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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DELMARVA POWER & LIGHT COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE AND VIRGINIA 51-0084283
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
(302) 429-3011
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
BARBARA S. GRAHAM,
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
800 KING STREET
P.O. BOX 231
WILMINGTON, DELAWARE 19899
(302) 429-3448
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement, as determined by
market conditions.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Common Stock(2)........
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Debt Securities(3).....
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Total(4)............. $250,000,000 100% $250,000,000 $86,206.90
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(2) Subject to note (4) below, there are being registered hereunder such
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the Registrant.
(3) Subject to note (4) below, there are being registered hereunder such
indeterminate principal amount of Debt Securities as may be sold, from time
to time, by the Registrant.
(4) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$250,000,000.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
PROSPECTUS
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$250,000,000
DELMARVA POWER & LIGHT COMPANY
COMMON STOCK
MEDIUM TERM NOTES, SERIES C
FIRST MORTGAGE BONDS (SECURED MEDIUM-TERM NOTES)
----------------
Delmarva Power & Light Company (the "Company") may offer from time to time
not more than $250,000,000 in the aggregate of the following securities, at
prices and on terms to be determined at or prior to the time of sale: (i)
shares of Common Stock, par value $2.25 per share (the "New Common Stock");
(ii) unsecured Medium Term Notes, Series C (the "New Notes"), and (iii) First
Mortgage Bonds, which may be designated "Secured Medium-Term Notes" (the "New
Bonds")(the New Notes and the New Bonds are herein collectively called the
"Debt Securities" and the New Common Stock and the Debt Securities are herein
collectively called the "Securities").
Specific terms of each issue of the Securities will be set forth in an
accompanying prospectus supplement and, in the case of Medium-Term Notes, a
pricing supplement (collectively, a "Prospectus Supplement"), together with the
terms of the offering of such issue of the Securities. The applicable
Prospectus Supplement will set forth with regard to the particular Securities,
without limitation, the following: (i) in the case of the New Common Stock, the
number of shares of New Common Stock being issued at such time; and (ii) in the
case of the Debt Securities, the designation or designations, the principal
amount or amounts, the date or dates of maturity, the interest rate or rates,
the interest accrual date or dates, the interest payment dates, any sinking
fund or other redemption provisions and any other specific terms of the Debt
Securities being issued at such time.
The Debt Securities will be represented either by global securities
registered in the name of a nominee of The Depository Trust Company, as
depository, or by certificated securities issued to the registered owners
thereof, as set forth in the applicable Prospectus Supplement. Interests in the
global securities will be shown on, and transfers thereof will be effected only
through, records maintained by The Depository Trust Company (with respect to
its participants' interests) and by its participants or persons that hold
through such participants (with respect to the interest of persons other than
such participants). Except under the circumstances described herein,
certificated securities will not be issued in exchange for global securities.
For further information relating to the New Common Stock, see "Description of
the New Common Stock" herein and the applicable Prospectus Supplement. For
further information relating to the Debt Securities, see "Description of the
New Notes," "Description of the New Bonds" and "Book-Entry System" herein, and
the applicable Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Company may sell the Securities through underwriters, dealers or agents,
or directly to one or more purchasers. The applicable Prospectus Supplement
will set forth the names of underwriters, dealers or agents, if any, and the
price to the public of such Securities, any applicable commissions or discounts
and the net proceeds to the Company, or the means of determining the same, from
any such sale. See "Plan of Distribution" for possible indemnification
arrangements for underwriters, dealers, agents and purchasers.
Outstanding shares of Common Stock are listed on and the shares of New Common
Stock also will be listed on the New York Stock Exchange (Symbol: DEW) and the
Philadelphia Stock Exchange. The Debt Securities may be listed on one or more
securities exchanges at the Company's discretion.
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The date of this Prospectus is , 199
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "SEC" or the "Commission"). Such reports, proxy statements and
other information may be inspected and copied at the offices of the Commission
at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.; 14th
Floor, 500 West Madison Street, Chicago, Illinois; and 13th Floor, Seven World
Trade Center, New York, New York. Copies of this material may also be obtained
at prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Certain securities of the Company
are listed on the New York and Philadelphia Stock Exchanges, and reports, proxy
material and other information concerning the Company can also be inspected at
the offices of both Exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the Commission
pursuant to the Exchange Act, are incorporated by reference in this Prospectus
and shall be deemed to be a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1993; and
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
3. The Company's Current Report on Form 8-K dated May 25, 1994.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be made a part hereof from
their respective dates of filing; provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to Section 13 of
the Exchange Act prior to the filing with the Commission of the Company's most
recent Annual Report on Form 10-K shall not be deemed to be incorporated by
reference herein or to be a part hereof from and after the date of the filing
of such Annual Report on Form 10-K. The documents incorporated by reference
herein or in any documents incorporated or deemed to be incorporated by
reference herein are sometimes hereinafter called the "Incorporated Documents."
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for all purposes to the extent that a statement
contained in this Prospectus or in any subsequently filed Incorporated Document
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus has been delivered, on
the request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated by reference in this
Prospectus, other than exhibits to such Incorporated Documents, except exhibits
that are specifically incorporated by reference into the information that this
Prospectus incorporates. Requests for such copies should be directed to Mr.
Donald P. Connelly, Secretary, Delmarva Power & Light Company, 800 King Street,
P. O. Box 231, Wilmington, Delaware 19899, (302) 429-3011.
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<PAGE>
THE COMPANY
The Company was incorporated in Delaware on April 22, 1909, and in Virginia
on December 31, 1979. The Company's principal executive offices are located at
800 King Street, P. O. Box 231, Wilmington, Delaware 19899, (302) 429-3011.
The Company is an investor-owned public utility which provides electric
service to approximately 388,500 customers on the Delmarva Peninsula in an area
consisting of about 5,700 square miles with a population of approximately
1,000,000. The Company also provides natural gas service to approximately
93,000 customers in an area consisting of about 275 square miles with a
population of approximately 452,000 in northern Delaware, including the City of
Wilmington.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be added to its general funds and used for financing the
capital requirements of the Company, including financing the Company's utility
construction program, financing acquisitions of other entities or facilities,
refunding or redeeming, in whole or in part, certain of the Company's
outstanding securities, and other general corporate purposes relating to the
Company's utility business, including the repayment of short-term borrowings
incurred for any such purposes. To the extent the proceeds are not immediately
so used, they may be temporarily invested in short-term interest-bearing
obligations.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
12 MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, -----------------------------
1994 1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
(SEC Method).......................... 3.69X 3.47X 3.03X 2.58X 2.03X 3.01X
</TABLE>
Under the SEC Method, earnings, including AFUDC, have been computed by adding
the amount of income taxes and fixed charges to Net Income. Fixed charges
include gross interest expense and the estimated interest component of rentals.
Excluding the write-off of an investment in certain non-regulated subsidiary
projects, the ratio of earnings to fixed charges for the year ended December
31, 1990, would be 2.89X. Net income and income taxes related to the cumulative
effect of a change in accounting for unbilled revenues recorded in 1991 are
excluded from the computation of this ratio. Excluding the gain from the
Company's share of a settlement reached in the lawsuit against PECO Energy
Company, formerly known as Philadelphia Electric Company, in connection with
the shutdown of the Peach Bottom Atomic Power Station, the ratio of earnings to
fixed charges for the year ended December 31, 1992, would be 2.78X.
DESCRIPTION OF COMMON STOCK
The statements under this heading do not purport to be complete and are
subject to the detailed provisions of the Company's Restated Certificate and
Articles of Incorporation, as amended (the "Charter"), and the Company's
Mortgage and Deed of Trust dated October 1, 1943, as amended and supplemented
(the "Mortgage"), a copy of each of which has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The shares of the
Company's Common Stock currently outstanding and the New Common Stock are
herein collectively called the "Common Stock."
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<PAGE>
DIVIDEND RIGHTS
The holders of Common Stock shall be entitled to receive such dividends as
may be declared by the Board of Directors, except that the holders of the
Preferred Stock have a right to receive cumulative dividends at the rates set
forth in the title of each series thereof before any dividends are paid to the
holders of Common Stock.
LIMITATIONS ON PAYMENT OF DIVIDENDS ON COMMON STOCK
The Charter and the Mortgage contain restrictions on the payment of cash
dividends on Common Stock, including restrictions that would become applicable
if Common Stock equity were less than 25% of total capitalization. (At December
31, 1993, Common Stock equity was approximately 47.7% of total capitalization,
including Variable Rate Demand Bonds.) Retained earnings available for
dividends on Common Stock as of December 31, 1993, were approximately $223.8
million under the most restrictive of these provisions.
VOTING RIGHTS
The holders of Common Stock have one vote for each share held. Except as
provided by law and as hereinafter set forth, the holders of the Preferred
Stock are not entitled to vote. Upon default in the payment of dividends on the
Preferred Stock in an amount equivalent to or exceeding one year's dividends,
and until all dividends in default shall have been paid or declared and set
apart for payment, the holders of the Preferred Stock are entitled as a class
to elect a majority of the Board of Directors and the holders of the Common
Stock are entitled as a class to elect the remaining directors. The consent of
certain proportions of the Preferred Stock is required to effect a merger,
consolidation or sale or other disposition of all of the Company's assets, to
amend, alter, change or repeal any of the express terms of the Preferred Stock
in a manner prejudicial to its holders, to increase the authorized number of
shares of, or to create or authorize any kind of stock ranking prior to or on
parity with, or any security convertible into, the Preferred Stock and to issue
unsecured debt or additional shares of the Preferred Stock unless certain
capitalization and coverages tests are met. In some cases, the right to vote
only applies in certain circumstances.
OTHER RIGHTS
The holders of Common Stock have no preemptive rights to purchase additional
shares of Common Stock or securities convertible into Common Stock.
The outstanding shares of Common Stock are, and the additional shares offered
by this Prospectus upon issuance will be, fully paid and non-assessable.
Subject to the preferential rights of creditors and the holders of Preferred
Stock, the holders of the Common Stock are entitled to share ratably in the
distribution of all remaining assets in the event of liquidation.
CLASSIFICATION OF THE BOARD OF DIRECTORS
The Board of Directors is divided into three classes, each class consisting,
as nearly as possible, of one-third of the total number of directors
constituting the entire Board.
DESCRIPTION OF THE NEW NOTES
Unless otherwise specified in the applicable Prospectus Supplement, the
following description of the New Notes will apply.
The New Notes will be issued under the Company's Indenture, dated as of
November 1, 1988 (such Indenture, as supplemented and amended, together with
any constituent instruments establishing the terms of particular Notes (as
hereinafter defined), is herein called the "Indenture"), between the Company
and Chemical Bank, successor to Manufacturers Hanover Trust Company, as trustee
(the "Note Trustee"). The
4
<PAGE>
statements under this heading do not purport to be complete and are subject to
the detailed provisions of the Indenture, a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
GENERAL
The Indenture provides that, in addition to the New Notes offered hereby,
additional debt securities (including both interest-bearing and original issue
discount securities) may be issued thereunder without limitation as to the
aggregate principal amount (Indenture, Section 301). The debt securities of all
series under the Indenture are herein collectively called the "Notes." The
Indenture does not limit the amount of other debt, secured or unsecured, that
may be issued by the Company. However, the Charter provides that, so long as
any shares of its Preferred Stock--$100 Par and Preferred Stock--$25 Par are
outstanding, the Company must obtain the consent of the holders of a majority
of the voting power of such Preferred Stock in order to issue or assume any
unsecured debt (other than for refunding or renewing outstanding unsecured
securities of the Company resulting in equal or longer maturities or redeeming
or retiring all outstanding shares of the Company's Preferred Stock) if such
action would cause the total outstanding principal amount of all unsecured debt
to exceed 20% of the Company's secured debt in the aggregate outstanding and
the capital stock, premiums thereon, and surplus of the Company, as stated on
its books at such time.
The New Notes will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Company. Substantially all of the properties
of the Company are subject to the lien of the Mortgage securing the Company's
First Mortgage Bonds. (See "Description of the New Bonds.")
Each New Note will have a maturity ranging from nine months to forty years
commencing on its date of original issuance (the "Original Issue Date"). Unless
otherwise specified in the applicable Prospectus Supplement, each New Note will
bear interest from, and including, the Original Issue Date, or, if later, the
most recent date to which interest has been paid or duly provided for, to, but
excluding, the Interest Payment Date (as hereinafter defined), at the rate per
annum stated on the face thereof until the principal amount thereof is paid or
made available for payment. Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the New Notes being offered hereby
and thereby: (1) the designation or designations and the principal amount or
amounts of such New Notes; (2) the purchase price or prices of such New Notes
(the "Issue Price"); (3) the Original Issue Date; (4) the date or dates on
which such New Notes will mature (the "Maturity Date"); (5) the rate or rates
per annum at which and the initial date or dates from which such New Notes will
bear interest (the "Interest Rate"); (6) the initial date or dates from which
interest will accrue; (7) the date or dates on which such interest will be
payable (each, an "Interest Payment Date"); (8) any sinking fund or other
redemption provisions; (9) whether such New Notes will be issued in global form
and, if so, the minimum denominations of interests therein; and (10) any other
specific terms of such New Notes.
FORM, EXCHANGE AND PAYMENT
The New Notes will be issued in fully registered form in denominations of
$1,000 and integral multiples thereof. The New Notes will be transferable and
exchangeable at the office of the Note Trustee in New York City, without
charge, other than taxes or other governmental charges incident thereto
(Indenture, Section 305). Interest on each Interest Payment Date, except at
maturity or upon redemption, will be paid by check in New York Clearing House
funds mailed to the holder of record as of the close of business on the Record
Date with respect to such Interest Payment Date (unless otherwise specified in
the applicable Prospectus Supplement, the Record Date shall be the 15th day of
the calendar month, whether or not a Business Day (as hereinafter defined),
next preceding such Interest Payment Date); provided, however, that, unless
otherwise specified in the applicable Prospectus Supplement, if the Original
Issue Date of any New Note is after a Record Date and before the corresponding
Interest Payment Date, such New Note will bear interest from
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<PAGE>
the Original Issue Date but payment of interest shall commence on the second
Interest Payment Date succeeding the Original Issue Date. Payment of the
principal of and premium and interest, if any, on the New Notes at the Maturity
Date or upon redemption will be in immediately available funds upon
presentation of the New Notes at the office of the Note Trustee (Indenture,
Section 307, and Form of New Note). If the Maturity Date or any Interest
Payment Date 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 after the scheduled payment
date. "Business Day" means any day, other than a Saturday or Sunday, that is
not a day on which banking institutions in New York City are generally
authorized or obligated by law or executive order to remain closed.
Notwithstanding the foregoing, if the Company elects to use the book-entry
system through the Depository (as defined in "Book-Entry System"), for so long
as the New Notes shall be held by the Depository or its nominee, owners of
interests in the New Notes will not be entitled to have any individual New
Notes registered in their names, and transfers of interests and payments of
principal, premium, if any, and interest will be made as described herein under
"Book-Entry System."
REDEMPTION
Any terms for the optional or mandatory redemption of New Notes will be set
forth in the applicable Prospectus Supplement. If redeemable, such New Notes
will be redeemed only upon notice, by mail, not less than 30 nor more than 60
days prior to the date fixed for redemption. Any notice of optional redemption
may state that such redemption shall be conditional upon the receipt by the
Note Trustee, on or prior to the date fixed for such redemption, of money
sufficient to pay the principal of and the premium and interest, if any, on the
New Notes to be redeemed and that if such money has not been so received, such
notice will be of no force or effect and the Company will not be required to
redeem such New Notes (Indenture, Section 404).
EVENTS OF DEFAULT
The following constitute Events of Default under the Indenture with respect
to each series of Notes outstanding thereunder:
(a) failure to pay any interest on any Note of such series or any
additional amount payable pursuant to the Indenture within 30 days after
the same becomes due and payable;
(b) failure to pay the principal of, or premium, if any, on, any Note of
such series within 3 Business Days after its maturity;
(c) failure to perform or breach of any covenant or warranty of the
Company in the Indenture (other than a covenant or warranty of the Company
in the Indenture solely for the benefit of one or more series of Notes
other than such series) for 90 days after written notice to the Company by
the Note Trustee or to the Company and the Note Trustee by the Holders of
at least 25% in principal amount of the Notes of such series outstanding
under the Indenture as provided in the Indenture;
(d) default under any bond, debenture, note or other evidence of
indebtedness of the Company for borrowed money (including Notes of other
series issued under the Indenture) or under any mortgage, indenture or
other instrument securing or evidencing any indebtedness of the Company for
borrowed money, which default:
(1) shall constitute a failure to make any payment in excess of
$5,000,000 of the principal of, or interest on, such indebtedness, or
(2) shall have resulted in such indebtedness in an amount in excess
of $10,000,000 becoming or being declared due and payable prior to the
date it would otherwise have become due and payable, without such
payment having been made, such indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within a period of
90 days after written notice
6
<PAGE>
to the Company by the Note Trustee or to the Company and the Note
Trustee by the Holders of at least 25% in principal amount of the Notes
of such series outstanding under the Indenture as provided in the
Indenture;
(e) certain events of bankruptcy, insolvency or reorganization; and
(f) any other Event of Default specified with respect to the Notes of
such series (Indenture, Section 801).
An Event of Default with respect to the New Notes does not necessarily
constitute an Event of Default with respect to the Notes of any other series
issued under the Indenture.
REMEDIES
If an Event of Default with respect to any series of any Notes occurs and is
continuing, then either the Note Trustee or the Holders of not less than 33% in
principal amount of the Notes of such series may declare the principal amount
of all of the Notes of such series to be due and payable immediately; provided,
however, that if any Event of Default occurs and is continuing with respect to
more than one series of Notes, the Note Trustee or the Holders of not less than
33% in aggregate principal amount of the Notes of all such series, considered
as one class, may make such declaration of acceleration and not the Holders of
the Notes of any one of such series.
At any time after the declaration of acceleration with respect to the Notes
of any series has been made and before a judgment or decree for payment of the
money due has been obtained, the Holders of a majority in principal amount of
the Notes of such series, by written notice to the Company and the Note
Trustee, may rescind and annul such declaration and its consequences, if:
(a) the Company has paid or deposited with the Note Trustee a sum
sufficient to pay
(1) all overdue interest on all Notes of such series;
(2) the principal of and premium, if any, on any Notes of such series
that have become due otherwise than by such declaration of acceleration
and interest thereon at the rate or rates prescribed therefor in such
Notes;
(3) interest upon overdue interest at the rate or rates prescribed
therefor in such Notes, to the extent that payment of such interest is
lawful; and
(4) all amounts due to the Note Trustee under the Indenture;
and
(b) any other Event or Events of Default with respect to the Notes of
such series, other than the nonpayment of the principal of Notes of such
series which has become due solely by such declaration of acceleration,
have been cured or waived as provided in the Indenture (Indenture, Section
802).
If an Event of Default with respect to the Notes of any series occurs and is
continuing, the Holders of a majority in principal amount of the Notes of such
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Note Trustee, or exercising any
trust or power conferred on the Note Trustee, with respect to the Notes of such
series; provided, however, that if an Event of Default occurs and is continuing
with respect to more than one series of Notes, the Holders of a majority in
aggregate principal amount of the Notes of all such series, considered as one
class, will have the right to make such direction, and not the Holders of the
Notes of any one of such series; and provided, further, that (a) any such
direction will not be in conflict with any rule of law or with the Indenture
and could not involve the Note Trustee in personal liability in circumstances
where indemnity would not, in the Note Trustee's sole discretion, be adequate
and (b) the Note Trustee may take any other action its deems proper which is
not inconsistent with such direction (Indenture, Section 812). The right of a
Holder of any Note of such series to institute a proceeding with respect to the
Indenture is subject to certain conditions precedent, but each Holder has an
absolute right to receive payment of principal and premium and interest, if
any, when
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<PAGE>
due and to institute suit for the enforcement of any such payment (Indenture,
Sections 807 and 808). The Indenture provides that the Note Trustee, within 90
days after the occurrence of any default thereunder with respect to the Notes
of a series, is required to give the Holders of the Notes of such series notice
of any default, unless cured or waived; provided, however, that, except in the
case of a default in the payment of principal of or premium or interest, if
any, on any Notes of such series, the Note Trustee may withhold such notice if
the Note Trustee determines that it is in the interest of such Holders to do
so; and provided, further, that in the case of an Event of Default of the
character specified above in clause (c) under "Events of Default," no such
notice shall be given to such Holders until at least 30 days after the
occurrence thereof (Indenture, Section 902).
The Company will be required to furnish annually to the Note Trustee a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance (Indenture,
Section 608).
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company will not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person unless (a) the corporation formed by such consolidation
or into which the Company is merged or the Person that acquires by conveyance
or transfer, or that leases, the property and assets of the Company
substantially as an entirety, is a Person organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia,
and such Person expressly assumes, by supplemental indenture, the due and
punctual payment of the principal of and premium and interest, if any, on all
of the Notes and the performance of all of the covenants of the Company under
the Indenture, (b) immediately after giving effect to such transactions, no
Event of Default, and no event that after notice or lapse of time would become
an Event of Default, will have occurred and be continuing, and (c) the Company
shall have delivered to the Note Trustee an Officers' Certificate and an
Opinion of Counsel confirming that such transaction is in compliance with the
Indenture (Indenture, Section 1101).
MODIFICATION OF INDENTURE
Without the consent of any Holders of Notes, the Company and the Note Trustee
may enter into one or more supplemental indentures for any of the following
purposes:
(a) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company in the
Indenture and the Notes; or
(b) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Notes or Tranche thereof or to surrender any right
or power conferred upon the Company by the Indenture; or
(c) to add any additional Events of Default with respect to all or any
series of Notes; or
(d) to change or eliminate any provision of the Indenture; provided,
however, that if such change or elimination will materially and adversely
affect the interests of the Holders of the Notes of any series or Tranche
thereof, such change or elimination will become effective with respect to
such Notes only when they no longer remain Outstanding; or
(e) to provide collateral security for the Notes; or
(f) to establish the form or terms of Notes of any series or Tranche
thereof as contemplated by the Indenture; or
(g) to evidence and provide for acceptance of the appointment of a
separate or successor trustee under the Indenture with respect to the Notes
of one or more series and to add to or change any of the provisions of the
Indenture as shall be necessary to provide for or to facilitate the
administration of the trusts under the Indenture by more than one Note
Trustee; or
8
<PAGE>
(h) to provide for the procedures required to permit the utilization of a
noncertificated system of registration for any Notes or Tranche thereof; or
(i) to cure any ambiguity, defect or inconsistency or to make any other
provisions with respect to matters and questions arising under the
Indenture; provided, however, that such action or other provisions shall
not adversely affect the interests of the Holders of Notes of any series or
Tranche thereof in any material respect. (Indenture, Section 1201.)
Other than as stated in the preceding paragraph, the consent of the Holders
of not less than a majority in principal amount of the Notes of all series,
considered as one class, is required for the purpose of adding any provisions
to, or changing in any manner or eliminating any of the provisions of, the
Indenture pursuant to a supplemental indenture; provided, however, that if less
than all of the series of Notes are directly affected by a supplemental
indenture, then the consent only of the Holders of a majority in aggregate
principal amount of the Notes of all series so directly affected, considered as
one class, will be required; and provided, further, that if the Notes of any
series shall have been issued in more than one Tranche and if the proposed
supplemental indenture shall directly affect the rights of the Holders of Notes
of one or more, but less than all, of such Tranches, then the consent only of
the Holders of a majority in aggregate principal amount of the Notes of all
Tranches so directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall, without the
consent of the Holder of each Note of each series or Tranche directly affected
thereby, (a) change the stated maturity of, or any installment of principal of
or interest on, any Note, or reduce the principal thereof or the rate of
interest, or redemption premium thereon, or change the method of calculating
the rate of interest thereon, or otherwise change the terms or place of payment
of the principal thereof or interest or redemption premium thereon, (b) reduce
the percentage in principal amount of the Notes of such series or Tranche
thereof required to consent to any supplemental indenture or waiver under the
Indenture or to reduce the requirements for quorum and voting, (c) change any
obligation of the Company to maintain an office or agency at the place or
places where the principal of and premium and interest, if any, on the Notes of
such series are payable, or (d) modify certain of the provisions in the
Indenture relating to supplemental indentures, waivers of certain covenants and
waivers of past defaults (Indenture, Section 1202).
A supplemental indenture that changes or eliminates any covenant or other
provision of the Indenture which has expressly been included solely for the
benefit of one or more particular series of Notes or Tranche thereof, or that
modifies the rights of the holders of Notes of such series or Tranche thereof
with respect to such covenants or other provisions, shall be deemed not to
affect the rights under the Indenture of the Holders of any Notes of any other
series or Tranche thereof (Indenture, Section 1202).
DEFEASANCE
The New Notes, or any portion of the principal amount thereof, will, prior to
the maturity thereof, be deemed to have been paid for purposes of the Indenture
(except as to certain rights such as rights of registrations of transfer or
exchange expressly provided for in the Indenture), and the entire indebtedness
of the Company in respect thereof will be deemed to have been satisfied and
discharged, if there shall have been irrevocably deposited with the Note
Trustee, in trust (a) money in an amount that will be sufficient, or (b)
Government Obligations (as hereinafter defined), that do 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 monies that, together with the
money, if any, deposited with or held by the Note Trustee, will be sufficient,
or (c) a combination of (a) and (b) that will be sufficient to pay when due the
principal of and premium and interest, if any, due and to become due on the New
Notes or such portion thereof on and prior to the maturity thereof. For this
purpose, "Government Obligations" include direct obligations of, or obligations
unconditionally guaranteed by, the United States of America entitled to the
benefit of the full faith and credit thereof and certificates, depository
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 (Indenture, Section 701).
9
<PAGE>
DESCRIPTION OF THE NEW BONDS
The New Bonds will be issued under the Mortgage, to which Chemical Bank is
the successor trustee (the "Bond Trustee"). The statements under this heading
do not purport to be complete and are subject to the detailed provisions of the
Mortgage. The bonds of all series under the Mortgage are herein collectively
called the "Bonds".
GENERAL
The New Bonds will have maturities ranging from nine months to forty years.
Each New Bond will bear interest from, and including, the date specified in the
applicable Prospectus Supplement, or, if later, the most recent date to which
interest has been paid or duly provided for, at the rate per annum stated on
the face thereof until the principal amount thereof is paid or made available
for payment. Interest on the New Bonds will be computed on the basis of a 360-
day year consisting of twelve 30-day months.
Reference is made to the applicable Prospectus Supplement for the following
terms and other information with respect to the New Bonds being offered hereby
and thereby: (1) the designation or designations and the principal amount or
amounts of such New Bonds; (2) the purchase price or prices of such New Bonds;
(3) the original issue date of such New Bonds; (4) the date or dates on which
such New Bonds will mature; (5) the rate or rates per annum at which and the
initial date or dates from which such New Bonds will bear interest; (6) the
initial date or dates from which interest will accrue; (7) the date or dates on
which such interest will be payable; (8) any sinking fund or other redemption
provisions; (9) whether such New Bonds will be issued in global form and, if
so, the minimum denominations of interests therein; and (10) any other specific
terms of such New Bonds.
FORM, EXCHANGE AND PAYMENT
The New Bonds will be issued in fully registered form in denominations of
$1,000 and integral multiples thereof. The New Bonds will be transferable and
exchangeable at the office of the Bond Trustee in New York City, without charge
other than taxes or other governmental charges incident thereto. Principal,
premium, if any, and interest will be payable at such office. Notwithstanding
the foregoing, if the Company elects to use the book-entry system through the
Depository, for so long as the New Bonds shall be held by the Depository or its
nominee, owners of interests in the New Bonds will not be entitled to have any
individual New Bonds registered in their names, and transfers of interests and
payments of principal, premium, if any, and interest will be made as described
herein under "Book-Entry System."
MAINTENANCE FUND
If the amount expended by the Company for certain property additions does not
at the end of each calendar year equal the minimum provision for property
retirements or depreciation (as defined in the Mortgage), computed cumulatively
at the end of each such year, the Company is required to deposit with the Bond
Trustee cash, to the extent of the difference less certain credits, on or
before the next succeeding April 30. The Company may not satisfy the
maintenance requirement by the deposit of cash with the Bond Trustee so long as
property additions remain available as a maintenance fund credit.
Minimum provision for property retirements or depreciation means the greater
of (a) an amount equal to 1/12 of 2 1/2% (2 1/4% prior to September 1, 1967) of
the mathematical average of depreciable fixed property on the books of the
Company on the first and last days of any period, multiplied by the number of
full calendar months included in such period, or (b) the remainder of (i) 15%
of the gross operating revenues of the Company during such period arising from
the operation of bondable property after deducting the cost of electrical
energy and gas purchased for resale in connection with such operation, less
(ii) the charges of operating expenses for current repairs and maintenance of
bondable property.
For the calendar year 1993, the Company applied $66,300,000 of property
additions to satisfy the maintenance requirement.
10
<PAGE>
SECURITY
The New Bonds will be secured equally with all other Bonds outstanding or
hereinafter issued under the Mortgage (except as any sinking fund may afford
additional security for a particular series) by the lien of the Mortgage which
constitutes a first lien on substantially all of the Company's properties
consisting principally of electric generating stations, electric transmission
and distribution lines and substations, gas transmission and distribution
facilities and general office and service buildings, and including its
undivided fractional interest in certain properties, but not including certain
properties to the extent specifically excepted from such lien, such as cash,
securities, judgments, contracts, accounts receivable, choses in action and
goods, wares, merchandise, equipment, materials or supplies held or acquired
for sale or consumption.
Such lien is subject to (a) the conditions and limitations in the instruments
through which the Company claims title to its properties, (b) "excepted
encumbrances" (as defined in the Mortgage), and (c) the prior lien of the Bond
Trustee for its compensation, expenses and liability, and subject further to
the qualification that where payments for rights-of-way on or under private
property for transmission and distribution lines and mains were minor in
amount, no examination of underlying titles as to rights-of-way have been made.
After-acquired property may also be subject to prior liens and to possible
rights of others which may attach prior to recordation of a supplemental
indenture conveying such property to the Bond Trustee after its acquisition.
ISSUANCE OF ADDITIONAL BONDS
Subject to certain conditions and restrictions, additional Bonds may be
issued under the Mortgage to the extent of: (a) 60% of the bondable value of
property additions; (b) the aggregate principal amount of refundable prior lien
Bonds theretofore or then retired; (c) the aggregate principal amount of any
Bonds theretofore issued and thereafter or then retired; or (d) the amount of
cash deposited with the Bond Trustee against the issuance of Bonds, which cash
may be withdrawn to the extent of 60% of the bondable value of property
additions or of the aggregate principal amount of retired Bonds. As of December
31, 1993, the Company's property additions available for the issuance of
additional Bonds and other purposes, excluding retired bonds and any other
credits available for the issuance of additional Bonds, were $727,800,000.
Bonds may be issued pursuant to (a) and (d) above (and in certain cases (b) and
(c) above) only if "net earnings" (as defined in the Mortgage) shall be at
least two times the annual interest requirement on the first mortgage bonds and
prior lien bonds to be outstanding.
RELEASE AND SUBSTITUTION OF PROPERTY
Generally, mortgaged property may be released upon the deposit, pledge with
or certification to the Bond Trustee of the consideration received therefor,
but at not less than the fair value thereof.
DIVIDEND RESTRICTIONS ON COMMON STOCK
The Mortgage prohibits the payment of cash dividends on Common Stock unless
thereafter there remains earned surplus of the Company accumulated on or after
October 15, 1943, in an amount equivalent to any deficiency in the property
retirement and depreciation requirement computed in accordance with the
Mortgage. There is no such deficiency at this time.
MODIFICATION OF MORTGAGE
The Mortgage may be modified with the consent of the Company and of the
holders of 75% in principal amount of the Bonds then outstanding which are
affected by such modification; provided, however, that no such modification
shall change the terms of payment of the Bonds without the consent of the
bondholders affected, or reduce the percentage of consent required for
modification without the consent of all the bondholders.
11
<PAGE>
DEFAULT
The Mortgage provides that the following events will constitute "completed
defaults" thereunder: failure to pay principal; failure for 60 days to pay
interest; failure to pay principal, premium, or interest upon any outstanding
prior lien bonds beyond the period of grace specified; certain events in
involuntary bankruptcy or insolvency proceedings which continue for a period of
60 days after a court order or decree in such proceedings; certain events in
voluntary bankruptcy or insolvency proceedings; an assignment for benefit of
creditors; and failure to perform any other provisions of the Mortgage for 60
days after written notice shall have been given to the Company by the Bond
Trustee or to the Company and the Bond Trustee by the holders of at least 25%
in principal amount of the Bonds then outstanding. If a completed default
exists, the holders of not less than a majority in principal amount of the
Bonds then outstanding may in writing require the Bond Trustee to take such
action to enforce payment of the Bonds then outstanding and to foreclose the
Mortgage and sell the property. The Bond Trustee is not obligated to take the
aforesaid action unless the Bond Trustee has been reasonably indemnified. Under
the Mortgage, no periodic evidences are required to be furnished to the Bond
Trustee as to the absence of a completed default or as to compliance with the
terms of the Mortgage.
BOOK-ENTRY SYSTEM
The Debt Securities, at the option of the Company, may be issued as either
certificated securities or global securities. If, as described in the
applicable Prospectus Supplement, the Company shall elect to use a book-entry
system with respect to any issue of the Debt Securities, upon issuance, all of
such Debt Securities will be represented by one fully-registered global
security (the "Global Security"). The Global Security will be deposited with,
or on behalf of, The Depository Trust Company ("DTC") or such other depository
as may be subsequently designated (the "Depository") and registered in the name
of the Depository or a nominee thereof.
So long as the Depository, or its nominee, is the registered owner of a
Global Security, such Depository or such nominee, as the case may be, will be
considered the owner of such Global Security for all purposes under the
Indenture or the Mortgage, as the case may be, including notices and voting.
Payments of principal of, and premium, if any, and interest on, the Global
Security will be made to the Depository or its nominee, as the case may be, as
the registered owner of such Global Security. Except as set forth below, the
owners of beneficial interests in a Global Security will not be entitled to
have any individual Debt Securities registered in their names, will not receive
or be entitled to receive physical delivery of any such Debt Securities and
will not be considered the owners of Debt Securities under the Indenture or the
Mortgage, as the case may be. Accordingly, each person holding a beneficial
interest in a Global Security must rely on the procedures of the Depository
and, if such person is not a Direct Participant (as hereinafter defined), on
procedures of the Direct Participant through which such person holds its
interest, to exercise any of the rights of the registered owner of such Debt
Security.
The following is based solely on information furnished by DTC:
DTC will act as securities depository for the Global Securities. The Global
Securities will be issued as fully-registered securities registered in the name
of CEDE & Co. (DTC's partnership nominee).
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 Exchange Act. 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.
12
<PAGE>
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations ("Direct
Participants"). 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 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
Commission.
Purchases of the Debt Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for such purchases of
Debt Securities on DTC's records. The ownership interest of each actual
purchaser of each Debt Security ("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 purchases, but Beneficial Owners
are expected to receive written confirmation providing details of the
transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interest in the Debt Securities 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 Debt Securities, except in the event that use
of the book-entry system for the Debt Securities is discontinued.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
CEDE & Co. The deposit of Debt Securities 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 of the Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Debt Securities 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.
Conveyance 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.
If the Debt Securities are redeemable prior to the maturity date, redemption
notices shall be sent to CEDE & Co. If less than all of the Debt Securities 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 Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Company as soon as possible after the record date. The Omnibus Proxy assigns
CEDE & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Principal and interest payments on the Debt Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the date on which
interest is payable 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 payment 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 Note Trustee, the Bond Trustee, or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Company
and the Note Trustee or the Bond Trustee, as the case may be. Disbursement of
such payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
13
<PAGE>
DTC may discontinue providing services as securities depository with respect
to the Debt Securities at any time by giving reasonable notice to the Company,
the Note Trustee, and the Bond Trustee. The Company may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
securities depository). Under such circumstances, in the event that a successor
securities depository is not obtained, Debt Securities in certificated form
will be printed and delivered.
* * * * *
Neither the Company nor the Note Trustee nor the Bond Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interest in the Debt Securities or for
maintaining, supervising, or reviewing any records relating to such beneficial
interests.
VALIDITY OF THE SECURITIES
The validity of the Securities will be passed upon for the Company by Dale G.
Stoodley, General Counsel for the Company, and for any underwriters or agents
by Reid & Priest, 40 West 57th Street, New York, New York. Reid & Priest may
rely as to matters of all laws, other than New York and Federal laws, upon the
opinion of Mr. Stoodley. Mr. Stoodley may rely as to matters of Virginia law
upon the opinion of Peter F. Clark, Assistant General Counsel for the Company,
as to matters of Maryland, New Jersey, and Pennsylvania law upon the opinions
of counsel admitted in such jurisdictions, and as to matters of New York law
upon the opinion of Reid & Priest. All matters pertaining to titles, the lien
and enforceability of the Mortgage and franchises will be passed upon only by
Mr. Stoodley, relying as to Virginia law upon the opinion of Mr. Clark, and as
to matters of Maryland, New Jersey, and Pennsylvania law upon the opinions of
counsel admitted in such jurisdictions. From time to time, Reid & Priest has
represented the Company with respect to matters unrelated to the Securities.
As of January 31, 1994, Mr. Stoodley held, in the form of stock and share
equivalents in the Company's employee benefit plans, approximately 2,020 shares
of the Company's Common Stock and had been granted 1,780 performance shares as
to which full rights will not vest, if at all, until a future date. On such
date, Mr. Stoodley's shares, including the performance shares, had a fair
market value of approximately $84,550.
EXPERTS
The consolidated financial statements and related schedules incorporated by
reference in this Prospectus from the Company's Annual Report on Form 10-K for
the year ended December 31, 1993, have been audited by Coopers & Lybrand,
independent public accountants, as indicated in their reports with respect
thereto, which reports include an explanatory paragraph regarding the Company's
changes in its methods of accounting in 1991, for unbilled revenues, and in
1993, for income taxes and postretirement benefits other than pensions, and are
incorporated by reference herein in reliance upon such reports given upon the
authority of that firm as experts in accounting and auditing.
Dale G. Stoodley, General Counsel for the Company, has reviewed the
statements as to matters of law and legal conclusions under "Description of the
Common Stock," "Description of the New Notes" and "Description of the New
Bonds" and in the Incorporated Documents and such statements are included
herein and therein upon his authority as an expert.
14
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to a limited number of purchasers or to
a single purchaser; or (iii) through agents. The applicable Prospectus
Supplement will set forth the terms of the offering of the Securities offered
thereby, the purchase price of such Securities and the proceeds to the Company
from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be sold from time to time in one or
more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of the sale. The
Securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters as may be designated by the
Company, or directly by one or more of such firms. The underwriter or
underwriters with respect to a particular underwritten offering of Securities
will be named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will
be set forth on the cover page of such Prospectus Supplement. Unless otherwise
set forth in the applicable Prospectus Supplement, the obligations of the
underwriters to purchase the Securities offered thereby will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all such Securities if any are purchased.
Securities may be sold directly by the Company or through agents designated
by the Company from time to time. The applicable Prospectus Supplement will set
forth the name of any agent involved in the offer or sale of the Securities in
respect of which such Prospectus Supplement is delivered as well as any
commissions payable by the Company to such agent. Unless otherwise indicated in
the applicable Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject to any conditions set forth in such
Prospectus Supplement and the commission payable for solicitation of such
contracts will be set forth therein.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended.
15
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses relating to the Securities are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fees.................. $ 86,207
Stock Exchange Listing Fees..................................... 22,250
Delaware Public Service Commission filing fee................... 750
Virginia State Corporation Commission filing fee................ 250
Recordation fees................................................ 40,000
Legal services.................................................. 100,000
Auditor's fees.................................................. 40,000
Fees and expenses of trustees and their counsel................. 45,000
Fees of Transfer Agent and Registrar............................ 12,000
Printing........................................................ 40,000
Rating fees..................................................... 75,000
Miscellaneous................................................... 28,543
--------
Total......................................................... $490,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Charter provides that the Company 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 the Company. This provision is not exclusive of other rights to which any
director or officer may otherwise be entitled. Under applicable corporate law,
the Company may, upon a determination that such persons have met the applicable
statutory standard of conduct, indemnify directors, officers, employees and
agents against expenses, judgments, fines and settlement payments reasonably
incurred.
Subject to certain exceptions, the directors and all corporate officers of
the Company are insured to an overall limit of $45,000,000 (subject to a
Company deductible of $200,000 for each loss involving non-nuclear operations
and $1,000,000 for each loss involving nuclear operations) because of any claim
or claims made against them, including claims arising under the 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 the Company is
insured to the extent that it shall have indemnified the directors and officers
for such loss. The premiums for such insurance are paid by the Company.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1-A Form of Underwriting Agreement relating to the New Common Stock.
1-B Form of Distribution Agreement relating to the Debt Securities.
1-C Form of Underwriting Agreement relating to New Bonds.
3-A A copy of the Company's Restated Certificate and Articles of
Incorporation effective as of April 12, 1990 (filed with
Registration No. 33-50453).*
3-B A copy of the Company's Certificate of Designation and Articles of
Amendment establishing the 7 3/4% Preferred Stock--$25 Par (filed
with Registration No. 33-50453).*
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
3-C A copy of the Company's Certificate of Designation and Articles of
Amendment establishing the 6 3/4% Preferred Stock (filed with Form
10-K for the year ended December 31, 1993).*
3-D A copy of the Company's By-Laws as amended September 30, 1993
(filed with Form 10-K for the year ended December 31, 1993).*
4-A A copy of the Mortgage and Deed of Trust from the Company to The
New York Trust Company as Trustee, dated as of October 1, 1943,
and copies of the First through Sixty-Eighth Supplemental
Indentures thereto (filed with Registration No. 33-1763).*
4-B A copy of the Sixty-Ninth Supplemental Indenture (filed with
Registration No. 33-39756).*
4-C Copies of the Seventieth through Seventy-Fourth Supplemental
Indentures (filed with Registration No. 33-24955).*
4-D Copies of the Seventy-Fifth through Seventy-Seventh Supplemental
Indentures (filed with Registration No. 33-39756).*
4-E A copy of the Seventy-Eighth and Seventy-Ninth Supplemental
Indentures (filed with Registration No. 33-46892).*
4-F A copy of the Eightieth Supplemental Indenture (filed with
Registration No. 33-49750).*
4-G A copy of the Eighty-First Supplemental Indenture (filed with
Registration No. 33-57652).*
4-H A copy of the Eighty-Second Supplemental Indenture (filed with
Registration No.
33-63582).*
4-I A copy of the Eighty-Third Supplemental Indenture (filed with
Registration No. 33-50453).*
4-J A Copy of the Eighty-Fourth Supplemental Indenture.
4-K A Copy of the Eighty-Fifth Supplemental Indenture.
4-L A Copy of the Eighty-Sixth Supplemental Indenture.
4-M Form of Supplemental Indenture relating to the New Bonds.
4-N Indenture between the Company and Chemical Bank (successor to
Manufacturers Hanover Trust Company) as Trustee dated as of
November 1, 1988, relating to the New Notes (filed with
Registration No. 33-46892).*
5-A Opinion of Dale G. Stoodley, General Counsel for the Company,
regarding legality under Delaware and Virginia law.
5-B Opinion of Peter F. Clark, Assistant General Counsel for the
Company, regarding legality under Virginia law.
12 Statement of Computation of Ratio of Earnings to Fixed Charges
(filed with Form 10-Q for the quarter ended March 31, 1994).*
23 See Page II-5 for the Consent of Independent Public Accountants.
The Consents of Mr. Stoodley and Mr. Clark are included in their
respective opinions filed as Exhibits 5-A and 5-B.
24 Power of Attorney (see Page II-3).
25 Statement of Eligibility and Qualification of the Note Trustee and
Bond Trustee on Form
T-1.
</TABLE>
- --------
* Incorporated by reference pursuant to Rule 411.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement; (i) To include any
Prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
To reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; (iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that the undertakings set forth
in paragraphs (i) and (ii) above do not apply if the Registration Statement
is on Form S-3 and the information required to be included in a post-
effective amendment by those clauses is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(b) That, for the purpose of determining liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus 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.
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the 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 the Registrant 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 Act and will be governed by the final
adjudication of such issue.
POWER OF ATTORNEY
Each person whose signature appears on the following page hereby authorizes
the agent for service named in the Registration Statement to execute the name
of each such person, and to file, any and all amendments and post-effective
amendments to the Registration Statement as the Registrant deems appropriate
and appoints such agent for service as attorney-in-fact to sign in his or her
behalf individually and in each capacity stated.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF WILMINGTON, STATE OF DELAWARE, ON THE 26TH DAY OF
MAY, 1994.
Delmarva Power & Light Company
By: /s/ B. S. Graham
---------------------------------
(B. S. GRAHAM, VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND
ON THE DATE INDICATED.
SIGNATURE TITLE DATE
/s/ H. E. Cosgrove Chairman of the May 26, 1994
- ------------------------------------- Board, President,
(H. E. COSGROVE) Chief Executive
Officer and Director
(Principal Executive
Officer)
/s/ B. S. Graham Vice President and May 26, 1994
- ------------------------------------- Chief Financial
(B. S. GRAHAM) Officer (Principal
Financial Officer)
/s/ James P. Lavin Comptroller and May 26, 1994
- ------------------------------------- Chief Accounting
(JAMES P. LAVIN) Officer (Principal
Accounting Officer)
/s/ Michael G. Abercrombie Director May 26, 1994
- -------------------------------------
(MICHAEL G. ABERCROMBIE
/s/ Robert D. Burris Director May 26, 1994
- -------------------------------------
(ROBERT D. BURRIS)
/s/ Audrey K. Doberstein Director May 26, 1994
- -------------------------------------
(AUDREY K. DOBERSTEIN)
/s/ M. B. Emery Director May 26, 1994
- -------------------------------------
(MICHAEL B. EMERY)
Director
- -------------------------------------
(JAMES H. GILLIAM, JR.)
/s/ Sarah I. Gore Director May 26, 1994
- -------------------------------------
(SARAH I. GORE)
/s/ James C. Johnson, III Director May 26, 1994
- -------------------------------------
(JAMES C. JOHNSON, III)
/s/ H. R. Landon Director May 26, 1994
- -------------------------------------
(H. R. LANDON)
/s/ James T. McKinstry Director May 26, 1994
- -------------------------------------
(JAMES T. MCKINSTRY)
II-4
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement of Delmarva Power & Light Company on Form S-3 of our reports dated
February 4, 1994, on our audits of the consolidated financial statements and
financial statement schedules of Delmarva Power & Light Company and its
subsidiary companies, as listed in Item 14(a) of the 1993 Annual Report of
Delmarva Power & Light Company on Form 10-K, which reports include an
explanatory paragraph regarding the Company's changes in its methods of
accounting in 1991, for unbilled revenues, and in 1993, for income taxes and
postretirement benefits other than pensions. We also consent to the reference
to our firm under the heading "Experts" in the Prospectus.
Coopers & Lybrand
2400 Eleven Penn Center
Philadelphia, PA 19103
May 26, 1994
II-5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
EXHIBIT INDEX NUMBER
------------- -------
<S> <C>
Form of Underwriting Agreement relating to the New Common Stock. 1-A
Form of Distribution Agreement relating to the Debt Securities. 1-B
Form of Underwriting Agreement relating to New Bonds. 1-C
A copy of the Company's Restated Certificate and Articles of 3-A
Incorporation effective as of April 12, 1990 (filed with
Registration No. 33-50453).*
A copy of the Company's Certificate of Designation and Articles of 3-B
Amendment establishing the 7 3/4% Preferred Stock--$25 Par (filed
with Registration No. 33-50453).*
A copy of the Company's Certificate of Designation and Articles of 3-C
Amendment establishing the 6 3/4% Preferred Stock (filed with Form
10-K for the year ended December 31, 1993).*
A copy of the Company's By-Laws as amended September 30, 1993 3-D
(filed with Form 10-K for the year ended December 31, 1993).*
A copy of the Mortgage and Deed of Trust from the Company to The 4-A
New York Trust Company as Trustee, dated as of October 1, 1943,
and copies of the First through Sixty-Eighth Supplemental
Indentures thereto (filed with Registration No. 33-1763).*
A copy of the Sixty-Ninth Supplemental Indenture (filed with 4-B
Registration No. 33-39756).*
Copies of the Seventieth through Seventy-Fourth Supplemental 4-C
Indentures (filed with Registration No. 33-24955).*
Copies of the Seventy-Fifth through Seventy-Seventh Supplemental 4-D
Indentures (filed with Registration No. 33-39756).*
A copy of the Seventy-Eighth and Seventy-Ninth Supplemental 4-E
Indentures (filed with Registration No. 33-46892).*
A copy of the Eightieth Supplemental Indenture (filed with 4-F
Registration No. 33-49750).*
A copy of the Eighty-First Supplemental Indenture (filed with 4-G
Registration No. 33-57652).*
A copy of the Eighty-Second Supplemental Indenture (filed with 4-H
Registration No.
33-63582).*
A copy of the Eighty-Third Supplemental Indenture (filed with 4-I
Registration No. 33-50453).*
A Copy of the Eighty-Fourth Supplemental Indenture. 4-J
A Copy of the Eighty-Fifth Supplemental Indenture. 4-K
A Copy of the Eighty-Sixth Supplemental Indenture. 4-L
Form of Supplemental Indenture relating to the New Bonds. 4-M
Indenture between the Company and Chemical Bank (successor to 4-N
Manufacturers Hanover Trust Company) as Trustee dated as of
November 1, 1988, relating to the New Notes (filed with
Registration No. 33-46892).*
Opinion of Dale G. Stoodley, General Counsel for the Company, 5-A
regarding legality under Delaware and Virginia law.
Opinion of Peter F. Clark, Assistant General Counsel for the 5-B
Company, regarding legality under Virginia law.
Statement of Computation of Ratio of Earnings to Fixed Charges 12
(filed with Form 10-Q for the quarter ended March 31, 1994).*
See Page II-5 for the Consent of Independent Public Accountants. 23
The Consents of Mr. Stoodley and Mr. Clark are included in their
respective opinions filed as Exhibits 5-A and 5-B.
Power of Attorney (see Page II-3). 24
Statement of Eligibility and Qualification of the Note Trustee and 25
Bond Trustee on Form
T-1.
</TABLE>
- --------
* Incorporated by reference pursuant to Rule 411.
<PAGE>
DELMARVA POWER & LIGHT COMPANY
Common Stock
UNDERWRITING AGREEMENT
----------------------
_______ __, 199_
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The undersigned, Delmarva Power & Light Company, a Delaware and Virginia
corporation (the "Company"), hereby confirms its agreement with each of the
several Underwriters hereinafter named as follows:
The term "Underwriters" as used herein shall be deemed to mean the firm or
corporation or the several firms or corporations named in Schedule II hereto and
any underwriter substituted as provided in Section 3 and the term "Underwriter"
shall be deemed to mean one of such Underwriters. If the firm or firms listed
in Schedule I hereto (the "Representative") are the same as the firm or firms
listed in Schedule II hereto, then the terms "Underwriters" and
"Representative", as used herein, shall each be deemed to refer to such firm or
firms. The Representa-tive represents that it has been authorized by the
Underwriters to execute this Agreement on their behalf and to act for them in
the manner herein provided. All obligations of the Underwriters hereunder are
several and not joint. If more than one firm is named in Schedule I hereto, any
action under or in respect of this Agreement may be taken by such firms jointly
as the Representative or by one of the firms acting on behalf of the
Representative and such action will be binding upon all the Underwriters.
1. Description of Shares. The Company has authorized by appropriate
---------------------
corporate action and proposes to issue and sell to the several Underwriters its
Common Stock, Par Value $2.25 ("Common Stock"), in the amount specified in
Schedule I hereto (the "Firm Shares").
<PAGE>
-2-
In addition, for the sole purpose of covering over-allotments in connection
with the sale of the Firm Shares, the Company, as provided in Section 3, has
granted to the Underwriters an option (the "Option") to purchase from the
Company the Option Shares (as defined in Section 3), up to the maximum amount
specified in Schedule I hereto, at the same price per share as the Firm Shares.
The Firm Shares and the Option Shares are hereinafter collectively referred to
as the "Shares".
2. Representations, Warranties and Agreements of the Company. The
---------------------------------------------------------
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement (identified in Schedule I hereto),
together with amendments thereto, if any, with respect to the Shares 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. Copies of said
registration statement, together with all amendments thereto, if any,
including the exhibits filed therewith, have heretofore been delivered to
the Representative, and copies of any amendments thereto, including the
exhibits filed therewith, which shall be subsequently filed will be so
delivered to the Repre-sentative. As used in this Agreement, the term
"Registration Statement" means said registration statement, including
exhibits, financial statements and all documents incorporated therein by
reference, as amended to the date hereof. As used in the Agreement, (i)
the term "Prospectus" means (A) if a preliminary prospectus supplement with
respect to the Shares was prepared in conformity with the Rules and
Regulations and, together with the prospectus in the form included in the
Registration Statement, filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations ("Rule 424(b)"), such preliminary prospectus
supplement and prospectus completed to reflect the terms of the sale of the
Shares, (B) if no such preliminary prospectus supplement was so prepared
and filed, the prospectus in the form included in the Registration
Statement as to be supplemented by a prospectus supplement reflecting the
terms of the offering of the Shares or (c) if the Shares are to be offered
without a prospectus supplement, the prospectus in the form included in the
Registration Statement completed to reflect the terms of such offering, in
each case proposed to be filed on or about
<PAGE>
-3-
the date hereof with the Commission pursuant to Rule 424(b), and (ii) the
term "Prospectus Supplement" means the prospectus supplement proposed so to
be filed with the Commission, in each case including all documents in-
corporated in such prospectus and prospectus supplement by reference (the
"Incorporated Documents"). In the event of any amendment to the
Registration Statement after the date hereof, the term "Registration
Statement" also shall mean such Registration Statement as so amended. In
the event of any supplement to the Prospectus, after the date of the filing
with the Commission of the Prospectus pursuant to Rule 424(b), the term
"Prospectus" also shall mean such Prospectus as so amended or supplemented;
provided, however, that any supplement to the Prospectus filed with the
Commission pursuant to Rule 424(b) with respect to an offering of the
Company's securities other than the Shares shall not be deemed to be a
supplement to or part of the Prospectus. Any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to refer to and include the
filing of any document under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), deemed to be incorporated therein after the
date hereof and prior to the termination of the offering of the Shares by
the Underwriters.
(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) On the date of this Agreement and at all times subsequent hereto
up to and at the Closing Date (as defined in Section 3) and, in respect of
the Option Shares, up to and at the Option Closing Date (as defined in
Section 3), (i) the Registration Statement and the Prospectus do and will,
contain all statements and information which are required to be included
therein by the Act and the Rules and Regulations and will conform, in all
material respects, to the requirements of the Act and the Rules and
Regulations; (ii) the Registration Statement does not and will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; and
<PAGE>
-4-
(iii) the Prospectus does not and will not include any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter expressly for use in the
preparation thereof. There are no contracts or documents of the Company or
of any Subsidiary (as defined below) of the Company 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.
(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. Each of the Incorporated Documents, when it and
any amendment thereto was filed with the Commission, complied as to form in
all material respects to the requirements of the Exchange Act, and the
rules and regulations of the Commission thereunder, and any Incorporated
Document and any amendment thereto, when filed with the Commission will
comply as to form in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder;
and none of such documents includes or will include any untrue statement of
a material fact or omits or will omit to state any material fact required
to be stated therein, or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of Delaware and Virginia, with
all corporate 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 shares; the Company
is duly qualified to do busi-ness as a foreign corporation in good standing
in Maryland, New Jersey, Ohio and Pennsylvania, being all of the
jurisdictions in which the conduct of its business or its ownership or
leasing of property requires such qualification, with all corporate
authority, including
<PAGE>
-5-
franchises necessary to own or lease its properties and conduct its
business as described in the Registration Statement and Prospectus. The
Company has no direct subsidiaries other than Delmarva Energy Company,
Delmarva Industries, Inc., Delmarva Capital Investments, Inc. and Delmarva
Services Company (the "Subsidiaries"), all of the stock of each of which is
owned by the Company, free and clear of any lien, pledge or other
encumbrance except for those matters satisfactory to the Underwriters
discussed in the opinion of Dale G. Stoodley, General Counsel for the
Company, delivered pursuant to Section 5(d) hereof. Each of the
Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of any jurisdiction in which the
conduct of its business or its ownership or leasing of property requires
such qualification, with all corporate and other authority and franchises
necessary to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus.
(f) The performance of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any statute, indenture, mortgage, deed
of trust, note agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them is
bound or to which any of their property is subject, or of the Company's
Restated Certificate and Articles of Incorporation, as amended, or By-Laws,
as amended, or any order, rule or regulation of any court or other
governmental body applicable to the Company or any of the Subsidiaries or
any of their property.
(g) The Company has full power and lawful authority to authorize,
issue and sell the Shares on the terms and conditions herein set forth, and
has taken all corporate action necessary therefor; has obtained every
consent, approval, authorization or 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 or other orders are not subject to appeal.
<PAGE>
-6-
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in or contemplated by the Registration Statement and the Prospectus: (1)
the Company and the Subsidiaries taken as a whole have not incurred any
material liabilities or obligations, direct or contingent, and have not
entered into any material transaction, not in the ordinary course of
business; (2) there has not been any material change in the capital stock
or long-term debt of the Company and the Subsidiaries taken as a whole or
any material adverse change, or development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, net worth or results of operations of the Company
and the Subsidiaries taken as a whole; (3) no material loss or damage
(whether or not insured) to the property of the Company and the
Subsidiaries taken as a whole has been sustained; and (4) no legal or
governmental proceeding, domestic or foreign, materially affecting the
Company and the Subsidiaries taken as a whole or the transactions con-
templated by this Agreement, has been instituted or, to the knowledge of
the Company, threatened.
(i) The financial statements set forth in or incorporated by
reference into the Registration Statement and the Prospectus fairly present
the consolidated financial condition of the Company and the Subsidiaries
and the results of their operations as of the dates and for the periods
therein specified; and said financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles which have been consistently applied throughout the periods
involved.
(j) Coopers & Lybrand, which has reported on certain financial
statements filed with the Commission and incorporated by reference into the
Registration Statement and the Prospectus, are independent certified public
accountants as required by the Act and the Rules and Regulations.
(k) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, there is not pending any action, suit or
other proceeding to which the Company or any of the Subsidiaries is a party
or of which any property of the Company or any of the Subsidiaries is the
subject, before or by any court or other governmental body, which might
result in any material adverse change in
<PAGE>
-7-
the condition, business or prospects of the Company and the Subsidiaries
taken as a whole or might materially adversely affect the properties or
assets of the Company and the Subsidiaries taken as a whole; and no such
action, suit or proceeding is known by the Company to be threatened or
contemplated.
(l) All of the outstanding shares of the capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; when the Shares shall have been delivered against payment
therefor as provided herein, they will have been duly and validly issued,
and will be fully paid and non-assessable and free and clear of any claim,
lien, encumbrance or security interest on behalf of, or arising through,
the Company; and the Shares conform to the description thereof contained in
the Registration Statement and the Prospectus.
(m) 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.
(n) The Company and the Subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(o) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any
<PAGE>
-8-
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis
of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole.
3. Sale, Purchase, and Delivery of Shares; Options; Substitution of
----------------------------------------------------------------
Underwriters. On the basis of the representations, warranties and agreements
- ------------
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to each of the Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the respective
principal amount of Firm Shares set forth opposite the name of such Underwriter
in Schedule II hereto at the purchase price set forth in Schedule I hereto.
The Company agrees to make the certificates for the Firm Shares
available to the Representative for the purpose of expediting their checking and
packaging on behalf of the Underwriters, at the New York City offices of
Chemical Bank, not later than 1:30 P.M. on the business day next preceding the
Closing Date.
Payment for and delivery of the Firm Shares (the "Closing") shall be
made at the place, time and date specified in Schedule I hereto or at such other
time and date as the Representative and the Company may agree in writing, such
time and date for payment being herein referred to as the "Closing Date". On
the Closing Date, the Company shall deliver certificates for the Firm Shares to
the Representative for the respective accounts of the Underwriters, against
payment to or upon the order of the Company of the purchase price of the Firm
Shares, by certified check or checks, or official bank or bank cashier's check
or checks, payable in New York Clearing House funds. Time shall be of the
essence, and delivery at the time determined as set forth above is a further
condition of the obligation of each Underwriter and of the Company. The
certificates for the Firm Shares so delivered shall be registered in the
respective names of the Underwriters in the respective numbers of shares set
forth opposite the names of such Underwriters in Schedule II annexed hereto, but
the Company will, if requested by the Representative not less than three (3)
full business days prior to the Closing Date, deliver all or any part of such
certificates registered in such other names and in such other denominations as
may be requested. To the extent
<PAGE>
-9-
practicable, the Representative will furnish the taxpayer identification numbers
of the registered owners.
The Company hereby grants to the Underwriters the Option. The Option
may be exercised, in whole or in part, on one occasion during the period
commencing on the date hereof and ending on the thirtieth day after the date
hereof, by written notice from the Representative to the Company. Such notice
shall set forth the aggregate number of shares of Common Stock (the "Option
Shares") as to which the Option is being exercised and specify the date of
delivery of, and payment for, such shares (the "Option Closing Date"), which
date shall be neither earlier than the later of the Closing Date or the second
business day following the date of exercise nor later than the fifth business
day after the date of exercise.
The Company agrees to make the certificates for the Option Shares
available to the Representative for the purpose of expediting their checking and
packaging on behalf of the Underwriters, at the New York City offices of
Chemical Bank, not later than 1:30 P.M. on the business day next preceding the
Option Closing Date.
Payment for the Option Shares shall be made on the Option Closing
Date. On the Option Closing Date, at the time and place specified in Schedule I
hereto, or at such other time and place as the Company and the Representative
may agree in writing, the Company shall deliver certificates for the Option
Shares to the Representative for the respective accounts of the Underwriters,
against payment to or upon the order of the Company of the purchase price of the
Option Shares, by certified check or checks, or official bank or bank cashier's
check or checks, payable in New York Clearing House funds. Time shall be of the
essence, and delivery at the time determined as set forth above is a further
condition of the obligation of each Underwriter and of the Company. The
certificates for the Option Shares so delivered shall be registered in the
respective names of the Underwriters in proportion to the respective numbers of
shares set forth opposite the names of such Underwriters in Schedule II annexed
hereto, but the Company will, if requested by the Representative not less than
two (2) full business days prior to the Option Closing Date, deliver all or any
part of such certificates registered in such other names and in such other
denominations as may be requested. To the extent practicable, the
Representative will furnish the taxpayer identification numbers of the
registered owners.
<PAGE>
-10-
It is understood that the several Underwriters propose to offer the
Shares for sale as set forth in the Prospectus.
In the event of default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for the Firm Shares or
Option Shares, as the case may be, pursuant to this Section, and if the
aggregate of such defaults shall not exceed 10% of the Firm Shares or Option
Shares, as the case may be, the remaining Underwriters shall be obligated sev-
erally (in proportion to their respective commitments hereunder or in such other
proportion as may be agreed upon by the Representative) to purchase the Firm
Shares or Option Shares, as the case may be, which such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall for any reason permitted under this Agreement cancel their
obligations to take up and pay for the Firm Shares or the Option Shares, as the
case may be, pursuant to this Section, or in the event of a default by one or
more Underwriters in respect of their obligations under this Agreement to take
up and pay for the Firm Shares or the Option Shares, as the case may be,
pursuant to this Section, and if the aggregate of such cancellations or defaults
shall exceed 10% of the aggregate principal amount of the Firm Shares or Option
Shares, as the case may be, the remaining Underwriters shall have the right to
take up and pay for (in such proportion as may be agreed upon by the
Representative) the Firm Shares or Option Shares, as the case may be, which the
cancelling or defaulting Underwriter or Underwriters agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date or the
Option Closing Date, as the case may be, take up and pay for the aggregate
principal amount of the Firm Shares or Option Shares, as the case may be, which
the cancelling or defaulting Underwriter or Underwriters failed to purchase, the
time for delivery of the Firm Shares or Option Shares, as the case may be, shall
be extended for twenty-four hours, and the several Underwriters shall have the
privilege of substituting within such twenty-four hours another underwriter or
underwriters satisfactory to the Company. If no such underwriter or
underwriters shall have been substituted as aforesaid, prior to the termination
of such extended time for delivery, the time for delivery of the Firm Shares or
Option Shares, as the case may be, shall be extended for a further twenty-four
hours, during which the Company shall have the privilege of finding another
underwriter or underwriters, satisfactory to the Representative, to purchase the
aggregate principal amount of the Firm Shares or Option Shares, as the case may
be, which the cancelling or defaulting Underwriter or Underwriters failed to
purchase. If it shall be arranged for the remaining Underwriters or substituted
<PAGE>
-11-
underwriters to take up the Firm Shares or Option Shares, as the case may be, of
the cancelling or defaulting Underwriter or Underwriters as provided in this
Section, (i) the Representative or the Company shall have the right to postpone
the time of delivery of the Firm Shares or Option Shares, as the case may be,
for a period of not more than five full business days, in order to effect
whatever changes which such arrangements may make necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees promptly to file any amendment to the Registration Statement or
any supplement to the Prospectus which such arrangements may make necessary, and
(ii) the Firm Shares or Option Shares, as the case may be, to be purchased by
the remaining Underwriters or substituted underwriters shall be taken as the
basis of their respective underwriting obligations for all purposes of this
Agreement.
If, in the event of a default by one or more Underwriters, the
remaining Underwriters shall not take up and pay for all of the Firm Shares or
Option Shares, as the case may be, agreed to be purchased by the defaulting
Underwriters or substitute another underwriter or underwriters as aforesaid and
the Company shall not find another underwriter or underwriters for such Firm
Shares or Option Shares, as the case may be, as aforesaid, then this Agreement
may be terminated by the Company by giving prompt notice to the remaining
Underwriters.
If the Company shall not so elect to terminate this Agreement, it
shall have the right to require such remaining Underwriters, irrespective of the
default as aforesaid, to purchase the aggregate principal amount of the Firm
Shares or Option Shares, as the case may be, which they have agreed to purchase
hereunder. In such event the Company shall, within twenty-four hours after such
second twenty-four hour period, give notice thereof in writing or by facsimile
transmission to such remaining Underwriters and thereupon the time for delivery
of the Firm Shares or Option Shares, as the case may be, may be postponed for a
period of not more than five full business days in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements and the Company agrees
promptly to file any amendment to the Registration Statement or any supplement
to the Prospectus which may thereby be made necessary. In the absence of such
notice from the Company, this Agreement shall terminate without further action
on the part of either the Company or the Underwriters.
<PAGE>
-12-
In the event of any such termination, the Company shall not be under
any liability to any Underwriter (except to the extent provided in Sections 4(e)
and 7 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed to purchase Firm Shares or Option Shares, as the case may be,
otherwise than for some reason permitted under this Agreement) be under any
liability to the Company (except to the extent provided in Section 7 hereof).
Any action taken by the non-defaulting Underwriters or by the Company
under this Section shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
4. Covenants of the Company. The Company further covenants and
------------------------
agrees with the several Underwriters that:
(a) The Company shall comply with the provisions of, and make all
requisite filings with the Commission pursuant to, Rule 424(b) and notify
the Representative promptly of all such filings. The Company will not at
any time file any amendment to the Registration Statement or supplement to
the Prospectus of which the Representative shall not previously have been
advised and furnished with a copy or to which the Representative or Reid &
Priest, counsel for the several Underwriters, shall have reasonably and
promptly objected in writing or which is not in compliance with the Act or
the Rules and Regulations. The Company will prepare and file with the
Commission, promptly upon the Representative's request, any amendment to
the Registration Statement or supplement to the Prospectus which, in the
opinion of counsel for the several Underwriters and counsel for the
Company, may be necessary or advisable in connection with the offering of
the Shares by the Underwriters. The Company will file timely all reports
and any definitive proxy or 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 subsequent to the date hereof
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares.
(b) The Company will notify the Representative promptly and confirm
in writing of (i) the issuance of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Prospectus or any order directed to the adequacy
or accuracy of any Incorporated Document or of the initiation
<PAGE>
-13-
of any proceedings for any such purpose and (ii) the receipt of any
comments from the Commission in respect of the Registration Statement or
the Prospectus, or requesting additional information or the amendment or
supplementation of the Registration Statement or the Prospectus. If the
Commission shall issue a stop order or any order preventing or suspending
the use of the Prospectus or any order directed to the adequacy or accuracy
of any Incorporated Document at any time, or shall initiate any proceedings
for any such purpose, the Company will make every reasonable effort to
prevent the issuance of such order and, if issued, to obtain the lifting
thereof.
(c) Within the time during which a prospectus relating to the Shares
is required to be delivered under the Act, the Company will comply so far
as it is able with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of or
dealings in the Shares as contemplated by the provisions hereof; and if
during such period any event occurs as a result of which the Prospectus
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if during such
period it is necessary to amend or supplement the Prospectus to comply with
the Act or the Rules and Regulations or to file under the Exchange Act or
the rules and regulations of the Commission thereunder any document
incorporated by reference into the Prospectus in order to comply with the
Act, the Rules and Regulations, the Exchange Act or the rules and
regulations of the Commission thereunder, the Company will promptly notify
the Representative and will amend or supplement the Prospectus or file such
document (in form satisfactory to counsel for the Underwriters and counsel
for the Company and at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will cooperate with the Underwriters in qualifying
and registering the Shares for sale under the securities laws and legal
investment laws of such jurisdictions as the Representative may designate,
and in continuing such qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to submit
to any
<PAGE>
-14-
requirements which it deems unduly burdensome. The Company will advise the
Representative promptly of any order or communication of any public
authority addressed to the Company suspending or threatening to suspend
qualification of the Shares for sale in any jurisdiction.
(e) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay, or
reimburse the Underwriters on demand for, all reasonable costs and expenses
incident to the performance of the Company's obligations under this
Agreement, including all expenses incident to the authorization of the
Shares and their issue and delivery by the Company, all expenses incident
to listing the Shares on any stock exchange, any necessary stamp taxes in
connection with the foregoing, the reasonable fees and expenses of the
Company's counsel and accountants, the costs and expenses incident to the
preparation and filing under the Act of the Registration Statement
(including all exhibits and amendments thereto), the Prospectus and this
Agreement, all fees and disbursements (including reasonable fees and
disbursements of counsel) incurred by the Company or the Underwriters in
connection with the qualification of the Shares for sale under state
securities laws and the preparation of Blue Sky Memoranda and Legal
Investment Surveys, the cost of furnishing to the Underwriters copies of
Blue Sky Memoranda and Legal Investment Surveys, the Registration Statement
and the Prospectus, and each amended or supplemented Registration Statement
or Prospectus and each Prospectus prepared to permit compliance with
Section 10(a)(3) of the Act and the cost of preparing copies of this
Agreement. The Company shall not, however, be required to pay for any of
the Representative's expenses or those of any of the other Underwriters,
other than as hereinabove set forth and the costs of preparing copies of
the legal opinion referred to in subparagraph (e) of Section 5 hereof, the
Underwriters' Questionnaires and the Agreement Among Underwriters;
provided, however, that, if this Agreement shall not be consummated because
it is (i) terminated by the Representative pursuant to Section 5 or Section
6 hereof, (ii) terminated pursuant to Section 3 hereof, or (iii) terminated
by reason of any failure, refusal or inability on the part of the Company
to perform any undertaking or satisfy any condition of this Agreement or to
comply with any of the terms hereof on its part to be performed, unless
such failure, refusal or inability be due to the default or omission of the
Underwriters, then and in any such case, the Company shall reimburse the
several Underwriters (but not
<PAGE>
-15-
defaulting Underwriters in the event of termination pursuant to Section 3
hereof) for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel for the several Underwriters) reasonably incurred
in connection with investigating, marketing and proposing to market the
Shares or in contemplation of performing their obligations hereunder, but
the Company shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits or
commissions from the sale by them of the Shares.
(f) The Company will apply the proceeds from the sale of the Shares
substantially as set forth under the caption "Use of Proceeds" in the
Prospectus.
(g) The Company will deliver to the Representative, as promptly as
practicable, a signed copy of the Registration Statement and all amendments
thereto including all exhibits filed therewith and signed consents,
certificates and opinions of accountants and of any other persons named in
the Registration Statement as having prepared, certified or reviewed any
part thereof, and will deliver to the Representative such number of
unsigned copies of the Registration Statement, without exhibits, and of all
amendments thereto, as the Representative may reasonably request. The
Company will deliver to or upon the order of the Representative, from time
to time, as many copies of the Prospectus (excluding Incorporated
Documents) as the Representative may reasonably request.
(h) The Company will make generally available to its security holders
and deliver to the Representative as soon as it is practicable to do so, an
earnings statement (which need not be audited) covering a period of at
least twelve months beginning not later than the first day of the month
next succeeding the month in which occurred the effective date of the
Registration Statement (as defined in Rule 158 under the Act), which shall
satisfy the requirements of Section 11(a) of the Act.
(i) For a period of five years from the Closing Date, the Company
will deliver to the Representative and, upon request, to each of the other
Underwriters (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 the Representative
shall reasonably request. If at any time, the Company shall have a
majority-owned subsidiary or
<PAGE>
-16-
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.
(j) During the period beginning on the date hereof and continuing
through the later of the Closing Date and the Option Closing Date, the
Company, except for sales of common stock pursuant to dividend reinvestment
and employee benefit plans, will not offer, sell or otherwise alienate,
without the Representative's prior consent, any other of its Shares of
Common Stock.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
several Underwriters to purchase and pay for the Firm Shares and the Option
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and as of the Closing Date and, with respect to the Option Shares, the
Option Closing Date (as if made on such Dates), of the representations and
warranties of the Company herein, to the accuracy of statements of Company
officers made in certificates delivered pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, or order preventing or suspending the use of the Prospectus,
shall have been issued; no order of the Commission directed to the adequacy
or accuracy of any Incorporated Document shall be in effect; and no
proceedings for any such purpose shall have been instituted or be pending
or, to the knowledge of the Company or the Representative, shall be
contemplated or threatened by the Commission; any request of the Commission
for additional information (to be included in the Registration Statement or
the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of Reid & Priest, counsel for the several
Underwriters; no amendment to the Registration Statement or Prospectus
shall have been filed hereafter to which the Representative or Reid &
Priest, counsel for the several Underwriters, shall have reasonably and
promptly objected in writing after having received reasonable notice and a
copy thereof; there shall be in full force and effect on the date of this
Agreement appropriate orders of The Public Service Commission of Delaware
and the State Corporation Commission of Virginia permitting the issuance
and
<PAGE>
-17-
sale of the Shares and the transactions relating thereto substantially in
accordance with the terms and conditions set forth herein; such orders
shall contain no condition inconsistent with the provisions hereof or
unacceptable to the Representative and shall be issued under circumstances
that in the Representative's reasonable judgment are appropriate for the
protection of the Underwriters; and on or prior to the Closing Date, and,
with respect to the Option Shares, the Option Closing Date, neither of said
orders shall have been rescinded, modified or stayed, or the right of the
Company to operate thereunder restrained, or be subject to any litigation
or proceeding pending, or to the knowledge of the Representative or the
Company, threatened.
(b) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth
in or contemplated by the Prospectus, there shall not have been any change
in the capital stock, short-term debt or long-term debt of the Company and
the Subsidiaries taken as a whole, or any adverse change or any development
involving a prospective adverse change in the condition, financial or
otherwise, or in the earnings, business, net worth or results of operations
of the Company and the Subsidiaries taken as a whole, all or any of which,
in the Representative's reasonable judgment, materially impairs the
investment quality of the Shares; and no Underwriter shall have disclosed
in writing to the Company on or prior to the Closing Date or, with respect
to the Option Shares, the Option Closing Date, that the Registration
Statement or Prospectus contained an untrue statement of fact which, in the
opinion of Reid & Priest, counsel for the Underwriters, is material, or
omits to state a fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the statements
therein not misleading.
(c) The authorization and issuance of the Shares, the Registration
Statement, the Prospectus and all corporate proceedings and other legal
matters incident thereto shall be satisfactory in all material respects to
Reid & Priest, and the Company shall have furnished to Reid & Priest such
documents as they may reasonably request to enable them to be satisfied
with respect to the matters referred to in this subparagraph and to furnish
to the Representative an opinion, dated as of the Closing Date, or, with
respect to the Option Shares, the Option Closing Date, as required by
subparagraph (e) of this Section 5.
<PAGE>
-18-
(d) On the Closing Date, and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received the
favorable opinion of Dale G. Stoodley, General Counsel for the Company,
dated as of such date, satisfactory in form, scope and substance to the
Representative and to counsel for the Underwriters to the effect that:
(i) the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware and Virginia,
with all corporate power and other authority 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 Shares; and each of
the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of any jurisdiction in which the conduct of its business or
the ownership or leasing of its properties requires such qualification,
with all corporate and other authority and franchises necessary to own or
lease its properties and conduct its business as described in the
Registration Statement and Prospectus.
(ii) the Company is duly qualified as a foreign corporation in
good standing in Maryland, New Jersey, Ohio and Pennsylvania, being all of
the jurisdictions in which the conduct of its business or its ownership or
leasing of properties requires such qualification; and the Company owns all
of the stock of the Subsidiaries, free and clear of any lien, pledge or
other encumbrance;
(iii) except as otherwise set forth in the Prospectus, and except
with respect to the location of certain poles, wires and other facilities
within public highways or over or under public or navigable waters (the
status of which does not in any case threaten to affect materially the
Company's ability to conduct its present business), the Company has such
valid franchises, certificates of convenience and necessity, operating
rights, licenses, permits, consents, approvals, authorizations and/or
orders of governmental bodies, political subdivisions or regulatory
authorities, free from materially burdensome restrictions, as are necessary
for the acquisition, construction and ownership of the properties owned or
leased by it and the maintenance and operation of the properties operated
by it and the conduct of the business carried on by
<PAGE>
-19-
it as described in the Registration Statement and the Prospectus, and, to
the best of the knowledge of such counsel, the Company is not in default or
violation of any of such franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political subdivisions
or regulatory authorities, to the extent which would materially affect the
conduct of such business, and the Company is not, to any material extent,
in violation of any applicable Federal, state or other laws and
regulations;
(iv) the Firm Shares or the Option Shares, as the case may be,
have been duly and validly authorized and issued and, when delivered
against payment therefor as provided herein, will be fully paid and non-
assessable and free and clear of any claim, lien, encumbrance or security
interest on behalf of, or arising through, the Company;
(v) the Shares conform as to legal matters to the description
thereof and the statements concerning them contained in the Registration
Statement and the Prospectus, and the summary of certain terms and
provisions thereof appearing in the Registration Statement and the
Prospectus fairly presents the information called for by the Act and the
Rules and Regulations;
(vi) the Delaware Public Service Commission and the Virginia
State Corporation Commission have issued orders (to be identified by date
and docket number) authorizing the issuance and sale of the Shares and
authorizing generally the transactions relating thereto (including
permitting the Company to enter into this Agreement and perform its
obligations hereunder). Neither of such orders contains any condition
inconsistent with the provisions hereof nor, to the best knowledge of such
counsel, has either of such orders been rescinded, modified or stayed, and
no further action is required to be taken by, and no further authorization,
consent or approval is required to be obtained from, any governmental
authority having jurisdiction in connection with the authorization,
issuance and sale of the Shares (other than in connection with state
securities or blue sky laws as to which counsel need express no opinion);
(vii) the statements in the Prospectus that are stated therein to
have been made on the authority of such counsel as an expert have been
reviewed by such counsel and,
<PAGE>
-20-
as to matters of law and legal conclusions, are correct and fairly present
the information required to be shown;
(viii) such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or the
Prospectus that are not described as required, or of any contracts or
documents of a character required to be described in the Registration
Statement or Prospectus, incorporated by reference into the Prospectus or
filed as exhibits to the Registration Statement by the Act or by the Rules
and Regulations that are not described, incorporated by reference or filed
as required;
(ix) the performance of this Agreement and the consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not result in a breach of any of the terms or provisions of, or
constitute a default under, the Restated Certificate and Articles of
Incorporation, as amended, or By-Laws, as amended, of the Company, or any
indenture, mortgage, deed of trust, note or other agreement or instrument
known to such counsel to which the Company or any of the Subsidiaries is a
party or by which any of them is bound or to which any of their property is
subject, or any order, rule or regulation known to such counsel applicable
to the Company or any of the Subsidiaries of any court or other
governmental body;
(x) this Agreement has been duly authorized, executed and
delivered by the Company and is valid and binding on the Company, except
that rights to indemnity hereunder may be limited under securities laws;
(xi) the Registration Statement has become effective under the
Act, and, to the best knowledge of such counsel, no stop order with respect
thereto has been issued, no 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
best knowledge of such counsel, contem-plated by the Commission; at the
time the Registration Statement became effective, the Registration
Statement, and at the time the Prospectus was first filed with the
Commission pursuant to Rule 424(b), the Prospectus, complied as to form in
all material respects with the requirements of the Act and the Rules and
Regulations, and the Incorporated Documents, when filed with the
Commission, complied as to form in all material respects with the
requirements of the
<PAGE>
-21-
Exchange Act and the rules and regulations of the Commission thereunder;
and such counsel has no reason to believe that (i) the Registration
Statement at the time the Registration Statement became effective, and at
the Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (ii)
the Prospectus, at the time the Prospectus was filed with the Commission
pursuant to Rule 424(b) and at the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the Statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no opinion as to the
financial statements and other financial data included therein;
(xii) the Shares have been listed, upon official notice of
issuance, on the New York Stock Exchange and the Philadelphia Stock
Exchange; and
(xiii) the shareholders of the Company have no preemptive rights to
subscribe for any of the Shares.
(e) On the Closing Date, and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received the
favorable opinion of Reid & Priest, counsel for the several Underwriters,
dated as of such date, satisfactory in form, scope and substance to the
Representative with respect to the sufficiency of all corporate proceedings
and other legal matters relating to the Shares, the form of the
Registration Statement and the Prospectus, and as to the execution and
authorization of this Agreement and the transactions contemplated hereby as
the Representative may reasonably require, and the Company shall have
furnished to such counsel such documents as they may have requested for the
purpose of enabling them to pass upon such matters. In rendering such
opinions, Reid & Priest may rely as to matters governed by Delaware,
Maryland, New Jersey, Ohio, Pennsylvania and Virginia law upon the opinion
of Dale G. Stoodley, General Counsel for the Company, who may in turn rely
upon the opinions of other counsel as to certain legal conclusions affected
by the laws of Maryland, New Jersey, Ohio, Pennsylvania and Virginia.
(f) On the date hereof, at the Closing Date and, with respect to the
Option Shares, on the Option Closing Date,
<PAGE>
-22-
the Representative shall have received letters of Coopers & Lybrand, dated
as of such dates, to the effect set forth in Schedule III annexed hereto
and with respect to such other matters as to which the Representative shall
have inquired.
(g) On the Closing Date and, with respect to the Option Shares, on
the Option Closing Date, the Representative shall have received a
certificate or certificates, dated as of such date, of the President or a
Vice President or the principal accounting officer of the Company to the
effect that, to the best of his or her knowledge based on a reasonable
investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct, as though made on and as of the Closing
Date or the Option Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all the conditions required
by this Agreement to be performed or satisfied by the Company on or prior
to the Closing Date or the Option Closing Date, as the case may be; and
(ii) he or she has examined the Registration Statement and the
Prospectus, and, in his or her opinion, the Registration Statement, when it
became effective and at all times subsequent thereto up to and including
the Closing Date, did not and does not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus, when the Prospectus Supplement was filed with the Commission
and at all times subsequent thereto up to and including the Closing Date,
did not and does not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in an amended Registration Statement or a supplemented Prospectus
which had not been so set forth.
All the opinions, letters, certificates and documents mentioned above
or elsewhere in this Agreement will be in compliance with the provisions hereof
only if they are reasonably satisfactory to Reid & Priest. The Company will
furnish the Representative with such conformed copies of such opinions,
<PAGE>
-23-
letters, certificates and documents as the Representative may reasonably
request.
If any condition to the Underwriters' obligations hereunder to be
satisfied on or prior to the Closing Date is not so satisfied, the
Representative may terminate this Agreement without liability on the part of any
Underwriter or the Company, except for the expenses to be paid or reimbursed by
the Company pursuant to Section 4(e) and except for any liability under Section
7 hereof.
6. Termination of Agreement. (a) The Representative, by notice to
------------------------
the Company, may terminate this Agreement, at any time after the date of this
Agreement and on or prior to the Closing Date and, with respect to the Option
Shares, the Option Closing Date, if during such period (i) trading on the New
York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by the New York Stock
Exchange or the American Stock Exchange or by order of the Commission or any
other governmental authority having jurisdiction, or trading of the Company's
securities on any exchange or in any over-the-counter market shall have been
suspended, or (ii) a banking moratorium shall have been declared by Federal or
New York authorities, or (iii) an outbreak of hostilities or an escalation
thereof, a declaration of war by Congress, another substantial calamity or
crisis or another event or occurrence of a similar character which, in the
Representative's reasonable judgment, makes it impracticable or inadvisable to
proceed with the completion of the sale of and payment for the Firm Shares or
Option Shares, as the case may be, or to enforce contracts for the sale of the
Shares shall have occurred, or (iv) the Company shall have sustained a
substantial loss by fire, flood, accident or other calamity which in the
Representative's reasonable judgment renders it inadvisable to consummate the
sale of the Firm Shares or Option Shares, as the case may be, to, and the
delivery of the Firm Shares or Option Shares, as the case may be, by, the
several Underwriters, regardless of whether or not such loss shall have been
insured. This Agreement may also be terminated at any time prior to the Closing
Date if, in the reasonable judgment of the Representative, the subject matter of
any amendment or supplement to the Registration Statement or the Prospectus
renders it either inadvisable to proceed with such offering or inadvisable to
proceed with the delivery of the Firm Shares or Option Shares, as the case may
be, to be purchased hereunder.
<PAGE>
-24-
(b) In the event of the termination pursuant to this Section, the
Company shall not be under any liability to any Underwriter, except for the
expenses to be paid by it pursuant to the provisions of Section 4(e) and except
for any liability under Section 7, nor shall any Underwriter be under any
liability to the Company, except for any liability under Section 7.
(c) If the Representative elects to terminate this Agreement as
provided in this Section, the Company shall be notified promptly by the
Representative by telephone, confirmed in writing.
7. Indemnification. (a) The Company will indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls such Underwriter
within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or allegedly untrue
statement of any material fact contained in the Registration Statement, any
preliminary prospectus, the Prospectus, 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, in the light of the circumstances under which they were
made, not misleading; and will reimburse each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or allegedly untrue statement or omission
or alleged omission made in the Registration Statement, any preliminary
prospectus, or the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter specifically for use in the preparation thereof.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to
<PAGE>
-25-
which the Company or any such director, officer or controlling person may become
subject, under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or allegedly untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus, or the Prospectus, or any amendment or supplement thereto, or arise
out of or based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or allegedly untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter specifically for use in the preparation thereof; and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company or any such director, officer or controlling person in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred. This indemnity agreement will be in
addition to any liability such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability 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, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless, (i) the employment
of additional counsel has been authorized in writing by the indemnifying party
in connection with defending such action, or (ii) representation of both the
indemnifying party and the indemnified party by the same counsel is
inappropriate by applicable standards of professional conduct for attorneys in
the jurisdiction where suit
<PAGE>
-26-
is instituted due to actual or potential conflicting interests between them (it
being understood that the indemnifying party shall not be liable for the expense
of more than one separate counsel (in addition to local counsel) representing
the indemnified parties in such action). 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) No indemnity by the Company hereunder shall apply in respect of
(i) any preliminary prospectus furnished to a person to whom any of the Shares
shall have been sold, unless a copy of the Prospectus is furnished by an
Underwriter or securities dealer to such person at or prior to the furnishing of
the written confirmation of such sale or mailed to such person with such
confirmation or (ii) any preliminary prospectus or Prospectus used by an
Underwriter or securities dealer after the same has been superseded by an
amended or supplemented preliminary prospectus or Prospectus supplied by the
Company to the Representative for the use of the Underwriters and securities
dealers. As used in this Section 7(d), the term "Prospectus" does not include
any Incorporated Document.
(e) If the indemnification provided for in subparagraph (a) or (b)
above should not be available to an indemnified party in respect of any losses,
claims, damages, liabilities and expenses referred to therein, then the
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and such indemnified party on the other from the offering
of the Shares, and also the relative fault of the indemnifying party on the one
hand and such indemnified party on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities and
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriters, in each
<PAGE>
-27-
case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(f) The parties hereto agree that it would not be just and equitable
if contribution were to be determined by pro rata allocation (even if the
Underwriters were to be 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. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in subparagraph (c) above if
the indemnifying party shall have assumed the defense of any such action in
accordance with the provisions thereof). No person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Representations and Indemnities to Survive. All representations
------------------------------------------
and warranties of the Company contained herein and in the certificate or
certificates delivered pursuant to Section 5(g) and the indemnity agreements
contained in Section 7 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company or any officer, director
or controlling person, and shall survive delivery of and payment for the Shares
and, in the case of the indemnity agreements contained in Section 7, any
termination of this Agreement.
9. Notices. All communications hereunder shall be in writing and if
-------
sent to the Underwriters shall be mailed, delivered or transmitted by facsimile
and confirmed to the Representative at the address set forth in Schedule I
hereto, or if sent to the Company shall be mailed, delivered or transmitted by
facsimile and confirmed to it, c/o Vice President and Chief Financial Officer,
800 King Street, P.O. Box 231, Wilmington, Delaware 19899. Any such address may
be changed from time to time by notice as aforesaid.
<PAGE>
-28-
10. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the several Underwriters and the Company and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person or corporation, other than the
parties hereto, their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 7, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto, their respective successors and assigns and said controlling persons,
officers and directors, and for the benefit of no other person or corporation.
No purchaser of any of the Shares through or from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
11. Underwriters Not Agents of the Company. Nothing herein contained
--------------------------------------
shall constitute the Underwriters, or any of them, agents or representatives of
the Company, or authorize them to act for or on behalf of the Company in any
capacity.
12. Controlling Law. Although the place of performance of certain
---------------
obligations under this Agreement is stated to be outside of Delaware, it is the
express intention of the parties hereto that this Agreement shall be governed by
and construed in accordance with the laws of Delaware, without regard to the
choice of law principles.
If the foregoing correctly sets forth the understanding between the
Company and the Underwriters, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Underwriters severally.
Very truly yours,
DELMARVA POWER & LIGHT COMPANY
By
------------------------------
Title:
<PAGE>
-29-
ACCEPTED as of the date first
above written, as Underwriters
and as Representatives of the
other Underwriters named in
Schedule II.
<PAGE>
-30-
[Insert name of Representative]
By:
By
-----------------------------
Title:
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated _______ __, 199_
Registration Statement No. __________
Representatives and Address:
Securities:
Designation: Common Stock, Par Value $2.25
Number of Shares: _________
Maximum Number of Option Shares: _______
Purchase Price per Share: $_______
Public Offering Price per Share: _______
Concession per Share: $_____
Reallowance per Share: $_____
Closing Date, Time and Location:
Option Closing Time and Location:
<PAGE>
SCHEDULE II
-----------
Underwriter Number of Shares
----------- ----------------
____________
Total ...................................
============
<PAGE>
DELMARVA POWER & LIGHT COMPANY
$250,000,000
Medium-Term Notes, Series C
and
First Mortgage Bonds
(Secured Medium-Term Notes)
Distribution Agreement
----------------------
199
----------, -
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center, North Tower
New York, New York 10281
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Delmarva Power & Light Company, a Delaware and Virginia corporation (the
"Company"), proposes to issue and sell from time to time its Medium Term Notes,
Series C (the "Notes") and First Mortgage Bonds, which may be designated as
"Secured Medium-Term Notes" (the "Bonds") (collectively, the "Securities"), in
an aggregate amount up to $250,000,000 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") in accordance with Section 2(b) hereof.
The Notes will be issued under an Indenture, dated as of November 1, 1988,
as it may be supplemented and amended (the "Note Indenture"), between the
Company and Manufacturers Hanover Trust
<PAGE>
-2-
Company, as Trustee (the "Note Trustee"). The Bonds will be issued under the
Company's Mortgage and Deed of Trust, dated as of October 1, 1943, to the New
York Trust Company (to which the Chemical Bank is successor), as trustee (the
"Bond Trustee"), as heretofore supplemented and amended and to be further
supplemented and amended by one or more Supplemental Indentures (collectively,
the "Supplemental Indenture") with respect to the Bonds (collectively, the
"Mortgage"). The Note Indenture and Mortgage are sometimes hereinafter referred
to individually as an "Indenture" and collectively as the "Indentures." The
Note Trustee and the Bond Trustee are sometimes hereinafter referred to
individually as a "Trustee" and collectively as the "Trustees." The Securities
shall have the maturity ranges, interest rates, if any, 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 Indentures.
1. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to, and agrees with, each Agent that:
(a) A registration statement on Form S-3 in respect of the Securities
has been filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), in
the form heretofore delivered or to be delivered to such Agent, excluding
exhibits to such registration statement but including all documents
currently incorporated by reference in the prospectus included therein, and
such registration statement in such form has been declared effective by the
Commission and, to the best of the Company's knowledge, no stop order
suspending the effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement being hereinafter called a "Preliminary Prospectus"; such
registration statement, including all exhibits thereto but excluding the
Forms T-1, as amended at the time it became effective, being hereinafter
called the "Registration Statement"; the prospectus (including, if
applicable, any prospectus supplement) relating to the Securities, in the
form in which it has most recently been filed with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to
<PAGE>
-3-
any Preliminary 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 any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated therein by
reference; and any reference to the Prospectus as amended or supplemented
shall be deemed to refer to and include the Prospectus as amended or
supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof) in relation to Securities sold
pursuant to this Agreement, in the form filed with the Commission pursuant
to Rule 424(b) under the Act and in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, or any amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder 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;
provided, however, that this representation and warranty 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;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date in the case of the Registration Statement and any amendment
thereto and as of the applicable
<PAGE>
-4-
filing date in the case of the Prospectus and any supplement thereto,
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; provided, however, that this representation and
warranty 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;
(d) There has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus.
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdictions of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) 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;
(g) 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 Indentures, which will be substantially in the
forms filed as exhibits to the Registration Statement; each Indenture has
been duly authorized and qualified under the Trust Indenture Act 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 equity principles; and
each Indenture conforms and the Securities of any particular issuance of
Securities will conform to the descriptions thereof in the Prospectus as
amended or supplemented to relate to such issuance of Securities;
<PAGE>
-5-
(h) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indentures, 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 of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor
will such action result in any violation of the provisions of the Restated
Certificate and Articles of Incorporation or the By-Laws, as amended, of
the Company 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 properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body is required for the solicitation of offers to purchase Securities
and the issue and sale of the Securities or the consummation by the Company
of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indentures, except such as have been, or will have been
prior to the Commencement Date (as defined in Section 3 hereof), obtained
under the Act, the Trust Indenture Act and the laws of the State of
Delaware and Commonwealth of Virginia governing the regulation of public
utilities and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the solicitation by such Agent of offers to purchase
Securities from the Company and with purchases of Securities by such Agent
as principal, as the case may be, in each case in the manner contemplated
hereby;
(i) Other than as set forth or contemplated in the Prospectus, 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 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;
(j) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate
<PAGE>
-6-
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; and
(k) 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 its best 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 each Trustee a copy of the Administrative Procedure as from time to
time in effect.
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
<PAGE>
-7-
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 .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
20 years and more .750%
</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 either
or both Agents and the Company, which may be substantially in the form of Annex
I hereto, or (ii) an oral agreement between either 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. Each Terms Agreement may also
specify any requirements for opinions of counsel, accountants' letters and
officers' certificates pursuant to Section 4 hereof. The commitment
of any Agent to 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.
<PAGE>
-8-
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, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, 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 Reid & Priest, 40 West 57th Street, New York,
New York, 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 any 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 promptly
all reports
<PAGE>
-9-
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 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;
(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
<PAGE>
-10-
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 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) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) as soon as they
are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company
as such Agent may from time to time
<PAGE>
-11-
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(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) the 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 (including any purchase by such Agent as principal
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 as though made at and as of such date, and an
undertaking that such representations and warranties will be true and
correct as of the settlement date for the Securities relating to such
acceptance or as of the Time of Delivery relating to such purchase
pursuant to a Terms Agreement, 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);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than
by a Pricing Supplement) and each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus, and
each time the Company sells Securities to such Agent as principal pursu-
ant to a Terms Agreement and such Terms Agreement specifies the delivery
of an opinion or opinions by Reid & Priest, counsel to the Agents, as a
condition to the purchase of Securities pursuant to such Terms Agreement,
the Company shall furnish to such counsel such papers and information as
they may reasonably request to enable them to furnish to such Agent the
opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a
<PAGE>
-12-
Pricing Supplement), each time a document filed under the Act or the
Exchange Act is incorporated by reference into the Prospectus, and each
time the Company sells Securities to such Agent as principal pursuant to a
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of Dale G.
Stoodley, General Counsel for the Company, or other counsel for the
Company satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such purchase
pursuant to a Terms Agreement, as the case may be, in form satisfactory to
such Agent, to the effect that such Agent may rely on the opinion of such
counsel referred to in Section 6(c) hereof which was last furnished to
such Agent to the same extent as though it were dated the date of such
letter authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu of such
opinion, an opinion of the same tenor as the opinion of such counsel
referred to in Section 6(c) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the Prospectus,
in either case to set forth financial information included in or derived
from the Company's consolidated financial statements or accounting
records, and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of a letter under this Section 4(j) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
cause 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 forthwith to
furnish such Agent a letter, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such purchase pursuant to a
Terms Agreement, as the case may be, in form satisfactory to such Agent,
of the same tenor as the letter referred to in Section 6(d) hereof but
modified to relate to the Registration Statement and the Prospectus as
amended or supplemented to the date of such letter, with such changes as
may be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company, to the
<PAGE>
-13-
extent such financial statements and other information are available as of
a date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or
other matter, such letter may reconfirm as true and correct at such date
as though made at and as of such date, rather than repeat, statements with
respect to such financial information or other matter made in the letter
referred to in Section 6(d) hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells Securities
to such Agent as principal and the applicable Terms Agreement specifies
the delivery of a certificate under this Section 4(k) as a condition to
the purchase of Securities pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement, amendment, incorporation
or Time of Delivery relating to such purchase pursuant to a Terms
Agreement, as the case may be, in such form and executed by such officers
of the Company as shall be satisfactory to such Agent, to the effect that
the statements contained in the certificate referred to in Section 6(f)
hereof which was last furnished to such Agent are true and correct at such
date as though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented to such date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in said
Section 6(f) but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date.
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 Preliminary 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
<PAGE>
-14-
word processor or reproducing this Agreement, any Terms Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda 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) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
by the Company; (x) 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 (xi) 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 of Agents' Obligations. The obligation of any Agent, as
---------------------------------
agent of the Company, at any time ("Solicitation Time") to solicit offers to
purchase the Securities and the obligation of any offeree to purchase
Securities or 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 applicable date referred to in Section 4(k) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the case
may be, and at and as of such Solicitation Time or Time of Delivery, as the
case may be, the condition that on or prior to such Solicitation Time or Time
of Delivery, as the case may be, the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the
<PAGE>
-15-
Pricing Supplement) with respect to such Securities shall have been filed
with the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act 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) Reid & Priest, counsel to the Agents, shall have furnished to
such Agent (i) such opinion or opinions, dated the Commencement Date, with
respect to the incorporation of the Company, the validity of each
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as such Agent may
reasonably request, and (ii) if and to the extent requested by such Agent,
with respect to each applicable date referred to in Section 4(h) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, 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) Dale G. Stoodley, 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 Section 4(i) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in form
and substance satisfactory to such Agent, to the effect that:
(i) the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware and
Virginia with all corporate power
<PAGE>
-16-
and other authority, including franchises, necessary to own or lease
its properties and conduct its business as described in the
Registration Statement and Prospectus as amended or supplemented and
to issue and sell the Securities; and each of the Subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction and is duly qualified to
do business as a foreign corporation and is in good standing under
the laws of any jurisdiction in which the conduct of its business or
the ownership or leasing of its properties requires such
qualification, with all corporate and other authority and franchises
necessary to own or lease its properties and conduct its business as
described in the Registration Statement and Prospectus;
(ii) the Company is duly qualified to do business as a foreign
corporation in good standing in Maryland, New Jersey, Ohio and
Pennsylvania, being all of the jurisdic-tions in which the conduct of
its business or its ownership or leasing of properties requires such
qualifi-cation; and the Company owns all of the stock of its
subsidiaries, free and clear of any lien, pledge or other encumbrance;
(iii) except as otherwise set forth in the Prospectus as amended
or supplemented, and except with respect to the location of certain
poles, wires, and other facilities within public highways or over or
under public or navigable waters (the status of which does not in any
case threaten to affect materially the Company's ability to conduct
its present business), the Company has such valid franchises,
certificates of convenience and necessity, operating rights, licenses,
permits, consents, approvals, authorizations and/or orders of
governmental bodies, political subdivisions or regulatory authorities,
free from materially burdensome restrictions, as are necessary for the
acquisition, construction and ownership of the properties owned or
leased by it and the maintenance and operation of the properties now
operated by it and the conduct of the business now carried on by it as
described in the Registration Statement and the Prospectus as
amended or supplemented, and to the best of the knowledge of such
counsel, the Company is not in default or violation of any such
franchises, certificates of convenience and necessity, operating
rights, licenses, permits, consents, approvals, authorizations, and/or
orders of governmental bodies, political subdivisions or regulatory
authorities to an extent which would materially
<PAGE>
-17-
affect the conduct of such business, and the Company is not, to any
material extent, in violation of any applicable Federal, state or
other laws and regulations;
(iv) each of the Note Indenture and the Mortgage has been, and,
at the date of issuance of each series of the Bonds, the Supplemental
Indenture with respect to such series will have been, duly authorized,
executed and delivered and is, and will be, as the case may be, a
valid instrument legally binding upon the Company and enforceable in
accordance with its terms, except as remedies may be limited by
bankruptcy, insolvency or other laws of general application affecting
the enforcement of creditors' rights generally or principles of
equity;
(v) the Mortgage, including each supplement thereto, has been
duly recorded as a mortgage upon the property covered thereby in such
a manner as is necessary to maintain the lien thereof; and with
respect to security interests in personal property and fixtures
covered by the Mortgage, financing statements have been duly filed, to
the extent required, under the provisions of the Delaware, Maryland,
New Jersey, Pennsylvania and Virginia Uniform Commercial Codes
(certain of which contain requirements for the filing of continuation
statements at specified intervals in order to preserve the security);
(vi) substantially all the utility plant and real property
owned by the Company at the date of the Supplemental Indenture are
adequately described in the Mortgage so as to constitute the Mortgage
a lien thereon as security for the Bonds, subject to no liens,
encumbrances, or rights of others, other than those specified or
referred to in the Prospectus under the heading "Description of the
New Bonds-Security";
(vii) at the date of issuance of each series of the Bonds,
substantially all the utility plant and real property owned by the
Company will be adequately described in the Mortgage so as to
constitute the Mortgage a lien thereon as security for the Bonds,
subject to no liens, encumbrances, or rights of others, other than
those specified or referred to in the Prospectus as amended or
supplemented under the heading "Description of The New Bonds-
Security";
(viii) the Notes have been duly authorized and, with respect to
the Notes of each issue, when the terms thereof have been duly
established in accordance with a Company
<PAGE>
-18-
Order or pursuant to such procedures acceptable to the Note Trustee
as may be specified in a Company Order, when they have been duly
executed by the proper officers of the Company, authenticated by the
Trustee and delivered by the Company, and when payment therefor has
been received by the Company, they will have been validly issued and
will be valid and binding obligations of the Company enforceable in
accordance with their terms and entitled to the benefits provided by
the Note Indenture, subject to the limitations set forth in
paragraph (iv) above;
(ix) at the date of issuance of each series of the Bonds, the
Bonds of such series will have been duly authorized and, when duly
executed by the proper officers of the Company, authenticated by the
Trustee and delivered by the Company, and when payment therefor has
been received by the Company, they will have been validly issued and
will be valid and binding obligations of the Company enforceable in
accordance with their terms and entitled to the lien of, and benefits
provided by, the Mortgage, subject to the limitations set forth in
paragraph (iv) above;
(x) the terms of the Note Indenture and the Mortgage conform,
and at the date of issuance of each issue of the Notes or series of
the Bonds, the Notes of such issue or the Bonds of such series, as the
case may be, will conform, as to legal matters, to the description
thereof and the statements concerning them in the Registration
Statement and the Prospectus as amended or supplemented; the summary
of certain terms and provisions of the Note Indenture and the Mortgage
appearing in the Registration Statement and the Prospectus as amended
or supplemented fairly presents, and at each such date of issuance,
the summary of certain terms and provisions of the Notes of such issue
or the Bonds of such series, as the case may be, appearing in the
Registration Statement and the Prospectus as amended or supplemented
will fairly present, the information called for by the Act and the
rules and regulations of the Commission thereunder; and the Note
Indenture and the Mortgage have been duly qualified under the Trust
Indenture Act of 1939;
(xi) the Delaware Public Service Commission and the Virginia State
Corporation Commission have issued orders (to be identified by date
and docket number) authorizing the issuance and sale of the Securities
and authorizing generally the transactions relating thereto (including
permitting the Company to enter into this Agreement and
<PAGE>
-19-
perform its obligations hereunder); neither of such orders contains
any condition inconsistent with the provisions hereof nor, to the
best knowledge of such counsel, has either of such orders been
rescinded, modified or stayed; and no further action is required to
be taken by, and no further authorization, consent or approval is
required to be obtained from, any governmental authority having
jurisdiction in connection with the authorization, issuance and sale
of the Securities (other than in connection with state securities or
blue sky laws as to which counsel need express no opinion);
(xii) the statements in the Prospectus as amended or supplemented
that are stated therein to have been made on the authority of such
counsel as an expert have been reviewed by such counsel and, as to
matters of law and legal conclusions, are correct and fairly present
the information required to be shown;
(xiii) such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or
the Prospectus as amended or supplemented which are not described as
required, or of any contracts or documents of the Company or any of
its subsidiaries of a character required to be described in the
Registration Statement or Prospectus as amended or supplemented,
incorporated by reference into the Prospectus as amended or
supplemented or filed as exhibits to the Registration Statement by the
Act or by the rules and regulations of the Commission thereunder which
have not been described, incorporated by reference or filed as
required;
(xiv) the performance of this Agreement and of any Terms Agreement
and the consummation of the transactions herein or therein
contemplated and the fulfillment of the terms hereof or thereof will
not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, the Restated
Certificate and Articles of Incorporation, as amended, or By-Laws,
as amended, of the Company, or any statute, or any indenture,
mortgage, deed of trust, note agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which any of them is bound or to which
any of their property is subject, or any order, rule or regulation
known to such counsel applicable to the Company or to any of its
subsidiaries or any of their property of any court or other
governmental body;
<PAGE>
-20-
(xv) this Agreement has been, and when executed any Terms
Agreement shall have been, duly authorized and entered into by the
Company; and this Agreement is, and when executed and delivered any
Terms Agreement shall be, valid and binding on the Company, except
that rights to indemnity hereunder and thereunder may be limited under
securities laws.
(xvi) The documents incorporated by reference in the Prospectus as
amended or supplemented, when they became effective or were filed with
the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading, except that such
counsel need express no opinion as to the financial statements and
other financial data included therein; and
(xvii) the Registration Statement has become effective under the
Act, and, to the best of the knowledge of such counsel, no stop order
with respect thereto has been issued and is continuing, no 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 best knowledge of such
counsel, contemplated by the Commission; the Registration Statement at
the time it became effective complied, and the Prospectus as amended
or supplemented complies, as to form, in all material respects, with
the requirements of the Act and the Trust Indenture Act and the rules
and regulations thereunder; such counsel has no reason to believe that
(i) the Registration Statement, at the time the Registration Statement
became effective and at the Solicitation Time, contained or contains
any statement of a material fact or omitted or omits to state
any material
<PAGE>
-21-
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except that in each case such
counsel need express no opinion as to the financial statements and
other financial data included therein.
(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 Commencement Date and each
applicable date referred to in Section 4(j) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent to the effect set forth in Annex III
hereto;
(e) There shall not have occurred any:
(i) change, or any development involving a prospective change,
in the condition, financial or otherwise, or in the earnings, business
or operations, of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus, as amended or supplemented at
such Solicitation Time or Time of Delivery, as the case may be, that,
in such Agent's judgment, is material and adverse and that makes it,
in such Agent's judgment, impracticable to market the Securities on
the terms and in the manner contemplated by the Prospectus, as so
amended or supplemented;
(ii) (A) 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 judgment, is material and adverse and,
in the case of 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 judgment, impracticable to market the Securities
on the terms and in the manner contemplated by the Prospectus, as
amended
<PAGE>
-22-
or supplemented at such Solicitation Time or Time of Delivery, as
the case may be; and
(iii) 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;
except, in each case, as disclosed to such Agent in writing by the Company
prior to such Solicitation Time, or unless in each case described in (ii)
above, the relevant event shall have occurred and been known to such Agent
prior to such Solicitation Time, as the case may be.
(f) 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 Section 4(k) hereof that is on
or prior to such Solicitation Time or Time of Delivery, as the case may be,
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) and (e) of this Section 6, and as to
such other matters as such Agent may reasonably request.
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 any Preliminary Prospectus, the Registration
Statement, 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, how-ever, 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
<PAGE>
-23-
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 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 in respect of any Preliminary
Prospectus shall not inure to the benefit of either Agent on account of any such
losses, claims, damages or liabilities arising from the sale of the Securities
to any offeree if such Agent failed to send or give a copy of the Prospectus as
amended or supplemented (excluding documents incorporated therein by reference),
if any amendments or supplements thereto shall have been furnished, at or prior
to the time of written confirmation of the sale involved, to such offeree with
or prior to the written confirmation of such sale.
(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 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 Registration Statement, 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 and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably
<PAGE>
-24-
satisfactory to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such proceeding and shall
pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but 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 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)
<PAGE>
-25-
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 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.
<PAGE>
-26-
(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. 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
<PAGE>
-27-
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 fourth 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 Morgan Stanley & Co. Incorporated, shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to 1251
Avenue of the Americas, New York, New York 10020, Attention: Manager, Credit
Department, Facsimile Transmission No. (212) 703-4575 and a copy to 1221 Avenue
of the Americas, New York, New York 10020, Attention: Managing Director, Debt
Syndicate, Facsimile Transmission No. (212) 764-7490, Attention: Manager, Debt
Syndicate, and if to Merrill Lynch & Co. shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to World
Financial Center, North Tower, 23rd Floor, New York, New York 10281, Facsimile
Transmission No. (212) 449-2234, Attention: MTN Product Management, and if to
the Company shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to Delmarva Power & Light Company, 800
King Street, Wilmington, Delaware 19899, Facsimile Transmission No. (302) 429-
3665, 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.
<PAGE>
-28-
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.
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
<PAGE>
-29-
a binding agreement between the Company and each of you in accordance with its
terms.
Very truly yours,
DELMARVA POWER & LIGHT COMPANY
By:
------------------------------
Title:
---------------------------
Accepted in New York, New York,
as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:
------------------------------
Title:
---------------------------
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------
Title:
---------------------------
<PAGE>
-30-
ANNEX I
DELMARVA POWER & LIGHT COMPANY
Medium Term Notes, Series C
Terms Agreement
---------------
, 19
[Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center, North Tower
New York, New York 10281]
[Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020]
Dear Sirs:
Delmarva Power & Light Company (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 Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated (the "Agents") on the other,
to issue and sell to [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated] [Morgan Stanley & Co. Incorporated] 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
<PAGE>
-31-
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 [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated] [Morgan Stanley & Co. Incorporated] and [Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated] [Morgan Stanley & Co.
Incorporated] agree 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.
DELMARVA POWER & LIGHT COMPANY
By:
------------------------------
Title:
---------------------------
Accepted in New York, New York,
as of the date hereof:
[MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED]
[MORGAN STANLEY & CO. INCORPORATED]
By:
---------------------------------
<PAGE>
-32-
Title:_______________________________
<PAGE>
-33-
Schedule to Annex I
Title of Purchased Securities:
[ % Medium-Term Notes]
[ % First Mortgage Bonds, Series due ]
Aggregate Principal Amount:
$
[Price to Public: ]
Purchase Price by [Merrill Lynch & Co.] [Morgan Stanley & Co. Incorporated]
% of the principal amount of [, plus accrued interest from to
]
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]
Indenture:
[Indenture, dated as of November 1, 1988, between the Company and
Manufacturers Hanover Trust Co., as Trustee]
[Mortgage and Deed of Trust, dated as of October 1, 1943, to the New York
Trust Company (to which Chemical Bank is successor), as Trustee, as supplemented
and amended to and including the _____ Supplemental Indenture]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
<PAGE>
-34-
Interest Payment Dates:
[months and dates]
Redemption 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 4(h).]
[(2) The opinion of counsel to the Company referred to in Section 4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
<PAGE>
-35-
ANNEX II
DELMARVA POWER & LIGHT COMPANY
Administrative Procedure
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated ______, 199_ (the "Distribution Agreement"),
between Delmarva Power & Light Company (the "Company") and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated (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.
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"). 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
<PAGE>
-36-
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) If a Fixed Rate Security, the interest rate;
(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;
(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) If a Floating Rate Security, such of the following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;]
(10) Name, address and taxpayer identification number of the
registered owner;
<PAGE>
-37-
(11) Denomination of certificates to be delivered at settlement;
(12) Whether such Security is a Book-Entry Security or a Certificated
Security; and
(13) Whether such Agent is acting as Selling Agent or Purchasing Agent.
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 fifth business day following the date on which such Pricing Supplement is
first used, and will promptly deliver 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:
Morgan Stanley & Co. Incorporated:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
4th Floor
New York, New York 10020
Attn: Medium-Term Note Trading Desk, Carlos Cabrera
Telephone: (212) 296-5830
Telecopy: (212) 764-7490
Merrill Lynch & Co.:
Merrill Lynch & Co. - Tritech Services
4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
Attn: Final Prospectus Unit/Nachman Kimerling
Telephone: (908) 878-6526
Telecopy: (908) 878-6530
also, for record keeping purposes, please send a copy to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attn: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
<PAGE>
-38-
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 pur-
chaser or its agent of (a) the confirmation of sale or (b) the Security.
Date of Settlement:
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 fifth business day after the date of acceptance of such offer, unless the
Company 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.
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 Note Trustee or the Bond Trustee, as
the case may be, by telephone (confirmed in writing) or by facsimile
transmission or other acceptable written means. The Note Trustee or the Bond
Trustee, as the case may be, 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 a
certificate delivered to the holder thereof or a person designated by such
holder (a "Certificated 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. PROCEDURES FOR BOOK-ENTRY SECURITIES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by DTC, each Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its
<PAGE>
-39-
respective obligations under a Letter of Representation from the Company and
such Trustee to DTC, dated as of June 4, 1993 (the "Letter of Representation"),
and, in the case of the Note Trustee, a Medium-Term Note Certificate Agreement
between such Trustee and DTC dated December 2, 1988, and, in the case of the
Bond Trustee, a Medium-Term Note Certificate Agreement between such Trustee and
DTC, dated as of December 2, 1988, 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.
Upon receipt of the Sale Information from the Company, the Trustee will
then assign a CUSIP number to the Global Security representing such Security and
will notify the Company and the Agent of such CUSIP number by telephone as soon
as practicable.
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. The Initial Interest Payment Date for such 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.
<PAGE>
-40-
3. The CUSIP number of the Global Security representing such
Security.
4. 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. 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 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 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 such 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 Security to the Agent's participant account
and credit such Security to the participant accounts of the Participants with
respect to such Security and (ii) to debit the settlement accounts of such
Partici-pants 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.
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.
Unless the Agent is the end purchaser of such Security, the Agent will
confirm the purchase of such Security to the purchaser
<PAGE>
-41-
either by transmitting to the Participants with respect to such 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 cancelled, 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.
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.
B. PROCEDURES FOR CERTIFICATED SECURITIES
In the case of a sale of Certificated Securities to a purchaser solicited
by an Agent, 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 Securities against delivery by the Selling Agent of a
receipt therefor. On the Settlement Date, the Selling Agent will deliver
payment for such Securities in immediately available funds to the Trustee in an
amount equal to the issue price of the 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 Securities to a Purchasing Agent, the Trustee
will, by 2:15 p.m., New York City time, on the Settlement Date, deliver the
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.
<PAGE>
-42-
The Note Trustee or Bond Trustee, as the case may be, shall deliver
Certificated Securities to:
Morgan Stanley & Co. Incorporated:
Morgan Stanley & Co. Incorporated
Bank of New York
One Wall Street, 4th Floor
New York, NY 10015
Attn: Dealer's Clearance Department
Merrill Lynch & Co.:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Money Market Clearance - MTNs:
75 Barclay Street
Ground Floor, Window C
New York, NY 10080
Attn: Kevin Brennan
Failure to Settle:
A. PROCEDURES FOR BOOK-ENTRY SECURITIES
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Security, the Trustee may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal message instructing DTC to
debit such Security to the Trustee's participant account, provided that the
Trustee's participant account contains a principal amount of the Global Security
representing such 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 "cancelled," make appropriate entries in the Trustee's records
and send such cancelled 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 cancelled 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
and shall be cancelled immediately after issuance and the other of which shall
represent the remaining Book-Entry Securities previously represented by the
surrendered Global Security and shall bear the CUSIP number of the surrendered
Global Security.
<PAGE>
-43-
If the purchase price for any Book-Entry Security is not timely paid to the
Participants with respect to such 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.
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.
B. PROCEDURES FOR CERTIFICATED SECURITIES
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>
-44-
ANNEX III
Accountants' Letter
-------------------
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent public accountants shall
furnish letters to the effect that:
(i) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
schedules audited by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished to
the Agents;
(iii) In their opinion, the unaudited selected financial information
with respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for the five such fiscal years
which were included or incorporated by reference in the Company's Annual
Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and
<PAGE>
-45-
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of changes in
financial position included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with the basis
for the audited consolidated statements of income, consolidated
balance sheets and consolidated statements of changes in financial
position included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder
<PAGE>
-46-
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of common stock in connection with
the Company's Dividend Reinvestment Plan, issuances of capital stock
upon exercise of options and stock appreciation rights, upon earn-outs
of performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase or decrease in the consolidated long-term debt of the Company
and its subsidiaries, other than repayments of long-term debt and
amortization of premium and discounts on long-term debt, in each case
in excess of $5,000,000, or any decreases in consolidated net current
assets or net assets or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated operating revenues, operating income, net income,
earnings applicable to common stock or other items specified by the
Agents, or any increases in any items specified by the Agents, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the Agents,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(v) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain
<PAGE>
-47-
amounts, percentages and financial information specified by the Agents
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Agents or in documents
incorporated by reference in the Prospectus specified by the Agents, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries
and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
<PAGE>
DELMARVA POWER & LIGHT COMPANY
First Mortgage Bonds
UNDERWRITING AGREEMENT
----------------------
_____________, 199_
To the Representative named in Schedule I hereto
of the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
The undersigned, Delmarva Power & Light Company, a Delaware and Virginia
corporation (the "Company"), hereby confirms its agreement with each of the
several Underwriters hereinafter named as follows:
The term "Underwriters" as used herein shall be deemed to mean the firm or
corporation or the several firms or corporations named in Schedule II hereto and
any underwriter substituted as provided in Section 3 and the term "Underwriter"
shall be deemed to mean one of such Underwriters. If the firm or firms listed
in Schedule I hereto (the "Representative") are the same as the firm or firms
listed in Schedule II hereto, then the terms "Underwriters" and
"Representative", as used herein, shall each be deemed to refer to such firm or
firms. The Representative represents that it has been authorized by the
Underwriters to execute this Agreement on their behalf and to act for them in
the manner herein provided. All obligations of the Underwriters hereunder are
several and not joint. If more than one firm is named in Schedule I hereto, any
action under or in respect of this Agreement may be taken by such firms jointly
as the Representative or by one of the firms acting on behalf of the
Representative and such action will be binding upon all the Underwriters.
1. Description of Bonds. The Company has authorized by appropriate
--------------------
corporate action and proposes to issue and sell to the several Underwriters its
First Mortgage Bonds of the series designations, with the terms and in the
amounts specified in Schedule I hereto (the "Bonds"), to be issued under its
Mortgage and Deed of Trust, dated as of October 1, 1943, to the New York Trust
Company (to which the Chemical Bank is successor), as trustee (the "Trustee"),
as heretofore supplemented and amended and to be further supplemented and
amended by a Supplemental
<PAGE>
-2-
Indenture with respect to the Bonds (the "Supplemental Indenture"), a copy of
the form of which has been heretofore delivered to the Representative
(collectively, the "Mortgage").
2. Representations, Warranties and Agreements of the Company. The
---------------------------------------------------------
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a) A registration statement (identified in Schedule I hereto),
together with amendments thereto, if any, with respect to the Bonds 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 Mortgage
has been qualified under the Trust Indenture Act of 1939, as amended.
Copies of such registration statement, together with all amendments
thereto, if any, have heretofore been delivered to the Representative, 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 the Representative. As used in this Agreement, the term "Registration
Statement" means such registration statement, including exhibits, financial
statements and all documents incorporated therein by reference, as amended
through the date hereof. As used in this Agreement, (i) the term
"Prospectus" means (A) if a preliminary prospectus supplement with respect
to the Bonds was prepared in conformity with the Rules and Regulations and,
together with the prospectus in the form included in the Registration
Statement, filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations ("Rule 424(b)"), such preliminary prospectus supplement and
prospectus completed to reflect the terms of the sale of the offering of
the Bonds, (B) if no such preliminary prospectus supplement was so prepared
and filed, the prospectus in the form included in the Registration
Statement as to be supplemented by a prospectus supplement reflecting the
terms of the offering of the Bonds, or (C) if the Bonds are to be offered
without a prospectus supplement, the prospectus in the form included in the
Registration Statement completed to reflect the terms of such offering, in
each case proposed to be filed with the Commission pursuant to Rule 424(b)
on or about the date hereof, and (ii) the term "Prospectus Supplement"
means the prospectus supplement proposed so to be filed with the
Commission, in each case including all documents
<PAGE>
-3-
incorporated in such prospectus and prospectus supplement by reference (the
"Incorporated Documents"). In the event of any amendment to the
Registration Statement after the date hereof, the term "Registration
Statement" shall mean such Registration Statement as so amended. In the
event of any amendment or supplement to the Prospectus after the date of
the filing with the Commission of the Prospectus Supplement pursuant to
Rule 424(b), the term "Prospectus" shall mean such Prospectus as so amended
or supplemented; provided, however, that any supplement to the Prospectus
filed with the Commission pursuant to Rule 424(b) with respect to an
offering of the Company's securities other than the Bonds shall not be
deemed to be a supplement to or part of the Prospectus. Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to
the Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), deemed to be incorporated therein
after the date hereof and prior to the termination of the offering of the
Bonds by the Underwriters.
(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) On the date of this Agreement and at all times subsequent
hereto up to and at the Closing Date (as defined in Section 3), (i) the
Registration Statement and the Prospectus do and will contain all
statements and information which are required to be included therein by the
Act and the Rules and Regulations and do and will conform, in all material
respects, to the requirements of the Act and the Rules and Regulations;
(ii) the Mortgage does and will conform, in all material respects, to the
requirements of the Trust Indenture Act of 1939, as amended; (iii) the
Registration Statement does not and will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iv) the Prospectus does not and will not include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made,
<PAGE>
-4-
not misleading; provided, however, that the Company makes no
representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter expressly for use in the preparation thereof or to any
statement in or omissions from the Statement of Eligibility and
Qualification of the Trustee under the Mortgage. There are no contracts or
documents of the Company or of any subsidiary of the Company 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.
(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. Each of the Incorporated Documents, when it
and when any amendment thereto was filed with the Commission, complied as
to form in all material respects to the requirements of the Exchange Act,
and the rules and regulations of the Commission thereunder, and any
Incorporated Document and any amendment thereto, when filed with the
Commission, will comply as to form in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and none of such documents includes or will include
any untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(e) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Delaware and Virginia,
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 Bonds; the Company is duly qualified to do business as a foreign
corporation in good standing in Maryland, New Jersey, Ohio and
Pennsylvania, being all of the jurisdictions in which the conduct of its
business or its ownership or leasing of properties requires such
qualification, with all corporate authority, including franchises necessary
to own or lease its properties and conduct its business as described in the
Registration Statement and Prospectus. The Company has no direct
subsidiaries other than Delmarva Energy Company, Delmarva
<PAGE>
-5-
Industries, Inc., Delmarva Capital Investments, Inc. and Delmarva Services
Company (the "Subsidiaries"), all of the stock of each of which is owned by
the Company free and clear of any lien, pledge or other encumbrance, except
for those matters satisfactory to the Underwriters discussed in the opinion
of Dale G. Stoodley, General Counsel for the Company, pursuant to Section
5(d) hereof. Each of the Subsidiaries has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation and is licensed to do business as a foreign corporation and
is in good standing under the laws of any jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, with all corporate and other authority and franchises
necessary to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus.
(f) Except as otherwise stated in the Registration Statement
and the Prospectus, each of the Company and the Subsidiaries, as the case
may be, has good and marketable title in fee simple, free from
encumbrances, to all of the real property referred to in the Registration
Statement and the Prospectus as being owned by it, subject to exceptions
which are minor and do not impair the use of the affected property in the
operation of their businesses.
(g) The performance of this Agreement and the consummation of
the transactions herein contemplated and the fulfillment of the terms
hereof will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, the Mortgage, or
any indenture, mortgage, deed of trust, note agreement or other agreement
or instrument to which the Company or any of the Subsidiaries is a party or
by which any of them is bound or to which any of their property is subject,
or of the Company's Restated Certificate and Articles of Incorporation, as
amended, or By-Laws, as amended, or any order, rule or regulation of any
court or other governmental body applicable to the Company or to any of the
Subsidiaries or any of their property.
(h) The Company has full power and lawful authority to
authorize, issue and sell the Bonds on the terms and conditions herein set
forth, has taken all corporate action necessary therefor; has obtained
every consent, approval, authorization and other order of any regulatory
body which is required for such authorization,
<PAGE>
-6-
issue or sale, except as may be required in connection with the resale of
the Bonds by the Underwriters under state securities laws; and such
consents, approvals, authorizations and other orders are not subject to
appeal.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set
forth in or contemplated by the Registration Statement and the Prospectus:
(1) the Company and the Subsidiaries taken as a whole have not incurred any
material liabilities or obligations, direct or contingent, and have not
entered into any material transaction, not in the ordinary course of
business; (2) there has not been any material change in the capital stock
or long-term debt of the Company and the Subsidiaries taken as a whole or
any material adverse change, or development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, business, net worth or results of operations of the Company
and the Subsidiaries taken as a whole; (3) no material loss or damage
(whether or not insured) to the property of the Company and the
Subsidiaries taken as a whole has been sustained; and (4) no legal or
governmental proceeding, domestic or foreign, materially affecting the
Company and the Subsidiaries taken as a whole or the transactions con-
templated by this Agreement, has been instituted or, to the knowledge of
the Company, threatened.
(j) The financial statements set forth in or incorporated by
reference into the Registration Statement and the Prospectus fairly present
the consolidated financial condition of the Company and the Subsidiaries
and the results of their operations as of the dates and for the periods
therein specified; and such financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles which have been consistently applied throughout the periods
involved.
(k) Coopers & Lybrand, which has reported on certain financial
statements filed with the Commission and incorporated by reference into the
Registration Statement and the Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(l) Except as set forth in or contemplated by the Registration
Statement and the Prospectus, there is not pending any action, suit or
other proceeding to which the
<PAGE>
-7-
Company or any of the Subsidiaries is a party or of which any property of
the Company or any of the Subsidiaries is the subject, before or by any
court or other governmental body, which might result in any material
adverse change in the condition, business or prospects of the Company and
the Subsidiaries taken as a whole or might materially adversely affect the
properties or assets of the Company and the Subsidiaries taken as a whole;
and no such action, suit or proceeding is known by the Company to be
threatened or contemplated.
(m) At the Closing Date, the Mortgage and the Bonds will conform
in all material respects to all statements in relation thereto contained in
the Registration Statement and the Prospectus, and the Mortgage and the
Bonds will have been duly authorized, executed, authenticated and delivered
and will be legal, valid and binding obligations of the Company.
(n) At the Closing Date, the Mortgage will constitute a valid
first lien, except as otherwise stated in or permitted by the Mortgage, on
substantially all of the Company's utility plant, real estate and other
properties, and will be enforceable in accordance with its terms, except as
remedies are limited by bankruptcy, insolvency, or other laws of general
application or principles of equity affecting the enforcement of creditors'
rights generally.
(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) The Company and the Subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the
<PAGE>
-8-
aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(q) In the ordinary course of its business, the Company conducts
a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
3. Sale, Purchase and Delivery of Bonds; Substitution of
-----------------------------------------------------
Underwriters. On the basis of the representations, warranties and agreements
- ------------
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to each of the Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, the respective
principal amount of Bonds set forth opposite the name of such Underwriter in
Schedule II hereto at the purchase prices set forth in Schedule I hereto.
The Company agrees to make the Bonds available to the Representative
for the purpose of expediting their checking and packaging on behalf of the
Underwriters, at the office of the Trustee hereinafter mentioned or of The
Depository Trust Company ("DTC"), not later than 1:30 P.M. on the business day
next preceding the Closing Date.
Payment for the Bonds shall be made at the place, time and date
specified in Schedule I hereto or at such other time and date as the
Representative and the Company may agree in writing, such time and date for
payment being herein referred to as the "Closing Date". On the Closing Date,
the Company shall deliver the Bonds to DTC (or the Representative, if the
Representative and the Company shall so agree in writing), against payment to or
upon the order of the Company of the purchase price of the Bonds, by certified
check or checks, or official bank or bank cashier's check or checks, payable in
New York Clearing House funds. Time shall be of the essence, and delivery at
the time determined as set forth above is a further condition of the obligation
of each
<PAGE>
-9-
Underwriter and of the Company. The Bonds so delivered shall be in definitive
form and registered in the name of DTC or its nominee (or in such other name or
names as the Representative and the Company shall agree in writing).
It is understood that the Underwriters propose to offer the Bonds for
sale as set forth in the Prospectus.
In the event of default by one or more Underwriters in respect of
their obligations under this Agreement to take up and pay for the Bonds pursuant
to this Section, and if the aggregate of such defaults does not exceed 10% of
the aggregate principal amount of the Bonds, the remaining Underwriters shall be
obligated severally (in proportion to their respective commitments hereunder or
in such other proportion as may be agreed upon by the Representative) to
purchase the aggregate principal amount of the Bonds which such defaulting
Underwriter or Underwriters agreed but failed to purchase. If any Underwriter
or Underwriters shall for any reason permitted hereunder cancel their
obligations to purchase hereunder, or shall fail to take up and pay for the
aggregate principal amount of the Bonds set forth opposite their respective
names in Schedule II hereof upon tender of such Bonds in accordance with the
terms hereof and the aggregate of such cancellations and defaults exceeds 10% of
the aggregate principal amount of the Bonds, the remaining Underwriters shall
have the right to take up and pay for (in such proportion as may be agreed upon
by the Representative) the aggregate principal amount of the Bonds which the
cancelling or defaulting Underwriter or Underwriters agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the aggregate principal amount of the Bonds which the cancelling or
defaulting Underwriter or Underwriters agreed but failed to purchase, the time
for delivery of the Bonds shall be extended for twenty-four hours, and the
Underwriters shall have the privilege of substituting within such twenty-four
hours another underwriter or underwriters satisfactory to the Company. If no
such underwriter or underwriters shall have been substituted as aforesaid, prior
to the termination of such extended time for delivery, the time for delivery of
the Bonds shall be extended for a further twenty-four hours, during which the
Company shall have the privilege of finding another underwriter or underwriters,
satisfactory to the Representative, to purchase the aggregate principal amount
of the Bonds which the cancelling or defaulting Underwriter or Underwriters
agreed but failed to purchase. If it shall be arranged for the remaining
Underwriters or substituted underwriters to take up the aggregate principal
amount of the Bonds of the cancelling or defaulting Underwriter or Underwriters
<PAGE>
-10-
as provided in this Section, (i) the Representative or the Company shall have
the right to postpone the time of delivery of the Bonds for a period of not more
than seven full business days, in order to effect whatever changes that such
arrangements may make necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendment to the Registration Statement or any supplement to the
Prospectus that such arrangements may make necessary, and (ii) the aggregate
principal amount of the Bonds to be purchased by the remaining Underwriters or
substituted underwriters shall be taken as the basis of their respective
underwriting obligations for all purposes of this Agreement.
If, in the event of a default by one or more Underwriters, the
remaining Underwriters shall not take up and pay for all of the aggregate
principal amount of the Bonds agreed to be purchased by the defaulting
Underwriters or substitute another underwriter or underwriters as aforesaid and
the Company shall not find another underwriter or underwriters to purchase such
aggregate principal amount of the Bonds as aforesaid, then this Agreement may be
terminated by the Company by giving prompt notice to the remaining Underwriters.
If the Company shall not so elect to terminate this Agreement, it
shall have the right to require such remaining Underwriters, irrespective of the
default as aforesaid, to purchase the aggregate principal amount of the Bonds
which they have agreed to purchase hereunder. In such event the Company shall,
within twenty-four hours after such second twenty-four hour period, give notice
thereof in writing to such remaining Underwriters and thereupon the time for
delivery of the Bonds may be postponed for a period of not more than four full
business days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents or
arrangements. The Company agrees, in such event, promptly to file any amendment
to the Registration Statement or any supplement to the Prospectus which may
thereby be made necessary. In the absence of such notice from the Company, this
Agreement shall terminate without further action on the part of either the
Company or the Underwriters.
In the event of any such termination, the Company shall not be under
any liability to any Underwriter (except to the extent provided in Sections 4(e)
and 7 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed to purchase Bonds otherwise than for some reason permitted under
this Agreement) be under any liability to the Company (except to the extent
provided in Section 7 hereof).
<PAGE>
-11-
Any action taken by the non-defaulting Underwriters or by the Company
under this Section shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
4. Covenants of the Company. The Company further covenants and
------------------------
agrees with the Underwriters that:
(a) The Company shall comply with the provisions of, and make
all requisite filings with the Commission pursuant to, Rule 424(b) and
notify the Representative promptly of all such filings. The Company will
not at any time file any amendment to the Registration Statement or
supplement to the Prospectus of which the Representative shall not
previously have been advised and furnished with a copy or to which the
Representative or Reid & Priest, counsel for the several Underwriters,
shall have reasonably and promptly objected in writing or which is not in
compliance with the Act or the Rules and Regulations. The Company will
prepare and file with the Commission, promptly upon the Representative's
request, any amendment to the Registration Statement or supplement to the
Prospectus which, in the opinion of the Company's counsel and counsel for
the several Underwriters, may be necessary or advisable in connection with
the distribution of the Bonds by the Underwriters. The Company will file
timely all reports and any definitive proxy or 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
subsequent to the date hereof and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Bonds.
(b) The Company will notify the Representative promptly and
confirm in writing (i) the issuance of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of the Prospectus or of any order directed to the
adequacy or accuracy of any Incorporated Document or of the initiation of
any proceedings for any such purpose and (ii) the receipt of any comments
from the Commission in respect of the Registration Statement or the
Prospectus, or requesting additional information or the amendment or sup-
plementation of the Registration Statement or the Prospectus. If the
Commission shall issue a stop order or any order preventing or suspending
the use of the Prospectus or any order directed to the adequacy or accuracy
of any Incorporated Document at any time, or shall initiate any
<PAGE>
-12-
proceedings for any such purpose, the Company will make every reasonable
effort to prevent the issuance of such order and, if issued, to obtain the
lifting thereof.
(c) Within the time during which a prospectus relating to the
Bonds is required to be delivered under the Act, the Company will comply so
far as it is able with all requirements imposed upon it by the Act, as now
and hereafter amended, and the Rules and Regulations, as from time to time
in force, so far as necessary to permit the continuance of sales of or
dealings in the Bonds as contemplated by the provisions hereof and the
Prospectus; and if during such period any event occurs as a result of which
the Prospectus would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if during such period it is necessary to amend or supplement the Prospectus
to comply with the Act or the Rules and Regulations or to file under the
Exchange Act or the rules and regulations of the Commission thereunder any
document incorporated by reference into the Prospectus in order to comply
with the Act, the Rules and Regulations, the Exchange Act or the rules and
regulations of the Commission there-under, the Company will promptly notify
the Representative and will amend or supplement the Prospectus or file such
document (in form satisfactory to counsel for the Underwriters and counsel
for the Company and at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will cooperate with the Underwriters in
qualifying and registering the Bonds for sale under the securities laws and
legal investment laws of such jurisdictions as the Representative may
designate, and in continuing such qualifications in effect so long as
required for the distribution of the Bonds; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to submit to any requirements which it deems unduly burdensome.
The Company will advise the Representative promptly of any order or
communication of any public authority addressed to the Company suspending
or threatening to suspend qualification of the Bonds for sale in any
jurisdiction.
(e) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company will pay, or
reimburse the Underwriters on
<PAGE>
-13-
demand for, all reasonable costs and expenses incident to the performance
of the Company's obligations under this Agreement, including all expenses
incident to the authorization of the Bonds and their issue and delivery by
the Company, all expenses incident to listing the Bonds on any stock
exchange, any necessary stamp taxes in connection with the foregoing, the
reasonable fees and expenses of the Company's counsel and accountants, the
costs and expenses incident to the preparation and filing under the Act of
the Registration Statement (including all exhibits and amendments thereto),
the Prospectus and this Agreement, all reasonable fees and disbursements
(including reasonable fees and disbursements of counsel) incurred by the
Company or the Underwriters in connection with the qualification of the
Bonds for sale under state securities laws and the preparation of Blue Sky
Memoranda and Legal Investment Surveys, the cost of furnishing to the
Underwriters copies of Blue Sky Memoranda and Legal Investment Surveys, the
Registration Statement and the Prospectus, and each amended or supplemented
Registration Statement or Prospectus and each Prospectus prepared to permit
compliance with Section 10(a)(3) of the Act and the cost of preparing
copies of this Agreement. The Company shall not, however, be required to
pay for any of the Representative's expenses or those of any of the other
Underwriters, other than as hereinabove set forth or the costs of preparing
copies of the legal opinion referred to in subparagraph (e) of Section 5
hereof, the Underwriters' Questionnaires and the Agreement Among Under-
writers; provided, however, that, if this Agreement shall not be
consummated because it is (i) terminated by the Representative pursuant to
Section 5 or Section 6 hereof, (ii) terminated pursuant to Section 3
hereof, or (iii) terminated by reason of any failure, refusal or inability
on the part of the Company to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on
its part to be performed, unless such failure, refusal or inability be due
to the default or omission of the Underwriters, then and in any such case,
the Company shall reimburse the Underwriters (but not defaulting
Underwriters in the event of termination pursuant to Section 3 hereof) for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel for the Underwriters) reasonably incurred in connection with
investigating, marketing and proposing to market the Bonds or in
contemplation of performing their obligations hereunder, but the Company
shall not in any event be liable to any of the Underwriters for damages on
account of loss of anticipated profits or commissions from the sale by them
of the Bonds.
<PAGE>
-14-
(f) The Company will apply the proceeds from the sale of the
Bonds substantially as set forth under the caption "Use of Proceeds" in
the Prospectus.
(g) The Company will deliver to the Representative, as promptly
as practicable, a signed copy of the Registration Statement and all
amendments thereto including all exhibits filed therewith and signed
consents, certificates and opinions of accountants and of any other persons
named in the Registration Statement as having prepared, certified or
reviewed any part thereof, and will deliver to the Representative such
number of unsigned copies of the Registration Statement, without exhibits,
and of all amendments thereto, as the Representative may reasonably
request. The Company will deliver to or upon the order of the
Representative, from time to time, as many copies of the Prospectus
(excluding Incorporated Documents) as the Representative may reasonably
request.
(h) The Company will make generally available to its security
holders and deliver to the Representative as soon as it is practicable to
do so, an earnings statement (as defined in Rule 158 under the Act), which
need not be audited, covering a period of at least twelve months beginning
not later than the first day of the month next succeeding the month in
which occurred the effective date of the Registration Statement, which
shall satisfy the requirements of Section 11(a) of the Act.
(i) For a period of five years from the Closing Date, the
Company will deliver to the Representative and, upon request, to each of
the other Underwriters (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 the
Representative 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.
(j) The Supplemental Indenture, when executed and delivered at
the Closing, will be in substantially the form which has heretofore been
delivered to the Representative with only such changes therein as the
Representative shall
<PAGE>
-15-
have been advised of and shall not have reasonably objected to in writing.
(k) During the period beginning on the date hereof and
continuing through the Closing Date, the Company will not offer, sell or
otherwise alienate, without the Representative's prior consent, any other
of its First Mortgage Bonds.
5. Conditions of Underwriters' Obligations. The obligations of the
---------------------------------------
several Underwriters to purchase and pay for the Bonds, as provided herein,
shall be subject to the accuracy, as of the date hereof and as of the Closing
Date (as if made on the Closing Date), of the representations and warranties of
the Company herein, to the accuracy of statements of Company officers made in
certificates delivered pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement, or order preventing or suspending the use of the
Prospectus, shall have been issued and shall remain in effect; no order of
the Commission directed to the adequacy or accuracy of any Incorporated
Document shall be in effect; and no proceedings for any such purpose shall
have been instituted or be pending or, to the knowledge of the Company or
the Representative shall be contemplated or threatened by the Commission;
any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of Reid & Priest, counsel for
the Underwriters; no amendment to the Registration Statement or Prospectus
shall have been filed hereafter to which the Representative or Reid &
Priest shall have reasonably and promptly objected in writing after having
received reasonable notice and a copy thereof; there shall be in full force
and effect on the date of this Agreement appropriate orders of The Public
Service Commission of Delaware and the State Corporation Commission of
Virginia permitting the issuance and sale of the Bonds and the transactions
relating thereto substantially in accordance with the terms and conditions
set forth herein and in the Prospectus; such orders shall contain no
condition inconsistent with the provisions hereof or unacceptable to the
Representative and shall be issued under circumstances which in the
Representative's reasonable judgment are appropriate for the protection of
the Underwriters; and on or prior to the Closing Date, neither
<PAGE>
-16-
of said orders shall have been rescinded, modified or stayed, or the right
of the Company to operate thereunder restrained, or be subject to any
litigation or proceeding pending, or to the knowledge of the Representative
or the Company, threatened.
(b) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set
forth in or contemplated by the Prospectus, there shall not have been any
change in the capital stock, short-term debt or long-term debt of the Com-
pany and the Subsidiaries taken as a whole, or any adverse change or any
development involving a prospective adverse change in the condition,
financial or otherwise, or in the earnings, business, net worth or results
of operations of the Company and the Subsidiaries taken as a whole, all or
any of which, in the Representative's reasonable judgment, materially
impairs the investment quality of the Bonds; and no Underwriter shall have
disclosed in writing to the Company on or prior to the Closing Date that
the Registra-tion Statement or Prospectus contained an untrue statement of
fact which, in the opinion of Reid & Priest, counsel for the Underwriters,
is material, or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of circumstances then existing,
not misleading.
(c) The authorization and issuance of the Bonds, the
Registration Statement, the Prospectus and all corporate proceedings and
other legal matters incident thereto shall be satisfactory in all respects
to Reid & Priest and the Company shall have furnished to Reid & Priest such
documents as they may reasonably request to enable them to be satisfied
with respect to the matters referred to in this subparagraph and to furnish
to the Representative an opinion, dated as of the Closing Date, as required
by subparagraph (e) of this Section 5.
(d) On the Closing Date, the Representative shall have received
the favorable opinion of Dale G. Stoodley, General Counsel for the Company,
dated as of such date, satisfactory in form, scope and substance to the
Representative and to counsel for the Underwriters to the effect that:
(i) the Company has been duly organized and is validly
existing as a corporation in good standing
<PAGE>
-17-
under the laws of Delaware and Virginia with all corporate power and
other authority necessary to own or lease its properties and conduct
its business as described in the Registration Statement and Prospectus
and to issue and sell the Bonds; and each of the Subsidiaries has been
duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of any jurisdiction in which the conduct of its business or the
ownership or leasing of its properties requires such qualification,
with all corporate and other authority and franchises necessary to own
or lease its properties and conduct its business as described in the
Registration Statement and Prospectus;
(ii) the Company is duly qualified to do business as a
foreign corporation in good standing in Maryland, New Jersey, Ohio and
Pennsylvania, being all of the jurisdictions in which the conduct of
its business or its ownership or leasing of properties requires such
qualification; and the Company owns all of the stock of the
Subsidiaries, free and clear of any lien, pledge or other encumbrance;
(iii) except as otherwise set forth in the Prospectus, and
except with respect to the location of certain poles, wires, and other
facilities within public highways or over or under public or navigable
waters (the status of which does not in any case threaten to affect
materially the Company's ability to conduct its present business), the
Company has such valid franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, approvals,
authorizations and/or orders of governmental bodies, political
subdivisions or regulatory authorities, free from materially
burdensome restrictions, as are necessary for the acquisition,
construction and ownership of the properties now owned or leased by it
and the maintenance and operation of the properties now operated by it
and the conduct of the business now carried on by it as described in
the Registration Statement and the Prospectus, and to the best of the
knowledge of such counsel, the Company is not in default or violation
of any such franchises, certificates of convenience and necessity,
operating rights, licenses, permits, consents, approvals,
<PAGE>
-18-
authorizations, and/or orders of governmental bodies, political
subdivisions or regulatory authorities, to the extent that would
materially affect the conduct of such business, and the Company is
not, to any material extent, in violation of any applicable Federal,
state or other laws and regulations;
(iv) the Mortgage has been duly authorized, executed and
delivered and is a valid instrument legally binding upon the Company
and enforceable in accordance with its terms, except as remedies may
be limited by bankruptcy, insolvency or other laws of general
application affecting the enforcement of creditors' rights generally
or principles of equity;
(v) the Mortgage, including each supplement thereto, has
been duly recorded as a mortgage upon the property covered thereby in
such a manner as is necessary to maintain the lien thereof; and with
respect to security interests in personal property and fixtures
covered by the Mortgage, financing statements have been duly filed, to
the extent required, under the provisions of the Delaware, Maryland,
New Jersey, Pennsylvania and Virginia Uniform Commercial Codes
(certain of which contain requirements for the filing of continuation
statements at specified intervals in order to preserve the security);
(vi) substantially all the utility plant and real property
owned by the Company at the date of the Supplemental Indenture are
adequately described in the Mortgage so as to constitute the Mortgage
a lien thereon as security for the Bonds, subject to no liens,
encumbrances, or rights of others, other than those specified or
referred to in the Prospectus under the heading "Description of the
New Bonds-Security";
(vii) the Bonds have been duly authorized and, when duly
executed manually or in facsimile by the proper officers of the
Company, authenticated by the Trustee and delivered by the Company,
and when payment therefor has been received by the Company, they will
have been validly issued and will be valid and binding obligations of
the Company enforceable in accordance with their terms and entitled to
the lien of, and benefits provided by, the Mortgage, subject to the
limitations set forth in paragraph (iv) above;
<PAGE>
-19-
(viii) the terms of the Bonds and the Mortgage conform as to
legal matters to the description thereof and the statements concerning
them in the Registration Statement and the Prospectus, the summary of
certain terms and provisions thereof appearing in the Registration
Statement and the Prospectus fairly presents the information called
for by the Act and the Rules and Regulations and the Mortgage has been
duly qualified under the Trust Indenture Act of 1939;
(ix) the Delaware Public Service Commission and the Virginia
State Corporation Commission have issued orders (to be identified by
date and docket number) authorizing the issuance and sale of the Bonds
and authorizing generally the transactions relating thereto (including
permitting the Company to enter into this Agreement and perform its
obligations hereunder). Neither of such orders contains any condition
inconsistent with the provisions hereof nor, to the best knowledge of
such counsel, has either of such orders been rescinded, modified or
stayed, and no further action is required to be taken by, and no
further authorization, consent or approval is required to be obtained
from, any governmental authority having jurisdiction in connection
with the authorization, issuance and sale of the Bonds (other than in
connection with state securities or blue sky laws as to which counsel
need express no opinion);
(x) the statements in the Prospectus that are stated
therein to have been made on the authority of such counsel as an
expert have been reviewed by such counsel and, as to matters of law
and legal conclusions, are correct and fairly present the information
required to be shown;
(xi) such counsel does not know of any legal or governmental
proceedings required to be described in the Registration Statement or
the Prospectus which are not described as required, or of any
contracts or documents of the Company or any of the Subsidiaries of
the Company of a character required to be described in the
Registration Statement or Prospectus, incorporated by reference into
the Prospectus or filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations which have not been described,
incorporated by reference or filed as required;
<PAGE>
-20-
(xii) the performance of this Agreement and the consummation
of the transactions herein contemplated and the fulfillment of the
terms hereof will not result in a breach or violation of any of the
terms or provisions of, or constitute a default under, the Restated
Certificate and Articles of Incorporation, as amended, or By-Laws, as
amended, of the Company, or any statute, the Mortgage, or any
indenture, mortgage, deed of trust, note or other agreement or
instrument known to such counsel to which the Company or any of the
Subsidiaries is a party or by which any of them is bound or to which
any of their property is subject, or any order, rule or regulation
known to such counsel applicable to the Company or to any of the
Subsidiaries or any of their property of any court or other
governmental body;
(xiii) this Agreement has been duly authorized, executed and
delivered by the Company and is valid and binding on the Company,
except that rights to indemnity hereunder may be limited under
securities laws; and
(xiv) the Registration Statement has become effective under
the Act, and, to the best of the knowledge of such counsel, no stop
order with respect thereto has been issued and is continuing, no 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 best knowledge of such
counsel, contemplated by the Commission; at the time the Registration
Statement became effective, the Registration Statement, and at the
time the Prospectus Supplement was filed with the Commission pursuant
to Rule 424(b), the Prospectus, complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations, and each Incorporated Document, when it and when any
amendment thereto was filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that (i) the Registration Statement,
at the time the Registration Statement became effective and at the
Closing Date, contained or contains any statement of a material fact
or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(ii) the
<PAGE>
-21-
Prospectus, at the time the Prospectus Supplement was filed with the
Commission pursuant to Rule 424(b) and at the Closing Date, contained
or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
in each case such counsel need express no opinion as to the financial
statements and other financial data included therein.
(e) On the Closing Date, the Representative shall have received
the favorable opinion of Reid & Priest, counsel for the Underwriters, dated
as of such date, satisfactory in form, scope and substance to the
Representative with respect to the sufficiency of all corporate proceedings
and other legal matters relating to the Bonds, the form of the Registration
Statement and the Prospectus, and as to the execution and authorization of
this Agreement and the transactions contemplated hereby as the
Representative may reasonably require, and the Company shall have furnished
to such counsel such documents as they may have reasonably requested for
the purpose of enabling them to pass upon such matters. In rendering such
opinions, Reid & Priest may rely as to matters governed by Delaware,
Maryland, New Jersey, Ohio, Pennsylvania and Virginia law upon the opinion
of Dale G. Stoodley, General Counsel for the Company, who may in turn rely
upon the opinions of other counsel as to certain legal conclusions affected
by the laws of Maryland, New Jersey, Ohio, Pennsylvania and Virginia.
(f) On the date hereof and at the Closing Date the
Representative shall have received letters of Coopers & Lybrand, dated as
of such dates, to the effect set forth in Schedule III annexed hereto and
with respect to such other matters as to which the Representative shall
have inquired.
(g) On the Closing Date the Representative shall have received a
certificate or certificates, dated as of such date, of the President or a
Vice President of the Company or the principal accounting officer of the
Company to the effect that, to the best of his or her knowledge based on a
reasonable investigation:
(i) the representations and warranties of the Company in
this Agreement are true and correct, as though made on and as of the
Closing Date, and the Company has complied with all the agreements and
<PAGE>
-22-
satisfied all the conditions required by this Agreement to be
performed or satisfied by the Company on or prior to the Closing Date;
(ii) he or she has examined the Registration Statement and
the Prospectus, and, in his or her opinion, the Registration
Statement, when it became effective and at all times subsequent
thereto up to and including the Closing Date, did not and does not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, when the
Prospectus Supplement was filed with the Commission and at all times
subsequent thereto up to and including the Closing Date, did not and
does not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, and, since the effective date of
the Registration Statement, there has occurred no event required to be
set forth in an amended or supplemented Prospectus which had not been
so set forth.
All the opinions, letters, certificates and documents mentioned above
or elsewhere in this Agreement will be in compliance with the provisions hereof
only if they are reasonably satisfactory to Reid & Priest. The Company will
furnish the Representative with such conformed copies of such opinions, letters,
certificates and documents as the Representative may reasonably request.
If any condition to the Underwriters' obligations hereunder to be
satisfied on or prior to the Closing Date is not so satisfied, the
Representative may terminate this Agreement without liability on the part of any
Underwriter or the Company, except for the expenses to be paid or reimbursed by
the Company pursuant to Section 4(e) and except for any liability under Section
7 hereof.
6. Termination of Agreement. (a) The Representative, by notice to
------------------------
the Company, may terminate this Agreement at any time after the date of this
Agreement and on or prior to the Closing Date if during such period (i) trading
on the New York Stock Exchange or the American Stock Exchange shall have been
wholly suspended, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for
<PAGE>
-23-
securities shall have been required, on the New York Stock Exchange or the
American Stock Exchange, by the New York Stock Exchange or the American Stock
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, or trading of the Company's securities on any exchange or
in any over-the-counter market shall have been suspended, or (ii) a banking
moratorium shall have been declared by Federal or New York authorities, or (iii)
an outbreak of hostilities or an escalation thereof, a declaration of war by
Congress, another substantial calamity or crisis or another event or occurrence
of a similar character which, in the Representative's reasonable judgment,
makes it impracticable or inadvisable to proceed with the completion of the sale
of and payment for the Bonds or to enforce contracts for the sale of the Bonds
shall have occurred, or (iv) the Company shall have sustained a substantial loss
by fire, flood, accident or other calamity which in the Representative's
reasonable judgment renders it inadvisable to consummate the sale of the Bonds
to, and the delivery of the Bonds by, the several Underwriters, regardless of
whether or not such loss shall have been insured. This Agreement may also be
terminated at any time prior to the Closing Date if, in the reasonable judgment
of the Representative, the subject matter of any amendment or supplement to the
Registration Statement or the Prospectus renders it either inadvisable to
proceed with such offering or inadvisable to proceed with the delivery of the
Bonds to be purchased hereunder.
(b) In the event of termination pursuant to this Section, the Company
shall not be under any liability to any Underwriter, except for the expenses to
be paid by it pursuant to the provisions of Section 4(e) and except for any
liability under Section 7, nor shall any Underwriter be under any liability to
the Company, except for any liability under Section 7.
(c) If the Representative elects to terminate this Agreement as
provided in this Section, the Company shall be notified promptly by the
Representative by telephone, confirmed in writing.
7. Indemnification. (a) The Company will indemnify and hold
---------------
harmless each Underwriter and each person, if any, who controls such Underwriter
within the meaning of the Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject, under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or allegedly untrue
statement of any material fact
<PAGE>
-24-
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, 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, in the light
of the circumstances under which they were made, not misleading; and will
reimburse each Underwriter and each such controlling person for any legal or
other expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigation or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or allegedly untrue statement or omission or alleged omission made in
the Registration Statement, any preliminary prospectus, or the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by any Underwriter specifically for
use in the preparation thereof. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each of its directors, each of its officers who has signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or allegedly untrue
statement of any material fact contained in the Registration Statement, any
preliminary prospectus, or the Prospectus, or any amendment or supplement
thereto, or arise out of or based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or allegedly untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter specifically for use in the
preparation thereof; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred. This
<PAGE>
-25-
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; 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, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless, (i) the employment
of such additional counsel has been authorized in writing by the indemnifying
party in connection with defending such action, or (ii) representation of both
the indemnifying party and the indemnified party by the same counsel is
inappropriate by applicable standards of professional conduct for attorneys in
the jurisdiction where suit is instituted due to actual or potential conflicting
interests between them (it being understood that the indemnifying party shall
not be liable for the expense of more than one separate counsel (in addition to
local counsel) representing the indemnified parties in such action). 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) No indemnity by the Company hereunder shall apply in respect of
(i) any preliminary prospectus furnished to a person to whom any of the Bonds
are sold unless a copy of the Prospectus is furnished by an Underwriter or
securities dealer to such person at or prior to the furnishing of the written
confirmation of such sale or mailed to such person with such
<PAGE>
-26-
confirmation or (ii) any preliminary prospectus or Prospectus used by an
Underwriter or securities dealer after the same has been superseded by an
amended or supplemented preliminary prospectus or Prospectus supplied by the
Company to the Representative for the use of the Underwriters and securities
dealers. As used in this Section 7(d), the term "Prospectus" does not include
any Incorporated Document.
(e) If the indemnification provided for in subparagraph (a) or (b)
above should not be available to an indemnified party in respect of any losses,
claims, damages, liabilities and expenses referred to therein, then the
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party on the one hand and such indemnified party on the other from the offering
of the Bonds, and also the relative fault of the indemnifying party on the one
hand and such indemnified party on the other in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities and
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(f) The parties hereto agree that it would not be just and equitable
if contribution were to be determined by pro rata allocation (even if the
Underwriters were to be 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. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
action or claim (which shall be limited as provided in subparagraph (c) above if
<PAGE>
-27-
the indemnifying party shall have assumed the defense of any such action in
accordance with the provisions thereof). No person guilty of fraudulent
misrepresentation shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Representations and Indemnities to Survive. All representations
------------------------------------------
and warranties of the Company contained herein and in the certificate or
certificates delivered pursuant to Section 5(g) and the indemnity agreements
contained in Section 7 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company or any officer, director
or controlling person, and shall survive delivery of and payment for the Bonds
and, in the case of the indemnity agreements contained in Section 7, any
termination of this Agreement.
9. Notices. Except as otherwise provided herein, all communications
-------
hereunder shall be in writing and if sent to the Underwriters shall be mailed,
delivered or transmitted by facsimile and confirmed to the Representative at the
address set forth in Schedule I hereto, or if sent to the Company shall be
mailed, delivered or transmitted by facsimile and confirmed to it, c/o Vice
President and Chief Financial Officer, 800 King Street, P.O. Box 231,
Wilmington, Delaware 19899. Any such address may be changed from time to time
by notice as aforesaid.
10. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the several Underwriters and the Company and their respective
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person or corporation, other than the
parties hereto, their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 7, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto, their respective successors and assigns and said controlling persons,
officers and directors, and for the benefit of no other person or corporation.
No purchaser of any of the Bonds through or from any Underwriter shall be
construed a successor or assign by reason merely of such purchase.
11. Underwriters Not Agents of the Company. Nothing herein contained
--------------------------------------
shall constitute the Underwriters, or any of
<PAGE>
-28-
them, agents or representatives of the Company, or authorize them to act for or
on behalf of the Company in any capacity.
12. Controlling Law. Although the place of performance of certain
---------------
obligations under this Agreement is stated to be outside of Delaware, it is the
express intention of the parties hereto that this Agreement shall be governed by
and construed in accordance with the laws of Delaware, without regard to choice
of law principles.
[13. Effect of Agreement. It is the intent of the parties hereto
-------------------
that, with respect to the offering and sale of the Bonds contemplated hereby,
the terms and conditions of this Agreement supersede those contained in the
Distribution Agreement, dated _________, 199_, by and among the Company and
_________________________________________________________.]
If the foregoing correctly sets forth the understanding between the
Company and the Underwriters, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
the Company and the Underwriters severally.
Very truly yours,
DELMARVA POWER & LIGHT COMPANY
By:
---------------------------
Vice President
ACCEPTED as of the date first
above written, as Underwriters
and as Representatives of the
other Underwriters named in
Schedule II.
[Insert name of Representative]
By:
<PAGE>
-29-
By:
---------------------------
Title:
<PAGE>
SCHEDULE I
----------
Underwriting Agreement dated ______________, 199_
Registration Statement No.
Representatives and Address:
Securities:
Designation: First Mortgage Bonds, ____% Series
Due _____________
Principal Amount: $_______________
Supplemental Indenture dated as of ______,
199_
Date of Maturity:
Interest Rate: ____% per annum, payable _____ 1
and _______ 1 of each year, commencing
_______ 1, 199_,
Purchase Price: _____% of the principal amount
thereof, plus accrued interest, if any,
from ____ 1, 199_, to the date of
payment and delivery
Public Offering Price: ___% of the principal
amount thereof, plus accrued interest,
if any, from ____ 1, 199_ to the date of
payment and delivery
Redemption Terms:
Closing Date and Location:
<PAGE>
SCHEDULE II
-----------
Principal Amount
Underwriter of Bonds
- ------------- ----------------
Total
<PAGE>
CONFORMED COPY
This Instrument Prepared By
/s/ Sandra Kaufmann Battaglia
---------------------------------
Sandra Kaufmann Battaglia, Esquire
Potter Anderson & Corroon
350 Delaware Trust Building
Wilmington, Delaware 19801
================================================================================
DELMARVA POWER & LIGHT COMPANY
TO
CHEMICAL BANK,
Trustee.
EIGHTY-FOURTH SUPPLEMENTAL
INDENTURE
================================================================================
Effective as of June 1, 1993
(but executed on the dates shown on the execution page)
<PAGE>
DELMARVA POWER & LIGHT COMPANY
Eighty-Fourth Supplemental Indenture
Effective as of June 1, 1993
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
<S> <C>
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Form of Bond of the 1993 Series . . . . . . . . . . . . . . . . . 2
Recitals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Granting Clauses. . . . . . . . . . . . . . . . . . . . . . . . . 9
Description of Property . . . . . . . . . . . . . . . . . . . . . 11
Appurtenances . . . . . . . . . . . . . . . . . . . . . . . . . . 14
After Acquired Property Clause . . . . . . . . . . . . . . . . . 15
Properties Excepted from Lien and Operation of Indenture . . . . 15
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Subject Clause . . . . . . . . . . . . . . . . . . . . . . . . . 16
Grant in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 16
<CAPTION>
ARTICLE I
DESIGNATIONS, PROVISIONS, DENOMINATIONS AND ISSUANCE OF
BONDS OF THE 1993 GAS FACILITIES SERIES
<S> <C>
Sec. 1. Designations and Provisions of the Bonds . . . . . . . . 16
Sec. 2. Bonds Issued to State Trustee as Collateral . . . . . . 17
Sec. 3. Payment of the Bonds . . . . . . . . . . . . . . . . . . 17
Sec. 4. Redemption of the Bonds Prior to Maturity . . . . . . . 18
Sec. 5. Waiver of Notice of Redemption . . . . . . . . . . . . . 18
Sec. 6. Denominations and Exchange of the Bonds . . . . . . . . 19
* The Table of Contents and recording data are not part of the
Eighty-Fourth Supplemental Indenture as executed.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Sec. 7. Limitation of Principal Amount of Bonds . . . . . . . . 19
Sec. 8. Issuance of Bonds . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<TABLE>
<CAPTION>
ARTICLE II
DESIGNATIONS, PROVISIONS, DENOMINATIONS AND ISSUANCE OF
BONDS OF THE 1993 POLLUTION CONTROL REFUNDING SERIES
<S> <C>
Sec. 1. Designations and Provisions of the Bonds . . . . . . . . 19
Sec. 2. Bonds Issued to State Trustee as Collateral . . . . . . 20
Sec. 3. Payment of the Bonds . . . . . . . . . . . . . . . . . . 20
Sec. 4. Redemption of the Bonds Prior to Maturity . . . . . . . 21
Sec. 5. Waiver of Notice of Redemption . . . . . . . . . . . . . 22
Sec. 6. Denominations and Exchange of the Bonds . . . . . . . . 22
Sec. 7. Limitation of Principal Amount of Bonds . . . . . . . . 22
Sec. 8. Issuance of Bonds . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<TABLE>
<CAPTION>
ARTICLE III
MISCELLANEOUS
<S> <C>
Sec. 1. Indenture Affirmed as Supplemented . . . . . . . . . . 22
Sec. 2. Execution of Counterparts . . . . . . . . . . . . . . . 22
Sec. 3. Recitals are by Company . . . . . . . . . . . . . . . . 23
Sec. 4. Names and Addresses of Debtor and Secured Party . . . . 23
Sec. 5. Reliance on Certificates of State Trustee . . . . . . . 23
Sec. 6. Receipt by the Company . . . . . . . . . . . . . . . . 23
Signatures and Seals . . . . . . . . . . . . . . . . . . . . . . 23
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . 24
Certificate of Residence . . . . . . . . . . . . . . . . . . . . 26
Recordation Data . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
<PAGE>
This EIGHTY-FOURTH SUPPLEMENTAL INDENTURE, effective as of the 1st day
of June, 1993 (but executed on the dates hereinafter shown), made and entered
into by and between DELMARVA POWER & LIGHT COMPANY, a corporation of the State
of Delaware and the Commonwealth of Virginia, hereinafter called the Company,
party of the first part, and CHEMICAL BANK, a corporation of the State of New
York, hereinafter called the Trustee, party of the second part;
WITNESSETH:
WHEREAS, the Company heretofore executed and delivered its Indenture
of Mortgage and Deed of Trust (hereinafter in this Eighty-Fourth Supplemental
Indenture called the "Original Indenture"), dated as of October 1, 1943, to the
New York Trust Company, a corporation of the State of New York, as Trustee, to
which Chemical Bank is successor Trustee, to secure the First Mortgage Bonds of
the Company, unlimited in aggregate principal amount and issuable in series,
from time to time, in the manner and subject to the conditions set forth in the
Original Indenture granted and conveyed unto the Trustee, upon the trusts, uses
and purposes specifically therein set forth, certain real estate, franchises and
other property therein described, including property acquired after the date
thereof, except as therein otherwise provided; and
WHEREAS, the Original Indenture has been supplemented by eighty four
supplemental indentures specifically subjecting to the lien of the Original
Indenture as though included in the granting clause thereof certain property in
said supplemental indentures specifically described and amending and modifying
the provisions of the Original Indenture (the Original Indenture, as amended,
modified and supplemented by all of the indentures supplemental thereto,
including this Supplemental Indenture, is hereinafter in this Supplemental
Indenture called the "Indenture"); and
WHEREAS, the Original Indenture provides for the issuance of bonds
thereunder in one or more series, the form of each series of bonds and of the
coupons to be attached to any coupon bonds to be substantially in the forms set
forth therein with such omissions, variations and insertions as are authorized
or permitted by the Original Indenture and determined and specified by the Board
of Directors of the Company; and
WHEREAS, the Company is constructing improvements to its gas
facilities in its utility service area which will be financed through the
issuance by The Delaware Economic Development Authority (the "Authority") of its
revenue bonds designated Gas Facilities Revenue Bonds (Delmarva Power & Light
Company Project) Series 1993A pursuant to the terms of a Financing Agreement
between the Authority and the Company which
<PAGE>
will require the Company to deliver its First Mortgage Bonds to provide for
and secure the payment of such Gas Facilities Revenue Bonds; and
WHEREAS, the Company is refinancing certain indebtedness incurred in
connection with bonds previously issued by the Authority's predecessor, to
finance certain pollution control facilities of the Company, said refinancing to
be accomplished through the issuance by the Authority of a separate issue of its
revenue bonds designated Pollution Control Refunding Revenue Bonds (Delmarva
Power & Light Company Project) Series 1993B pursuant to the terms of a separate
Financing Agreement between the Authority and the Company which requires the
Company to deliver its First Mortgage Bonds to provide for and secure the
payment of such Pollution Control Refunding Revenue Bonds; and
WHEREAS, the Company, by appropriate corporate action in conformity
with the terms of the Indenture, has duly determined to create a series of bonds
to be designated as First Mortgage Bonds, Gas Facilities Series 1993A due
June 1, 2032 (hereinafter sometimes referred to as the "1993 Gas Facilities
Bonds" or the "bonds of the 1993 Gas Facilities Series") and has duly
determined to create a series of bonds to be designated as First Mortgage
Bonds, Pollution Control Refunding Series 1993B due June 1, 2021 (hereinafter
sometimes referred to as the "1993 Pollution Control Refunding Bonds" or the
"bonds of the 1993 Pollution Control Refunding Series") (the 1993 Gas
Facilities Bonds and the 1993 Pollution Control Refunding Bonds being herein
sometimes referred to collectively as the "bonds of the 1993 Series"), which
said bonds of the 1993 Series are to be substantially in the following form
with such additional identification as may be advisable to distinguish each
separate series:
[FORM OF FACE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
__________ Series 1993___
Due June 1, ________
Number:
Maturity Date: June 1, ______
Interest Rate:
Registered Owner:
Principal Amount: Dollars
-2-
<PAGE>
DELMARVA POWER & LIGHT COMPANY, a corporation of the State of Delaware
and the Commonwealth of Virginia (hereinafter called the Company), for value
received, hereby promises to pay to the Owner identified above, or registered
assigns as hereinafter provided, on the Maturity Date identified above, the
Principal Amount identified above, and to pay interest on said Principal Amount
until payment of said Principal Amount has been made or duly provided for at the
Interest Rate identified above, on June 1 and December 1 of each year,
commencing on December 1, 1993, and to pay interest on overdue principal and, to
the extent permitted by law, on overdue interest at the rate borne by this Bond,
except as the provisions hereinafter set forth with respect to redemption prior
to maturity may become applicable hereto, the principal of, premium, if any, and
interest on, this Bond being payable in lawful money of the United States of
America at the corporate trust office of the State Trustee (as hereinafter
defined). Interest on this bond shall be computed on the basis of a 360-day
year consisting of twelve 30-day months from the first day of June or December,
as the case may be, to which interest has been paid (or is deemed to have been
paid), unless no interest has been paid (or is deemed to have been paid) hereon,
in which case from June 1, 1993, until this bond shall be paid or the payment
hereof shall have been duly provided for.
The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
This bond shall not become valid or obligatory for any purpose until
CHEMICAL BANK, the Trustee under the Mortgage, or its successor thereunder,
shall have signed the certificate of authentication endorsed hereon.
IN WITNESS WHEREOF, DELMARVA POWER & LIGHT COMPANY has caused this
bond to be signed in its name with the manual or facsimile signature of its
President or one of its Vice Presidents and its corporate seal, or a facsimile
thereof, to be affixed hereto and attested by the manual signature of its
Secretary or one of its Assistant Secretaries.
Dated: June 1, 1993
Seal:
Attest: DELMARVA POWER & LIGHT COMPANY
____________________________ By______________________________
Secretary President
-3-
<PAGE>
This bond is one of the bonds of the series herein
designated, provided for in the within-mentioned mortgage.
Chemical Bank, Trustee
By__________________________
Authorized Officer
-4-
<PAGE>
[FORM OF REVERSE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
____________ Series 1993 _____
Due June 1, ______
This bond is one of an issue of bonds of the Company (herein referred
to as the "bonds"), not limited in principal amount, issuable in series, which
different series may mature at different times, may bear interest at different
rates, and may otherwise vary as in the Mortgage hereinafter mentioned provided,
and is one of a series known as First Mortgage Bonds, _______ Series 1993___ due
June 1, _____ (herein sometimes referred to as "bonds of the 1993_____ Series").
All bonds of all series issued and to be issued under and equally and ratably
secured (except insofar as any sinking fund, established in accordance with
the provisions of the Mortgage hereinafter mentioned, may afford additional
security for the bonds of any particular series) by the Mortgage and Deed of
Trust, dated as of October 1, 1943, executed by the Company to THE NEW YORK
TRUST COMPANY, as Trustee, to which CHEMICAL BANK, a corporation of the State
of New York, is successor Trustee (herein, together with any indentures
supplemental thereto, including an Eighty-Fourth Supplemental Indenture, dated
as of June 1, 1993, called the "Mortgage"), to which reference is made for a
description of the property mortgaged and pledged, the nature and extent of
the security, the rights and limitations of rights of the holders of the bonds
and of the Company in respect thereof, the rights, duties and immunities of
the Trustee, and the terms and conditions upon which the bonds are, and are to
be, issued and secured. The Mortgage contains provisions permitting the
Company and the Trustee, with the consent of the holders of not less than
seventy-five percent (75%) in principal amount of all the bonds at the time
outstanding (determined as provided in the Mortgage), evidenced as in the
Mortgage provided, or in case the rights under the Mortgage of the holders of
the bonds of one or more, but less than all, of the series of bonds
outstanding shall be affected, then with the consent of the holders of not
less than seventy-five percent (75%) in principal amount of the bonds at the
time outstanding of the one or more series, taken in the aggregate, affected
(determined as provided in the Mortgage), evidenced as in the Mortgage
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Mortgage or
modifying in any manner the rights of the holders of the bonds and coupons;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any bonds, or reduce the rate or extend the time of payment
of interest thereon, or reduce the principal amount thereof, without the
consent of the holder of each bond so affected, or (ii) reduce the aforesaid
percentage of bonds, the holders of which are
-5-
<PAGE>
required to consent to any such supplemental indenture without the consent of
the holders of all bonds then outstanding. Any such consent by the registered
holder of this bond (unless effectively revoked as provided in the Mortgage)
shall be conclusive and binding upon such holder and upon all future holders of
this bond, irrespective of whether or not any notation of such consent is made
upon this bond. No reference herein to the Mortgage and no provision of this
bond or of the Mortgage shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on, this bond at the time and place, at the rate and in the coin or
currency herein prescribed.
The fully registered bonds of the 1993 ______________ Series are
issuable in denominations of $5,000 and any integral multiple thereof. At the
office or agency to be maintained by the Company in the Borough of Manhattan,
The City of New York and in the manner and subject to the limitations provided
in the Mortgage, fully registered bonds of such series may be exchanged for a
like aggregate principal amount of fully registered bonds of such series of
other authorized denominations, and in each case without payment of any service
or other similar charge as provided in said Eighty-Fourth Supplemental
Indenture.
Concurrently with the issuance of the bonds of the 1993 __________
Series, The Delaware Economic Development Authority (the "Authority") is issuing
its ________________ Revenue Bonds (Delmarva Power & Light Company Project)
Series 1993___ (the "State Revenue Bonds") under and pursuant to an indenture
(the "State Indenture") between the Authority and Delaware Trust Company, as
trustee (the "State Trustee"), which term shall include its successors in trust,
if any, under the State Indenture). The bonds of the 1993 ________________
Series are issued to the State Trustee under a Pledge Agreement, between the
Company and the State Trustee, to provide for and secure the payment of the
State Revenue Bonds, the proceeds of which will be loaned to the Company to
finance or refinance certain facilities under a Financing Agreement between the
Authority and the Company.
Whenever payment or provision therefor has been made in respect of the
principal of, and premium, if any, and interest on, all or any portion of the
State Revenue Bonds in accordance with the State Indenture, the corresponding
amount of principal of, and premium, if any, and interest on, the bonds of the
1993 _________ Series issued as security therefor, shall be deemed to have been
paid.
If and whenever the Trustee is notified pursuant to Section 802 of the
State Indenture (i) that an event of default, as defined in Section 801 of such
State Indenture, has occurred and is continuing, (ii) that the principal of all
State Revenue Bonds then outstanding and the interest accrued thereon has been
declared due and payable, and (iii) that
-6-
<PAGE>
redemption of all of the bonds of the 1993 _____________ Series issued as
security therefor is demanded, then, as soon as practicable and in any event
within five (5) days of having received notice of such default and of such
declaration and such demand, the Trustee shall so notify the Company and, upon
receipt of sufficient funds, shall redeem all of such bonds of the 1993
________________ Series then outstanding by payment of the principal amount
thereof together with accrued interest to the redemption date; provided,
however, that such requirement of redemption shall be deemed to be waived if,
prior to the date fixed for such redemption, the State Trustee has notified the
Trustee in writing that such event of default under such State Indenture is
waived or cured and the accelerated maturity of such State Revenue Bonds ceases
to be effective. The Company covenants that, upon receipt of notice of such
redemption from the Trustee, it shall immediately deposit with the Trustee
sufficient funds to enable the Trustee to redeem all of the bonds of the 1993
______________ Series. The bonds of the 1993 ______________ Series also shall
be subject to redemption in whole and in part as provided in the Mortgage.
The holder of this bond, by the acceptance hereof, waives any right to
notice of redemption of this bond, in whole or in part, which it may have under
any provisions of the Mortgage.
The Mortgage provides that if the Company shall deposit with the
Trustee in trust for the purpose funds sufficient to pay the principal of all of
the bonds of any series, or such of the bonds of any series as have been or are
to be called for redemption, and premium, if any, thereon, and all interest
payable on such bonds to the date on which they become due and payable at
maturity or upon redemption or otherwise, and shall comply with the other
provisions of the Mortgage in respect thereof, then from the date of such
deposit such bonds shall no longer be entitled to any lien or benefit under the
Mortgage.
The principal hereof may be declared or may become due prior to the
express date of the maturity hereof on the conditions, in the manner and at the
time set forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.
This bond is transferable as prescribed in the Mortgage by the
registered holder hereof in person, or by his duly authorized attorney, at the
office or agency of the Company in said Borough of Manhattan, upon surrender and
cancellation of this bond, and thereupon a new fully registered bond or bonds of
authorized denominations of the same series and for the same aggregate principal
amount will be issued to the transferee in exchange herefore as provided in the
Mortgage, and in each case without payment of any service or other similar
charge as provided in said Eighty-Fourth Supplemental Indenture. The Company
and the Trustee, any paying agent and any bond registrar may deem and treat the
-7-
<PAGE>
person in whose name this bond is registered as the absolute owner hereof,
whether or not this bond shall be overdue, for the purpose of receiving payment
and for all other purposes and neither the Company nor the Trustee nor any
paying agent nor any bond registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of, premium,
if any, and interest on, this bond, or for any claim based hereon, or otherwise
in respect hereof, or based on, or in respect of, the Mortgage, against any
incorporator or any past, present or future subscriber to the capital stock,
stockholder, officer or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, stockholders, officers and directors, as such, being waived and
released by the holder and owner hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage; and
[END OF BOND FORM]
WHEREAS, all acts and things prescribed by law and by the charter and
bylaws of the Company necessary to make the bonds of the 1993 Series, when
executed by the Company and authenticated by the Trustee, as in the Indenture
provided, valid, binding and legal obligations of the Company, entitled in all
respects to the security of the Indenture, have been performed; and
WHEREAS, provision is made in Sections 5.11 and 17.01 of the Original
Indenture for such further instruments and indentures, supplemental to the
Original Indenture, as may be necessary or proper to carry out more effectually
the purposes of the Original Indenture, and to subject to the lien of the
Original Indenture any property acquired after the date of the Original
Indenture and intended to be covered thereby, with the same force and effect as
though included in the granting clause thereof, and to add such further
covenants, restrictions or conditions for the protection of the mortgaged and
pledged property and the holders of the bonds as the Board of Directors of the
Company and the Trustee shall consider to be for the protection of the holders
of the bonds, and to set forth the terms and provisions of any series of bonds
to be issued under the Original Indenture and the form of the bonds and coupons
of such series; and the Company since the date of the Original Indenture has
acquired additional property not heretofore specifically subjected to the lien
of the Original Indenture; and it is desired to add certain further covenants,
restrictions and conditions for the protection of the mortgaged and pledged
property and the holders of the bonds, as provided in this Eighty-Fourth
Supplemental Indenture, which the Board of Directors of the Company and the
Trustee consider to be for the protection of the holders of the bonds; and the
Company
-8-
<PAGE>
desires to issue the bonds of the 1993 Series; and the Company therefore deems
it advisable to enter into this Eighty-Fourth Supplemental Indenture in the form
and terms hereof; and
WHEREAS, the execution and delivery of this Eighty-Fourth Supplemental
Indenture has been duly authorized by the Board of Directors of the Company at a
meeting duly called and held according to law, and all conditions and
requirements necessary to make this Eighty-Fourth Supplemental Indenture a
valid, binding and legal instrument in accordance with its terms, for the
purposes herein expressed, and the execution and delivery hereof, in the form
and terms hereof, have been in all respects duly authorized;
NOW, THEREFORE, in order further to secure the payment of the
principal and interest and premium, if any, of all bonds issued and to be issued
under the Original Indenture and any indentures supplemental thereto, including
this Eighty-Fourth Supplemental Indenture, according to their tenor, purport and
effect and the performance and observance of all the covenants and conditions in
said bonds and the Original Indenture and any indentures supplemental thereto,
including this Eighty-Fourth Supplemental Indenture, contained and to subject to
the lien of the Original Indenture, as so supplemented, with the same force and
effect as though included in the granting clause thereof, additional property
now owned by the Company, and for and in consideration of the premises and of
the sum of One Dollar ($1.00), lawful money of the United States of America, to
the Company duly paid by the Trustee at or before the ensealing and delivery
hereof, and other valuable considerations, the receipt whereof is hereby
acknowledged, and intending to be legally bound hereby, the Company has executed
and delivered this Eighty-Fourth Supplemental Indenture, and hath granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over and confirmed, and granted a security interest therein, and by these
presents doth grant, bargain, sell release, convey, assign, transfer, mortgage,
pledge, set over and confirm, and grant a security interest therein, subject to
the provisions of the Indenture, unto CHEMICAL BANK, as trustee, and to its
successors in trust and to its and their assigns forever, all the following
described properties of the Company, and doth hereby confirm that the Company
will not cause or consent to a partition, either voluntary or through legal
proceedings, of property, whether herein described or heretofore or hereafter
acquired, in which its ownership shall be as tenants in common, except as
permitted by, and in conformity with, the provision of the Indenture and
particularly of Article IX of the Original Indenture:
All property, real, personal and mixed, tangible and intangible, owned
by the Company on the date of the execution hereof or which may be hereafter
acquired by it (except such property as in the Original Indenture expressly
excepted from the lien and operation of the Indenture).
-9-
<PAGE>
The property covered by this Eighty-Fourth Supplemental Indenture
shall include particularly, among other property, without prejudice to the
generality of the language hereinbefore or hereinafter contained, the following
described property:
All the electric generating stations, station sites, stations,
electric reserve generating stations, substations, substation sites, gas
manufacturing plants, ice and cold storage plants, steam plants, hot water
plants, hydro-electric stations, hydro-electric station sites, electric
transmission lines, electric distribution systems, gas transportation mains, gas
distribution systems, steam distribution systems, hot water distribution
systems, regulator stations, regulator station sites, office buildings,
storeroom buildings, warehouse buildings, boiler houses, plants, plant sites,
service plants, coal storage yards, and poleyards now or hereafter owned by the
Company, including all electric works, power houses, generators, turbines,
boilers, engines, furnaces, retorts, dynamos, buildings, structures,
transformers, meters, towers, poles, tower lines, cables, pole lines, tanks,
storage holders, regulators, gas works, pipes, pipe lines, mains, pipe fittings,
valves, drips, connections, tunnels, conduits, gates, motors, wires, switch
racks, switches, brackets, insulators, and all equipment, improvements,
machinery, appliances, devices, appurtenances, supplies and miscellaneous
property for generating, producing, transforming, converting, storing and
distributing electric energy, gas, ice, steam and hot water, and furnishing cold
storage, now or hereafter owned by the Company, together with all furniture and
fixtures located in the aforesaid buildings, and all land now or hereafter owned
by the Company on which the same or any part thereof are situated, and all of
the real estate, leases, leaseholds (except the last day of the term of each
lease and leasehold), and lands now or hereafter owned by the Company, including
land located on or adjacent to any river, stream or other water, together with
all flowage rights, flooding rights, water rights, riparian rights, dams and dam
sites and rights, flumes, canals, races, raceways, head works and diversion
works, and all of the municipal and other franchises, licenses, consents,
ordinances, permits, privileges, rights, servitudes, easements and rights-of-
way and other rights in or relating to real estate or the occupancy of the same
now or hereafter owned by the Company, and all of the other property, real,
personal or mixed, now or hereafter owned by the Company, forming a part of any
of the foregoing property or used or enjoyed or capable of being used or enjoyed
in connection therewith or in anywise appertaining thereto, whether developed or
undeveloped, or partially developed, or whether now equipped and operating or
not and wherever situated, and all of the Company's presently held or hereafter
acquired right, title and interest in and to the land on which the same or any
part thereof are situated or adjacent thereto, and all rights for or relating to
the construction, maintenance or operation of any of the foregoing property
through, over, under or upon any public streets or highways or other lands,
public or private, and (except as hereinafter expressly
-10-
<PAGE>
excepted) all the right, title and interest of the Company presently held or
hereafter acquired in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection with
any property hereinbefore described, and, as to all of the foregoing, whether
now owned by the Company or hereafter acquired by the Company.
Without limitation of the generality of the foregoing, the easements
and rights of way and other rights in or relating to real estate or the
occupancy of the same owned by the Company, and whether used or not used in
connection with the Company's operations, which were conveyed to the Company and
recorded in the following Real Property Deed Records to which reference is made
for a more particular description, to wit:
<TABLE>
<CAPTION>
State and County
- ----------------
DELAWARE
New Castle
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
11/13/92 1428 0265 01/25/93 1464 0034
12/16/92 1444 0082 01/25/93 1464 0036
12/22/92 1447 0231 01/25/93 1464 0038
01/25/93 1463 0154 01/25/93 1464 0040
01/25/93 1463 0157 01/25/93 1464 0042
01/25/93 1463 0160 01/25/93 1464 0044
01/25/93 1463 0294 01/25/93 1464 0047
01/25/93 1463 0298 01/25/93 1464 0050
01/25/93 1463 0301 01/25/93 1464 0052
01/25/93 1463 0304 01/25/93 1464 0054
01/25/93 1463 0307 01/25/93 1464 0056
01/25/93 1463 0309 01/25/93 1464 0058
01/25/93 1463 0311 01/25/93 1464 0060
01/25/93 1463 0313 01/25/93 1464 0062
01/25/93 1463 0315 01/25/93 1464 0066
01/25/93 1463 0317 01/25/93 1464 0070
01/25/93 1463 0319 01/25/93 1464 0079
01/25/93 1463 0321 01/25/93 1464 0090
01/25/93 1463 0323 01/25/93 1464 0095
01/25/93 1463 0325 02/17/93 1474 0026
01/25/93 1463 0327 02/17/93 1474 0301
01/25/93 1463 0329 02/17/93 1474 0304
01/25/93 1463 0331 02/17/93 1474 0307
01/25/93 1463 0333 02/17/93 1474 0310
01/25/93 1463 0335 02/17/93 1474 0312
01/25/93 1463 0337 02/17/93 1474 0314
01/25/93 1463 0339 02/17/93 1474 0316
01/25/93 1463 0342 02/17/93 1474 0318
01/25/93 1463 0345 02/17/93 1474 0320
01/25/93 1464 0001 02/17/93 1474 0322
01/25/93 1464 0004 02/17/93 1474 0324
01/25/93 1464 0006 02/17/93 1474 0328
</TABLE>
-11-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
01/25/93 1464 0014 02/17/93 1474 0330
01/25/93 1464 0016 02/17/93 1474 0332
01/25/93 1464 0018 02/17/93 1474 0334
01/25/93 1464 0020 03/08/93 1486 0009
01/25/93 1464 0022 03/08/93 1486 0017
01/25/93 1464 0024 03/08/93 1486 0019
01/25/93 1464 0026 03/08/93 1486 0021
01/25/93 1464 0028 03/08/93 1486 0023
01/25/93 1464 0030 03/08/93 1486 0026
01/25/93 1464 0032
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
DELAWARE
Sussex
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
01/07/93 DDG 1891 0150 01/07/93 DDG 1891 0158
01/07/93 DDG 1891 0152 01/07/93 DDG 1891 0160
01/07/93 DDG 1891 0154 01/07/93 DDG 1891 0162
01/07/93 DDG 1891 0156 01/07/93 DDG 1891 0164
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Caroline
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
10/13/92 FDM 250 0599 12/24/92 FDM 251 0374
12/24/92 FDM 251 0372
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Kent
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
10/14/92 MLM 029 0278 11/12/92 MLM 031 0114
10/14/92 MLM 029 0280 11/12/92 MLM 031 0116
10/14/92 MLM 029 0282 12/14/92 MLM 033 0054
10/14/92 MLM 029 0284 12/14/92 MLM 033 0056
10/14/92 MLM 029 0286 12/14/92 MLM 033 0058
10/14/92 MLM 029 0288 12/14/92 MLM 033 0060
10/14/92 MLM 029 0290 12/14/92 MLM 033 0062
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Queen Annes
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
11/12/92 MWM 0411 0020 11/12/92 MWM 0411 0052
11/12/92 MWM 0411 0022 11/24/92 MWM 0412 0491
11/12/92 MWM 0411 0024 11/24/92 MWM 0412 0493
11/12/92 MWM 0411 0026 11/24/92 MWM 0412 0495
11/12/92 MWM 0411 0028 12/14/92 MWM 0414 0269
11/12/92 MWM 0411 0030 12/14/92 MWM 0414 0271
11/12/92 MWM 0411 0032 12/14/92 MWM 0414 0273
11/12/92 MWM 0411 0034 12/14/92 MWM 0414 0275
11/12/92 MWM 0411 0036 12/14/92 MWM 0414 0277
11/12/92 MWM 0411 0038 12/14/92 MWM 0414 0279
11/12/92 MWM 0411 0040 12/14/92 MWM 0414 0281
11/12/92 MWM 0411 0042 12/14/92 MWM 0414 0283
11/12/92 MWM 0411 0044 12/14/92 MWM 0414 0285
11/12/92 MWM 0411 0046 12/14/92 MWM 0414 0287
11/12/92 MWM 0411 0048 12/14/92 MWM 0414 0289
11/12/92 MWM 0411 0050
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Somerset
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
11/12/92 ITP 0407 1080 11/12/92 ITP 0407 1082
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Talbot
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
12/17/92 MAS 0740 0487 01/21/93 MAS 0743 0410
12/17/92 MAS 0740 0489 01/21/93 MAS 0743 0412
12/17/92 MAS 0740 0491 01/21/93 MAS 0743 0414
12/17/92 MAS 0740 0493 01/21/93 MAS 0743 0416
01/21/93 MAS 0743 0408 01/21/93 MAS 0743 0418
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
- --------
Wicomico
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
10/14/92 MSB 1310 0303 11/12/92 MSB 1314 0414
10/14/92 MSB 1310 0305 11/12/92 MSB 1314 0416
10/14/92 MSB 1310 0307 11/12/92 MSB 1314 0418
11/12/92 MSB 1314 0406 11/12/92 MSB 1314 0420
11/12/92 MSB 1314 0408 11/12/92 MSB 1314 0422
11/12/92 MSB 1314 0410 12/14/92 MSB 1318 0373
11/12/92 MSB 1314 0412 12/14/92 MSB 1318 0375
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
MARYLAND
Worcester
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
10/13/92 RHO 1868 0432
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
VIRGINIA
Accomack
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
12/14/92 SHC 0633 00251 01/19/93 SHC 0635 00125
12/14/92 SHC 0633 00254 01/19/93 SHC 0635 00128
01/19/93 SHC 0635 00116 01/19/93 SHC 0635 00131
01/19/93 SHC 0635 00119 01/19/93 SHC 0635 00134
01/19/93 SHC 0635 00122
</TABLE>
<TABLE>
<CAPTION>
State and County
- ----------------
VIRGINIA
Northampton
Received Deed Records Received Deed Records
for Record Book Page for Record Book Page
<S> <C> <C> <C> <C> <C>
10/13/92 KFA 257 0758 10/13/92 KFA 257 0760
</TABLE>
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 9.01 of the Original Indenture) the
tolls, rents, revenues, issues, earnings,
-14-
<PAGE>
income, product and profits thereof, and all the estate, right, title and
interest and claim whatsoever, at law as well as in equity, which the Company
now has or may hereafter acquire in and to the aforesaid property and franchises
and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that all property, rights and
franchises acquired by the Company after the date hereof (except any in the
Original Indenture expressly excepted) shall (subject to the provisions of
Section 9.01 of the Original Indenture and to the extent permitted by law) be as
fully embraced within the lien of the Original Indenture and any indentures
supplemental thereto, including this Eighty-Fourth Supplemental Indenture, as if
such property, rights and franchises were at the time of the execution of the
Original Indenture owned by the Company and/or specifically described therein
and conveyed thereby and as if such property, rights and franchises were now
owned by the Company and/or specifically described herein and conveyed hereby;
Provided that, in addition to the reservations and exceptions herein
elsewhere contained, the following are not and are not intended to be granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted from the lien
and operation of the Original Indenture and any indentures supplemental thereto,
including this Eighty-Fourth Supplemental Indenture, viz.: (1) cash and shares
of stock and certificates or evidence of interest therein and obligations
(including bonds, notes and other securities) not, in or pursuant to the
Original Indenture or any indenture supplemental thereto, including this Eighty-
Fourth Supplemental Indenture, specifically pledged or deposited or delivered or
therein covenanted so to be; (2) any goods, wares, merchandise, equipment,
materials or supplies held or acquired for the purpose of sale or resale in the
usual course of business or for consumption in the operation of any properties
of the Company; and (3) all judgments, contracts, accounts and choses in action,
the proceeds of which the Company is not obligated as in the Original Indenture
provided to deposit with the Trustee hereunder; provided, however, that the
property and rights expressly excepted from the lien and operation of the
Original Indenture and any indentures supplemental thereto, including this
Eighty-Fourth Supplemental Indenture, in the above subdivisions (2) and (3)
shall (to the extent permitted by law) cease to be so excepted, in the event
that the Trustee or a receiver or trustee shall take possession of the mortgaged
and pledged property in the manner provided in Article X of the Original
Indenture, by reason of the occurrence of a completed default, as defined in
said Article X of the Original Indenture.
TO HAVE AND TO HOLD all such properties, real, personal, or mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be,
-15-
<PAGE>
unto the Trustee and its successors in the trusts created in the Indenture and
its and their assigns foreover;
SUBJECT, HOWEVER, to any reservations, exceptions, conditions,
limitations and restrictions contained in several deeds, servitudes, franchises
and contracts or other instruments through which the Company acquired, and/or
claims title to and/or enjoys the use of the aforesaid properties; and subject
also to encumbrances of the character defined in the Original Indenture as
"excepted encumbrances" in so far as the same may attach to any of the property
embraced herein;
IN TRUST NEVERTHELESS upon the terms, trusts, uses and purposes
specifically set forth in the Indenture; this Eighty-Fourth Supplemental
Indenture being made for the purpose inter alia, of subjecting the real estate
and premises and other property above described to the lien and operation of the
Indenture, so that the same shall be held specifically by the Trustee under and
subject to the terms and conditions of the Indenture in identically the same
manner and for the same trusts, uses and purposes, as though the said real
estate and premises and other property had been specifically described in the
Original Indenture.
AND IT IS HEREBY FURTHER COVENANTED AND AGREED and the Company and the
Trustee have mutually agreed, in consideration of the premises, as follows:
ARTICLE I
DESIGNATION, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE 1993 GAS FACILITIES SERIES
SECTION 1. A series of bonds of the Company issuable and secured by
the Indenture is hereby created and authorized, which series shall be designated
"First Mortgage Bonds, Gas Facilities Series 1993A due June 1, 2032" and
sometimes referred to as the "1993 Gas Facilities Bonds" or the "bonds of the
1993 Gas Facilities Series". All bonds of the 1993 Gas Facilities Series shall
be fully registered bonds.
Each bond of the 1993 Gas Facilities Series shall be dated as of
June 1, 1993, and shall mature, subject to prior redemption, upon the terms
and conditions hereinafter set forth, on June 1, 2032. All such bonds shall
bear interest at the rate of six and five hundredths percent (6.05%) per annum
from and including the date thereof until payment of the principal or
redemption price thereof shall have been made or provided for in accordance
with the provisions hereof, whether at maturity, upon redemption or otherwise.
Interest on such bonds shall be payable semi-annually on each June 1 and
December 1 commencing December 1, 1993. Interest on such bonds shall be
computed upon the basis of a 360-day year, consisting of twelve (12) thirty
(30) day months from the first day of June or December, as the case may be, to
which interest has
-16-
<PAGE>
been paid (or is deemed to have been paid), unless no interest has been paid (or
is deemed to have been paid) thereon, in which case from June 1, 1993, until all
such bonds shall be paid or the payment thereof shall have been duly provided
for. Each such bond shall bear interest on overdue principal and, to the extent
permitted by law, on overdue interest at the rate borne by such bonds.
The principal of, and premium, if any, and interest on, the bonds of
the 1993 Gas Facilities Series shall be payable in any coin or currency of the
United States of America which, at the respective dates of payment thereof, is
legal tender for the payment of public and private debts, and such principal,
premium, if any, and interest shall be payable at the corporate trust office of
the State Trustee, as hereinafter defined.
SECTION 2. The bonds of the 1993 Gas Facilities Series shall be
registered in the name of the State Trustee, as hereinafter defined, under an
Indenture of Trust, dated as of June 1, 1993 (for the purpose of this Article I
the "State Indenture"), between the Authority and Delaware Trust Company (for
the purpose of this Article I, including its successors in trust, if any, under
the State Indenture, the "State Trustee"), relating to the Authority's Gas
Facilities Revenue Bonds (Delmarva Power & Light Company Project) Series 1993A
(for the purpose of this Article I the "State Revenue Bonds"). The bonds of the
1993 Gas Facilities Series are issued to provide for, and secure, the payment of
the State Revenue Bonds, the proceeds of which will be used to finance certain
gas facilities located or to be located in the Company's gas distribution system
in New Castle County, Delaware, under a Financing Agreement dated as of June 1,
1993 (for the purpose of this Article I the "Agreement"), between the Authority
and the Company. The principal of, and premium, if any, and interest on, the
State Revenue Bonds are payable from payments made by the Company of principal
of, and premium, if any, and interest on, the bonds of the 1993 Gas Facilities
Series.
SECTION 3. Whenever payment or provision therefor has been made in
respect of the principal of, and premium, if any, and interest on, all or any
portion of the State Revenue Bonds in accordance with the State Indenture, the
corresponding amount of principal of, and premium, if any, and interest on, the
bonds of the 1993 Gas Facilities Series issued as security therefor, shall be
deemed to have been paid.
The Trustee may conclusively assume that the obligation of the Company
to make payments on the bonds of the 1993 Gas Facilities Series shall have been
fully satisfied and discharged in a timely manner unless and until the Trustee
shall have received a written notice to the contrary from the State Trustee,
which notice shall state the date such payment was due, the amount of such
payment, and the purpose for which such payment was to have been made.
-17-
<PAGE>
SECTION 4. (a) Mandatory Redemption Upon Redemption of State Revenue
-----------------------------------------------------
Bonds. On any date on which the State Revenue Bonds shall be redeemed in whole
- -----
or in part, the bonds of the 1993 Gas Facilities Series shall be redeemed in
like principal amount at the same redemption price plus the same accrued
interest as shall be payable on the State Revenue Bonds then to be redeemed.
The Company covenants that it shall deposit with the Trustee sufficient funds to
enable the Trustee to redeem all of the bonds of the 1993 Gas Facilities Series
so to be redeemed on each date on which they are to be redeemed.
(b) Mandatory Redemption upon Acceleration of State Revenue Bonds.
-------------------------------------------------------------
If and whenever the Trustee is notified pursuant to Section 802 of the State
Indenture (i) that an event of default, as defined in Section 801 of the State
Indenture, has occurred and is continuing, (ii) that the principal of all State
Revenue Bonds then outstanding and the interest accrued thereon has been
declared due and payable and (iii) that the redemption of the bonds of the 1993
Gas Facilities Series is demanded, then as soon as practicable, and in any event
within five (5) days of having received notice of such default and of such
declaration and such demand, the Trustee shall so notify the Company and, upon
receipt of sufficient funds, shall redeem all of the bonds of the 1993 Gas
Facilities Series then outstanding upon payment of the principal amount thereof
together with accrued interest to the redemption date; provided, however, that
such requirement of redemption shall be deemed to be waived, if, prior to the
date fixed for such redemption, the State Trustee has notified the Trustee in
writing that such event of default under the State Indenture is waived or cured
and the accelerated maturity of the State Revenue Bonds ceases to be effective.
The Company covenants that, upon receipt of notice of such redemption from the
Trustee, it shall immediately deposit with the Trustee sufficient funds to
enable the Trustee to redeem all of the bonds of the 1993 Gas Facilities Series.
(c) The Trustee shall not be deemed to have received a redemption
notice and demand from the State Trustee under Section 4(b), unless such notice
and demand shall have been signed by the President, a Vice President, an
Assistant Vice President, a Trust Officer or an Assistant Trust Officer of the
State Trustee and shall have been delivered to the Trustee at its principal
corporate trust office addressed to the attention of its Corporate Trustee
Administration Department.
(d) Notwithstanding any other provisions of the Indenture, the bonds
of the 1993 Gas Facilities Series are subject to redemption only as provided in
this Section 4.
SECTION 5. Each holder of bonds of the 1993 Gas Facilities Series, by
the acceptance thereof, has waived any rights to notice of redemption of such
bonds. Therefore, the Trustee shall not give notice to the holder of such
bonds, notwithstanding any other provisions of the Indenture.
-18-
<PAGE>
SECTION 6. Bonds of the 1993 Gas Facilities Series shall be issuable
in the denominations of $5,000 and integral multiples thereof. Bonds of the
1993 Gas Facilities Series may be exchanged at the option of the holders
thereof, for a like aggregate principal amount of fully registered bonds of such
series of other authorized denominations.
No service or other similar charge shall be made for any exchange,
transfer, or registration of the bonds of 1993 Gas Facilities Series, but the
Company may require payment of a sum sufficient to cover any tax or taxes or
other governmental charges required to be paid by the Company in relation
thereto.
SECTION 7. The principal amount of the bonds of the 1993 Gas
Facilities Series which may be authenticated and delivered hereunder is limited
in aggregate principal amount to $15,000,000.
SECTION 8. Bonds of the 1993 Gas Facilities Series in the aggregate
principal amount of $15,000,000 shall forthwith be executed by the Company and
delivered to the Trustee and shall be authenticated by the Trustee and
delivered, either before or after the recording hereof, in accordance with the
request of the Company, signed in the name of the Company by its President, or
one of its Vice Presidents and its Treasurer or one of its Assistant Treasurers,
upon compliance by the Company with the applicable provisions of Articles III
and IV of the Original Indenture, as amended.
ARTICLE II
DESIGNATION, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE 1993 POLLUTION CONTROL REFUNDING SERIES
SECTION 1. A series of bonds of the Company issuable and secured by
the Indenture is hereby created and authorized, which series shall be designated
"First Mortgage Bonds, Pollution Control Refunding Series 1993B due June 1,
2021" and sometimes referred to as the "1993 Pollution Control Refunding Bonds"
or the "bonds of the 1993 Pollution Control Refunding Series". All bonds of the
1993 Pollution Control Refunding Series shall be fully registered bonds.
Each bond of the 1993 Pollution Control Refunding Series shall be
dated as of June 1, 1993, and shall mature, subject to prior redemption, upon
the terms and conditions hereinafter set forth, on June 1, 2021. All such bonds
shall bear interest at the rate of five and ninety hundredths percent (5.90%)
per annum from and including the date thereof until payment of the principal or
redemption price thereof shall have been made or provided for in accordance with
the provisions hereof, whether at maturity, upon redemption or otherwise.
Interest on such bonds shall be payable semi-annually on each June 1 and
December 1 commencing December 1, 1993. Interest on such bonds shall be
computed upon the basis of a 360-day year,
-19-
<PAGE>
consisting of twelve (12) thirty (30) day months from the first day of June or
December, as the case may be, to which interest has been paid (or is deemed to
have been paid), unless no interest has been paid (or is deemed to have been
paid) thereon, in which case from June 1, 1993, until all such bonds shall be
paid or the payment thereof shall have been duly provided for. Each such bond
shall bear interest on overdue principal and, to the extent permitted by law, on
overdue interest at the rate borne by such bonds.
The principal of, and premium, if any, and interest on, the bonds of
the 1993 Pollution Control Refunding Series shall be payable in any coin or
currency of the United States of America which, at the respective dates of
payment thereof, is legal tender for the payment of public and private debts,
and such principal, premium, if any, and interest shall be payable at the
corporate trust office of the State Trustee, as hereinafter defined.
SECTION 2. The bonds of the 1993 Pollution Control Refunding Series
shall be registered in the name of the State Trustee, as hereinafter defined,
under an Indenture of Trust, dated as of June 1, 1993 (for the purpose of this
Article II the "State Indenture"), between the Authority and Delaware Trust
Company (for the purpose of this Article II, including its successors in trust,
if any, under the State Indenture, the "State Trustee"), relating to the
Authority's Pollution Control Refunding Revenue Bonds (Delmarva Power & Light
Company Project) Series 1993B (for the purpose of this Article II the "State
Revenue Bonds"). The bonds of the 1993 Pollution Control Refunding Series are
issued to provide for, and secure, the payment of the State Revenue Bonds, the
proceeds of which will be used to refinance certain pollution control facilities
under a Financing Agreement dated as of June 1, 1993 (for the purpose of this
Article II the "Agreement"), between the Authority and the Company. The
principal of, and premium, if any, and interest on, the State Revenue Bonds are
payable from payments made by the Company of principal of, and premium, if any,
and interest on, the bonds of the 1993 Pollution Control Refunding Series.
SECTION 3. Whenever payment or provision therefor has been made in
respect of the principal of, and premium, if any, and interest on, all or any
portion of the State Revenue Bonds in accordance with the State Indenture, the
corresponding amount of principal of, and premium, if any, and interest on, the
bonds of the 1993 Pollution Control Refunding Series issued as security
therefor, shall be deemed to have been paid.
The Trustee may conclusively assume that the obligation of the Company
to make payments on the bonds of the 1993 Pollution Control Refunding Series
shall have been fully satisfied and discharged in a timely manner unless and
until the Trustee shall have received a written notice to the contrary from the
State Trustee, which notice shall state the
-20-
<PAGE>
date such payment was due, the amount of such payment, and the purpose for which
such payment was to have been made.
SECTION 4. (a) Mandatory Redemption Upon Redemption of State Revenue
-----------------------------------------------------
Bonds. On any date on which the State Revenue Bonds shall be redeemed in whole
- -----
or in part, the bonds of the 1993 Pollution Control Refunding Series shall be
redeemed in like principal amount at the same redemption price plus the same
accrued interest as shall be payable on the State Revenue Bonds then to be
redeemed. The Company covenants that it shall deposit with the Trustee
sufficient funds to enable the Trustee to redeem all of the bonds of the 1993
Pollution Control Refunding Series so to be redeemed on each date on which they
are to be redeemed.
(b) Mandatory Redemption upon Acceleration of State Revenue Bonds.
-------------------------------------------------------------
If and whenever the Trustee is notified pursuant to Section 802 of the State
Indenture (i) that an event of default, as defined in Section 801 of the State
Indenture, has occurred and is continuing, (ii) that the principal of all State
Revenue Bonds then outstanding and the interest accrued thereon has been
declared due and payable and (iii) that the redemption of the bonds of the 1993
Pollution Control Refunding Series is demanded, then as soon as practicable, and
in any event within five (5) days of having received notice of such default and
of such declaration and such demand, the Trustee shall so notify the Company,
and upon receipt of sufficient funds, shall redeem all of the bonds of the 1993
Pollution Control Refunding Series then outstanding upon payment of the
principal amount thereof together with accrued interest to the redemption date;
provided, however, that such requirement of redemption shall be deemed to be
waived, if, prior to the date fixed for such redemption, the State Trustee has
notified the Trustee in writing that such event of default under the State
Indenture is waived or cured and the accelerated maturity of the State Revenue
Bonds ceases to be effective. The Company covenants that, upon receipt of
notice of such redemption from the Trustee, it shall immediately deposit with
the Trustee sufficient funds to enable the Trustee to redeem all of the bonds of
the 1993 Pollution Control Refunding Series.
(c) The Trustee shall not be deemed to have received a redemption
notice and demand from the State Trustee under Section 4(b), unless such notice
and demand shall have been signed by the President, a Vice President, an
Assistant Vice President, a Trust Officer or an Assistant Trust Officer of the
State Trustee and shall have been delivered to the Trustee at its principal
corporate trust office addressed to the attention of its Corporate Trustee
Administration Department.
(d) Notwithstanding any other provisions of the Indenture, the bonds
of the 1993 Pollution Control Refunding Series are subject to redemption only as
provided in this Section 4.
-21-
<PAGE>
SECTION 5. Each holder of bonds of the 1993 Pollution Control
Refunding Series, by the acceptance thereof, has waived any rights to notice of
redemption of such bonds. Therefore, the Trustee shall not give notice to the
holder of such bonds, notwithstanding any other provisions of the Indenture.
SECTION 6. Bonds of the 1993 Pollution Control Refunding Series shall
be issuable in the denominations of $5,000 and integral multiples thereof.
Bonds of the 1993 Pollution Control Refunding Series may be exchanged at the
option of the holders thereof, for a like aggregate principal amount of fully
registered bonds of such series of other authorized denominations.
No service or other similar charge shall be made for any exchange,
transfer, or registration of the bonds of 1993 Pollution Control Refunding
Series, but the Company may require payment of a sum sufficient to cover any tax
or taxes or other governmental charges required to be paid by the Company in
relation thereto.
SECTION 7. The principal amount of the bonds of the 1993 Pollution
Control Refunding Series which may be authenticated and delivered hereunder is
limited in aggregate principal amount to $18,200,000.
SECTION 8. Bonds of the 1993 Pollution Control Refunding Series in
the aggregate principal amount of $18,200,000 shall forthwith be executed by the
Company and delivered to the Trustee and shall be authenticated by the Trustee
and delivered, either before or after the recording hereof, in accordance with
the request of the Company, signed in the name of the Company by its President,
or one of its Vice Presidents and its Treasurer or one of its Assistant
Treasurers, upon compliance by the Company with the applicable provisions of
Articles III and IV of the Original Indenture, as amended.
ARTICLE III
MISCELLANEOUS
SECTION 1. As supplemented and amended by the aforesaid supplemental
indentures and as supplemented and amended by this Eighty-Fourth Supplemental
Indenture, the Original Indenture is in all respects ratified and confirmed and
the Original Indenture and the aforesaid supplemental indentures and this
Eighty-Fourth Supplemental Indenture shall be read, taken and construed as one
and the same instrument.
SECTION 2. This Eighty-Fourth Supplemental Indenture shall be
simultaneously executed in several counterparts, and all such counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.
-22-
<PAGE>
SECTION 3. The recitals of fact contained herein shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
SECTION 4. The debtor and its mailing address are Delmarva Power &
Light Company, 800 King Street, P.O. Box 231, Wilmington, Delaware 19899. The
secured party and its address, from which information concerning the security
interest hereunder may be obtained, are Chemical Bank, 450 W. 33rd Street, 9th
Floor, New York, New York 10001, Attn: Corporate Trustee Administration
Department.
SECTION 5. The Trustee may conclusively rely on, and shall be
protected in acting upon, any certificate, opinion, notice, demand, waiver,
request, consent, report, or other paper or document signed by the President, a
Vice President, or a Trust Officer of the State Trustee.
SECTION 6. The Company acknowledges that it received a true and
correct copy of this Eighty-Fourth Supplemental Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed in its name and behalf by its Vice President and its corporate seal to be
hereunto affixed and attested by its Secretary and the Trustee has caused this
instrument to be signed in its name and behalf by one of its Vice Presidents and
its corporate seal to be hereunto affixed and attested by a Trust Officer,
effective as of the 1st day of June, 1993.
DELMARVA POWER & LIGHT COMPANY
Date of Execution By /s/ B. S. Graham
-------------------------------
May 28, 1993 B. S. GRAHAM, VICE PRESIDENT
[Seal]
Attest:
/s/ D. P. Connelly
-------------------------------
D. P. CONNELLY, SECRETARY
CHEMICAL BANK
Date of Execution By /s/ F. J. Farrell
-------------------------------
May 28, 1993 F. J. FARRELL, VICE PRESIDENT
[Seal]
Attest:
/s/ R. Bishop
-------------------------------
R. BISHOP, TRUST OFFICER
-23-
<PAGE>
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
BE IT REMEMBERED that on this 28th day of May
--------- -------------
A.D. 1993, personally came before me, a notary public for the State of Delaware,
B. S. Graham, Vice President of DELMARVA POWER & LIGHT COMPANY, a corporation of
the State of Delaware and the Commonwealth of Virginia, party to the foregoing
instrument, known to me personally to be such, and acknowledged the said
instrument to be her own act and deed and the act and deed of said corporation;
that the signature of said Vice President is in her own proper handwriting; that
the seal affixed is the common or corporate seal of the said corporation; and
that her act of signing, sealing, executing and delivering said instrument was
duly authorized by resolution of the Board of Directors of said corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ Sheryl R. Hynson
-----------------------------------
Notary Public
My Commission expires
March 16, 1995
[Seal]
-24-
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
BE IT REMEMBERED that on this 28th day of May A.D. 1993,
-------- -------
personally came before me, a Notary Public for the State of New York, F. J.
Farrell, Vice President of CHEMICAL BANK, a corporation of the State of New
York, party to the foregoing instrument, known to me personally to be such,
and acknowledged the said instrument to be his own act and deed and the act
and deed of said corporation; that the signature of said Vice President is his
own proper handwriting; that the seal affixed is the common or corporate seal
of said corporation; and that his act of signing, sealing, executing and
delivering said instrument was duly authorized by resolution of the Board of
Directors of said Corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ Emily Fayan
----------------------------------
Notary Public
Notary Public, State of New York
No. 24-4737006
Qualified in Kings County
Certificate Filed in New York County
Commission Expires December 31, 1993
[Seal]
-25-
<PAGE>
CERTIFICATE OF RESIDENCE
CHEMICAL BANK, successor Trustee to the Trustee within named, by
merger, hereby certifies that its precise residence is 450 W. 33rd Street,
in the Borough of Manhattan, in The City of New York, in the State of New York.
CHEMICAL BANK
By: /s/ R. Bishop
-------------------------------
R. Bishop
Trust Officer
-26-
<PAGE>
RECORDATION DATA
Executed Counterparts of the Eighty-Fourth Supplemental Indenture were
recorded in Real Property Mortgage Records as follows:
<TABLE>
<CAPTION>
Received Mortgage Records
State and County for Record Book Page
---------- ---- ----
<S> <C> <C> <C>
DELAWARE:
New Castle 06/03/93 2863 316
Kent 06/02/93 X045 131
Sussex 06/02/93 1766 113
PENNSYLVANIA:
Armstrong 06/02/93 1298 162
Adams 06/01/93 731 302
Bedford 06/01/93 520 591
Blair 06/01/93 1072 385
Cambria 06/02/93 831 789
Cumberland 06/01/93 1138 1191
Delaware 06/02/93 1099 1543
Franklin 06/02/93 883 565
Huntingdon 06/02/93 326 512
Indiana 06/01/93 469 018
Lancaster 06/01/93 3908 563
Westmoreland 06/01/93 3133 196
York 06/01/93 641 803
NEW JERSEY:
Burlington 07/21/93 5088 241
Camden 06/02/93 3990 614
Gloucester 07/21/93 2425 116
Mercer 06/02/93 2775 010
Middlesex 06/02/93 4457 405
Salem 06/02/93 0714 040
Somerset 06/02/93 2263 506
Warren 06/02/93 1403 120
MARYLAND:
Caroline 06/03/93 215 352
Cecil 06/04/93 437 001
Dorchester 06/02/93 288 592
Kent 06/04/93 040 468
Queen Anne's 06/02/93 428 559
Somerset 06/02/93 411 1080
Talbot 06/03/93 752 345
Wicomico 06/01/93 1339 828
Worcester 06/02/93 1937 103
VIRGINIA:
Accomack 06/02/93 642 669
Northampton 06/02/93 261 386
</TABLE>
-27-
<PAGE>
This Instrument Prepared By
/s/ Donna J. Quisenberry
------------------------------
Donna J. Quisenberry
Delmarva Power & Light Company
800 King Street
Wilmington, DE 19801
================================================================================
DELMARVA POWER & LIGHT COMPANY
TO
CHEMICAL BANK,
Trustee.
----------------
EIGHTY-FIFTH SUPPLEMENTAL
INDENTURE
----------------
Effective as of July 1, 1993
(but executed on the dates shown on the execution page)
================================================================================
<PAGE>
DELMARVA POWER & LIGHT COMPANY
Eighty-Fifth Supplemental Indenture
Effective as of July 1, 1993
---------------
TABLE OF CONTENTS*
---------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Parties........................................................ 1
Recitals....................................................... 1
Form of Bond of the July 2003 Series........................... 2
Recitals....................................................... 6
Granting Clauses............................................... 6
Description of Property........................................ 7
Appurtenances.................................................. 9
After Acquired Property Clause................................. 9
Properties Excepted from Lien and Operation of Indenture....... 9
Habendum....................................................... 9
Subject Clause................................................. 10
Grant in Trust................................................. 10
<CAPTION>
ARTICLE I
DESIGNATIONS, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE JULY 2003 SERIES
<C> <S> <C>
Sec. 1. Designations, Provisions and Denominations of Bonds
of the July 2003 Series......................... 10
Sec. 2. Limitation of Principal Amount of Bonds of the
July 2003 Series................................ 11
Sec. 3. Issuance of Bonds of the July 2003 Series............. 11
</TABLE>
- ----------------------
* The Table of Contents and recording data are not part of the Eighty-
Fifth Supplemental Indenture as executed.
i
<PAGE>
ARTICLE II
MISCELLANEOUS
<TABLE>
<CAPTION>
PAGE
<C> <S> <C>
Sec. 1. Original Indenture Confirmed as Supplemented.......... 11
Sec. 2. Execution of Counterparts............................. 11
Sec. 3. Recitals are by Company............................... 11
Sec. 4. Names and Addresses of Debtor and Secured Party....... 11
Sec. 5. Company Acknowledgment................................ 11
Testimonium.................................................... 12
Signatures and Seals........................................... 12
Acknowledgements............................................... 13
Certificate of Residence....................................... 15
Recordation Data............................................... 16
</TABLE>
ii
<PAGE>
This EIGHTY-FIFTH SUPPLEMENTAL INDENTURE, effective as of the 1st day of
July, 1993 (but executed on the dates hereinafter shown), made and entered into
by and between DELMARVA POWER & LIGHT COMPANY, a corporation of the State of
Delaware and the Commonwealth of Virginia, hereinafter called the Company, party
of the first part, and CHEMICAL BANK, a corporation of the State of New York,
hereinafter called the Trustee, party of the second part;
WITNESSETH:
WHEREAS, the Company heretofore executed and delivered its Indenture of
Mortgage and Deed of Trust (hereinafter in this Eighty-Fifth Supplemental
Indenture called the "Original Indenture"), dated as of October 1, 1943, to the
New York Trust Company, a corporation of the State of New York, as Trustee, to
which Chemical Bank is successor Trustee, to secure the First Mortgage Bonds of
the Company, unlimited in aggregate principal amount and issuable in series,
from time to time, in the manner and subject to the conditions set forth in the
Original Indenture granted and conveyed unto the Trustee, upon the trusts, uses
and purposes specifically therein set forth, certain real estate, franchises and
other property therein described, including property acquired after the date
thereof, except as therein otherwise provided; and
WHEREAS, the Original Indenture has been supplemented by eighty-four
supplemental indentures specifically subjecting to the lien of the Original
Indenture as though included in the granting clause thereof certain property in
said supplemental indentures specifically described and amending and modifying
the provisions of the Original Indenture (the Original Indenture, as amended,
modified and supplemented by all of the indentures supplemental thereto,
including this Eighty-Fifth Supplemental Indenture, is hereinafter in this
Eighty-Fifth Supplemental Indenture called the "Indenture"); and
WHEREAS, the Original Indenture provides for the issuance of bonds
thereunder in one or more series, the form of each series of bonds and of the
coupons to be attached to any coupon bonds to be substantially in the forms set
forth therein with such omissions, variations and insertions as are authorized
or permitted by the Original Indenture and determined and specified by the Board
of Directors of the Company; and
WHEREAS, the Company, by appropriate corporate action in conformity with
the terms of the Original Indenture, has duly determined to create a series of
bonds to be designated as First Mortgage Bonds, 6.40% Series due July 1, 2003
(hereinafter sometimes referred to as the "July 2003 Series Bonds" or the "bonds
of the July 2003 Series"), which said July 2003 Series Bonds are to be
substantially in the following form:
<PAGE>
[FORM OF FACE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
6.40% Series due July 1, 2003
Number:
---
DELMARVA POWER & LIGHT COMPANY, a corporation of the State of Delaware and
the Commonwealth of Virginia (hereinafter called the Company), for value
received, hereby promises to pay to . . . . . . . . . . . . . . or registered
assigns, the sum of . . . . . . . . . . . . Dollars on July 1, 2003, at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for public and private debts, and to pay interest
thereon, semi-annually on January 1 and July 1 of each year at the rate of six
and forty hundredths percent (6.40%) per annum, at said office or agency in like
coin or currency, from the first day of January or July, as the case may be, to
which interest has been paid preceding the date hereof (unless the date hereof
is a January 1 or July 1 on which interest has been paid, in which case from the
date hereof, or unless the date hereof is prior to January 1, 1994, in which
case from July 1, 1993), until this bond shall mature, according to its terms or
on prior redemption or by declaration or otherwise, and at the highest rate of
interest borne by any of the bonds outstanding under the Mortgage hereinafter
mentioned from such date of maturity until this bond shall be paid or the
payment hereof shall have been duly provided for. Interest on this bond shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
The provisions of this bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.
This bond shall not become valid or obligatory for any purpose until
CHEMICAL BANK, the Trustee under the Mortgage, or its successor thereunder,
shall have signed the certificate of authentication endorsed hereon.
IN WITNESS WHEREOF, DELMARVA POWER & LIGHT COMPANY has caused this bond to
be signed in its name with the manual or facsimile signature of its President or
one of its Vice Presidents and its corporate seal, or a facsimile thereof, to be
affixed hereto and attested by the manual or facsimile signature of its
Secretary or one of its Assistant Secretaries.
-2-
<PAGE>
Dated:
Seal:
Attest: DELMARVA POWER & LIGHT COMPANY
By
- ------------------------- -------------------------------
Secretary President
Trustee's Authentication Certificate
------------------------------------
This bond is one of the bonds of the series herein designated, provided for in
the within-mentioned mortgage.
Chemical Bank, Trustee
By
-----------------------------
Authorized Officer
[FORM OF REVERSE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
6.40% Series due July 1, 2003
This bond is one of an issue of bonds of the Company (herein referred to
as the "bonds"), not limited in principal amount, issuable in series, which
different series may mature at different times, may bear interest at different
rates, and may otherwise vary as in the Mortgage hereinafter mentioned provided,
and is one of a series known as First Mortgage Bonds, 6.40% Series due July 1,
2003 (herein sometimes referred to as "bonds of the July 2003 Series"). All
bonds of all series issued and to be issued under and equally and ratably
secured (except insofar as any sinking fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular series) by the Mortgage and Deed of Trust, dated
as of October 1, 1943, executed by the Company to THE NEW YORK TRUST COMPANY, as
Trustee, to which CHEMICAL BANK, a corporation of the State of New York, is
successor Trustee (herein, together with any indentures supplemental thereto,
including an Eighty-Fifth
-3-
<PAGE>
Supplemental Indenture, dated as of July 1, 1993, called the "Mortgage"), to
which reference is made for a description of the property mortgaged and pledged,
the nature and extent of the security, the rights and limitations of rights of
the holders of the bonds and of the Company in respect thereof, the rights,
duties and immunities of the Trustee, and the terms and conditions upon which
the bonds are, and are to be, issued and secured. The Mortgage contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than seventy-five percent (75%) in principal amount of all
the bonds at the time outstanding (determined as provided in the Mortgage),
evidenced as in the Mortgage provided, or in case the rights under the Mortgage
of the holders of the bonds of one or more, but less than all, of the series of
bonds outstanding shall be affected, then with the consent of the holders of not
less than seventy-five percent (75%) in principal amount of the bonds at the
time outstanding of the one or more series, taken in the aggregate, affected
(determined as provided in the Mortgage), evidenced as in the Mortgage provided,
to execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Mortgage or modifying in any
manner the rights of the holders of the bonds and coupons; provided, however,
that no such supplemental indenture shall (i) extend the fixed maturity of any
bonds, or reduce the rate or extend the time of payment of interest thereon, or
reduce the principal amount thereof, without the consent of the holder of each
bond so affected, or (ii) reduce the aforesaid percentage of bonds, the holders
of which are required to consent to any such supplemental indenture without the
consent of the holders of all bonds then outstanding. Any such consent by the
registered holder of this bond (unless effectively revoked as provided in the
Mortgage) shall be conclusive and binding upon such holder and upon all future
holders of this bond, irrespective of whether or not any notation of such
consent is made upon this bond. No reference herein to the Mortgage and no
provision of this bond or of the Mortgage shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this bond at the time and place, at the rate
and in the coin or currency herein prescribed.
The fully registered bonds of the July 2003 Series are issuable in
denominations of $1,000 and any integral multiple thereof. At the office or
agency to be maintained by the Company in the Borough of Manhattan, The City of
New York and in the manner and subject to the limitations provided in the
Mortgage, fully registered bonds of such series may be exchanged for a like
aggregate principal amount of fully registered bonds of such series of other
authorized denominations, and in each case without payment of any service or
other similar charge as provided in said Eighty-Fifth Supplemental Indenture.
The bonds of the July 2003 Series shall not be subject to redemption prior
to maturity.
The principal hereof may be declared or may become due prior to the
express date of the maturity hereof on the conditions, in the manner and at the
time set forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.
-4-
<PAGE>
This bond is transferable as prescribed in the Mortgage by the registered
holder hereof in person, or by his duly authorized attorney, at the office or
agency of the Company in said Borough of Manhattan, upon surrender and
cancellation of this bond, and thereupon a new fully registered bond or bonds of
authorized denominations of the same series and for the same aggregate principal
amount will be issued to the transferee in exchange herefor as provided in the
Mortgage, and in each case without payment of any service or other similar
charge as provided in said Eighty-Fifth Supplemental Indenture. The Company and
the Trustee, any paying agent and any bond registrar may deem and treat the
person in whose name this bond is registered as the absolute owner hereof,
whether or not this bond shall be overdue, for the purpose of receiving payment
and for all other purposes and neither the Company nor the Trustee nor any
paying agent nor any bond registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of, premium, if
any, and interest on, this bond, or for any claim based hereon, or otherwise in
respect hereof, or based on, or in respect of, the Mortgage, against any
incorporator or any past, present or future subscriber to the capital stock,
stockholder, officer or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, stockholders, officers and directors, as such, being waived and
released by the holder and owner hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
[END OF FORM OF BOND]
-5-
<PAGE>
WHEREAS, all acts and things prescribed by law and by the charter and by-
laws of the Company necessary to make the July 2003 Series Bonds, when executed
by the Company and authenticated by the Trustee, as in the Original Indenture
provided, valid, binding and legal obligations of the Company, entitled in all
respects to the security of the Original Indenture and indentures supplemental
thereto, have been performed; and
WHEREAS, provision is made in Sections 5.11 and 17.01 of the Original
Indenture for such further instruments and indentures, supplemental to the
Original Indenture, as may be necessary or proper to carry out more effectually
the purposes of the Original Indenture, and to subject to the lien of the
Original Indenture any property acquired after the date of the Original
Indenture and intended to be covered thereby, with the same force and effect as
though included in the granting clause thereof, and to add such further
covenants, restrictions or conditions for the protection of the mortgaged and
pledged property and the holders of the bonds as the Board of Directors of the
Company and the Trustee shall consider to be for the protection of the holders
of the bonds, and to set forth the terms and provisions of any series of bonds
to be issued under the Original Indenture and the form of the bonds and coupons
of such series; and the Company since the date of the Original Indenture has
acquired additional property not heretofore specifically subjected to the lien
of the Original Indenture; and it is desired to add certain further covenants,
restrictions and conditions for the protection of the mortgaged and pledged
property and the holders of the bonds, as provided in this Eighty-Fifth
Supplemental Indenture, which the Board of Directors of the Company and the
Trustee consider to be for the protection of the holders of the bonds; and the
Company desires to issue the July 2003 Series Bonds; and the Company therefore
deems it advisable to enter into this Eighty-Fifth Supplemental Indenture in the
form and terms hereof; and
WHEREAS, the execution and delivery of this Eighty-Fifth Supplemental
Indenture has been duly authorized by the Board of Directors of the Company at a
meeting duly called and held according to law, and all conditions and
requirements necessary to make this Eighty-Fifth Supplemental Indenture a valid,
binding and legal instrument in accordance with its terms, for the purposes
herein expressed, and the execution and delivery hereof, in the form and terms
hereof, have been in all respects duly authorized;
NOW, THEREFORE, in order further to secure the payment of the principal
and interest and premium, if any, of all bonds issued and to be issued under the
Original Indenture and any indentures supplemental thereto, including this
Eighty-Fifth Supplemental Indenture, according to their tenor, purport and
effect and the performance and observance of all the covenants and conditions in
said bonds and the Original Indenture and any indentures supplemental thereto,
including this Eighty-Fifth Supplemental Indenture, contained and to subject to
the lien of the Original Indenture, as so supplemented, with the same force and
effect as though included in the granting clause thereof, additional property
now owned by the Company, and for and in consideration of the premises and of
the sum of One Dollar ($1.00), lawful money of the United States of America, to
the Company duly paid by the Trustee at or before the ensealing and delivery
hereof, and other valuable consideration, the receipt whereof is hereby
acknowledged, and intending to be legally bound hereby, the Company has executed
and delivered this Eighty-Fifth Supplemental Indenture,
-6-
<PAGE>
and hath granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over and confirmed, and granted a security interest
therein, and by these presents doth grant, bargain, sell release, convey,
assign, transfer, mortgage, pledge, set over and confirm, and grant a security
interest therein, subject to the provisions of the Indenture, unto CHEMICAL
BANK, as trustee, and to its successors in trust and to its and their assigns
forever, all the following described properties of the Company, and doth hereby
confirm that the Company will not cause or consent to a partition, either
voluntary or through legal proceedings, of property, whether herein described or
heretofore or hereafter acquired, in which its ownership shall be as tenants in
common, except as permitted by, and in conformity with, the provision of the
Original Indenture, as supplemented, and particularly of Article IX of the
Original Indenture:
All property, real, personal and mixed, tangible and intangible, owned by
the Company on the date of the execution hereof or which may be hereafter
acquired by it (except such property as in the Original Indenture expressly
excepted from the lien and operation of the Indenture).
The property covered by this Eighty-Fifth Supplemental Indenture shall
include particularly, among other property, without prejudice to the generality
of the language hereinbefore or hereinafter contained, the following described
property:
All the electric generating stations, station sites, stations, electric
reserve generating stations, substations, substation sites, gas manufacturing
plants, ice and cold storage plants, steam plants, hot water plants, hydro-
electric stations, hydro-electric station sites, electric transmission lines,
electric distribution systems, gas transportation mains, gas distribution
systems, steam distribution systems, hot water distribution systems, regulator
stations, regulator station sites, office buildings, storeroom buildings,
warehouse buildings, boiler houses, plants, plant sites, service plants, coal
storage yards, and poleyards now or hereafter owned by the Company, including
all electric works, power houses, generators, turbines, boilers, engines,
furnaces, retorts, dynamos, buildings, structures, transformers, meters, towers,
poles, tower lines, cables, pole lines, tanks, storage holders, regulators, gas
works, pipes, pipe lines, mains, pipe fittings, valves, drips, connections,
tunnels, conduits, gates, motors, wires, switch racks, switches, brackets,
insulators, and all equipment, improvements, machinery, appliances, devices,
appurtenances, supplies and miscellaneous property for generating, producing,
transforming, converting, storing and distributing electric energy, gas, ice,
steam and hot water, and furnishing cold storage, now or hereafter owned by the
Company, together with all furniture and fixtures located in the aforesaid
buildings, and all land now or hereafter owned by the Company on which the same
or any part thereof are situated, and all of the real estate, leases, leaseholds
(except the last day of the term of each lease and leasehold), and lands now or
hereafter owned by the Company, including land located on or adjacent to any
river, stream or other water, together with all flowage rights, flooding rights,
water rights, riparian rights, dams and dam sites and rights, flumes, canals,
races, raceways, head works and diversion works, and all of the municipal and
other franchises, licenses, consents, ordinances, permits, privileges, rights,
-7-
<PAGE>
servitudes, easements and rights-of-way and other rights in or relating to real
estate or the occupancy of the same now or hereafter owned by the Company, and
all of the other property, real, personal or mixed, now or hereafter owned by
the Company, forming a part of any of the foregoing property or used or enjoyed
or capable of being used or enjoyed in connection therewith or in any way
appertaining thereto, whether developed or undeveloped, or partially developed,
or whether now equipped and operating or not and wherever situated, and all of
the Company's presently held or hereafter acquired right, title and interest in
and to the land on which the same or any part thereof are situated or adjacent
thereto, and all rights for or relating to the construction, maintenance or
operation of any of the foregoing property through, over, under or upon any
public streets or highways or other lands, public or private, and (except as
hereinafter expressly excepted) all the right, title and interest of the Company
presently held or hereafter acquired in and to all other property of any kind or
nature appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described, and, as to all of the foregoing,
whether now owned by the Company or hereafter acquired by the Company.
Without limitation of the generality of the foregoing, the parcels of land
situate as hereinafter set forth and owned by the Company, and whether used or
not used in connection with the Company's operations, which real estate was
conveyed to the Company as hereinafter set forth by the following conveyances to
which reference is made for a more particular description, to wit:
No. 1 - All that certain piece, parcel or tract of land situate in the
Township of Lower Providence, County of Montgomery, State of Pennsylvania,
bounded and described in accordance with a map for Valley Forge Industrial Park,
Inc. (now Valley Forge Corporate Center, Inc.) by Yerkes Engineering Co. dated
August 17, 1959 and more particularly described in and was conveyed to Delmarva
Power & Light Company by a deed of Philadelphia Electric Company, dated July 17,
1992 and recorded January 7, 1993 in the Montgomery County Commissioners
Registry in and for Montgomery County, State of Delaware, in Deed Book 5031,
Page 583.
The above properties and rights are designated "498" for the purposes of
the Original Indenture and all indentures supplemental thereto. Also all other
lands and buildings and improvements thereon erected hereafter acquired.
-8-
<PAGE>
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in any way appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 9.01 of the Original Indenture) the
tolls, rents, revenues, issues, earnings, income, product and profits thereof,
and all the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid property and franchises and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that all property, rights and
franchises acquired by the Company after the date hereof (except any in the
Original Indenture expressly excepted) shall (subject to the provisions of
Section 9.01 of the Original Indenture and to the extent permitted by law) be as
fully embraced within the lien of the Original Indenture and any indentures
supplemental thereto, including this Eighty-Fifth Supplemental Indenture, as if
such property, rights and franchises were at the time of the execution of the
Original Indenture owned by the Company and/or specifically described therein
and conveyed thereby and as if such property, rights and franchises were now
owned by the Company and/or specifically described herein and conveyed hereby;
Provided that, in addition to the reservations and exceptions herein and
elsewhere contained, the following are not and are not intended to be granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted from the lien
and operation of the Original Indenture and any indentures supplemental thereto,
including this Eighty-Fifth Supplemental Indenture, viz.: (1) cash and shares
of stock and certificates or evidence of interest therein and obligations
(including bonds, notes and other securities) not in or pursuant to the Original
Indenture or any indenture supplemental thereto, including this Eighty-Fifth
Supplemental Indenture, specifically pledged or deposited or delivered or
therein covenanted so to be; (2) any goods, wares, merchandise, equipment,
materials or supplies held or acquired for the purpose of sale or resale in the
usual course of business or for consumption in the operation of any properties
of the Company; and (3) all judgments, contracts, accounts and choses in action,
the proceeds of which the Company is not obligated as in the Original Indenture
provided to deposit with the Trustee hereunder; provided, however, that the
property and rights expressly excepted from the lien and operation of the
Original Indenture and any indentures supplemental thereto, including this
Eighty-Fifth Supplemental Indenture, in the above subdivisions (2) and (3) shall
(to the extent permitted by law) cease to be so excepted, in the event that the
Trustee or a receiver or trustee shall take possession of the mortgaged and
pledged property in the manner provided in Article X of the Original Indenture,
by reason of the occurrence of a completed default, as defined in said Article X
of the Original Indenture.
TO HAVE AND TO HOLD all such properties, real, personal, or mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustee and its successors in the trusts created in the Indenture
and its and their assigns forever;
-9-
<PAGE>
SUBJECT, HOWEVER, to any reservations, exceptions, conditions, limitations
and restrictions contained in several deeds, servitudes, franchises and
contracts or other instruments through which the Company acquired, and/or claims
title to and/or enjoys the use of the aforesaid properties; and subject also to
encumbrances of the character defined in the Original Indenture as "excepted
encumbrances" in so far as the same may attach to any of the property embraced
herein;
IN TRUST NEVERTHELESS upon the terms, trusts, uses and purposes
specifically set forth in the Indenture; this Eighty-Fifth Supplemental
Indenture being made for the purpose, inter alia, of subjecting the real estate
----- ----
and premises and other property above described to the lien and operation of the
Indenture, so that the same shall be held specifically by the Trustee under and
subject to the terms and conditions of the Original Indenture in identically the
same manner and for the same trusts, uses and purposes, as though the said real
estate and premises and other property had been specifically described in the
Original Indenture.
AND IT IS HEREBY FURTHER COVENANTED AND AGREED and the Company and the
Trustee have mutually agreed, in consideration of the premises, as follows:
ARTICLE I.
DESIGNATION, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE JULY 2003 SERIES
SECTION 1. The bonds of the July 2003 Series shall be designated "First
Mortgage Bonds, 6.40% Series due July 1, 2003." All bonds of the July 2003
Series shall be fully registered bonds. All bonds of the July 2003 Series shall
be dated the date of issue, and shall bear interest from the first day of
January or July, as the case may be, to which interest has been paid preceding
the date thereof, unless such date is a January 1 or July 1 on which interest
has been paid, in which case they shall bear interest from such date, or unless
such date is prior to January 1, 1994, in which case they shall bear interest
from July 1, 1993. All bonds of the July 2003 Series shall be payable on July
1, 2003, in such coin or currency of the United States of America as at the time
of payment shall be legal tender for public and private debts, and shall bear
interest, payable in like coin and currency, at the rate of six and forty
hundredths percent (6.40%) per annum, payable semi-annually on January 1 and
July 1 of each year, until maturity, and at the highest rate of interest borne
by any of the bonds outstanding under the Original Indenture and any indenture
supplemental thereto, from such date of maturity until they shall be paid or
payment thereof shall have been duly provided for. Principal of, and interest
on, the bonds of the July 2003 Series shall be payable at the office or agency
of the Company in the Borough of Manhattan, the City of New York.
No bonds of the July 2003 Series shall be redeemable prior to maturity.
-10-
<PAGE>
Bonds of the July 2003 Series shall be issuable in denominations of $1,000
and multiples thereof. Bonds of the July 2003 Series may be exchanged at the
option of the holders thereof, for a like aggregate principal amount of fully
registered bonds of such series of other authorized denominations.
No service or other similar charge shall be made for any exchange,
transfer, or registration of the bonds of the July 2003 Series, but the Company
may require payment of a sum sufficient to cover any tax or taxes or other
governmental charges required to be paid by the Company in relation thereto.
SECTION 2. The principal amount of the bonds of the July 2003 Series
which may be authenticated and delivered hereunder is not limited, except as the
Original Indenture, as amended, limits the principal amount of bonds which may
be issued thereunder.
SECTION 3. Bonds of the July 2003 Series for the aggregate principal
amount of $90,000,000, being the initial issue of bonds of said Series, shall
forthwith be executed by the Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered, either before or after the recording
hereof, in accordance with the request of the Company, signed in the name of the
Company by its President or one of its Vice Presidents and its Treasurer or one
of its Assistant Treasurers, upon compliance by the Company with the applicable
provisions of Articles III and IV of the Original Indenture, as amended.
ARTICLE II.
MISCELLANEOUS
SECTION 1. As supplemented and amended by this Eighty-Fifth Supplemental
Indenture, the Original Indenture and all indentures supplemental thereto are in
all respects ratified and confirmed and the Original Indenture and the aforesaid
supplemental indentures and this Eighty-Fifth Supplemental Indenture shall be
read, taken and construed as one and the same instrument.
SECTION 2. This Eighty-Fifth Supplemental Indenture shall be
simultaneously executed in several counterparts, and all such counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.
SECTION 3. The recitals of fact contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
SECTION 4. The debtor and its mailing address are Delmarva Power & Light
Company, 800 King Street, P.O. Box 231, Wilmington, Delaware 19899. The secured
party and its address, from which information concerning the security interest
hereunder may be obtained, are Chemical Bank, 450 West 33rd Street, New York,
New York 10001, Attn: Corporate Trustee Administration Department.
SECTION 5. The Company acknowledges that it received a true and correct
copy of this Eighty-Fifth Supplemental Indenture.
-11-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be signed in
its name and behalf by its Vice President and its corporate seal to be hereunto
affixed and attested by its Secretary and the Trustee has caused this instrument
to be signed in its name and behalf by a Vice President and its corporate seal
to be hereunto affixed and attested by a Trust Officer, effective as of the 1st
day of July, 1993.
DELMARVA POWER & LIGHT COMPANY
Date of Execution By /s/ B. S. Graham
June 25, 1993 -------------------------------------
- ------------------ B. S. GRAHAM, VICE PRESIDENT
[Seal]
Attest:
/s/ D. P. Connelly
-------------------------------------
D. P. CONNELLY, SECRETARY
CHEMICAL BANK
Date of Execution By /s/ W. B. Dodge
June 25, 1993 -------------------------------------
- ------------------ W. B. DODGE, VICE PRESIDENT
[Seal]
Attest:
/s/ J. Kirsch
------------------------------------
J. KIRSCH, TRUST OFFICER
-12-
<PAGE>
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
BE IT REMEMBERED that on this 25th day of June A.D. 1993, personally came
before me, a notary public for the State of Delaware, B. S. GRAHAM, Vice
President of DELMARVA POWER & LIGHT COMPANY, a corporation of the State of
Delaware and the Commonwealth of Virginia, party to the foregoing instrument,
known to me personally to be such, and acknowledged the said instrument to be
her own act and deed and the act and deed of said corporation; that the
signature of said Vice President is in her own proper handwriting; that the seal
affixed is the common or corporate seal of the said corporation; and that her
act of signing, sealing, executing and delivering said instrument was duly
authorized by resolution of the Board of Directors of said corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ Sheryl R. Hynson
-----------------------------
Notary Public
Notary Public, State of Delaware
My Commission expires March 16, 1995
[Seal]
-13-
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
BE IT REMEMBERED that on this 25th day of June A.D. 1993, personally came
before me, a Notary Public for the State of New York, W. B. DODGE, Vice
President of CHEMICAL BANK, a corporation of the State of New York, party to the
foregoing instrument, known to me personally to be such, and acknowledged the
said instrument to be his own act and deed and the act and deed of said
corporation; that the signature of said Vice President is his own proper
handwriting; that the seal affixed is the common or corporate seal of said
corporation; and that his act of signing, sealing, executing and delivering said
instrument was duly authorized by resolution of the Board of Directors of said
Corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ Emily Fayan
-----------------------------
Notary Public
Notary Public, State of New York
No. 24-4737006
Qualified in Kings County
Certificate in New York County
Commission Expires December 31, 1993
[Seal]
-14-
<PAGE>
CERTIFICATE OF RESIDENCE
CHEMICAL BANK, successor Trustee to the Trustee within named, by merger,
hereby certifies that its precise residence is 450 West 33rd Street, in the
Borough of Manhattan, in The City of New York, in the State of New York.
CHEMICAL BANK
By: /s/ J. Kirsch
------------------------
J. KIRSCH, TRUST OFFICER
-15-
<PAGE>
RECORDATION DATA
Executed Counterparts of the Eighty-Fifth Supplemental Indenture were
recorded in Real Property Mortgage Records as follows:
<TABLE>
<CAPTION>
Received Mortgage Records
State and County for Record Book Page
- ------------------ ---------- ---- ----
<S> <C> <C> <C>
DELAWARE:
New Castle 06/29/93 2907 246
Kent 06/29/93 0046 308
Sussex 06/30/93 1781 094
PENNSYLVANIA:
Armstrong 06/28/93 1305 243
Adams 06/28/93 0745 129
Bedford 06/28/93 0524 186
Blair 06/29/93 1075 497
Cambria 06/29/93 0835 506
Cumberland 06/28/93 1145 830
Delaware 06/29/93 1112 795
Franklin 06/28/93 0889 361
Huntingdon 06/28/93 0328 440
Indiana 06/28/93 0470 757
Lancaster 06/28/93 3947 002
Westmoreland 06/28/93 3154 233
York 06/28/93 0662 230
NEW JERSEY:
Burlington 09/02/93 5180 220
Camden 06/29/93 4007 168
Gloucester 06/29/93 2403 044
Mercer 06/29/93 2798 263
Middlesex 06/29/93 4476 015
Salem 06/29/93 0719 162
Somerset 06/29/93 2275 675
Warren 06/29/93 1411 321
MARYLAND:
Caroline 06/29/93 0253 232
Cecil 06/29/93 0441 040
Dorchester 06/28/93 0289 839
Kent 06/30/93 0042 359
Queen Anne's 06/30/93 0431 778
Somerset 06/29/93 0412 704
Talbot 06/30/93 0754 247
Wicomico 06/29/93 1344 488
Worcester 06/29/93 1946 536
VIRGINIA:
Accomack 06/30/93 0644 533
Northampton 06/30/93 0262 008
</TABLE>
-16-
<PAGE>
CONFORMED COPY
This Instrument Prepared By
/s/ Donna J. Quisenberry
-------------------------------
Donna J. Quisenberry
Delmarva Power & Light Company
800 King Street
Wilmington, Delaware 19801
================================================================================
DELMARVA POWER & LIGHT COMPANY
TO
CHEMICAL BANK,
Trustee.
EIGHTY-SIXTH SUPPLEMENTAL
INDENTURE
================================================================================
Dated as of October 1, 1993
(but executed on the dates shown on the execution page)
<PAGE>
DELMARVA POWER & LIGHT COMPANY
Eighty-Sixth Supplemental Indenture
Dated as of October 1, 1993
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
<S> <C>
Parties................................................... 1
Recitals.................................................. 1
Form of Bond of the 1993C Series.......................... 2
Recitals.................................................. 7
Granting Clauses.......................................... 8
Granting Clauses.......................................... 9
Appurtenances............................................. 16
After Acquired Property Clause............................ 16
Properties Excepted from Lien and Operation of Indenture.. 16
Habendum.................................................. 17
Subject Clause............................................ 17
Grant in Trust............................................ 17
<CAPTION>
ARTICLE I
DESIGNATIONS, PROVISIONS, DENOMINATIONS AND ISSUANCE OF
BONDS OF THE 1993C GAS FACILITIES REFUNDING SERIES
<S> <C>
Sec. 1. Designations and Provisions of the Bonds......... 18
Sec. 2. Bonds Issued to State Trustee as Collateral...... 18
Sec. 3. Payment of the Bonds............................. 18
Sec. 4. Redemption of the Bonds Prior to Maturity........ 19
Sec. 5. Waiver of Notice of Redemption................... 20
</TABLE>
- -----------------------
* The Table of Contents and recording data are not part of the Eighty-Sixth
Supplemental Indenture as executed.
<PAGE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Sec. 6. Denominations and Exchange of the Bonds.......... 20
Sec. 7. Limitation of Principal Amount of Bonds.......... 20
Sec. 8. Issuance of Bonds................................ 20
<CAPTION>
ARTICLE II
MISCELLANEOUS
<S> <C>
Sec. 1. Indenture Affirmed as Supplemented............... 20
Sec. 2. Execution of Counterparts........................ 21
Sec. 3. Recitals are by Company.......................... 21
Sec. 4. Names and Addresses of Debtor and Secured Party.. 21
Sec. 5. Reliance on Certificates of State Trustee........ 21
Sec. 6. Receipt by the Company........................... 21
Signatures and Seals...................................... 22
Acknowledgments........................................... 23
Certificate of Residence.................................. 25
Recordation Data.......................................... 26
</TABLE>
<PAGE>
This EIGHTY-SIXTH SUPPLEMENTAL INDENTURE, dated as of the 1st day of
October, 1993 (but executed on the dates hereinafter shown), is made and entered
into by and between DELMARVA POWER & LIGHT COMPANY, a corporation of the State
of Delaware and the Commonwealth of Virginia (hereinafter called the "Company"),
party of the first part, and CHEMICAL BANK, a corporation of the State of New
York (hereinafter called the "Trustee"), party of the second part;
WITNESSETH:
WHEREAS, the Company heretofore executed and delivered its Indenture
of Mortgage and Deed of Trust (the "Original Indenture"), dated as of October 1,
1943, to the New York Trust Company, a corporation of the State of New York, as
Trustee, to which Chemical Bank is successor Trustee, to secure the First
Mortgage Bonds of the Company, unlimited in aggregate principal amount and
issuable in series, from time to time, in the manner and subject to the
conditions set forth in the Original Indenture, and by said Original Indenture
granted and conveyed unto the Trustee, upon the trusts, uses and purposes
specifically therein set forth, certain real estate, franchises and other
property therein described, including property acquired after the date thereof,
except as therein otherwise provided; and
WHEREAS, the Original Indenture has been supplemented by eighty-five
supplemental indentures specifically subjecting to the lien of the Original
Indenture as though included in the granting clause thereof certain property in
said supplemental indentures specifically described and amending and modifying
the provisions of the Original Indenture (the Original Indenture, as amended,
modified and supplemented by all of the indentures supplemental thereto,
including this Supplemental Indenture, is hereinafter called the "Indenture");
and
WHEREAS, the Original Indenture provides for the issuance of bonds
thereunder in one or more series, the form of each series of bonds and of the
coupons to be attached to any coupon bonds to be substantially in the forms set
forth therein with such omissions, variations and insertions as are authorized
or permitted by the Original Indenture and determined and specified by the Board
of Directors of the Company; and
WHEREAS, the Company is refinancing certain indebtedness incurred in
connection with bonds previously issued by The Delaware Economic Development
Authority (the "Authority"), to finance certain improvements to the Company's
gas facilities in its utility service area, said refinancing to be accomplished
through the issuance by the Authority of a separate issue of its revenue bonds
designated Variable Rate Demand Gas Facilities Refunding Revenue Bonds (Delmarva
Power & Light Company Project) Series 1993C (the "State Revenue Bonds") pursuant
to the terms of a Financing Agreement dated as of
<PAGE>
October 1, 1993, between the Authority and the Company (the "Financing
Agreement"); and
WHEREAS, under the terms of a Pledge Agreement between the Company and
The Bank of New York, as trustee for the State Revenue Bonds, the Company is
required to deliver its First Mortgage Bonds to provide for and secure the
payment of the State Revenue Bonds; and
WHEREAS, the Company, by appropriate corporate action in conformity
with the terms of the Indenture, has duly determined to create a series of bonds
to be designated as First Mortgage Bonds, Gas Facilities Refunding Series 1993C
due October 1, 2028 (hereinafter sometimes referred to as the "1993C Gas
Facilities Refunding Bonds" or the "bonds of the 1993C Gas Facilities Refunding
Series"), which bonds of the 1993C Gas Facilities Refunding Series are to be
substantially in the following form with such additional identification as may
be advisable to distinguish each separate series:
[FORM OF FACE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
Gas Facilities Refunding Series 1993C
Due October 1, 2028
Number:
Maturity Date: October 1, 2028
Interest Rate: 0%
Registered Owner:
Principal Amount:
Dollars
DELMARVA POWER & LIGHT COMPANY, a corporation of the State of Delaware
and the Commonwealth of Virginia (hereinafter called the Company), for value
received, hereby promises to pay to the Owner identified above, or registered
assigns as hereinafter provided, on the Maturity Date identified above, the
Principal Amount identified above in lawful money of the United States of
America at the corporate trust office of the State Trustee (as hereinafter
defined).
The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
- 2 -
<PAGE>
This bond shall not become valid or obligatory for any purpose until
CHEMICAL BANK, the Trustee under the Mortgage, or its successor thereunder,
shall have signed the certificate of authentication endorsed hereon.
IN WITNESS WHEREOF, DELMARVA POWER & LIGHT COMPANY has caused this
bond to be signed in its name with the manual or facsimile signature of its
President or one of its Vice Presidents and its corporate seal, or a facsimile
thereof, to be affixed hereto and attested by the manual or facsimile signature
of its Secretary or one of its Assistant Secretaries.
Dated:
Seal:
Attest: DELMARVA POWER & LIGHT COMPANY
By
- -------------------------------- --------------------------------
Secretary President
Trustee's Authentication Certificate
This bond is one of the bonds of the series herein
designated, provided for in the within-mentioned mortgage.
Chemical Bank, Trustee
By
---------------------------------
Authorized Officer
- 3 -
<PAGE>
[FORM OF REVERSE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
Gas Facilities Refunding Series 1993C
Due October 1, 2028
This bond is one of an issue of bonds of the Company (herein
referred to as the "bonds"), not limited in principal amount, issuable in
series, which different series may mature at different times, may bear
interest at different rates, and may otherwise vary as in the Mortgage
hereinafter mentioned provided, and is one of a series known as First Mortgage
Bonds, Gas Facilities Refunding Series 1993C due October 1, 2028 (herein
sometimes referred to as "bonds of the 1993C Gas Facilities Refunding
Series"), all bonds of all series issued and to be issued under and equally
and ratably secured (except insofar as any sinking fund, established in
accordance with the provisions of the Mortgage hereinafter mentioned, may
afford additional security for the bonds of any particular series) by the
Mortgage and Deed of Trust, dated as of October 1, 1943, executed by the
Company to THE NEW YORK TRUST COMPANY, as Trustee, to which CHEMICAL BANK, a
corporation of the State of New York, is successor Trustee (herein, together
with any indentures supplemental thereto, including an Eighty-Sixth
Supplemental Indenture, dated as of October 1, 1993, called the "Mortgage"),
to which reference is made for a description of the property mortgaged and
pledged, the nature and extent of the security, the rights and limitations of
rights of the holders of the bonds and of the Company in respect thereof, the
rights, duties and immunities of the Trustee, and the terms and conditions
upon which the bonds are, and are to be, issued and secured. The Mortgage
contains provisions permitting the Company and the Trustee, with the consent
of the holders of not less than seventy-five percent (75%) in principal amount
of all the bonds at the time outstanding (determined as provided in the
Mortgage), evidenced as in the Mortgage provided, or in case the rights under
the Mortgage of the holders of the bonds of one or more, but less than all, of
the series of bonds outstanding shall be affected, then with the consent of
the holders of not less than seventy-five percent (75%) in principal amount of
the bonds at the time outstanding of the one or more series, taken in the
aggregate, affected (determined as provided in the Mortgage), evidenced as in
the Mortgage provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Mortgage or modifying in any manner the rights of the holders of the
bonds and coupons; provided, however, that no such supplemental indenture
shall (i) extend the fixed maturity of any bonds, or reduce the rate or extend
the time of payment of interest thereon, or reduce the principal amount
thereof, without the consent of the holder of each bond so affected, or (ii)
reduce the aforesaid percentage
- 4 -
<PAGE>
of bonds, the holders of which are required to consent to any such supplemental
indenture without the consent of the holders of all bonds then outstanding. Any
such consent by the registered holder of this bond (unless effectively revoked
as provided in the Mortgage) shall be conclusive and binding upon such holder
and upon all future holders of this bond, irrespective of whether or not any
notation of such consent is made upon this bond. No reference herein to the
Mortgage and no provision of this bond or of the Mortgage shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of this bond at the time and place and in the coin or currency herein
prescribed.
The fully registered bonds of the 1993C Gas Facilities Refunding
Series are issuable in denominations of $5,000 and any integral multiple
thereof. At the office or agency to be maintained by the Company in the Borough
of Manhattan, The City of New York and in the manner and subject to the
limitations provided in the Mortgage, fully registered bonds of such series may
be exchanged for a like aggregate principal amount of fully registered bonds of
such series of other authorized denominations, and in each case without payment
of any service or other similar charge as provided in the Eighty-Sixth
Supplemental Indenture.
Concurrently with the issuance of the bonds of the 1993C Gas
Facilities Refunding Series, The Delaware Economic Development Authority (the
"Authority") is issuing its Variable Rate Demand Gas Facilities Refunding
Revenue Bonds (Delmarva Power & Light Company Project) Series 1993C (the "State
Revenue Bonds") under and pursuant to an indenture (the "State Indenture")
between the Authority and The Bank of New York, as trustee (the "State Trustee",
which term shall include its successors in trust, if any, under the State
Indenture). The bonds of the 1993C Gas Facilities Refunding Series are issued
to the State Trustee under a Pledge Agreement, between the Company and the State
Trustee, to provide for and secure the payment of the State Revenue Bonds, the
proceeds of which will be loaned to the Company to refinance certain facilities
under a Financing Agreement between the Authority and the Company.
Whenever payment or provision therefor has been made in respect of the
principal of and premium, if any, and interest on, all or any portion of the
State Revenue Bonds in accordance with the State Indenture, the corresponding
amount of principal of the bonds of the 1993C Gas Facilities Refunding Series
issued as security therefor, plus an amount equal to ten months' interest
thereon computed on the basis of a 360-day year of twelve 30-day months at 15
percent per annum, shall be deemed to have been paid.
If and whenever the Trustee is notified pursuant to Section 802 of the
State Indenture (i) that an event of default, as defined in Section 801 of the
State Indenture, has occurred and is continuing, (ii) that the principal of all
State Revenue Bonds then outstanding and the interest accrued
- 5 -
<PAGE>
thereon has been declared due and payable, and (iii) that redemption of all of
the bonds of the 1993C Gas Facilities Refunding Series issued as security
therefor is demanded, then, as soon as practicable and in any event within five
(5) days of having received notice of such default and of such declaration and
such demand, the Trustee shall so notify the Company and, upon receipt of
sufficient funds, shall redeem all of such bonds of the 1993C Gas Facilities
Refunding Series then outstanding by payment of the principal amount thereof;
provided, however, that such requirement of redemption shall be deemed to be
waived if, prior to the date fixed for such redemption, the State Trustee has
notified the Trustee in writing that such event of default under such State
Indenture is waived or cured and the accelerated maturity of such State Revenue
Bonds ceases to be effective. The Company covenants that, upon receipt of
notice of such redemption from the Trustee, it shall immediately deposit with
the Trustee sufficient funds to enable the Trustee to redeem all of the bonds of
the 1993C Gas Facilities Refunding Series. The bonds of the 1993C Gas
Facilities Refunding Series also shall be subject to redemption in whole or in
part as provided in the Mortgage.
The holder of this bond, by the acceptance hereof, waives any right to
notice of redemption of this bond, in whole or in part, which it may have under
any provisions of the Mortgage.
The Mortgage provides that if the Company shall deposit with the
Trustee in trust for the purpose funds sufficient to pay the principal of all of
the bonds of any series, or such of the bonds of any series as have been or are
to be called for redemption, and premium, if any, thereon, and all interest
payable on such bonds to the date on which they become due and payable at
maturity or upon redemption or otherwise, and shall comply with the other
provisions of the Mortgage in respect thereof, then from the date of such
deposit such bonds shall no longer be entitled to any lien or benefit under the
Mortgage.
The principal hereof may be declared or may become due prior to the
express date of the maturity hereof on the conditions, in the manner and at the
time set forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.
This bond is transferable as prescribed in the Mortgage by the
registered holder hereof in person, or by his or her duly authorized attorney,
at the office or agency of the Company in said Borough of Manhattan, upon
surrender and cancellation of this bond, and thereupon a new fully registered
bond or bonds of authorized denominations of the same series and for the same
aggregate principal amount will be issued to the transferee in exchange herefore
as provided in the Mortgage, and in each case without payment of any service or
other similar charge as provided in the Eighty-Sixth
- 6 -
<PAGE>
Supplemental Indenture. The Company and the Trustee, any paying agent and any
bond registrar may deem and treat the person in whose name this bond is
registered as the absolute owner hereof, whether or not this bond shall be
overdue, for the purpose of receiving payment and for all other purposes and
neither the Company nor the Trustee nor any paying agent nor any bond registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of this
bond, or for any claim based hereon, or otherwise in respect hereof, or based
on, or in respect of, the Mortgage, against any incorporator or any past,
present or future subscriber to the capital stock, stockholder, officer or
director, as such, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, under any rule of
law, statute or constitution or by the enforcement of any assessment or
otherwise, all such liability of incorporators, subscribers, stockholders,
officers and directors, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Mortgage[END OF BOND FORM]; and
WHEREAS, all acts and things prescribed by law and by the Restated
Certificate and Articles of Incorporation, as amended, and By-Laws, as amended,
of the Company necessary to make the bonds of the 1993C Gas Facilities Refunding
Series, when executed by the Company and authenticated by the Trustee, as in the
Indenture provided, valid, binding and legal obligations of the Company,
entitled in all respects to the security of the Indenture, have been performed;
and
WHEREAS, provision is made in Sections 5.11 and 17.01 of the Original
Indenture for such further instruments and indentures, supplemental to the
Original Indenture, as may be necessary or proper to carry out more effectually
the purposes of the Original Indenture, and to subject to the lien of the
Original Indenture any property acquired after the date of the Original
Indenture and intended to be covered thereby, with the same force and effect as
though included in the granting clause thereof, and to add such further
covenants, restrictions or conditions for the protection of the mortgaged and
pledged property and the holders of the bonds as the Board of Directors of the
Company and the Trustee shall consider to be for the protection of the holders
of the bonds, and to set forth the terms and provisions of any series of bonds
to be issued under the Original Indenture and the form of the bonds and coupons
of such series; and the Company since the date of the Original Indenture has
acquired additional property not heretofore specifically subjected to the lien
of the Original Indenture; and it is desired to add certain further covenants,
restrictions and conditions for the protection of the mortgaged and pledged
property and the holders of the bonds, as provided in this Eighty-Sixth
Supplemental Indenture, which the Board of Directors of the Company and the
Trustee consider to be for the
- 7 -
<PAGE>
protection of the holders of the bonds; and the Company desires to issue the
bonds of the 1993C Gas Facilities Refunding Series; and the Company therefore
deems it advisable to enter into this Eighty-Sixth Supplemental Indenture in the
form and terms hereof; and
WHEREAS, the execution and delivery of this Eighty-Sixth Supplemental
Indenture has been duly authorized by the Board of Directors of the Company at a
meeting duly called and held according to law, and all conditions and
requirements necessary to make this Eighty-Sixth Supplemental Indenture a valid,
binding and legal instrument in accordance with its terms, for the purposes
herein expressed, and the execution and delivery hereof, in the form and terms
hereof, have been in all respects duly authorized;
NOW, THEREFORE, in order further to secure the payment of the
principal and interest and premium, if any, of all bonds issued and to be issued
under the Original Indenture and any indentures supplemental thereto, including
this Eighty-Sixth Supplemental Indenture, according to their tenor, purport and
effect and the performance and observance of all the covenants and conditions in
the bonds and the Original Indenture and any indentures supplemental thereto,
including this Eighty-Sixth Supplemental Indenture, contained and to subject to
the lien of the Original Indenture, as so supplemented, with the same force and
effect as though included in the granting clause thereof, additional property
now owned by the Company, and for and in consideration of the premises and of
the sum of One Dollar ($1.00), lawful money of the United States of America, to
the Company duly paid by the Trustee at or before the ensealing and delivery
hereof, and other valuable consideration, the receipt whereof is hereby
acknowledged, and intending to be legally bound hereby, the Company has executed
and delivered this Eighty-Sixth Supplemental Indenture, and has granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over and confirmed, and granted a security interest therein, and by these
presents does grant, bargain, sell release, convey, assign, transfer, mortgage,
pledge, set over and confirm, and grant a security interest therein, subject to
the provisions of the Indenture, unto CHEMICAL BANK, as trustee, and to its
successors in trust and to its and their assigns forever, all the following
described properties of the Company, and does hereby confirm that the Company
will not cause or consent to a partition, either voluntary or through legal
proceedings, of property, whether herein described or heretofore or hereafter
acquired, in which its ownership shall be as tenants in common, except as
permitted by, and in conformity with, the provision of the Indenture and
particularly of Article IX of the Original Indenture:
All property, real, personal and mixed, tangible and intangible, owned
by the Company on the date of the execution hereof or which may be hereafter
acquired by it (except such
- 8 -
<PAGE>
property as in the Original Indenture expressly is excepted from the lien and
operation of the Indenture).
The property covered by this Eighty-Sixth Supplemental Indenture shall
include particularly, among other property, without prejudice to the generality
of the language hereinbefore or hereinafter contained, the following described
property:
All the electric generating stations, station sites, stations,
electric reserve generating stations, substations, substation sites, gas
manufacturing plants, ice and cold storage plants, steam plants, hot water
plants, hydro-electric stations, hydro-electric station sites, electric
transmission lines, electric distribution systems, gas transportation mains, gas
distribution systems, steam distribution systems, hot water distribution
systems, regulator stations, regulator station sites, office buildings,
storeroom buildings, warehouse buildings, boiler houses, plants, plant sites,
service plants, coal storage yards, and poleyards now or hereafter owned by the
Company, including all electric works, power houses, generators, turbines,
boilers, engines, furnaces, retorts, dynamos, buildings, structures,
transformers, meters, towers, poles, tower lines, cables, pole lines, tanks,
storage holders, regulators, gas works, pipes, pipe lines, mains, pipe fittings,
valves, drips, connections, tunnels, conduits, gates, motors, wires, switch
racks, switches, brackets, insulators, and all equipment, improvements,
machinery, appliances, devices, appurtenances, supplies and miscellaneous
property for generating, producing, transforming, converting, storing and
distributing electric energy, gas, ice, steam and hot water, and furnishing cold
storage, now or hereafter owned by the Company, together with all furniture and
fixtures located in the aforesaid buildings, and all land now or hereafter owned
by the Company on which the same or any part thereof are situated, and all of
the real estate, leases, leaseholds (except the last day of the term of each
lease and leasehold), and lands now or hereafter owned by the Company, including
land located on or adjacent to any river, stream or other water, together with
all flowage rights, flooding rights, water rights, riparian rights, dams and dam
sites and rights, flumes, canals, races, raceways, head works and diversion
works, and all of the municipal and other franchises, licenses, consents,
ordinances, permits, privileges, rights, servitudes, easements and rights-of-
way and other rights in or relating to real estate or the occupancy of the same
now or hereafter owned by the Company, and all of the other property, real,
personal or mixed, now or hereafter owned by the Company, forming a part of any
of the foregoing property or used or enjoyed or capable of being used or enjoyed
in connection therewith or in anywise appertaining thereto, whether developed or
undeveloped, or partially developed, or whether now equipped and operating or
not and wherever situated, and all of the Company's presently held or hereafter
acquired right, title and interest in and to the land on which the same or any
part thereof are situated or adjacent thereto, and all rights for or relating to
the construction, maintenance
- 9 -
<PAGE>
or operation of any of the foregoing property through, over, under or upon any
public streets or highways or other lands, public or private, and (except as
hereinafter expressly excepted) all the right, title and interest of the Company
presently held or hereafter acquired in and to all other property of any kind or
nature appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described, and, as to all of the foregoing,
whether now owned by the Company or hereafter acquired by the Company.
Without limiting the generality of the foregoing, the parcels of land
situate as hereinafter set forth and owned by the Company, and whether used or
not used in connection with the Company's operations, which real estate was
conveyed to the Company as hereinafter set forth by the following conveyances to
which reference is made for a more particular description, to wit:
No. 1 - All that certain piece, parcel or tract of land situate in
the City of Salisbury, Wicomico County, State of Maryland, being more
particularly described as "Parcel 'D'--To Be Closed" on a plat entitled
"Naylor Mill Road--W. Zion Rd. Widening--Relocation" dated August 31, 1991,
and recorded among the Land Records of Wicomico County, Maryland in Plat
Cabinet M.S.B. No. 8 Folio 39/156 and was conveyed to Delmarva Power & Light
Company by Deed of the City of Salisbury, dated May 3, 1993 and recorded June
3, 1993 in the Land Records of Wicomico County, Maryland, in Deed Book 1340,
page 294.
The above properties and rights are designated "M1141" for the
purposes of the Original Indenture and all indentures supplemental thereto.
Also all other lands and buildings and improvements thereon erected hereafter
acquired.
Also without limiting the generality of the foregoing, the easements
and rights of way and other rights in or relating to real estate or the
occupancy of the same owned by the Company, and whether used or not used in
connection with the Company's operations, which were conveyed to the Company and
recorded in the following Real Property Deed Records to which reference is made
for a more particular description, to wit:
<TABLE>
<CAPTION>
State and County
- ----------------
DELAWARE
Kent
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
------------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/27/93 MTS 053 018 5/27/93 MTS 053 022
05/27/93 MTS 053 020
</TABLE>
- 10 -
<PAGE>
<TABLE>
<CAPTION>
State and County
- ----------------
DELAWARE
New Castle
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
01/25/93 1463 348 05/28/93 1530 043
01/25/93 1464 008 05/28/93 1530 045
01/25/93 1464 010 06/08/93 1535 231
03/29/93 1495 101 07/07/93 1552 016
03/30/93 1496 030 07/07/93 1552 018
03/30/93 1496 032 07/07/93 1552 020
03/30/93 1496 034 07/07/93 1552 022
03/30/93 1496 036 07/07/93 1552 024
03/30/93 1496 038 07/07/93 1552 026
03/30/93 1496 041 07/07/93 1552 028
03/30/93 1496 044 07/07/93 1552 030
03/30/93 1496 047 07/07/93 1552 032
03/30/93 1496 051 07/07/93 1552 035
04/28/93 1511 099 07/29/93 1563 191
04/28/93 1511 103 07/29/93 1563 193
05/13/93 1520 169 07/29/93 1563 195
05/19/93 1523 344 07/29/93 1563 197
05/19/93 1523 347 07/29/93 1563 199
05/19/93 1523 349 07/29/93 1563 201
05/19/93 1524 001 07/29/93 1563 203
05/19/93 1524 032 07/29/93 1563 205
05/19/93 1524 033 07/29/93 1563 207
05/19/93 1524 035 07/29/93 1563 210
05/19/93 1524 037 07/29/93 1563 212
05/28/93 1530 032 07/29/93 1563 214
05/28/93 1530 036 07/29/93 1563 216
05/28/93 1530 039 07/29/93 1563 218
05/28/93 1530 041 07/29/93 1563 220
07/29/93 1563 226
07/29/93 1563 253
</TABLE>
- 11 -
<PAGE>
<TABLE>
<CAPTION>
State and County
----------------
DELAWARE
Sussex
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/05/93 DDG 1910 148 06/02/93 DDG 1915 056
05/05/93 DDG 1910 150 06/02/93 DDG 1915 058
05/05/93 DDG 1910 152 06/02/93 DDG 1915 060
05/05/93 DDG 1910 154 06/02/93 DDG 1915 062
06/02/93 DDG 1915 034 06/02/93 DDG 1915 064
06/02/93 DDG 1915 036 06/11/93 DDG 1916 230
06/02/93 DDG 1915 038 07/09/93 DDG 1922 047
06/02/93 DDG 1915 040 07/09/93 DDG 1922 049
06/02/93 DDG 1915 042 07/09/93 DDG 1922 051
06/02/93 DDG 1915 044 07/09/93 DDG 1922 053
06/02/93 DDG 1915 046 07/09/93 DDG 1922 056
06/02/93 DDG 1915 048 07/09/93 DDG 1922 058
06/02/93 DDG 1915 050 07/09/93 DDG 1922 060
06/02/93 DDG 1915 052 07/09/93 DDG 1922 062
06/02/93 DDG 1915 054 07/29/93 DDG 1925 310
07/29/93 DDG 1925 312
</TABLE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
Caroline
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
03/02/93 FDM 252 016 06/28/93 FDM 253 217
05/03/93 FDM 252 614 06/28/93 FDM 253 219
05/06/93 FDM 252 658 07/29/93 FDM 254 203
05/27/93 FDM 252 843 07/29/93 FDM 254 205
05/27/93 FDM 252 845 07/29/93 FDM 254 207
06/28/93 FDM 253 215
</TABLE>
- 12 -
<PAGE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
Kent
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/03/93 MLM 038 560 06/28/93 MLM 042 196
05/03/93 MLM 038 562 06/28/93 MLM 042 198
05/03/93 MLM 038 564 06/28/93 MLM 042 200
05/03/93 MLM 038 566 06/28/93 MLM 042 202
05/03/93 MLM 038 568 06/28/93 MLM 042 204
05/03/93 MLM 038 570 06/28/93 MLM 042 206
05/03/93 MLM 038 572 06/28/93 MLM 042 208
05/03/93 MLM 038 574 06/28/93 MLM 042 210
05/27/93 MLM 040 162 06/28/93 MLM 042 212
05/27/93 MLM 040 164 06/28/93 MLM 042 214
05/27/93 MLM 040 166 06/28/93 MLM 042 216
05/27/93 MLM 040 168 06/28/93 MLM 042 218
05/27/93 MLM 040 170 06/28/93 MLM 042 220
05/27/93 MLM 040 172 06/28/93 MLM 042 222
06/17/93 MLM 041 419 06/28/93 MLM 042 224
06/28/93 MLM 042 188 07/29/93 MLM 043 543
06/28/93 MLM 042 190 07/29/93 MLM 043 545
06/28/93 MLM 042 192 07/29/93 MLM 043 547
06/28/93 MLM 042 194 07/29/93 MLM 043 549
</TABLE>
- 13 -
<PAGE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
Queen Annes
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/03/93 MWM 425 847 07/29/93 MWM 434 359
05/03/93 MWM 425 850 07/29/93 MWM 434 361
05/03/93 MWM 425 852 07/29/93 MWM 434 363
05/03/93 MWM 425 854 07/29/93 MWM 434 365
05/03/93 MWM 425 856 07/29/93 MWM 434 367
05/03/93 MWM 425 858 07/29/93 MWM 434 369
05/03/93 MWM 425 860 07/29/93 MWM 434 371
05/03/93 MWM 425 862 07/29/93 MWM 434 373
06/28/93 MWM 431 123 07/29/93 MWM 434 375
06/28/93 MWM 431 126 07/29/93 MWM 434 377
06/28/93 MWM 431 128 07/29/93 MWM 434 379
06/28/93 MWM 431 130 07/29/93 MWM 434 381
07/29/93 MWM 434 328 07/29/93 MWM 434 383
07/29/93 MWM 434 330 07/29/93 MWM 434 385
07/29/93 MWM 434 332 07/29/93 MWM 434 387
07/29/93 MWM 434 335 07/29/93 MWM 434 389
07/29/93 MWM 434 337 07/29/93 MWM 434 391
07/29/93 MWM 434 339 07/29/93 MWM 434 393
07/29/93 MWM 434 341 07/29/93 MWM 434 395
07/29/93 MWM 434 343 07/29/93 MWM 434 397
07/29/93 MWM 434 345 07/29/93 MWM 434 399
07/29/93 MWM 434 347 07/29/93 MWM 434 401
07/29/93 MWM 434 349 07/29/93 MWM 434 403
07/29/93 MWM 434 351 07/29/93 MWM 434 405
07/29/93 MWM 434 353 07/29/93 MWM 434 407
07/29/93 MWM 434 355 07/29/93 MWM 434 409
07/29/93 MWM 434 357 07/29/93 MWM 434 411
07/29/93 MWM 434 413
</TABLE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
---------
Somerset
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/28/93 ITP 411 939 06/28/93 ITP 412 659
05/28/93 ITP 411 941 07/30/93 ITP 413 322
05/28/93 ITP 411 943 07/30/93 ITP 413 324
06/28/93 ITP 412 655 07/30/93 ITP 413 326
06/28/93 ITP 412 657
</TABLE>
- 14 -
<PAGE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
--------
Talbot
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/05/93 MAS 750 148 07/29/93 MAS 756 111
05/05/93 MAS 750 150 07/29/93 MAS 756 113
05/05/93 MAS 750 152 07/29/93 MAS 756 115
06/28/93 MAS 753 977 07/29/93 MAS 756 117
07/29/93 MAS 756 109 08/18/93 MAS 757 450
</TABLE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
Wicomico
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
03/22/93 MSB 1330 616 05/12/93 MSB 1337 332
03/22/93 MSB 1330 618 05/12/93 MSB 1337 334
03/22/93 MSB 1330 620 05/28/93 MSB 1339 584
03/22/93 MSB 1330 622 05/28/93 MSB 1339 586
03/22/93 MSB 1330 625 05/28/93 MSB 1339 588
03/22/93 MSB 1330 627 05/28/93 MSB 1339 590
05/12/93 MSB 1337 326 05/28/93 MSB 1339 592
05/12/93 MSB 1337 328 05/28/93 MSB 1339 600
05/12/93 MSB 1337 330 05/28/93 MSB 1339 602
</TABLE>
<TABLE>
<CAPTION>
State and County
----------------
MARYLAND
Worchester
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/12/93 RHO 1930 118 06/07/93 RHO 1938 408
05/12/93 RHO 1930 122 06/07/93 RHO 1938 411
05/12/93 RHO 1930 126 07/30/93 RHO 1956 560
05/12/93 RHO 1930 129 07/30/93 RHO 1956 562
</TABLE>
- 15 -
<PAGE>
<TABLE>
<CAPTION>
State and County
----------------
VIRGINIA
Accomack
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/03/93 SHC 0641 215 07/30/93 SHC 0646 692
05/03/93 SHC 0641 218 07/30/93 SHC 0646 695
05/03/93 SHC 0641 221 07/30/93 SHC 0646 698
05/28/93 SHC 0642 493 07/30/93 SHC 0646 701
05/28/93 SHC 0642 496 07/30/93 SHC 0646 704
06/28/93 SHC 0644 414 07/30/93 SHC 0646 707
06/28/93 SHC 0644 417
</TABLE>
<TABLE>
<CAPTION>
VIRGINIA
Northampton
Deed Records Deed Records
Received ------------ Received ------------
for Record Book Page for Record Book Page
---------- ---- ---- ---------- ---- ----
<S> <C> <C> <C> <C> <C>
05/04/93 KFA 260 855 05/04/93 KFA 260 859
05/04/93 KFA 260 857
</TABLE>
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid property
or any part thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 9.01 of the Original
Indenture) the tolls, rents, revenues, issues, earnings, income, product and
profits thereof, and all the estate, right, title and interest and claim
whatsoever, at law as well as in equity, which the Company now has or may
hereafter acquire in and to the aforesaid property and franchises and every
part and parcel thereof.
IT IS HEREBY AGREED by the Company that all property, rights and
franchises acquired by the Company after the date hereof (except any in the
Original Indenture expressly excepted) shall (subject to the provisions of
Section 9.01 of the Original Indenture and to the extent permitted by law) be as
fully embraced within the lien of the Original Indenture and any indentures
supplemental thereto, including this Eighty-Sixth Supplemental Indenture, as if
such property, rights and franchises were at the time of the execution of the
Original Indenture owned by the Company and/or specifically described therein
and conveyed thereby and as if such property, rights and franchises were now
owned by the Company and/or specifically described herein and conveyed hereby;
Provided that, in addition to the reservations and exceptions herein
elsewhere contained, the following are not and are not intended to be granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted from the lien
and operation of the Original Indenture and any indentures
- 16 -
<PAGE>
supplemental thereto, including this Eighty-Sixth Supplemental Indenture, viz.:
(1) cash and shares of stock and certificates or evidence of interest therein
and obligations (including bonds, notes and other securities) not, in or
pursuant to the Original Indenture or any indenture supplemental thereto,
including this Eighty-Sixth Supplemental Indenture, specifically pledged or
deposited or delivered or therein covenanted so to be; (2) any goods, wares,
merchandise, equipment, materials or supplies held or acquired for the purpose
of sale or resale in the usual course of business or for consumption in the
operation of any properties of the Company; and (3) all judgments, contracts,
accounts and choses in action, the proceeds of which the Company is not
obligated as in the Original Indenture provided to deposit with the Trustee
hereunder; provided, however, that the property and rights expressly excepted
from the lien and operation of the Original Indenture and any indentures
supplemental thereto, including this Eighty-Sixth Supplemental Indenture, in the
above subdivisions (2) and (3) shall (to the extent permitted by law) cease to
be so excepted, in the event that the Trustee or a receiver or trustee shall
take possession of the mortgaged and pledged property in the manner provided in
Article X of the Original Indenture, by reason of the occurrence of a completed
default, as defined in Article X of the Original Indenture.
TO HAVE AND TO HOLD all such properties, real, personal, or mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustee and its successors in the trusts created in the Indenture
and its and their assigns foreover;
SUBJECT, HOWEVER, to any reservations, exceptions, conditions,
limitations and restrictions contained in the several deeds, servitudes,
franchises and contracts or other instruments through which the Company
acquired, and/or claims title to and/or enjoys the use of the aforesaid
properties; and subject also to encumbrances of the character defined in the
Original Indenture as "excepted encumbrances" in so far as the same may attach
to any of the property embraced herein;
IN TRUST NEVERTHELESS upon the terms, trusts, uses and purposes
specifically set forth in the Indenture; this Eighty-Sixth Supplemental
Indenture being made for the purpose, inter alia, of subjecting the real estate
----- ----
and premises and other property above described to the lien and operation of the
Indenture, so that the same shall be held specifically by the Trustee under and
subject to the terms and conditions of the Indenture in identically the same
manner and for the same trusts, uses and purposes, as though the said real
estate and premises and other property had been specifically described in the
Original Indenture.
AND IT IS HEREBY FURTHER COVENANTED AND AGREED and the Company and the
Trustee have mutually agreed, in consideration of the premises, as follows:
- 17 -
<PAGE>
ARTICLE I
DESIGNATION, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE 1993C GAS FACILITIES REFUNDING SERIES
SECTION 1. A series of bonds of the Company issuable and secured by
the Indenture is hereby created and authorized, which series shall be designated
"First Mortgage Bonds, Gas Facilities Refunding Series 1993C due October 1,
2028". All bonds of the 1993C Gas Facilities Refunding Series shall be fully
registered bonds.
Each bond of the 1993C Gas Facilities Refunding Series shall mature,
subject to prior redemption, upon the terms and conditions hereinafter set
forth, on October 1, 2028.
The principal of the bonds of the 1993C Gas Facilities Refunding
Series shall be payable in any coin or currency of the United States of America
which, at the respective dates of payment thereof, is legal tender for the
payment of public and private debts, and such principal shall be payable at the
corporate trust office of the State Trustee (as hereinafter defined).
SECTION 2. The bonds of the 1993C Gas Facilities Refunding Series
shall be registered in the name of the State Trustee, as trustee under an
Indenture of Trust, dated as of October 1, 1993, (the "State Indenture") between
the Authority and The Bank of New York (including its successors in trust, if
any, under the State Indenture, the "State Trustee") relating to the State
Revenue Bonds. The bonds of the 1993C Gas Facilities Refunding Series are
issued to provide for, and secure, the payment of the State Revenue Bonds, the
proceeds of which will be used to refinance certain gas facilities located in
the Company's gas distribution system in New Castle County, Delaware, under the
Financing Agreement. The principal of, and premium, if any, and interest on,
the State Revenue Bonds are payable from payments made by the Company of
principal of, and premium on, if any, the bonds of the 1993C Gas Facilities
Refunding Series.
SECTION 3. Whenever payment or provision therefor has been made in
respect of the principal of and premium, if any, and interest on, all or any
portion of the State Revenue Bonds in accordance with the State Indenture, the
corresponding amount of principal of the bonds of the 1993C Gas Facilities
Refunding Series issued as security therefor, plus an amount equal to ten
months' interest thereon computed on the basis of a 360-day year of twelve 30-
day months at 15 percent per annum, shall be deemed to have been paid. The
bonds of the 1993C Gas Facilities Refunding Series shall be deemed paid in full
and shall be cancelled whenever payment or provision therefor has been made in
respect of the principal of, and premium, if any, and interest on, all of the
State Revenue Bonds in accordance with the State Indenture. In such event, the
Company shall
- 18 -
<PAGE>
deliver the bonds of the 1993C Gas Facilities Refunding Series to the Trustee.
The Trustee may conclusively assume that the obligation of the Company
to make payments on the bonds of the 1993C Gas Facilities Refunding Series shall
have been fully satisfied and discharged in a timely manner unless and until the
Trustee shall have received a written notice to the contrary from the State
Trustee, which notice shall state the date such payment was due, the amount of
such payment, and the purpose for which such payment was to have been made.
SECTION 4. (a) Mandatory Redemption Upon Redemption of State Revenue
-----------------------------------------------------
Bonds. On any date on which the State Revenue Bonds shall be mandatorily
- -----
redeemed in whole or in part, a corresponding amount of the principal of the
bonds of the 1993C Gas Facilities Refunding Series issued as security therefor,
plus an amount equal to ten months' interest thereon computed on the basis of a
360-day year of twelve 30-day months at 15 percent per annum, shall be redeemed
at the same redemption price as shall be payable on the State Revenue Bonds then
to be redeemed. The Company covenants that it shall deposit with the State
Trustee on behalf of the Trustee sufficient funds to enable the Trustee to
redeem all of the bonds of the 1993C Gas Facilities Refunding Series so to be
redeemed on each date on which they are to be redeemed.
(b) Mandatory Redemption upon Acceleration of State Revenue Bonds.
-------------------------------------------------------------
If and whenever the Trustee is notified pursuant to Section 802 of the State
Indenture (i) that an event of default, as defined in Section 801 of the State
Indenture, has occurred and is continuing, (ii) that the principal of all State
Revenue Bonds then outstanding and the interest accrued thereon has been
declared due and payable and (iii) that the redemption of the bonds of the 1993C
Gas Facilities Refunding Series is demanded, then as soon as practicable, and in
any event within five (5) days of having received notice of such default and of
such declaration and such demand, the Trustee shall so notify the Company and,
upon receipt of sufficient funds, shall redeem all of the bonds of the 1993C Gas
Facilities Refunding Series then outstanding upon payment of the principal
amount thereof; provided, however, that such requirement of redemption shall be
deemed to be waived, if, prior to the date fixed for such redemption, the State
Trustee has notified the Trustee in writing that such event of default under the
State Indenture is waived or cured and the accelerated maturity of the State
Revenue Bonds ceases to be effective. The Company covenants that, upon receipt
of notice of such redemption from the Trustee, it shall immediately deposit with
the State Trustee on behalf of the Trustee sufficient funds to enable the
Trustee to redeem all of the bonds of the 1993C Gas Facilities Refunding Series.
(c) The Trustee shall not be deemed to have received a redemption
notice and demand from the State Trustee under Section 4(b), unless such notice
and demand shall have been
- 19 -
<PAGE>
signed by the President, a Vice President, an Assistant Vice President, a Trust
Officer or an Assistant Trust Officer of the State Trustee and shall have been
delivered to the Trustee at its principal corporate trust office addressed to
the attention of its Corporate Trust Administration Department.
(d) Notwithstanding any other provisions of the Indenture, the bonds
of the 1993C Gas Facilities Refunding Series are subject to redemption only as
provided in this Section 4.
SECTION 5. Each holder of bonds of the 1993C Gas Facilities Refunding
Series, by the acceptance thereof, has waived any rights to notice of redemption
of such bonds. Therefore, the Trustee shall not give such notice to the holder
of such bonds, notwithstanding any other provisions of the Indenture.
SECTION 6. Bonds of the 1993C Gas Facilities Refunding Series shall
be issuable in the denominations of $5,000 and integral multiples thereof.
Bonds of the 1993C Gas Facilities Refunding Series may be exchanged at the
option of the holders thereof, for a like aggregate principal amount of fully
registered bonds of such series of other authorized denominations.
No service or other similar charge shall be made for any exchange,
transfer, or registration of the bonds of the 1993C Gas Facilities Refunding
Series, but the Company may require payment of a sum sufficient to cover any tax
or taxes or other governmental charges required to be paid by the Company in
relation thereto.
SECTION 7. The principal amount of the bonds of the 1993C Gas
Facilities Refunding Series which may be authenticated and delivered hereunder
is limited in aggregate principal amount to $17,500,000.
SECTION 8. Bonds of the 1993C Gas Facilities Refunding Series in the
aggregate principal amount of $17,500,000 shall forthwith be executed by the
Company and delivered to the Trustee and shall be authenticated by the Trustee
and delivered, either before or after the recording hereof, in accordance with
the request of the Company, signed in the name of the Company by its President,
or one of its Vice Presidents and its Treasurer or one of its Assistant
Treasurers, upon compliance by the Company with the applicable provisions of
Articles III and IV of the Original Indenture, as amended.
ARTICLE II
MISCELLANEOUS
SECTION 1. As supplemented and amended by the aforesaid supplemental
indentures and as supplemented and
- 20 -
<PAGE>
amended by this Eighty-Sixth Supplemental Indenture, the Original Indenture is
in all respects ratified and confirmed and the Original Indenture and the
aforesaid supplemental indentures and this Eighty-Sixth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 2. This Eighty-Sixth Supplemental Indenture shall be
simultaneously executed in several counterparts, and all such counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.
SECTION 3. The recitals of fact contained herein shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
SECTION 4. The debtor and its mailing address are Delmarva Power &
Light Company, 800 King Street, P.O. Box 231, Wilmington, Delaware 19899. The
secured party and its address, from which information concerning the security
interest hereunder may be obtained, are Chemical Bank, 450 W. 33rd Street, 15th
Floor, New York, New York 10001, Attn: Corporate Trustee Administration
Department.
SECTION 5. The Trustee may conclusively rely on, and shall be
protected in acting upon, any certificate, opinion, notice, demand, waiver,
request, consent, report, or other paper or document signed by the President, a
Vice President, or a Trust Officer of the State Trustee.
SECTION 6. The Company acknowledges that it received a true and
correct copy of this Eighty-Sixth Supplemental Indenture.
- 21 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed in its name and behalf by its Vice President and its corporate seal to be
hereunto affixed and attested by its Secretary and the Trustee has caused this
instrument to be signed in its name and behalf by one of its Vice Presidents and
its corporate seal to be hereunto affixed and attested by a Trust Officer,
effective as of October 1, 1993.
DELMARVA POWER & LIGHT COMPANY
Date of Execution By/s/ B. S. Graham
September 30, 1993 -------------------------------
B. S. GRAHAM, VICE PRESIDENT
[Seal]
Attest:
/s/ D. P. Connelly
-------------------------------
D. P. CONNELLY, SECRETARY
CHEMICAL BANK
Date of Execution By/s/ John Generale
October 4, 1993 -------------------------------
JOHN GENERALE, VICE PRESIDENT
[Seal]
Attest:
/s/ G. John Kirsch
-------------------------------
G. JOHN KIRSCH, TRUST OFFICER
- 22 -
<PAGE>
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
BE IT REMEMBERED that on this 30th day of September A.D. 1993,
personally came before me, a notary public for the State of Delaware, B. S.
Graham, Vice President of DELMARVA POWER & LIGHT COMPANY, a corporation of the
State of Delaware and the Commonwealth of Virginia, party to the foregoing
instrument, known to me personally to be such, and acknowledged the said
instrument to be her own act and deed and the act and deed of said corporation;
that the signature of said Vice President is in her own proper handwriting; that
the seal affixed is the common or corporate seal of the said corporation; and
that her act of signing, sealing, executing and delivering said instrument was
duly authorized by resolution of the Board of Directors of said corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ Sheryl R. Hynson
---------------------------------
Notary Public, State of Delaware
My Commission expires March 16, 1995
[Seal]
CERTIFICATION
-------------
This document was prepared under the supervision of an attorney
admitted to practice before the Court of Appeals of Maryland, or by or on behalf
of one of the parties named in the within instrument.
/s/ Donna J. Quisenberry
---------------------------------
- 23 -
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
BE IT REMEMBERED that on this 4th day of October A.D. 1993, personally
came before me, a Notary Public for the State of New York, John Generale, Vice
President of CHEMICAL BANK, a corporation of the State of New York, party to the
foregoing instrument, known to me personally to be such, and acknowledged the
said instrument to be his own act and deed and the act and deed of said
corporation; that the signature of said Vice President is his own proper
handwriting; that the seal affixed is the common or corporate seal of said
corporation; and that his act of signing, sealing, executing and delivering said
instrument was duly authorized by resolution of the Board of Directors of said
Corporation.
GIVEN under my hand and official seal the day and year aforesaid.
/s/ James Foley
---------------------------------
Notary Public, State of New York
No. 31-6348400
Qualified in New York County
My Commission Expires August 31, 1994
[Seal]
- 24 -
<PAGE>
CERTIFICATE OF RESIDENCE
CHEMICAL BANK, successor Trustee to the Trustee within named, by
merger, hereby certifies that its precise residence is 450 W. 33rd Street, in
the Borough of Manhattan, in The City of New York, in the State of New York.
CHEMICAL BANK
By:/s/ G. John Kirsch
------------------------------
G. JOHN KIRSCH
Trust Officer
- 25 -
<PAGE>
RECORDATION DATA
Executed Counterparts of the Eighty-Sixth Supplemental Indenture were
recorded in Real Property Mortgage Records as follows:
<TABLE>
<CAPTION>
Mortgage Records
Received ----------------
State and County for Record Book Page
---------- ---- ----
<S> <C> <C> <C>
DELAWARE:
Kent 10/08/93 L-047 228
New Castle 10/08/93 3073 047
Sussex 10/08/93 1828 210
PENNSYLVANIA:
Adams 10/06/93 789 046
Armstrong 10/07/93 1335 172
Bedford 10/06/93 535 144
Blair 10/07/93 1086 699
Cambria 10/07/93 848 089
Cumberland 10/08/93 1169 397
Delaware 10/07/93 1155 1486
Franklin 10/07/93 909 274
Huntingdon 10/06/93 337 067
Indiana 10/06/93 477 127
Lancaster 10/06/93 4075 542
Westmoreland 10/06/93 3229 283
York 10/06/93 734 656
NEW JERSEY:
Burlington 10/12/93 5273 065
Camden 10/12/93 4073 917
Gloucester 10/12/93 2497 173
Mercer 10/13/93 2907 155
Middlesex 10/12/93 4554 445
Salem 10/12/93 740 084
Somerset 10/12/93 2324 485
Warren 10/12/93 1445 149
MARYLAND:
Caroline 10/12/93 257 095
Cecil 10/12/93 457 054
Dorchester 10/07/93 294 130
Kent 10/12/93 047 180
Queen Anne's 10/08/93 441 153
Somerset 10/08/93 414 922
Talbot 10/08/93 761 384
Wicomico 10/07/93 1358 277
Worcester 10/08/93 1979 470
VIRGINIA:
Accomack 10/08/93 651 485
Northampton 10/08/93 263 705
</TABLE>
- 26 -
<PAGE>
FORM OF
-------
This Instrument Prepared By
Delmarva Power & Light Company
800 King Street
Wilmington, DE 19801
================================================================================
DELMARVA POWER & LIGHT COMPANY
TO
CHEMICAL BANK,
Trustee.
----------------
________________ SUPPLEMENTAL
INDENTURE
----------------
Effective as of ___________________
(but executed on the dates shown on the execution page)
================================================================================
<PAGE>
DELMARVA POWER & LIGHT COMPANY
_____________Supplemental Indenture
Effective as of ______________
---------------
TABLE OF CONTENTS*
---------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Parties....................................................... 1
Recitals...................................................... 1
Form of Bond of the __________ Series......................... 2
Recitals...................................................... 6
Granting Clauses.............................................. 6
Description of Property....................................... 7
Appurtenances................................................. 9
After Acquired Property Clause................................ 9
Properties Excepted from Lien and Operation of Indenture...... 9
Habendum...................................................... 9
Subject Clause................................................ 10
Grant in Trust................................................ 10
</TABLE>
ARTICLE I
DESIGNATIONS, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE _________ SERIES
<TABLE>
<CAPTION>
<S> <C>
Sec. 1. Designations, Provisions and Denominations of Bonds
of the __________ Series....................... 10
Sec. 2. Limitation of Principal Amount of Bonds of the
__________Series........................... 11
Sec. 3. Issuance of Bonds of the __________Series............ 11
- ---------------
</TABLE>
* The Table of Contents and recording data are not part of the
_____________Supplemental Indenture as executed.
i
<PAGE>
ARTICLE II
MISCELLANEOUS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Sec. 1. Original Indenture Confirmed as Supplemented..... 11
Sec. 2. Execution of Counterparts........................ 11
Sec. 3. Recitals are by Company.......................... 11
Sec. 4. Names and Addresses of Debtor and Secured Party.. 11
Sec. 5. Company Acknowledgment........................... 11
Testimonium............................................... 12
Signatures and Seals...................................... 12
Acknowledgements.......................................... 13
Certificate of Residence.................................. 15
Recordation Data.......................................... 16
</TABLE>
ii
<PAGE>
This ______________ SUPPLEMENTAL INDENTURE, effective as of the ____ day
of ___________ (but executed on the dates hereinafter shown), made and entered
into by and between DELMARVA POWER & LIGHT COMPANY, a corporation of the State
of Delaware and the Commonwealth of Virginia, hereinafter called the Company,
party of the first part, and CHEMICAL BANK, a corporation of the State of New
York, hereinafter called the Trustee, party of the second part;
WITNESSETH:
WHEREAS, the Company heretofore executed and delivered its Indenture of
Mortgage and Deed of Trust (hereinafter in this ____________ Supplemental
Indenture called the "Original Indenture"), dated as of October 1, 1943, to the
New York Trust Company, a corporation of the State of New York, as Trustee, to
which Chemical Bank is successor Trustee, to secure the First Mortgage Bonds of
the Company, unlimited in aggregate principal amount and issuable in series,
from time to time, in the manner and subject to the conditions set forth in the
Original Indenture granted and conveyed unto the Trustee, upon the trusts, uses
and purposes specifically therein set forth, certain real estate, franchises and
other property therein described, including property acquired after the date
thereof, except as therein otherwise provided; and
WHEREAS, the Original Indenture has been supplemented by ___________
supplemental indentures specifically subjecting to the lien of the Original
Indenture as though included in the granting clause thereof certain property in
said supplemental indentures specifically described and amending and modifying
the provisions of the Original Indenture (the Original Indenture, as amended,
modified and supplemented by all of the indentures supplemental thereto,
including this ____________ Supplemental Indenture, is hereinafter in this
_____________ Supplemental Indenture called the "Indenture"); and
WHEREAS, the Original Indenture provides for the issuance of bonds
thereunder in one or more series, the form of each series of bonds and of the
coupons to be attached to any coupon bonds to be substantially in the forms set
forth therein with such omissions, variations and insertions as are authorized
or permitted by the Original Indenture and determined and specified by the Board
of Directors of the Company; and
WHEREAS, the Company, by appropriate corporate action in conformity with
the terms of the Original Indenture, has duly determined to create a series of
bonds to be designated as First Mortgage Bonds, ______ Series due ___________
(hereinafter sometimes referred to as the "_________ Series Bonds" or the "bonds
of the _________ Series"), which said _________ Series Bonds are to be
substantially in the following form:
<PAGE>
[FORM OF FACE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
_____ Series due _____________
Number: ____
DELMARVA POWER & LIGHT COMPANY, a corporation of the State of Delaware and
the Commonwealth of Virginia (hereinafter called the Company), for value
received, hereby promises to pay to . . . . . . . . . . . . . . or registered
assigns, the sum of . . . . . . . . . . . . Dollars on ___________, at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment shall be legal tender for public and private debts, and to pay interest
thereon, semi-annually on _________ and ______ of each year at the rate of
___________________________________ per annum, at said office or agency in like
coin or currency, from the first day of _______ or _____, as the case may be, to
which interest has been paid preceding the date hereof (unless the date hereof
is a __________ or _______ on which interest has been paid, in which case from
the date hereof, or unless the date hereof is prior to _______________, in which
case from ___________), until this bond shall mature, according to its terms or
on prior redemption or by declaration or otherwise, and at the highest rate of
interest borne by any of the bonds outstanding under the Mortgage hereinafter
mentioned from such date of maturity until this bond shall be paid or the
payment hereof shall have been duly provided for. Interest on this bond shall
be computed on the basis of a 360-day year consisting of twelve 30-day months.
The provisions of this bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.
This bond shall not become valid or obligatory for any purpose until
CHEMICAL BANK, the Trustee under the Mortgage, or its successor thereunder,
shall have signed the certificate of authentication endorsed hereon.
IN WITNESS WHEREOF, DELMARVA POWER & LIGHT COMPANY has caused this bond to
be signed in its name with the manual or facsimile signature of its President or
one of its Vice Presidents and its corporate seal, or a facsimile thereof, to be
affixed hereto and attested by the manual or facsimile signature of its
Secretary or one of its Assistant Secretaries.
- 2 -
<PAGE>
Dated:
Seal:
Attest: DELMARVA POWER & LIGHT COMPANY
By
- ----------------------- ------------------------------
Secretary President
Trustee's Authentication Certificate
------------------------------------
This bond is one of the bonds of the series herein designated, provided for in
the within-mentioned mortgage.
Chemical Bank, Trustee
By
---------------------------------
Authorized Officer
[FORM OF REVERSE OF BOND]
DELMARVA POWER & LIGHT COMPANY
FIRST MORTGAGE BOND
______ Series due ____________
This bond is one of an issue of bonds of the Company (herein referred to
as the "bonds"), not limited in principal amount, issuable in series, which
different series may mature at different times, may bear interest at different
rates, and may otherwise vary as in the Mortgage hereinafter mentioned provided,
and is one of a series known as First Mortgage Bonds, ______ Series due
___________ (herein sometimes referred to as "bonds of the _________ Series").
All bonds of all series issued and to be issued under and equally and ratably
secured (except insofar as any sinking fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular series) by the Mortgage and Deed of Trust, dated
as of October 1, 1943, executed by the Company to THE NEW YORK TRUST COMPANY, as
Trustee, to which CHEMICAL BANK, a corporation of the State of New York, is
successor Trustee (herein, together with any indentures supplemental thereto,
including an _____________
- 3 -
<PAGE>
Supplemental Indenture, dated as of ___________, called the "Mortgage"), to
which reference is made for a description of the property mortgaged and pledged,
the nature and extent of the security, the rights and limitations of rights of
the holders of the bonds and of the Company in respect thereof, the rights,
duties and immunities of the Trustee, and the terms and conditions upon which
the bonds are, and are to be, issued and secured. The Mortgage contains
provisions permitting the Company and the Trustee, with the consent of the
holders of not less than seventy-five percent (75%) in principal amount of all
the bonds at the time outstanding (determined as provided in the Mortgage),
evidenced as in the Mortgage provided, or in case the rights under the Mortgage
of the holders of the bonds of one or more, but less than all, of the series of
bonds outstanding shall be affected, then with the consent of the holders of not
less than seventy-five percent (75%) in principal amount of the bonds at the
time outstanding of the one or more series, taken in the aggregate, affected
(determined as provided in the Mortgage), evidenced as in the Mortgage provided,
to execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Mortgage or modifying in any
manner the rights of the holders of the bonds and coupons; provided, however,
that no such supplemental indenture shall (i) extend the fixed maturity of any
bonds, or reduce the rate or extend the time of payment of interest thereon, or
reduce the principal amount thereof, without the consent of the holder of each
bond so affected, or (ii) reduce the aforesaid percentage of bonds, the holders
of which are required to consent to any such supplemental indenture without the
consent of the holders of all bonds then outstanding. Any such consent by the
registered holder of this bond (unless effectively revoked as provided in the
Mortgage) shall be conclusive and binding upon such holder and upon all future
holders of this bond, irrespective of whether or not any notation of such
consent is made upon this bond. No reference herein to the Mortgage and no
provision of this bond or of the Mortgage shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this bond at the time and place, at the rate
and in the coin or currency herein prescribed.
The fully registered bonds of the __________ Series are issuable in
denominations of $1,000 and any integral multiple thereof. At the office or
agency to be maintained by the Company in the Borough of Manhattan, The City of
New York and in the manner and subject to the limitations provided in the
Mortgage, fully registered bonds of such series may be exchanged for a like
aggregate principal amount of fully registered bonds of such series of other
authorized denominations, and in each case without payment of any service or
other similar charge as provided in said _____________ Supplemental Indenture.
The bonds of the __________ Series shall not be subject to redemption
prior to maturity.
The principal hereof may be declared or may become due prior to the
express date of the maturity hereof on the conditions, in the manner and at the
time set forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.
- 4 -
<PAGE>
This bond is transferable as prescribed in the Mortgage by the registered
holder hereof in person, or by his duly authorized attorney, at the office or
agency of the Company in said Borough of Manhattan, upon surrender and
cancellation of this bond, and thereupon a new fully registered bond or bonds of
authorized denominations of the same series and for the same aggregate principal
amount will be issued to the transferee in exchange herefor as provided in the
Mortgage, and in each case without payment of any service or other similar
charge as provided in said ____________ Supplemental Indenture. The Company and
the Trustee, any paying agent and any bond registrar may deem and treat the
person in whose name this bond is registered as the absolute owner hereof,
whether or not this bond shall be overdue, for the purpose of receiving payment
and for all other purposes and neither the Company nor the Trustee nor any
paying agent nor any bond registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of, premium, if
any, and interest on, this bond, or for any claim based hereon, or otherwise in
respect hereof, or based on, or in respect of, the Mortgage, against any
incorporator or any past, present or future subscriber to the capital stock,
stockholder, officer or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, under any rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, stockholders, officers and directors, as such, being waived and
released by the holder and owner hereof by the acceptance of this bond and being
likewise waived and released by the terms of the Mortgage.
[END OF FORM OF BOND]
- 5 -
<PAGE>
WHEREAS, all acts and things prescribed by law and by the charter and by-
laws of the Company necessary to make the __________ Series Bonds, when executed
by the Company and authenticated by the Trustee, as in the Original Indenture
provided, valid, binding and legal obligations of the Company, entitled in all
respects to the security of the Original Indenture and indentures supplemental
thereto, have been performed; and
WHEREAS, provision is made in Sections 5.11 and 17.01 of the Original
Indenture for such further instruments and indentures, supplemental to the
Original Indenture, as may be necessary or proper to carry out more effectually
the purposes of the Original Indenture, and to subject to the lien of the
Original Indenture any property acquired after the date of the Original
Indenture and intended to be covered thereby, with the same force and effect as
though included in the granting clause thereof, and to add such further
covenants, restrictions or conditions for the protection of the mortgaged and
pledged property and the holders of the bonds as the Board of Directors of the
Company and the Trustee shall consider to be for the protection of the holders
of the bonds, and to set forth the terms and provisions of any series of bonds
to be issued under the Original Indenture and the form of the bonds and coupons
of such series; and the Company since the date of the Original Indenture has
acquired additional property not heretofore specifically subjected to the lien
of the Original Indenture; and it is desired to add certain further covenants,
restrictions and conditions for the protection of the mortgaged and pledged
property and the holders of the bonds, as provided in this ____________
Supplemental Indenture, which the Board of Directors of the Company and the
Trustee consider to be for the protection of the holders of the bonds; and the
Company desires to issue the __________ Series Bonds; and the Company therefore
deems it advisable to enter into this ____________ Supplemental Indenture in the
form and terms hereof; and
WHEREAS, the execution and delivery of this ____________ Supplemental
Indenture has been duly authorized by the Board of Directors of the Company at a
meeting duly called and held according to law, and all conditions and
requirements necessary to make this _____________ Supplemental Indenture a
valid, binding and legal instrument in accordance with its terms, for the
purposes herein expressed, and the execution and delivery hereof, in the form
and terms hereof, have been in all respects duly authorized;
NOW, THEREFORE, in order further to secure the payment of the principal
and interest and premium, if any, of all bonds issued and to be issued under the
Original Indenture and any indentures supplemental thereto, including this
_________ Supplemental Indenture, according to their tenor, purport and effect
and the performance and observance of all the covenants and conditions in said
bonds and the Original Indenture and any indentures supplemental thereto,
including this ____________ Supplemental Indenture, contained and to subject to
the lien of the Original Indenture, as so supplemented, with the same force and
effect as though included in the granting clause thereof, additional property
now owned by the Company, and for and in consideration of the premises and of
the sum of One Dollar ($1.00), lawful money of the United States of America, to
the Company duly paid by the Trustee at or before the ensealing and delivery
hereof, and other valuable consideration, the receipt whereof is hereby
acknowledged, and intending to be legally bound hereby, the Company has executed
and delivered this _____________ Supplemental Indenture,
- 6 -
<PAGE>
and hath granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged, pledged, set over and confirmed, and granted a security interest
therein, and by these presents doth grant, bargain, sell release, convey,
assign, transfer, mortgage, pledge, set over and confirm, and grant a security
interest therein, subject to the provisions of the Indenture, unto CHEMICAL
BANK, as trustee, and to its successors in trust and to its and their assigns
forever, all the following described properties of the Company, and doth hereby
confirm that the Company will not cause or consent to a partition, either
voluntary or through legal proceedings, of property, whether herein described or
heretofore or hereafter acquired, in which its ownership shall be as tenants in
common, except as permitted by, and in conformity with, the provision of the
Original Indenture, as supplemented, and particularly of Article IX of the
Original Indenture:
All property, real, personal and mixed, tangible and intangible, owned by
the Company on the date of the execution hereof or which may be hereafter
acquired by it (except such property as in the Original Indenture expressly
excepted from the lien and operation of the Indenture).
The property covered by this ____________ Supplemental Indenture shall
include particularly, among other property, without prejudice to the generality
of the language hereinbefore or hereinafter contained, the following described
property:
All the electric generating stations, station sites, stations, electric
reserve generating stations, substations, substation sites, gas manufacturing
plants, ice and cold storage plants, steam plants, hot water plants, hydro-
electric stations, hydro-electric station sites, electric transmission lines,
electric distribution systems, gas transportation mains, gas distribution
systems, steam distribution systems, hot water distribution systems, regulator
stations, regulator station sites, office buildings, storeroom buildings,
warehouse buildings, boiler houses, plants, plant sites, service plants, coal
storage yards, and poleyards now or hereafter owned by the Company, including
all electric works, power houses, generators, turbines, boilers, engines,
furnaces, retorts, dynamos, buildings, structures, transformers, meters, towers,
poles, tower lines, cables, pole lines, tanks, storage holders, regulators, gas
works, pipes, pipe lines, mains, pipe fittings, valves, drips, connections,
tunnels, conduits, gates, motors, wires, switch racks, switches, brackets,
insulators, and all equipment, improvements, machinery, appliances, devices,
appurtenances, supplies and miscellaneous property for generating, producing,
transforming, converting, storing and distributing electric energy, gas, ice,
steam and hot water, and furnishing cold storage, now or hereafter owned by the
Company, together with all furniture and fixtures located in the aforesaid
buildings, and all land now or hereafter owned by the Company on which the same
or any part thereof are situated, and all of the real estate, leases, leaseholds
(except the last day of the term of each lease and leasehold), and lands now or
hereafter owned by the Company, including land located on or adjacent to any
river, stream or other water, together with all flowage rights, flooding rights,
water rights, riparian rights, dams and dam sites and rights, flumes, canals,
races, raceways, head works and diversion works, and all of the municipal and
other franchises, licenses, consents, ordinances, permits, privileges, rights,
- 7 -
<PAGE>
servitudes, easements and rights-of-way and other rights in or relating to real
estate or the occupancy of the same now or hereafter owned by the Company, and
all of the other property, real, personal or mixed, now or hereafter owned by
the Company, forming a part of any of the foregoing property or used or enjoyed
or capable of being used or enjoyed in connection therewith or in any way
appertaining thereto, whether developed or undeveloped, or partially developed,
or whether now equipped and operating or not and wherever situated, and all of
the Company's presently held or hereafter acquired right, title and interest in
and to the land on which the same or any part thereof are situated or adjacent
thereto, and all rights for or relating to the construction, maintenance or
operation of any of the foregoing property through, over, under or upon any
public streets or highways or other lands, public or private, and (except as
hereinafter expressly excepted) all the right, title and interest of the Company
presently held or hereafter acquired in and to all other property of any kind or
nature appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described, and, as to all of the foregoing,
whether now owned by the Company or hereafter acquired by the Company.
Without limitation of the generality of the foregoing, the parcels of land
situate as hereinafter set forth and owned by the Company, and whether used or
not used in connection hereinafter set forth by the following conveyances to
which reference is made for a more particular description, to wit:
[PROPERTY DESCRIPTION INSERTED HERE]
- 8 -
<PAGE>
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in any way appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Section 9.01 of the Original Indenture) the
tolls, rents, revenues, issues, earnings, income, product and profits thereof,
and all the estate, right, title and interest and claim whatsoever, at law as
well as in equity, which the Company now has or may hereafter acquire in and to
the aforesaid property and franchises and every part and parcel thereof.
IT IS HEREBY AGREED by the Company that all property, rights and
franchises acquired by the Company after the date hereof (except any in the
Original Indenture expressly excepted) shall (subject to the provisions of
Section 9.01 of the Original Indenture and to the extent permitted by law) be as
fully embraced within the lien of the Original Indenture and any indentures
supplemental thereto, including this __________ Supplemental Indenture, as if
such property, rights and franchises were at the time of the execution of the
Original Indenture owned by the Company and/or specifically described therein
and conveyed thereby and as if such property, rights and franchises were now
owned by the Company and/or specifically described herein and conveyed hereby;
Provided that, in addition to the reservations and exceptions herein and
elsewhere contained, the following are not and are not intended to be granted,
bargained, sold, released, conveyed, assigned, transferred, mortgaged, pledged,
set over or confirmed hereunder and are hereby expressly excepted from the lien
and operation of the Original Indenture and any indentures supplemental thereto,
including this ___________ Supplemental Indenture, viz.: (1) cash and shares of
stock and certificates or evidence of interest therein and obligations
(including bonds, notes and other securities) not in or pursuant to the Original
Indenture or any indenture supplemental thereto, including this ____________
Supplemental Indenture, specifically pledged or deposited or delivered or
therein covenanted so to be; (2) any goods, wares, merchandise, equipment,
materials or supplies held or acquired for the purpose of sale or resale in the
usual course of business or for consumption in the operation of any properties
of the Company; and (3) all judgments, contracts, accounts and choses in action,
the proceeds of which the Company is not obligated as in the Original Indenture
provided to deposit with the Trustee hereunder; provided, however, that the
property and rights expressly excepted from the lien and operation of the
Original Indenture and any indentures supplemental thereto, including this
____________ Supplemental Indenture, in the above subdivisions (2) and (3) shall
(to the extent permitted by law) cease to be so excepted, in the event that the
Trustee or a receiver or trustee shall take possession of the mortgaged and
pledged property in the manner provided in Article X of the Original Indenture,
by reason of the occurrence of a completed default, as defined in said Article X
of the Original Indenture.
TO HAVE AND TO HOLD all such properties, real, personal, or mixed,
granted, bargained, sold, released, conveyed, assigned, transferred, mortgaged,
pledged, set over or confirmed by the Company as aforesaid, or intended so to
be, unto the Trustee and its successors in the trusts created in the Indenture
and its and their assigns forever;
- 9 -
<PAGE>
SUBJECT, HOWEVER, to any reservations, exceptions, conditions, limitations
and restrictions contained in several deeds, servitudes, franchises and
contracts or other instruments through which the Company acquired, and/or claims
title to and/or enjoys the use of the aforesaid properties; and subject also to
encumbrances of the character defined in the Original Indenture as "excepted
encumbrances" in so far as the same may attach to any of the property embraced
herein;
IN TRUST NEVERTHELESS upon the terms, trusts, uses and purposes
specifically set forth in the Indenture; this ____________ Supplemental
Indenture being made for the purpose, inter alia, of subjecting the real estate
----- ----
and premises and other property above described to the lien and operation of the
Indenture, so that the same shall be held specifically by the Trustee under and
subject to the terms and conditions of the Original Indenture in identically the
same manner and for the same trusts, uses and purposes, as though the said real
estate and premises and other property had been specifically described in the
Original Indenture.
AND IT IS HEREBY FURTHER COVENANTED AND AGREED and the Company and the
Trustee have mutually agreed, in consideration of the premises, as follows:
ARTICLE I.
DESIGNATION, PROVISIONS, DENOMINATIONS AND ISSUANCE
OF BONDS OF THE JULY 2003 SERIES
SECTION 1. The bonds of the __________ Series shall be designated "First
Mortgage Bonds, ______ Series due ___________." All bonds of the __________
Series shall be fully registered bonds. All bonds of the __________ Series
shall be dated the date of issue, and shall bear interest from the first day of
_______ or ____, as the case may be, to which interest has been paid preceding
the date thereof, unless such date is a _________ or ______ on which interest
has been paid, in which case they shall bear interest from such date, or unless
such date is prior to _____________, in which case they shall bear interest from
__________. All bonds of the __________ Series shall be payable on ___________,
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for public and private debts, and shall bear
interest, payable in like coin and currency, at the rate of
______________________________ per annum, payable semi-annually on _________ and
_______ of each year, until maturity, and at the highest rate of interest borne
by any of the bonds outstanding under the Original Indenture and any indenture
supplemental thereto, from such date of maturity until they shall be paid or
payment thereof shall have been duly provided for. Principal of, and interest
on, the bonds of the __________ Series shall be payable at the office or agency
of the Company in the Borough of Manhattan, the City of New York.
No bonds of the __________ Series shall be redeemable prior to maturity.
- 10 -
<PAGE>
Bonds of the _________ Series shall be issuable in denominations of $1,000
and multiples thereof. Bonds of the _________ Series may be exchanged at the
option of the holders thereof, for a like aggregate principal amount of fully
registered bonds of such series of other authorized denominations.
No service or other similar charge shall be made for any exchange,
transfer, or registration of the bonds of the __________ Series, but the Company
may require payment of a sum sufficient to cover any tax or taxes or other
governmental charges required to be paid by the Company in relation thereto.
SECTION 2. The principal amount of the bonds of the _________ Series
which may be authenticated and delivered hereunder is not limited, except as the
Original Indenture, as amended, limits the principal amount of bonds which may
be issued thereunder.
SECTION 3. Bonds of the _________ Series for the aggregate principal
amount of $__________, being the initial issue of bonds of said Series, shall
forthwith be executed by the Company and delivered to the Trustee and shall be
authenticated by the Trustee and delivered, either before or after the recording
hereof, in accordance with the request of the Company, signed in the name of the
Company by its President or one of its Vice Presidents and its Treasurer or one
of its Assistant Treasurers, upon compliance by the Company with the applicable
provisions of Articles III and IV of the Original Indenture, as amended.
ARTICLE II.
MISCELLANEOUS
SECTION 1. As supplemented and amended by this ___________ Supplemental
Indenture, the Original Indenture and all indentures supplemental thereto are in
all respects ratified and confirmed and the Original Indenture and the aforesaid
supplemental indentures and this _____________ Supplemental Indenture shall be
read, taken and construed as one and the same instrument.
SECTION 2. This ____________ Supplemental Indenture shall be
simultaneously executed in several counterparts, and all such counterparts
executed and delivered, each as an original, shall constitute but one and the
same instrument.
SECTION 3. The recitals of fact contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.
SECTION 4. The debtor and its mailing address are Delmarva Power & Light
Company, 800 King Street, P.O. Box 231, Wilmington, Delaware 19899. The secured
party and its address, from which information concerning the security interest
hereunder may be obtained, are Chemical Bank, 450 West 33rd Street, New York,
New York 10001, Attn: Corporate Trustee Administration Department.
SECTION 5. The Company acknowledges that it received a true and correct
copy of this _____________ Supplemental Indenture.
- 11 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be signed in
its name and behalf by its Vice President and its corporate seal to be hereunto
affixed and attested by its Secretary and the Trustee has caused this instrument
to be signed in its name and behalf by a Vice President and its corporate seal
to be hereunto affixed and attested by a Trust Officer, effective as of the ____
day of _______, _________.
DELMARVA POWER & LIGHT COMPANY
Date of Execution By ________________________________
- ----------------- VICE PRESIDENT
[Seal]
Attest:
_________________________________
SECRETARY
CHEMICAL BANK
Date of Execution By _________________________________
- ----------------- VICE PRESIDENT
[Seal]
Attest:
_________________________________
TRUST OFFICER
- 12 -
<PAGE>
STATE OF DELAWARE )
) SS.
NEW CASTLE COUNTY )
BE IT REMEMBERED that on this _____ day of ______________, personally came
before me, a notary public for the State of Delaware, ____________, Vice
President of DELMARVA POWER & LIGHT COMPANY, a corporation of the State of
Delaware and the Commonwealth of Virginia, party to the foregoing instrument,
known to me personally to be such, and acknowledged the said instrument to be
her own act and deed and the act and deed of said corporation; that the
signature of said Vice President is in her own proper handwriting; that the seal
affixed is the common or corporate seal of the said corporation; and that her
act of signing, sealing, executing and delivering said instrument was duly
authorized by resolution of the Board of Directors of said corporation.
GIVEN under my hand and official seal the day and year aforesaid.
________________________________
Notary Public
[Seal]
- 13 -
<PAGE>
STATE OF NEW YORK )
) SS.
COUNTY OF NEW YORK )
BE IT REMEMBERED that on this _____ day of ______________, personally came
before me, a Notary Public for the State of New York, ___________, Vice
President of CHEMICAL BANK, a corporation of the State of New York, party to the
foregoing instrument, known to me personally to be such, and acknowledged the
said instrument to be his own act and deed and the act and deed of said
corporation; that the signature of said Vice President is his own proper
handwriting; that the seal affixed is the common or corporate seal of said
corporation; and that his act of signing, sealing, executing and delivering said
instrument was duly authorized by resolution of the Board of Directors of said
Corporation.
GIVEN under my hand and official seal the day and year aforesaid.
________________________________
Notary Public
[Seal]
- 14 -
<PAGE>
CERTIFICATE OF RESIDENCE
CHEMICAL BANK, successor Trustee to the Trustee within named, by merger,
hereby certifies that its precise residence is 450 West 33rd Street, in the
Borough of Manhattan, in The City of New York, in the State of New York.
CHEMICAL BANK
By: _______________________________
TRUST OFFICER
- 15 -
<PAGE>
RECORDATION DATA
Executed Counterparts of the ____________ Supplemental Indenture were
recorded in Real Property Mortgage Records as follows:
<TABLE>
<CAPTION>
Received Mortgage Records
State and County for Record Book Page
- ---------------- ---------- ---- ----
<S> <C> <C> <C>
DELAWARE:
New Castle
Kent
Sussex
PENNSYLVANIA:
Armstrong
Adams
Bedford
Blair
Cambria
Cumberland
Delaware
Franklin
Huntingdon
Indiana
Lancaster
Westmoreland
York
NEW JERSEY:
Burlington
Camden
Gloucester
Mercer
Middlesex
Salem
Somerset
Warren
MARYLAND:
Caroline
Cecil
Dorchester
Kent
Queen Anne's
Somerset
Talbot
Wicomico
Worcester
VIRGINIA:
Accomack
Northampton
</TABLE>
- 16 -
<PAGE>
[DELMARVA POWER & LIGHT COMPANY LETTERHEAD APPEARS HERE]
Exhibit 5-A
-----------
May 26, 1994
Delmarva Power & Light Company
800 King Street
P. O. Box 231
Wilmington, DE 19899
Re: Issuance and Sale of up to $250 Million
Common Stock and Debt Securities
---------------------------------------
Ladies and Gentlemen:
Delmarva Power & Light Company (the "Company") is filing, on or about the
date hereof, a Registration Statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement covers up to $250,000,000 of the Company's
Common Stock, par value $2.25 per share (the "Common Stock"), and/or its debt
securities, comprised of its First Mortgage Bonds, which may be designated
"Secured Medium-Term Notes" (collectively, the "Bonds") to be issued under a
Mortgage and Deed of Trust dated as of October 1, 1943, between the Company and
Chemical Bank as successor trustee (the "Bond Trustee"), as amended and
supplemented (the "Mortgage"), and/or its unsecured Medium-Term Notes, Series C
(the "Notes") to be issued under an Indenture dated as of November 1, 1988,
between the Company and Chemical Bank, as successor trustee (the "Note
Trustee"), as amended and supplemented (the "Indenture")(the Common Stock, the
Bonds and the Notes are herein collectively called the "Securities"), or any
combination thereof. The corporate proceedings and other actions taken by the
Company in connection with the authorization and issuance and the registration
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 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
and the Commonwealth of Virginia.
I am also of the opinion that:
(a) When all corporate action necessary to the valid authorization and
issuance of the Securities shall have been duly taken by the Company;
and
<PAGE>
Delmarva Power & Light Company
May 26, 1994
Page 2
(b) When the Registration Statement, as it may be amended, with respect to
the Securities shall have become effective; and
(c) When the Delaware Public Service Commission and the Virginia State
Corporation Commission shall have entered appropriate orders approving
the issuance of the Securities; then
(1) When the Common Stock has been listed for trading on the New York
Stock Exchange and the Philadelphia Stock Exchange; then
(A) So long as the Common Stock is issued on or before the
expiration of the authority for such issuance as
reflected in the Orders of the Delaware Public Service
Commission and the Virginia State Corporation
Commission, the Common Stock may be issued for the
purposes and upon the terms stated in the Registration
Statement, as then amended and effective, and in the
Orders of the Delaware Public Service Commission and the
Virginia Corporation Commission, as then amended and
effective; and
(B) When so issued and paid for, the Common Stock will be
validly issued, fully paid and non-assessable capital
stock of the Company; and
(2) When the Note Trustee shall have taken all action required by the
Indenture; then
(A) So long as the Notes are issued on or before the expiration
of the authority for such issuance as reflected in the
Orders of the Delaware Public Service Commission and the
Virginia State Corporation Commission, the Notes may be
issued for the purposes and upon the terms stated in the
Registration Statement, as then amended and effective, and
in the Orders of the Delaware Public Service Commission and
the Virginia Corporation Commission, as then amended and
effective; and
(B) When so issued and paid for, the Notes will be validly
issued, binding upon and enforceable against the Company in
accordance with their terms, except as remedies may be
limited by the laws and principles of equity affecting
generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws; and
<PAGE>
Delmarva Power & Light Company
May 26, 1994
Page 3
(3) When the Bond Trustee shall have taken all action required by the
Mortgage, to be further amended by one or more supplemental
indentures; and
(4) When a supplemental indenture with respect to the Bonds shall
have been executed and delivered by the Company to the Bond
Trustee and shall have been duly recorded in the appropriate
counties in Delaware, Virginia, Maryland and any other
appropriate states, all as contemplated by, and in conformity
with, the Mortgage; then
(A) So long as the Bonds are issued on or before the expiration
of the authority for such issuance as reflected in the
Orders of the Delaware Public Service Commission and the
Virginia State Corporation Commission, the Bonds may be
issued for the purposes and upon the terms stated in the
Registration Statement, as then amended and effective, and
in the Orders of the Delaware Public Service Commission and
the Virginia State Corporation Commission, as then amended
and effective; and
(B) When so issued and paid for, the Bonds will be validly
issued, binding upon and enforceable against the Company in
accordance with their terms, except as remedies may be
limited by the laws and principles of equity affecting
generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws.
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 and the
Federal law of the United States. To the extent that matters addressed in this
opinion are governed by the laws of the Commonwealth of Virginia, I have relied
on the opinion of the Company's Assistant General Counsel, Peter F. Clark.
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,
/s/DALE G. STOODLEY
Dale G. Stoodley
<PAGE>
[DELMARVA POWER & LIGHT COMPANY LETTERHEAD APPEARS HERE]
Exhibit 5-B
-----------
May 26, 1994
Delmarva Power & Light Company
800 King Street
P. O. Box 231
Wilmington, DE 19899
Attention: Dale G. Stoodley, Esquire
Re: Issuance and Sale of up to $250 Million
Common Stock and Debt Securities
--------------------------------------
Ladies and Gentlemen:
Delmarva Power & Light Company (the "Company") is filing, on or about the
date hereof, a Registration Statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement covers up to $250,000,000 of the Company's
Common Stock, par value $2.25 per share (the "Common Stock"), and/or its debt
securities, comprised of its First Mortgage Bonds, which may be designated
"Secured Medium-Term Notes" (collectively, the "Bonds") to be issued under a
Mortgage and Deed of Trust dated as of October 1, 1943, between the Company and
Chemical Bank as successor trustee (the "Bond Trustee"), as amended and
supplemented (the "Mortgage"), and/or its unsecured Medium-Term Notes, Series C
(the "Notes") to be issued under an Indenture dated as of November 1, 1988,
between the Company and Chemical Bank, as successor trustee (the "Note
Trustee"), as amended and supplemented (the "Indenture")(the Common Stock, the
Bonds and the Notes are herein collectively called the "Securities"), or any
combination thereof. I am Assistant General Counsel for the Company and have
acted in that capacity in connection with the authorization and issuance and the
registration by the Company of the Securities.
I am of the opinion that the Company is a corporation duly organized,
validly existing, and in good standing under the laws of the Commonwealth of
Virginia.
I am also of the opinion, but only to the extent that the matters addressed
in this opinion are governed by Virginia law, that:
(a) When all corporate action necessary to the valid authorization and
issuance of the Securities shall have been duly taken by the Company;
and
<PAGE>
Delmarva Power & Light Company
May 26, 1994
Page 2
(b) When the Registration Statement, as it may be amended, with respect to
the Securities shall have become effective; and
(c) When the Virginia State Corporation Commission shall have entered
appropriate orders approving the issuance of the Securities; then
(1) When the Common Stock has been listed for trading on the New York
Stock Exchange and the Philadelphia Stock Exchange; then
(A) So long as the Common Stock is issued on or before the
expiration of the authority for such issuance as
reflected in the Order of the Virginia State Corporation
Commission, the Common Stock may be issued for the
purposes and upon the terms stated in the Registration
Statement, as then amended and effective, and in the
Order of the Virginia Corporation Commission, as then
amended and effective; and
(B) When so issued and paid for, the Common Stock will be
validly issued, fully paid and non-assessable capital
stock of the Company; and
(2) When the Note Trustee shall have taken all action required by the
Indenture; then
(A) So long as the Notes are issued on or before the expiration
of the authority for such issuance as reflected in the
Order of the Virginia State Corporation Commission, the
Notes may be issued for the purposes and upon the terms
stated in the Registration Statement, as then amended and
effective, and in the Order of the Virginia Corporation
Commission, as then amended and effective; and
(B) When so issued and paid for, the Notes will be validly
issued, binding upon and enforceable against the Company in
accordance with their terms, except as remedies may be
limited by the laws and principles of equity affecting
generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws; and
(3) When the Bond Trustee shall have taken all action required by the
Mortgage, to be further amended by one or more supplemental
indentures; and
(4) When a supplemental indenture with respect to the Bonds shall
have been executed and delivered by the Company to the Bond
Trustee and shall have been duly recorded in the appropriate
<PAGE>
counties in Virginia and any other appropriate states, all as
contemplated by, and in conformity with, the Mortgage; then
(C) So long as the Bonds are issued on or before the expiration
of the authority for such issuance as reflected in the
Order of the Virginia State Corporation Commission, the
Bonds may be issued for the purposes and upon the terms
stated in the Registration Statement, as then amended and
effective, and in the Order of the Virginia State
Corporation Commission, as then amended and effective; and
(B) When so issued and paid for, the Bonds will be validly
issued, binding upon and enforceable against the Company in
accordance with their terms, except as remedies may be
limited by the laws and principles of equity affecting
generally the enforcement of creditors' rights, including,
without limitation, bankruptcy and insolvency laws.
I am a member of the Bars of the Commonwealth of Virginia and the State of
Delaware, but, for purposes of rendering this opinion, I have been engaged as an
expert only with respect to the laws of the Commonwealth of Virginia as such
laws might affect the issuance and sale of the Securities.
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,
/s/PETER F. CLARK
Peter F. Clark
<PAGE>
--------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------
----------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------
Delmarva Power & Light Company
(Exact name of obligor as specified in its charter)
Delaware and Virginia 51-0084283
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
800 King Street
P. O. Box 231
Wilmington, Delaware 19899
(Address of principal executive offices) (Zip Code)
------------------------------------
Debt Securities
(Title of the indenture securities)
---------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State House,
Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551 and Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is incorporated by
reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-46892, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 17th day of May, 1994.
CHEMICAL BANK
By /s/ G. John Kirsch
------------------------------------------------
G. John Kirsch
Assistant Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1993, published in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin.............................................. $ 4,371
Interest-bearing balances...................................... 5,829
Securities......................................................... 21,834
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold............................................. 2,125
Securities purchased under agreements to resell................ 900
Loans and lease financing receivables:
Loans and leases, net of unearned income........................ $ 60,826
Less: Allowance for loan and lease losses....................... 2,326
Less: Allocated transfer risk reserve........................... 121
--------
Loans and leases, net of unearned income,
allowance, and reserve.......................................... 58,379
Assets held in trading accounts.................................... 8,556
Premises and fixed assets (including capitalized
leases)......................................................... 1,238
Other real estate owned............................................ 713
Investments in unconsolidated subsidiaries and
associated companies............................................ 112
Customer's liability to this bank on acceptance
outstanding..................................................... 1,063
Intangible assets.................................................. 526
Other assets....................................................... 9,864
TOTAL ASSETS....................................................... $115,510
========
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
Deposits
In domestic offices.............................................. $ 51,611
Noninterest-bearing ..................................... $19,050
Interest-bearing ......................................... 32,561
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's........................................................ 24,886
Noninterest-bearing ..................................... $ 136
Interest-bearing ........................................ 24,750
-------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased........................................... 8,496
Securities sold under agreements to repurchase.................... 514
Demand notes issued to the U.S. Treasury........................... 1,501
Other Borrowed money............................................... 8,538
Mortgage indebtedness and obligations under capitalized
leases............................................................ 20
Bank's liability on acceptances executed and outstanding........... 1,084
Subordinated notes and debentures.................................. 3,500
Other liabilities.................................................. 7,419
TOTAL LIABILITIES.................................................. 107,569
--------
<CAPTION>
EQUITY CAPITAL
<S> <C>
Common stock....................................................... 620
Surplus............................................................ 4,501
Undivided profits and capital reserves............................. 2,663
Less: Net unrealized loss on marketable equity
securities.................................................. (159)
Cumulative foreign currency translation adjustments................ (2)
TOTAL EQUITY CAPITAL............................................... 7,941
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL....................................... $115,510
========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition is true and correct to the best of my knowledge
and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this statement of resources and liabilities. We
declare that it has been examined by us, and to the best
of our knowledge and belief has been prepared in confor-
mance with the instructions and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
