and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture and the resignation or removal of the Trustee.
For purposes of this Section, the term "Trustee" shall include any
predecessor Trustee, provided that any Trustee hereunder shall not be liable for
the willful misconduct, negligence or bad faith of any other Trustee hereunder.
SECTION 6.08. Replacement of Trustee
The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in aggregate principal amount of the Securities or, as
long as no Event of Default under Section 5.01 has occurred or is continuing,
the Company may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee.
The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to
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Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to payment of all amounts
owing to it in its individual capacity and to the lien provided for in Section
6.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee. If the Trustee fails to comply with Section 6.10, any Securityholder
(subject to compliance with TIA Section 310(b)(iii)) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 6.07 shall continue for the benefit of
the retiring Trustee.
SECTION 6.09. Successor Trustee by Merger
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to another
person or banking association, the resulting, surviving or transferee person or
banking association without any further act shall be the successor Trustee,
provided such person or banking association shall be otherwise qualified and
eligible under this Article.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 6.10. Eligibility; Disqualification
The Trustee shall at all times satisfy the requirements of TIA Section
310(a). The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report. The Trustee
shall comply with TIA Section 310(b).
SECTION 6.11. Preferential Collection of Claims Against Company
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated. For
purposes of Section 311(b) of the TIA: (a) the term "cash transaction" shall
have the meaning provided in Rule 116-4 under the TIA, and (b) the term
"self-liquidating paper" shall have the meaning provided in Rule 116-6 under the
TIA.
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ARTICLE 7
DISCHARGE OF SECURITIES AND INDENTURE
SECTION 7.01. Satisfaction and Discharge of Securities
Any Security or Securities, or any portion of the principal amount
thereof, shall be deemed to have been paid for all purposes of this Indenture,
and the entire indebtedness of the Company in respect thereof shall be satisfied
and discharged, if there shall have been irrevocably deposited with the Trustee
or any Paying Agent (other than the Company), in trust:
(a) money in an amount which shall be sufficient, or
(b) in the case of a deposit made prior to the maturity of such Securities
or portions thereof, U.S. Government Obligations, which shall not
contain provisions permitting the redemption or other prepayment
thereof at the option of the issuer thereof, the principal of and the
interest on which when due, without any regard to reinvestment
thereof, will provide moneys which, together with the money, if any,
deposited with or held by the Trustee or such Paying Agent, shall be
sufficient, or
(c) a combination of (a) or (b) which shall be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on such Securities or portions thereof; provided, however,
that in the case of a redemption, the notice requisite to the validity of such
redemption shall have been given or irrevocable authority shall have been given
by the Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee; and provided, further, that the Company shall have
delivered to the Trustee and such Paying Agent:
(x) if such deposit shall have been made prior to the maturity of such
Securities, a Company Request stating that the money and U.S.
Government Obligations deposited in accordance with this Section shall
be held in trust, as provided in Section 7.03;
(y) if U.S. Government Obligations shall have been deposited, an Opinion
of Counsel to the effect that such obligations constitute U.S.
Government Obligations and do not contain provisions permitting the
redemption or other prepayment thereof at the option of the issuer
thereof, and an opinion of an independent public accountant of
nationally recognized standing, selected by the Company, to the effect
that the other requirements set forth in clause (b) and, if
applicable, (c) above have been satisfied; and
(z) if such deposit shall have been made prior to the maturity of such
Securities, an Officer's Certificate stating the Company's intention
that, upon delivery of such Officer's Certificate, its indebtedness in
respect of such Securities or portions thereof will have been
satisfied and discharged as contemplated in this Section.
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Upon the deposit of money or U.S. Government Obligations, or both, in
accordance with this Section, together with the documents required by clauses
(x), (y) and (z) above, the Trustee shall, upon Company Request, acknowledge in
writing that such Securities or portions thereof are deemed to have been paid
for all purposes of this Indenture and that the entire indebtedness of the
Company in respect thereof has been satisfied and discharged as contemplated in
this Section. In the event that all of the conditions set forth in the preceding
paragraph shall have been satisfied in respect of any Securities or portions
thereof except that, for any reason, the Officer's Certificate specified in
clause (z) (if otherwise required) shall not have been delivered, such
Securities or portions thereof shall nevertheless be deemed to have been paid
for all purposes of this Indenture, and the Holders of such Securities or
portions thereof shall nevertheless be no longer entitled to the benefits
provided by this Indenture or of any of the covenants of the Company under
Article Three or any other covenants made in respect of such Securities or
portions thereof as contemplated by Section 2.01 or the fourth paragraph of
Section 2.03, but the indebtedness of the Company in respect of such securities
or portions thereof shall not be deemed to have been satisfied and discharged
prior to maturity for any other purpose; and, upon Company Request, the Trustee
shall acknowledge in writing that such Securities or portions thereof are deemed
to have been paid for all purposes of this Indenture.
If payment at stated maturity of less than all of the Securities of any
series is to be provided for in the manner and with the effect provided in this
Section, the Trustee shall select such Securities, or portions of the principal
amount thereof, in the manner specified by Section 9.03 for selection for
redemption of less than all the Securities of a series.
In the event that Securities which shall be deemed to have been paid for
purposes of this Indenture, and, if such is the case, in respect of which the
Company's indebtedness shall have been satisfied and discharged, all as provided
in this Section, do not mature and are not to be redeemed within the sixty (60)
day period commencing with the date of the deposit of moneys or U.S. Government
Obligations, as aforesaid, the Company shall, as promptly as practicable, give a
notice, in the same manner as a notice of redemption with respect to such
Securities, to the Holders of such Securities to the effect that such deposit
has been made and the effect thereof.
Notwithstanding that any Securities shall be deemed to have been paid for
purposes of this Indenture, as aforesaid, the obligations of the Company and the
Trustee in respect of such Securities under Sections 2.04, 2.05, 2.06, 2.08,
2.09, 6.07, and 9.04 and this Article shall survive.
The Company shall pay, and shall indemnify the Trustee or any Paying Agent
with which U.S. Government Obligations shall have been deposited as provided in
this Section against, any tax, fee or other charge imposed on or assessed
against such U.S. Government Obligations or the principal or interest received
in respect of such U.S. Government Obligations, including, but not limited to,
any such tax payable by any entity deemed, for tax purposes, to have been
created as a result of such deposit.
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Anything herein to the contrary notwithstanding, (a) if, at any time after
a Security would be deemed to have been paid for purposes of this Indenture,
and, if such is the case, the Company's indebtedness in respect thereof would be
deemed to have been satisfied and discharged, pursuant to this Section (without
regard to the provisions of this paragraph), the Trustee or any Paying Agent, as
the case may be, (i) shall be required to return the money or U.S. Government
Obligations, or combination thereof, deposited with it as aforesaid to the
Company or its representative under any applicable Bankruptcy Law, (ii) are
unable to apply any money held by the Trustee as provided in this Section and
Section 7.03 with respect to such Security by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, such Security shall thereupon be deemed
retroactively not to have been paid and any satisfaction and discharge of the
Company's indebtedness in respect thereof shall retroactively be deemed not to
have been effected, and such Security shall be deemed to remain outstanding and
(b) any satisfaction and discharge of the Company's indebtedness in respect of
any Security shall be subject to the provisions of the last paragraph of Section
2.06.
SECTION 7.02. Satisfaction and Discharge of Indenture
This Indenture shall upon Company Request cease to be of further effect
(except as hereinafter expressly provided), and the Trustee, at the expense of
the Company, upon Company Request shall execute such instruments as the Company
shall reasonably request to evidence and acknowledge the satisfaction and
discharge of this Indenture when:
(a) both
(1) all Securities theretofore authenticated and delivered (other than
Securities that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.09) have been
delivered to the Trustee for cancellation; and
(2) all Securities not theretofore delivered to the Trustee for
cancellation have been deemed paid in accordance with Section
7.01; and
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
provided, however, that if, in accordance with the last paragraph of Section
7.01, any Security, previously deemed to have been paid for purposes of this
Indenture, shall be deemed retrospectively not to have been so paid, this
Indenture shall thereupon be deemed retrospectively not to have been satisfied
and discharged, as aforesaid, and to remain in full force and effect, and the
Company shall execute and deliver such instruments as the Trustee shall
reasonably request to evidence and acknowledge the same.
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Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 2.04,
2.05, 2.06, 2.08, 2.09, 6.07, and 9.04 and this Article shall survive.
Upon satisfaction and discharge of this Indenture as provided in this
Section, the Trustee shall turn over to the Company any and all money,
securities, and other property then held by the Trustee for the benefit of the
Holders of the Securities (other than money and U.S. Government Obligations held
by the Trustee pursuant to Section 7.03) and shall execute and deliver to the
Company upon Company Order delivered with such instruments, such instruments as,
in the judgment of the Company, shall be necessary, desirable or appropriate to
effect and evidence the satisfaction and discharge of this Indenture.
SECTION 7.03. Application of Trust Money
Neither the U.S. Government Obligations nor the money deposited pursuant
to section 7.01, nor the principal or interest payments on any such U.S.
Government Obligations, shall be withdrawn or used for any purpose other than,
and shall be held in trust for, the payment of the principal of and premium, if
any and interest, if any, on the Securities or portions of the principal amount
thereof in respect of which such deposit was made, all subject, however, to the
provisions of Section 2.06; provided, however, that any cash received from such
principal or interest payment on such U.S. Government Obligations, if not then
needed for such purpose, shall, to the extent practicable and upon Company
Request and delivery to the Trustee of the documents referred to in clause (y)
in the first paragraph of Section 7.01, be invested in U.S. Government
Obligations of the type described in clause (b) in the first paragraph of
Section 7.01 maturing at such times and in such amounts as shall be sufficient,
together with any other moneys and the proceeds of any other U.S. Government
Obligations then held by the Trustee, to pay when due the principal of, and
premium, if any, and interest, if any, due and to become due on such Securities
or portions thereof on and prior to the maturity thereof, and interest earned
from such reinvestment shall be paid to the Company as received, free and clear
of any trust, lien or pledge under this Indenture; and provided, further, that
any moneys held in accordance with this Section on the maturity of all such
Securities in excess of the amount required to pay the principal of and premium,
if any, and interest, if any, then due on such Securities shall be paid over to
the Company free and clear of any trust, lien or pledge under this Indenture;
and provided, further, that if an Event of Default shall have occurred and be
continuing, moneys to be paid over to the Company pursuant to this Section shall
be held until such Event of Default shall have been waived or cured.
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ARTICLE 8
AMENDMENTS
SECTION 8.01. Without Consent of Holders
The Company and the Trustee may amend and/or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 4;
(3) to provide for the procedures required to permit the Company to
utilize, at its option, a non-certificated system of registration for
all or any series of the Securities;
(4) to provide collateral security for the Securities;
(5) to add to the covenants of the Company for the benefit of all the
Holders or of one or more specific series of Securities or to
surrender any right or power herein conferred upon the Company;
(6) to make any change that does not adversely affect the rights of any
Securityholder in any material respect.
Without limiting the generality of the foregoing, if the TIA as in effect
at the date of the execution and delivery of this Indenture or any time
thereafter shall be amended and (i) if any such amendment shall require one or
more changes to any provisions hereof or the inclusion herein of any additional
provision, or shall by operation of law be deemed to effect such changes or
incorporate such provisions by reference or otherwise, this Indenture shall be
deemed to have been amended so as to conform to such amendment to the TIA and
the Company and the Trustee may, without the consent of any Holders, enter into
an indenture supplemental hereto to evidence such amendment hereof or (ii) if
any such amendment shall permit one or more changes to, or the elimination of,
any provisions hereof which, at the date of the execution and delivery hereof or
at any time thereafter, are required by the TIA to be contained herein or are
contained herein to reflect any provisions of the TIA as in effect at such date,
this Indenture shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental hereto to amend this Indenture to
effect such changes or elimination.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
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SECTION 8.02. With Consent of Holders
The Company and the Trustee may amend and/or supplement this Indenture or
the Securities without notice to any Securityholder but with the written consent
of the Holders of at least a majority in aggregate principal amount of the
outstanding Securities. However, without the consent of each Securityholder
affected, an amendment may not:
(1) reduce the amount of outstanding Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of interest on any
Security;
(3) reduce the principal of or extend the fixed maturity of any Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may or shall be redeemed;
(5) make any Security payable in money other than that stated in the
Security; or
(6) make any change in Section 5.04 or this Section;
and, provided further, that in case more than one series of Securities (or
Securities of a single series which have different Terms) shall be outstanding
under this Indenture, and any such proposed amendment shall affect the rights of
Holders of the Securities of one or more series (or Securities of a single
series which have different Terms) and shall not affect the rights of Holders of
the Securities of one or more of the other series (or other Securities of such
single series which have different Terms), then only Holders of Securities to be
affected shall have authority or be required to consent to or approve such
amendment. Any waiver of a default provided for in Section 5.04 shall be deemed
to affect the Securities of all series, and, subject to the foregoing, any
modification of the provisions of any sinking fund or covenant established in
respect of Securities of a particular series (or some, but not all Securities of
a single series having the same Terms) shall be deemed to affect only such
Securities.
It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Holders of the affected Securities a notice briefly describing such
amendment. The failure to give such notice to all Securityholders (or all
Holders of the affected Securities), or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
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SECTION 8.03. Compliance with Trust Indenture Act
Every amendment to this Indenture or the Securities shall comply with the
TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents and Waivers; Fixing of Record
Date
A consent to an amendment or any other action hereunder or a waiver by a
Holder of a Security shall bind the Holder and every subsequent Holder of that
Security or portion of the Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder's Security or portion of the Security if
the Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to take any action under
this Indenture by vote or consent. Such record date shall be the later of 30
days prior to the first solicitation of such consent or vote or the date of the
most recent list of Holders of the affected Securities furnished to the Trustee
pursuant to Section 2.07 prior to such solicitation. If a record date is fixed,
those persons who were Securityholders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Securityholders after such record
date.
SECTION 8.05. Notation on or Exchange of Securities
If an amendment changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee upon
Company Order shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
SECTION 8.06. Trustee To Sign Amendments
The Trustee shall sign any amendment or supplement authorized pursuant to
this Article 8 if the amendment does not adversely affect the rights, duties,
liabilities, benefits, protections, privileges, indemnities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 6.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
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ARTICLE 9
REDEMPTION
SECTION 9.01. Applicability
Securities of any series which are redeemable before their final maturity
shall be redeemable in accordance with their Terms and (except as otherwise
specified as contemplated by Section 2.01 or the fourth paragraph of Section
2.03 for Securities of any series) in accordance with this Article.
SECTION 9.02. Notice to Trustee
The Company may, with respect to any series of Securities (or Securities
of a series having the same Terms), reserve the right to redeem and pay such
Securities or any part thereof, or may covenant to redeem and pay the series of
Securities (or Securities of a series having the same Terms) or any part
thereof, before maturity at such time and on such terms as provided for in the
Terms of such Securities. If a series of Securities (or Securities of a series
having the same Terms) is redeemable and the Company wants or is obligated to
redeem all or part of the series of Securities (or Securities of a series having
the same Terms) pursuant to the Terms of such Securities, the Company shall
notify the Trustee of the redemption date and the principal amount of the series
of Securities (or Securities of a series having the same Terms) to be redeemed.
The Company shall give such notice at least 45 days before the redemption date
(or such shorter notice as may be acceptable to the Trustee in its sole
discretion).
SECTION 9.03. Selection of Securities To Be Redeemed
If less than all the Securities of a series (or Securities of a series
having the same Terms) are to be redeemed, the Trustee, not more than 45 days
prior to the redemption date, shall select the Securities of the series (or
Securities of a series having the same Terms) to be redeemed pro rata or by lot
or by such other method as the Trustee shall deem fair and appropriate. The
Trustee shall make the selection from Securities that are outstanding and that
have not previously been called for redemption. Securities of the series (or
Securities of a series having the same Terms) and portions of them selected by
the Trustee shall be redeemed in amounts of $1,000 or integral multiples of
$1,000 or with respect to Securities of any series issuable in other
denominations pursuant to Section 2.01(8), in amounts equal to the minimum
principal denomination for each such series and in integral multiples thereof.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Securities redeemed or to be redeemed only in part, to the portion of the
principal amount of such Securities which has been or is to be redeemed. The
Trustee shall promptly notify the Company in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
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SECTION 9.04. Notice of Redemption
(a) At least 30 days but not more than 60 days before a redemption date,
unless a shorter period is specified in the Terms of the Securities to
be redeemed, the Company shall cause to be mailed a notice of
redemption by first-class mail to each Holder of Securities (with a
copy to the Paying Agent (and to the Trustee if the Trustee is not
then the Paying Agent)) that are to be redeemed.
(b) All notices of redemption shall identify the Securities to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price and interest, if any, payable upon such
redemption;
(3) if less than all the outstanding Securities of a series (or
Securities of a series having the same Terms) are to be
redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities
to be redeemed;
(4) the name and address of the Paying Agent;
(5) that the Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(7) such other matters as the Company shall deem desirable or
appropriate.
(c) If at the time of any notice of redemption the Company shall not have
deposited or caused to be deposited with the Paying Agent moneys
sufficient to redeem all the Securities called for redemption, such
notice shall state that it is subject to the deposit of the redemption
moneys with the Paying Agent not later than the opening of business on
the redemption date and shall be of no effect unless such moneys are
so deposited. If such moneys are not deposited by such date and time,
the Paying Agent shall promptly notify the Holders of all Securities
called for redemption of such fact and the Company shall not be
required to redeem such Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.
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SECTION 9.05. Effect of Notice of Redemption
Once notice of redemption is mailed, and such notice is not conditional as
provided in Section 9.04(c) above, Securities called for redemption become due
and payable on the redemption date at the redemption price. Any failure to mail
notice of redemption or any defect therein shall not affect the redemption of
any other Securities called for redemption.
Upon surrender to the Paying Agent of such Securities, such Securities
shall be paid at the redemption price plus accrued interest to the redemption
date, but installments of interest due on or prior to the redemption date will
be payable to the Holders of such Securities of record at the close of business
on the relevant record dates, unless otherwise specified in the Terms of such
Securities.
SECTION 9.06. Deposit of Redemption Price
On or before the redemption date, the Company shall, subject to any
conditions stated in the notice of redemption, deposit with the Paying Agent
money sufficient to pay the redemption price of and interest accrued to the
redemption date on all Securities to be redeemed on that date.
SECTION 9.07. Securities Redeemed in Part
Upon surrender of a Security that is redeemed in part, the Company shall
issue and the Trustee upon Company Order shall authenticate and deliver to the
Holder of that Security a new Security or Securities of the same series and
terms in authorized denominations equal in aggregate principal amount to the
unredeemed portion of the Security surrendered.
ARTICLE 10
SINKING FUNDS
SECTION 10.01. Applicability
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities, except as otherwise specified as contemplated by
Section 2.01 or the fourth paragraph of Section 2.03 for Securities of any
series.
The minimum amount of any sinking fund payment provided for by the Terms
of any Securities is herein referred to as a "Mandatory Sinking Fund Payment",
and any payment in excess of such minimum amount provided for by the terms of
such Securities is herein referred to as an "Optional Sinking Fund Payment". If
provided for by the Terms of Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 10.02. Each sinking
fund payment shall be applied to the redemption of Securities of any series (or
Securities of a series having the same Terms) as provided for by the Terms of
such Securities.
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SECTION 10.02. Satisfaction of Sinking Fund Payments with Securities
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities to be made pursuant to the Terms of such
Securities as provided for by such Terms, (1) deliver outstanding Securities of
such series having the same Terms (other than any of such Securities previously
called for redemption) and (2) apply as credit Securities of such series having
the same Terms which have been redeemed either at the election of the Company
pursuant to the Terms of such Securities or through the application of permitted
Optional Sinking Fund Payments pursuant to the Terms of such Securities,
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of
cash payments pursuant to this Section 10.02, the principal amount of Securities
to be redeemed in order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next
succeeding sinking fund payment with respect to such series of Securities (or
Securities of such series having the same Terms), provided, however, that the
Trustee or such Paying Agent shall at the request of the Company from time to
time pay over and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent upon delivery by the Company to the Trustee of
Securities of that series having the same Terms purchased by the Company having
an unpaid principal amount equal to the cash payment required to be released to
the Company.
SECTION 10.03. Redemption of Securities for Sinking Fund
Not less than 60 days prior to each sinking fund payment date for any
series of Securities (or Securities of such series having the same Terms), the
Company will deliver to the Trustee an Officer's Certificate specifying the
amount of the next ensuing Mandatory Sinking Fund Payment for that series (or
Securities of such series having the same Terms) pursuant to the Terms of that
series, the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting of Securities of that series (or Securities of such series having the
same Terms) pursuant to Section 10.02, and the optional amount, if any, to be
added in cash to the next ensuing Mandatory Sinking Fund Payment, and the
Company shall thereupon be obligated to pay the amount therein specified. Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 9.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 9.04. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
9.05, 9.06 and 9.07.
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ARTICLE 11
MEETINGS OF HOLDERS; ACTIONS WITHOUT MEETING
SECTION 11.01. Purposes for Which Meetings May Be Called
A meeting of Holders of Securities of one or more, or all, series may be
called at any time and from time to time pursuant to this Article to make, give
or take request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 11.02. Call, Notice and Place of Meetings
(a) The Trustee may at any time call a meeting of Holders of Securities of
one or more, or all, series for any purpose specified in Section
11.01, to be held at such time and (except as provided in subsection
(b) of this Section) at such place in the County of New Castle, The
City of Wilmington, as the Trustee shall determine, or, with the
approval of the Company, at any other place. Notice of every such
meeting, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall
be given, in manner provided in Section 12.02, not less than
twenty-one (21) nor more than one hundred eighty (180) days prior to
the date fixed for the meeting.
(b) The Trustee may be asked to call a meeting of the Holders of
Securities of one or more, or all, series by the Company or the
Holders of thirty-three percent (33%) in aggregate principal amount of
all of the outstanding Securities of all such series, considered as
one class, for any purpose specified in Section 11.01, by written
request setting forth in reasonable detail the action proposed to be
taken at the meeting. If the Trustee shall have been asked by the
Company to call such a meeting, the Company shall determine the time
and place for such meeting and may call such meeting by giving notice
thereof in the manner provided in subsection (a) of this Section, or
shall direct the Trustee, in the name and at the expense of the
Company, to give such notice. If the Trustee shall have been asked to
call such a meeting by Holders in accordance with this subsection (b),
and the Trustee shall not have given the notice of such meeting within
twenty-one (21) days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein,
then the Holders of Securities of such series, in the principal amount
above specified, may determine the time and the place in the County of
New Castle, The City of Wilmington, or in such other place as shall be
determined or approved by the Company, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
(c) Any meeting of Holders of Securities of one or more, or all, series
shall be valid without notice if the Holders of all outstanding
Securities of such series are present in person or by proxy and if
representatives of the Company and the Trustee are present, or if
notice is waived in writing before or after the meeting by the Holders
of all outstanding Securities
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of such series or by such of them as are not present at the meeting in
person or by proxy, and by the Company and the Trustee.
SECTION 11.03. Persons Entitled to Vote at Meetings
To be entitled to vote at any meeting of Holders of Securities of one or
more, or all, series, a person shall be (a) a Holder of one or more outstanding
Securities of such series, or (b) a person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more outstanding Securities of such
series by such Holder or Holders. The only persons who shall be entitled to
attend any meeting of Holders of Securities of any series shall be the persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 11.04. Quorum; Action
The persons entitled to vote a majority in aggregate principal amount of
the outstanding Securities of the series with respect to which a meeting shall
have been called as hereinbefore provided, considered as one class, shall
constitute a quorum for a meeting of Holders or Securities of such series;
provided, however, that if any action is to be taken at such meeting which this
Indenture or the Terms of any series of Securities expressly provides may be
taken by the Holders of a specified percentage, which is less than majority, in
principal amount of the outstanding Securities of such series, considered as one
class, the persons entitled to vote such specified percentage in principal
amount of the outstanding Securities of such series considered as one class,
shall constitute a quorum. In the absence of a quorum within one hour of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other
case, the meeting may be adjourned for such period as may be determined by the
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for such period as may be determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Except as provided by
Section 11.05(e), notice of the reconvening of any meeting adjourned for more
than thirty (30) days shall be given as provided in Section 12.02 not less than
ten (10) days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
outstanding Securities of such series which shall constitute a quorum.
Except as limited by Section 8.02, any resolution presented to a meeting
or adjourned meeting duly reconvened at which a quorum is present as aforesaid
may be adopted only by the affirmative vote of the Holders of a majority in
aggregate principal amount of the outstanding Securities of the series with
respect to which such meeting shall have been called, considered as one class;
provided, however, that, except as so limited, any resolution with respect to
any action which this Indenture expressly provides may be taken by the Holders
of a specified percentage, which is less than a majority, in the principal
amount of the outstanding Securities of such series, considered as one class,
may be adopted at a meeting or an adjourned meeting duly reconvened
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and at which a quorum is present as aforesaid by the affirmative vote of the
Holder of such specified percentage in principal amount of the outstanding
Securities of such series, considered as one class.
Any resolution passed or decision taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities of the series with respect to which such meeting shall
have been held, whether or not present or represented at the meeting.
SECTION 11.05. Attendance at Meeting; Determination of Voting Rights; Conduct
and Adjournment of Meetings
(a) Attendance at meetings of Holders of Securities may be in person or by
proxy; and to the extent permitted by law, any such proxy shall remain
in effect and be binding upon any future Holder of the Securities with
respect to which it was given unless and until specifically revoked by
the Holder or future Holder (except as provided in Section 12.04(g))
of such Securities before being voted.
(b) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities in regard to proof of the holding of
such Securities and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right
to vote, and such other matters concerning the conduct of the meeting
as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations and approved by the Company, the
holding of Securities shall be proved in the manner specified in
Section 12.04 and the appointment of any proxy shall be proved in the
manner specified in Section 12.04. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section
12.04 or other proof.
(c) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders as provided in Section 11.02(b), in which
case the Company or the Holders of Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the persons entitled to vote a
majority in aggregate principal amount of the outstanding Securities
of all series represented at the meeting, considered as one class.
(d) At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of outstanding Securities held or
represented by such Holder or by proxy; provided, however, that no
vote shall be cast or counted at any meeting in respect of any
Security challenged as not outstanding and ruled by the chairman of
the meeting to
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be not outstanding. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security or proxy.
(e) Any meeting duly called pursuant to Section 11.02 at which a quorum is
present may be adjourned from time to time by persons entitled to vote
a majority in aggregate principal amount of the outstanding Securities
of all series represented at the meeting, considered as one class; and
the meeting may be held as so adjourned without further notice.
SECTION 11.06. Counting Votes and Recording Action of Meetings
The vote upon any resolution submitted to any meeting of Holders shall be
by written ballots on which shall be subscribed the signatures of the Holders or
their representatives by proxy and the principal amounts and serial numbers of
the outstanding Securities, of the series with respect to which the meeting
shall have been called, held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports of all votes cast at
the meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached to
such record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
such notice was given and provided in Section 11.02 and, if applicable, Section
11.04. Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
SECTION 11.07. Action without Meeting
In lieu of a vote of Holders at a meeting as hereinbefore contemplated in
this Article, any request, demand, authorization, direction, notice, consent,
waiver or other action may be made, given or taken by Holders by written
instruments as provided in Section 12.04.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by operation of TIA Section 318(c), the TIA imposed duties shall
control.
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SECTION 12.02. Notices
Any notice or communication shall be in writing and delivered in person or
mailed by first-class mail or transmitted by facsimile transmissions, telex or
other direct written electronic means to such telephone number or other
electronic communications address set forth opposite such parties name below or
to such other address as either party hereto may from time to time designate
addressed as follows:
if to the Company: Conectiv
800 King Street
Wilmington, DE 19899
Attention: Treasurer
Telephone: 302-429-3525
Facsimile: 302-429-3188
if to the Trustee: First Union Trust Company, National Association
One Rodney Square
920 King Street
Wilmington, DE 19801
Attention: Corporate Trust Administration
Telephone: 302-888-7539
Facsimile: 302-888-7544
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed,
first-class postage prepaid, to the Securityholder at the Securityholder's
address as it appears on the Security Register and shall be sufficiently given
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 12.03. Communication by Holders with Other Holders
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.04. Acts of Holders
(a) Any request, demand, authorization, direction, notice, consent,
election, waiver or other action provided by this Indenture to be
made, given or taken by Holders may be
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embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly
appointed in writing or, alternatively, may be embodied in and
evidenced by the record of Holders duly called and held in accordance
with the provisions of Article 11, or a combination of such
instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instruments or of a
writing appointing any such agent, or of the holding by any person of
a Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 6.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section. The record of
any meeting of Holders shall be proved in the manner provided in
Section 11.06.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof or may be proved in any other manner which the
Trustee and the Company deem sufficient. Where such execution is by a
signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The ownership, principal amount and serial numbers of Securities held
by any person, and the date of holding the same, shall be proved by
the Security Register maintained by the Security Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of a Holder shall bind every future
Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) Until such time as written instruments or the record described in
Section 12.04(a) or both shall have been delivered to the Trustee with
respect to the requisite percentage of Principal Amount of Securities
for the action contemplated by such instruments, any such instrument
executed and delivered by or on behalf of a Holder may be revoked with
respect to any or all of such Securities by written notice by such
Holder or any subsequent Holder, proven in the manner in which such
instrument was proven.
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(f) Securities of any series authenticated and delivered after any Act of
Holders may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any action taken by such Act of
Holders. If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and
the Company, to such action may be prepared and executed by the
Company and upon Company Order authenticated and delivered by the
Trustee in exchange for outstanding Securities of such series.
(g) The Company may, at its option, by Company Order, fix in advance a
record date for the determination of Holders entitled to give any
request, demand, authorization, direction, notice, consent, waiver or
other Act solicited by the Company, but the Company shall have no
obligation to do so; provided, however, that the Company may not fix a
record date for the giving or making of any notice, declaration,
request or direction referred to in the next sentence. In addition,
the Trustee may, at its option, fix in advance a record date for the
determination of Holders of Securities of any series entitled to join
in the giving or making of any Notice of Default, any declaration of
acceleration referred to in Section 5.02, any request to institute
proceedings referred to in Section 5.05 or any direction referred to
in Section 5.06, in each case with respect to Securities of such
series. If any such record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act, or
such notice, declaration, request or direction, may be given before or
after such record date, but only the Holders of record at the close of
business on the record date shall be deemed to be Holders for the
purposes of determining, subject to Section 12.07 (i) whether holders
of the requisite proportion of the outstanding Securities have
authorized or agreed or consented to such Act (and for that purpose
the principal amount of the Securities will be computed as of the
record date) and/or (ii) which Holders may revoke any such Act
(notwithstanding subsection (e) of this Section); and any such Act,
given as aforesaid, shall be effective whether or not the Holders
which authorized or agreed or consented to such Act remain Holders
after such record date and whether or not the Securities held by such
Holders remain outstanding after such record date.
SECTION 12.05. Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officer's Certificate in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
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SECTION 12.06. Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
covenant or condition has been complied with.
SECTION 12.07. When Securities Disregarded
In determining whether the Holders of the required principal amount of
outstanding Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any other obligor upon the Securities or by
any Affiliate of the Company or of such other obligor (unless the Company, such
Obligor or such Affiliate owns all Securities outstanding under the Indenture,
or all outstanding Securities of each such series determined without regard to
this Section) shall be disregarded and deemed not to be outstanding, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a
responsible officer of the Trustee knows are so owned shall be so disregarded
provided, however, that Securities so owned which have been pledged in good
faith may be regarded as outstanding if it is established to the reasonable
satisfaction of the Trustee that the pledgee, and not the Company, any such
other obligor or Affiliate of either thereof, has the right so to act with
respect to such Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company of such other
obligor. Also, subject to the foregoing, only Securities outstanding at the time
shall be considered in any such determination.
SECTION 12.08. Rules by Trustee, Paying Agent and Registrar
The Trustee may make reasonable rules for action by or a meeting of
Securityholders or for evidencing the due execution of consents or waivers by
Securityholders. The Security Registrar and the Paying Agent may make reasonable
rules for their functions.
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SECTION 12.09. Legal Holidays
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open in the State of New York, the State of
Delaware, or the State of North Carolina. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 12.10. Governing Law
This Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
SECTION 12.11. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities of this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 12.12. Successors
All agreements of the Company in this Indenture and the Securities shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 12.13. Multiple Originals
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
SECTION 12.14. Table of Contents; Headings
The table of contents and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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SECTION 12.15. Separability Clause
In case any provision in this Indenture or the Securities shall be held to
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 12.16. Entire Agreement
This Indenture embodies the entire agreement between the parties hereto
regarding the subject matter hereof, and supersedes any and all prior and
contemporaneous agreements between such parties regarding the subject matter
hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
CONECTIV
Attest:
by
Title: Title:
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, AS TRUSTEE
Attest:
by
Title: Title:
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STATE OF DELAWARE
SS.:
COUNTY OF NEW CASTLE
On this _____ day of May, 1999, before me personally came ___________, to
me known, who, being by me duly sworn, did depose and say that he/she resides at
Wilmington, Delaware 19899; that he/she is of CONECTIV, one of the corporations
described in and which executed the foregoing instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument bearing the
corporate name of said corporation is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that he/she
signed his/her name thereto by like order.
Notary Public
STATE OF_________________
SS.:
COUNTY OF________________
On the ____ day of May, 1999, before me personally came ______________, to
me known, who, being by me duly sworn, did depose and say that he/she resides at
_________________, and that he/she is an _________________ of _________________,
one of the corporations described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument bearing the corporate name of said corporation is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he/she signed his/her name thereto by
like authority.
Notary Public
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<PAGE> 56
FORM OF MEDIUM-TERM NOTE
[See legend at the end of this Security for restrictions on transfer and change
of form].
CONECTIV
MEDIUM-TERM NOTE, SERIES _________
NO.____________ $____________
Original Interest Accrual Date: Redeemable: Yes___ No___
Interest Rate: Initial Redemption Date:
Stated Maturity Date: Initial Redemption Price:
Issue Price ( %): Reduction Percentage:
Interest Payment Dates:
Regular Record Dates:
CONECTIV, a Delaware corporation (hereinafter called the Company), for
value received, hereby promises to pay to ____________ or registered assigns,
the principal sum of $_________ on the Stated Maturity Date specified above, and
to pay interest thereon from the Original Interest Accrual Date specified above
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on the Interest Payment Dates
specified above in each year, commencing with the Interest Payment Date next
succeeding the Original Interest Accrual Date specified above, and at maturity,
at the Interest Rate per annum specified above, until the principal hereof is
paid or duly provided for. The interest so payable, and paid or duly provided
for, on any Interest Payment Date shall, as provided in such Indenture, be paid
to the person in whose name this Security is registered at the close of business
on the Regular Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date. Notwithstanding the foregoing, (a) if the
Original Interest Accrual Date of this Security is after a Regular Record Date
and before the corresponding Interest Payment Date, interest so payable for the
period from and including the Original Interest Accrual Date to but excluding
such Interest Payment Date shall be paid on the next succeeding Interest Payment
Date to the Holder hereof on the related Regular Record Date; and (b) interest
payable at maturity shall be paid to the person to whom principal shall be paid.
Except as otherwise provided in said Indenture, any such interest not so paid or
duly provided for shall 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 is registered at the close of business on a special record date for the
payment of such unpaid interest to be fixed by the Trustee, notice of which
shall be given to Holders of Securities of this series not less than 15 days
prior to such special record date, or 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.
Payment of the principal of and premium, if any, on this Security and
interest hereon at maturity shall be made upon presentation of this Security at
the corporate trust office of First
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Union Trust Company, National Association in Wilmington, Delaware, or at such
other office or agency as may be designated for such purpose by the Company from
time to time. Payment of interest on this Security (other than interest at
maturity) shall be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Security Register, except that (a)
if such person shall be a securities depositary, such payment may be made by
such other means in lieu of check, as shall be agreed upon by the Company, the
Trustee or other Paying Agent and such person and (b) upon the written request
of a Holder of not less than $10 million in aggregate principal amount of
Securities (as hereinafter defined) of the same series delivered to the Company
and the Paying Agent at least 15 days prior to any Interest Payment Date,
payment of interest on such Securities to such Holder on such Interest Payment
Date shall be made by wire transfer of immediately available funds to an account
maintained within the continental United States specified by such Holder or, if
such Holder maintains an account with the entity acting as Paying Agent, by
deposit into such account. Payment of the principal of and premium, if any, and
interest on this Security, as aforesaid, shall be made in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and issuable in one or more
series under and equally secured by an Indenture, dated as of ____________, 1999
(such Indenture as originally executed and delivered and as supplemented or
amended from time to time thereafter, together with any constituent instruments
establishing the terms of particular Securities, being herein called the
"Indenture"), between the Company and First Union Trust Company, National
Association, 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 description of the
respective rights, limitations of rights, duties and immunities of the Company,
the Trustee and the Holders of the Securities thereunder and of the terms and
conditions upon which the Securities are, and are to be, authenticated and
delivered and secured. The acceptance of this Security shall be deemed to
constitute the consent and agreement by the Holder hereof to all of the terms
and provisions of the Indenture. This Security is one of the series designated
above.
If any Interest Payment Date, any Redemption Date or the Stated Maturity
Date shall not be a Business Day (as hereinafter defined), payment of the
amounts due on this Security on such date may be made on the next succeeding
Business Day; and, if such payment is made or duly provided for on such Business
Day, no interest shall accrue on such amounts for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity Date, as the case may
be, to such Business Day.
If, as specified above, this Security is redeemable, this Security is
subject to redemption at any time on or after the Initial Redemption Date
specified above, as a whole or in part, at the election of the Company, at the
applicable redemption price (as described below) plus accrued interest to the
date fixed for redemption. Such redemption price shall be the Initial Redemption
Price specified above for the twelve-month period commencing on the Initial
Redemption Date and shall decline for the twelve-month period commencing on each
anniversary of the Initial
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Redemption Date by a percentage of principal amount equal to the Reduction
Percentage specified above until such redemption price is 100% of the principal
amount of this Security to be redeemed.
[Insert provisions, if any, for redemption pursuant to a sinking fund or
analogous provision or at the option of the Holder.]
Notice of redemption [(other than at the election of the Holder)] shall be
given by mail to Holders of Securities, not less than 30 days nor more than 60
days prior to the date fixed for redemption, all as provided in the Indenture.
As provided in the Indenture, notice of redemption at the election of the
Company as aforesaid may state that such redemption shall be conditional upon
the receipt by the Trustee of money sufficient to pay the principal of and
premium, if any, and interest, if any, on this Security on or prior to the date
fixed for such redemption; a notice of redemption so conditioned shall be of no
force or effect if such money is not so received and, in such event, the Company
shall not be required to redeem this Security.
In the event of redemption of this Security in part only, a new Security
or Securities of this series, of like tenor, for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing the principal of this
Security may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Trustee to enter into one or more supplemental indentures for the purpose of
adding any provision to, or changing in any manner or eliminating any of the
provisions of, the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all series then
outstanding under the Indenture, considered as one class; provided, however,
that if there shall be Securities of more than one series (or Securities of a
single series which have different Terms) outstanding under the Indenture and if
a proposed supplemental indenture shall directly affect the rights of the
Holders of Securities of one or more series (or Securities of a single series
which have different Terms), and shall not affect the rights of Holders of one
or more of the other series (or other Securities of such single series which
have different Terms), then the consent only of the Holders of a majority in
aggregate principal amount of the outstanding Securities so directly affected,
considered as one class, shall be required; and provided, further, that the
Indenture permits the Trustee to enter into one or more supplemental indentures
for limited purposes without the consent of any Holders of Securities. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities then outstanding, on behalf of the Holders of
all Securities, to waive compliance by the Company 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 therefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
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As provided in the Indenture and subject to certain limitations therein
set forth, this Security or any portion of the principal amount thereof will be
deemed to have been paid for all purposes of the Indenture and to be no longer
outstanding thereunder, and, at the election of the Company, the Company's
entire indebtedness in respect thereof will be satisfied and discharged, if
there has been irrevocably deposited with the Trustee or any Paying Agent (other
than the Company), in trust, money in an amount which will be sufficient and/or
U.S. Government Obligations, the principal of and interest on which when due,
without regard to any reinvestment thereof, will provide moneys which, together
with moneys so deposited, will be sufficient to pay when due the principal of
and premium, if any, and interest on this Security when due.
The Indenture contains terms, provisions and conditions relating to the
consolidation or merger of the Company with or into, and the conveyance or other
transfer, or lease, of assets to, another person, to the assumption by such
other person, in certain circumstances, of all of the obligations of the Company
under the Indenture and on the Securities and to the release and discharge of
the Company, in certain circumstances, from such obligation. The Indenture also
contains terms, provisions and conditions relating to the assumption by a
subsidiary of the Company, in certain circumstances, of all the obligations
under the Securities and under the Indenture in respect of the Securities and to
the release and discharge of the Company, in certain circumstances, from such
obligation.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon presentment of this Security for registration of transfer at the
corporate trust office of First Union Trust Company, National Association in
Wilmington, Delaware or such other office or agency as may be designated by the
Company from time to time, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company, the Trustee or the
Security Registrar, as the case may be, 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 of like tenor and
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only as registered Securities,
without coupons, and 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 the same series, of any authorized
denominations, as requested by the Holder surrendering the same, and of like
tenor upon presentment of the Security or Securities to be exchanged at the
corporate trust office of First Union Trust Company, National Association in
Wilmington, Delaware or such other office or agency as may be designated by the
Company from time to time.
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.
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Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee, the Paying Agent or the Security Registrar may treat
the person in whose name this Security is registered as the absolute owner
hereof for all purposes, whether or not this Security be overdue, and none of
the Company, the Trustee, the Paying Agent or the Security Registrar shall be
affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, except to the extent that the
Trust Indenture Act shall be applicable.
As used herein, "Business Day" means any day, other than a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York, the State of Delaware or the State of North Carolina. All
other terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
As provided in the Indenture, a director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or for any claim based on, in
respect of or by reason of such obligation or their creation.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Conectiv, has caused this Instrument to be executed
under its corporate seal.
CONECTIV
By:____________________________
(CERTIFICATE ON AUTHENTICATION)
This is one of the Securities, of the series designated therein, described
in the within-mentioned Indenture.
Dated:____________________________
_______________________, as Trustee,
By
Authorized Officer
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (the "Depositary") to the Company or its agent for
registration of transfer, exchange or payment, and any certificate to be issued
is registered in the name of Cede & Co. or
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such other name as requested by an authorized representative of the depositary
(any amount payable thereunder is made payable to Cede & Co. or such other
name), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein. Unless and until this Security is exchanged in whole or in part
for certificated Securities registered in the names of the various beneficial
holders hereof as then certified to the Company and the Trustee by the
Depositary or a successor depositary, this Security may not be transferred
except as a whole by the Depositary to its nominee or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depositary or a nominee of such
successor depositary. This Security may be exchanged for definitive Securities
registered in the respective names of the beneficial holders hereof, and
thereafter shall be transferable without restrictions if: (A) the Depositary, or
any successor securities depositary, shall have notified the Company and the
Trustee that it is unwilling or unable to continue to act as securities
depositary with respect to the Securities and the Trustee shall not have been
notified by the Company within ninety (90) days of the identity of a successor
securities depositary with respect to the Securities; (B) the Company shall have
delivered to the Trustee a Company Order to the effect that the Securities shall
be so exchangeable on and after a date specified therein; or (C)(1) an Event of
Default shall have occurred and be continuing, (2) the Trustee shall have given
notice of such Event of Default pursuant to Section 6.05 of the Indenture and
(3) there shall have been delivered to the Company and the Trustee an Opinion of
Counsel to the effect that the interests of the beneficial owners of the
Securities in respect thereof will be materially impaired unless such owners
become Holders of definitive Securities.
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FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
[please insert social security or other identifying number of assignee]
_______________________________________________________________________________
[please print or typewrite name and address of assignee]
_______________________________________________________________________________
the within Security of CONECTIV and does hereby irrevocably constitute and
appoint ________ _________________________, Attorney, to transfer said Security
on the books of the within-mentioned Company, with full power of substitution in
the premises.
Dated:___________________________
<PAGE> 63
Notice: The signature to this assignment must correspond with the name as
written upon the face of the Security in every particular without alteration or
enlargement or any change whatsoever.
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<PAGE> 1
Exhibit 4(b)
================================================================================
CONECTIV
OFFICER'S CERTIFICATE
(Under Section 2.01 of the Indenture,
dated as of _________ ___, 1999)
Establishing Series of Securities Designated
Medium-Term Notes, Series A
___________ ___, 1999
================================================================================
<PAGE> 2
CONECTIV
OFFICER'S CERTIFICATE
(Under Section 2.01 of the Indenture,
dated as of ________ ___, 1999)
I, __________________, Treasurer of Conectiv (the "Company"), in
accordance with Section 2.01 of the Indenture, dated as of ______ ___, 1999 (the
"Indenture", capitalized terms used herein and not defined herein having the
meanings specified in the Indenture), of the Company to First Union Trust
Company, National Association, as trustee (the "Trustee"), pursuant to Board
Resolution (a true and complete copy of which the undersigned hereby certifies
is attached hereto as Exhibit B and which the undersigned hereby certifies is in
full force and effect) do hereby establish a series of Securities having the
terms and characteristics set forth in this Officer's Certificate.
PART I
Set forth below in this Part I are the terms and characteristics of
the series of Securities established hereby referred to in clauses (1) through
(20) in the second paragraph of Section 2.01 of the Indenture (the numbered
clauses set forth herein corresponding to such clauses in said Section 2.01).
(1) the title of the Securities of such series, being Series No. 1
under the Indenture, shall be "Medium-Term Notes, Series A" (the Securities of
such series, for purposes of this Officer's Certificate, being sometimes
hereinafter called the "Notes");
(2) the aggregate principal amount of Notes which may be
authenticated and delivered under the Indenture shall not be limited;
(3) the date or dates on which the principal of the Notes shall be
payable as shall be determined at the time of sale of the Notes, by the proper
officers of the Company and communicated to the Trustee by Company Order, or by
the proper officers of the Company pursuant to the Administrative Procedure (the
"Administrative Procedure") attached as Annex II to the Distribution Agreement
dated __________, 1999 among the Company, Lehman Brothers, Credit Suisse First
Boston; Banc One Capital Markets, Inc. and First Union Capital Markets,
provided, however, that in no event shall any Security have a term of less than
nine months or more than 40 years;
(4) the Notes may bear interest at a fixed rate (any such Note being
hereinafter a "Fixed Rate Note"), or they may bear no interest. There shall be
determined by the proper officers of the Company and communicated to the Trustee
by Company Order, or by the proper officers of the Company pursuant to the
Administrative Procedure, at the time of sale of the Notes, the interest rate or
rates (including the interest rate, if any, on overdue principal, premium or
interest, if any), applicable to such Fixed Rate Notes and interest shall accrue
on any Notes from the Original Interest Accrual Date specified and defined in
such Notes or the most recent date to which interest has been paid or duly
provided for; the
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<PAGE> 3
Interest Payment Dates on the Notes shall be determined at the time of sale of
the Notes by the proper officers of the Company and communicated to the Trustee
by Company Order, or determined by the proper officers of the Company pursuant
to the Administrative Procedure, and the regular record date with respect to
each such Interest Payment Date shall be the date 15 calendar days immediately
preceding such Interest Payment Date (whether or not a Business Day);
(5) the corporate trust office of First Union Trust Company,
National Association in Wilmington, Delaware shall be the place at which the
principal of and premium, if any, and interest, if any, on the Notes at maturity
shall be payable upon presentment, interest prior to maturity to be paid as
specified in the form of Note attached hereto, and First Union Trust Company,
National Association shall be the Security Registrar and a Paying Agent for the
Notes; provided, however, that the Company reserves the right to change, by one
or more Officer's Certificate supplemental to this Officer's Certificate, any
such place or the Security Registrar or such Paying Agent; and provided,
further, that the Company reserves the right to designate, by one or more
Officer's Certificates supplemental to this Officer's Certificate, its principal
corporate office in Wilmington, Delaware as any such place or itself as the
Security Registrar;
(6) the Notes shall be redeemable in whole or in part, at the option
of the Company as and to the extent determined at the time of sale of the Notes
by the proper officers of the Company and communicated to the Trustee by Company
Order or determined by the proper officers of the Company pursuant to the
Administrative Procedure;
(7) the terms of any sinking fund and the obligation, if any, of the
Company to redeem or purchase the Notes pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the period or
periods within which or the date or dates on which the price or prices at which,
and the terms and conditions upon which, such Notes thereof shall be redeemed or
purchased, in whole or in part, pursuant to such obligation shall be determined
at the time of sale of the Notes by the proper officers of the Company and
communicated to the Trustee by Company Order, or determined by the proper
officers of the Company pursuant to the Administrative Procedure;
(8) the Notes shall be issued in denominations of $1,000 and any
integral multiple thereof;
(9) (inapplicable);
(10) (See Part II);
(11) (inapplicable);
(12) (inapplicable);
(13) (inapplicable);
(14) (inapplicable);
(15) the Notes shall be substantially in the form of Fixed Rate Note
attached hereto as
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<PAGE> 4
Exhibit A and hereby authorized and approved and shall have such further terms
as set forth in such form;
(16) (inapplicable);
(17) the Securities are initially to be issued in global form,
registered in the name of Cede & Co., as nominee for The Depository Trust
Company (the "Depository"). Such Notes shall not be transferable or
exchangeable, nor shall any purported transfer be registered, except as follows:
(i) such Notes may be transferred in whole, and appropriate
registration of transfer effected, if such transfer is by such
nominee to the Depository, or by the Depository to another nominee
thereof, or by any nominee of the Depository to any other nominee
thereof, or by the Depository or any nominee thereof to any
successor securities depositary or any nominee thereof; and
(ii) such Notes may be exchanged for definitive Notes
registered in the respective names of the beneficial holders
thereof, and thereafter shall be transferable without restriction,
if:
(A) the Depository, or any successor securities
depositary, shall have notified the Company and the Trustee
that it is unwilling or unable to continue to act as
depository with respect to such Notes and the Trustee shall
not have been notified by the Company within (90) ninety days
of the identity of a successor securities depositary with
respect to such Notes;
(B) the Company shall have delivered to the Trustee a
Company Order to the effect that such Notes shall be so
exchangeable on and after a date specified therein; or
(C) (I) an Event of Default shall have occurred and be
continuing, (II) the Trustee shall have given notice of such
Event of Default pursuant to Section 6.05 of the Indenture and
(III) there shall have been delivered to the Company and the
Trustee an Opinion of Counsel to the effect that the interests
of the beneficial owners of such Notes in respect thereof will
be materially impaired unless such owners become Holders of
definitive Notes;
it being understood that any such registration of transfer or exchange shall be
effected in accordance with Section 2.08 of the Indenture.
(18) inapplicable; no service charge shall be made for the
registration of transfer or exchange of the Notes; provided, however, that the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with such transfer or exchange; and
(19) (inapplicable); and
(20) See Part II.
-3-
<PAGE> 5
PART II
Set forth below in this Part II are additional terms of the
Medium-Term Notes, Series A-, as contemplated by clause (20) in the second
paragraph of Section 2.01 of the Indenture.
(a) the Notes shall have such further terms as are set forth in the
form of Fixed Rate Note attached hereto as Exhibit A;
(b) if the Company shall make any deposit of money and/or U.S.
Government Obligations with respect to any Notes, or any portion of the
principal amount thereof, as contemplated by Section 7.01 of the Indenture, the
Company shall not deliver an Officer's Certificate described in clause (z) in
the first paragraph of said Section 7.01 unless the Company shall also deliver
to the Trustee, together with such Officer's Certificate, either:
(i) an instrument wherein the Company, notwithstanding the
satisfaction and discharge of its indebtedness in respect of the Notes,
shall assume the obligation (which shall be absolute and unconditional) to
irrevocably deposit with the Trustee or Paying Agent such additional sums
of money, if any, or additional U.S. Government Obligations (meeting the
requirements of Section 7.01 or the Indenture), if any, or any combination
thereof, at such time or times, as shall be necessary, together with the
money and/or U.S. Government Obligations theretofore so deposited, to pay
when due the principal of and premium, if any, and interest due and to
become due on such Notes or portions thereof, all in accordance with and
subject to the provisions of said Section 7.01; provided, however, that
such instrument may state that the obligation of the Company to make
additional deposits as aforesaid shall be subject to the delivery to the
Company by the Trustee of a notice asserting the deficiency accompanied by
an opinion of an independent public accountant of nationally recognized
standing showing the calculation thereof (which shall be obtained at the
expense of the Company); or
(ii) an Opinion of Counsel to the effect that the Holders of such
Notes, or portions of the principal amount thereof, will not recognize
income, gain or loss for United States federal income tax purposes as a
result of the satisfaction and discharge of the Company's indebtedness in
respect thereof and will be subject to United States federal income tax on
the same amounts, at the same times and in the same manner as if such
satisfaction and discharge had not been effected; and
(c)(i) So long as any of the Notes shall remain outstanding, the
Company shall not create, issue, incur or assume any Secured Debt without
the consent of the Holders of a majority in principal amount of the
outstanding Securities of all series (including the Notes) with respect to
which this covenant is specified as contemplated by Section 2.01,
considered as one class (all such Securities being hereinafter called the
"Benefitted Securities").
(ii) The provisions of clause (c)(i) above shall not prohibit the
creation, issuance, incurrence or assumption of any Secured Debt if either
(A) the Company shall make effective provision whereby all
Benefitted Securities then
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<PAGE> 6
outstanding shall be secured equally and ratably with such Secured Debt;
or
(B) the Company shall deliver to the Trustee bonds, notes or other
evidences of indebtedness secured by the Lien which secures such Secured
Debt (hereinafter called "Secured Obligations") (I) in an aggregate
principal amount equal to the aggregate principal amount of the Benefitted
Securities then outstanding, (II) maturing (or being subject to mandatory
redemption) on such dates and in such principal amounts that, at each
stated maturity of the outstanding Benefitted Securities, there shall
mature (or be redeemed) Secured Obligations equal in principal amount to
the Securities then to mature and (III) containing, in addition to any
mandatory redemption provisions applicable to all Secured Obligations
outstanding under such Lien and any mandatory redemption provisions
contained therein pursuant to clause (II) above, mandatory redemption
provisions correlative to the provisions, if any, for the mandatory
redemption (pursuant to a sinking fund or otherwise) of the Benefitted
Securities or for the redemption thereof at the option of the Holder, as
well as a provision for mandatory redemption upon an acceleration of the
maturity of all outstanding Benefitted Securities following an Event of
Default (such mandatory redemption to be rescinded upon the rescission of
such acceleration); it being expressly understood that such Secured
Obligations (X) may, but need not, bear interest, (Y) may, but need not,
contain provisions for the redemption thereof at the option of the issuer,
any such redemption to be made at a redemption price or prices not less
than the principal amount thereof and (Z) shall be held by the Trustee for
the benefit of the Holders of all Benefitted Securities from time to time
outstanding subject to such terms and conditions relating to surrender to
the Company, transfer restrictions, voting, application of payments of
principal and interest and other matters as shall be set forth in an
indenture supplemental hereto specifically providing for the delivery to
the Trustee of such Secured Obligations.
(iii) If the Company shall elect either of the alternatives described in
clause (c)(ii) above, the Company shall deliver to the Trustee:
(A) an indenture supplemental to the Indenture (I) together with
appropriate inter-creditor arrangements, whereby all Securities then
outstanding shall be secured by the Lien referred to in clause (c)(ii)
above equally and ratably with all other indebtedness secured by such Lien
or (II) providing for the delivery to the Trustee of Secured Obligations;
(B) an Officer's Certificate (I) stating that, to the knowledge of
the signer, (1) no Event of Default has occurred and is continuing and (2)
no event has occurred and is continuing which entitles the secured party
under such Lien to accelerate the maturity of the indebtedness outstanding
thereunder and (II) stating the aggregate principal amount of indebtedness
issuable, and then proposed to be issued, under and secured by such Lien;
(C) an Opinion of Counsel (I) if the Benefitted Securities then
outstanding are to be secured by such Lien, to the effect that all such
Securities then outstanding are entitled to the benefit of such Lien
equally and ratably with all other indebtedness outstanding under such
Lien or (II) if Secured Obligations are to be delivered to the Trustee, to
the effect that such Secured Obligations have been duly issued under such
Lien and constitute valid obligations, entitled to the benefit of such
Lien equally and ratably with all other indebtedness then outstanding
under such Lien.
-5-
<PAGE> 7
(iv) For all purposes of this clause (c), except as otherwise expressly
provided or unless the context otherwise requires:
"Debt", with respect to any person, means (A) indebtedness of such
person for borrowed money evidenced by a bond, debenture, note or other
written instrument or agreement by which such person is obligated to repay
such borrowed money and (B) any guaranty by such person of any such
indebtedness of another person. "Debt" does not include, among other
things, (X) indebtedness of such person under any installment sale or
conditional sale agreement or any other agreement relating to indebtedness
for the deferred purchase price of property or services, (Y) obligations
of such person under any lease agreement (including any lease intended as
security), whether or not such obligations are required to be capitalized
on the balance sheet of such person under generally accepted accounting
principles, or (Z) liabilities secured by any Lien on any property owned
by such person if and to the extent that such person has not assumed or
otherwise become liable for the payment thereof.
"Lien" means any lien, deed of trust, pledge or security interest.
"Secured Debt", with respect to any person, means Debt created,
issued, incurred or assumed by such person which is secured by a Lien upon
any shares of stock of Delmarva Power & Light Company or Atlantic City
Electric Company, whether owned at the date of the initial authentication
and delivery of the Notes, or thereafter acquired.
(d) The Company shall be released and discharged from all
obligations on the Notes and under the Indenture in respect of the Notes if:
(i) no Event of Default, or event which with the passage of time or the
giving of required notice, or both would become an Event of Default, has
occurred and is continuing; (ii) a subsidiary of the Company assumes such
obligations by delivering to the Trustee and to the Company a supplemental
indenture satisfactory in form and substance to the Trustee pursuant to which
such subsidiary (a) assumes, on a full recourse basis, the Company's
obligations on the Notes and the obligations under the Indenture relating to
the Notes, and (b) agrees that any covenants made by the Company with respect
to the Notes will become solely covenants of, and shall relate to, such
subsidiary; and (iii) at the time of such assumption the Company executes a
guarantee in form and substance satisfactory to the Trustee pursuant to which
the Company will fully and unconditionally guaranty the payment of the
obligations of the assuming subsidiary on the Notes and on the Indenture
relating to the Notes, including without limitation, payment, as and when
due, of the principal of and premium, if any, and interest, if any, on the
Notes.
------------
-6-
<PAGE> 8
IN WITNESS WHEREOF, I have executed this Officer's Certificate this
___ day of ____, 1999.
-----------------------------------
Name:
Title:
-7-
<PAGE> 1
Exhibit 5
May 11, 1999
Conectiv
800 King Street
P.O. Box 231
Wilmington, DE 19899
Re: Issuance and Sale of up to
$250 Million of Debt Securities
Ladies and Gentlemen:
I am General Counsel of Conectiv, a corporation organized
under the laws of Delaware (the "Company"). I have acted as counsel to the
Company in connection with the proposed issuance of unsecured debt securities
(the "Debt Securities") of the Company to be issued pursuant to the terms of an
indenture from the Company to the First Union Trust Company, as trustee (the
"Indenture"), to be issued and sold from time to time by the Company. The Debt
Securities are to be issued in an aggregate principal amount of up to
$250,000,000, as contemplated by the registration statement on Form S-3 filed
with the Securities and Exchange Commission on February 12, 1999, as proposed to
be amended (the "Registration Statement"), for the registration of the Debt
Securities under the Securities Act of 1933, as amended (the "Act"), and the
qualification of the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The corporate proceedings and other actions taken
by the Company in connection with the authorization, registration, issuance and
sale by the Company of the Securities have been reviewed by me or taken under my
advice and direction as General Counsel for the Company.
I or attorneys in whom I have confidence have examined and are
familiar with originals or copies, certified or otherwise identified to my
satisfaction, of the Registration Statement and the Indenture. I or attorneys in
whom I have confidence have also examined such other corporate records,
certificates and documents and have reviewed such questions of law as I consider
necessary or appropriate for purpose of the opinions expressed below.
<PAGE> 2
I am of the opinion that the Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
Based upon the foregoing and subject to the qualifications
hereinafter expressed, I am of the opinion that all action necessary for the due
authorization and legal issuance by the Company of the Debt Securities from time
to time will have been taken when:
(a) the Registration Statement shall have become effective
under the Act and the Indenture shall have been qualified under the
Trust Indenture Act;
(b) the Company's Board of Directors shall have taken such
action as may be necessary to authorize the issuance and sale by the
Company of the Debt Securities on the terms set forth or contemplated
by the Registration Statement, and exhibits thereto, and to authorize
such other action as may be necessary in connection with the
consummation of the issuance and sale of the Debt Securities from time
to time;
(c) The Indenture shall have been appropriately executed and
delivered by the Company and the Trustee, and an Officer's Certificate
establishing the Debt Securities as a series shall have been
appropriately executed and delivered by the Company under the
Indenture;
(d) Each of the Debt Securities shall have been appropriately
executed by the Company and appropriately authenticated by the Trustee
in accordance with the applicable provisions of the Indenture; and
(e) the specific terms of the Debt Securities shall have been
determined, and such Debt Securities shall have been issued and
delivered by the Company to the purchasers thereof against payment
therefor, all on such terms and otherwise as contemplated by and in
conformity with, the acts, proceedings and documents referred to above.
I am further of the opinion that, when the foregoing steps
have been taken with respect to the Debt Securities, such Debt Securities will
be legal and binding obligations of the Company, enforceable in accordance with
their terms, except that such enforcement may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
<PAGE> 3
I am a member of the Bar of the State of Delaware and am not
an expert on the law of any jurisdiction other than laws of the State of
Delaware. The foregoing opinions do not pass upon the matter of compliance with
"blue sky" laws or similar laws relating to the sale or distributions of the
Debt Securities by any underwriters or agents. I hereby authorize and consent to
the use of this opinion as an exhibit to the Company's Registration Statement on
Form S-3 and to any references to me in the Registration Statement and the
Prospectus constituting a part thereof.
Very truly yours,
Peter F. Clark
<PAGE> 1
Exhibit 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Conectiv on Form S-3 (File No. 333-72251) of our report dated February 5, 1999,
on our audits of the consolidated financial statements of Conectiv and
subsidiary companies as of December 31, 1998 and 1997 and for each of the three
years in the period ended December 31, 1998, which report is included in
Conectiv's Annual Report on Form 10-K for the year ended December 31, 1998. We
also consent to the reference to our firm under the caption "Experts".
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 11, 1999
<PAGE> 1
Exhibit 23(c)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No 333-72251 of Conectiv on Form S-3 of our report dated
February 2, 1998 (March 1, 1998 as to Note 4), appearing in the Current Report
on Form 8-K of Atlantic Energy, Inc. dated March 3, 1998 and to the reference to
us under the heading "Experts" in the Prospectus, which is part of such
Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
May 11, 1999
