As filed with the Securities and Exchange Commission on March 27, 1998
Registration No. 333-
=========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PP&L, Inc.
(Exact name of registrant as specified in its charter)
COMMONWEALTH OF PENNSYLVANIA 23-0959590
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Two North Ninth Street
Allentown, Pennsylvania 18101
610-774-5151
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
JOHN R. BIGGAR
SENIOR VICE PRESIDENT--FINANCIAL
TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA 18101
610-774-5151
(Name, address, including zip code, and
telephone number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
At such time or times after the effective date of this
Registration Statement as the registrant shall determine based
on market conditions and other factors.
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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. [ ]
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]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN
OFFERING PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE
CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION
STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ]
-------------
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO
RULE 462(C) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND
LIST THE SECURITIES ACT REGISTRATION NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
--------
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT
TO RULE 434, PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
========================================================================
PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM
CLASS OF OFFERING AGGREGATE AMOUNT OF
SECURITIES TO AMOUNT TO BE PRICE OFFERING REGISTRATION
BE REGISTERED REGISTERED PER UNIT* PRICE* FEE
------------------------------------------------------------------------
First Mortgage
Bonds . . . . . . $200,000,000 100% $200,000,000 $59,000
========================================================================
*For the purpose of calculating the registration fee only.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
=================================================================
<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities
has been filed with the Securities and Exchange Commission.
These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell
or the solicitation of any offer to buy nor shall there be any
sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED MARCH 27, 1998
$200,000,000
PP&L, INC.
FIRST MORTGAGE BONDS
PP&L, Inc. (the "Company" or "PP&L") expects to offer from time
to time up to $200,000,000 aggregate principal amount of its
First Mortgage Bonds ("Bonds") at prices and on terms to be
determined at the time of each sale. For each series of Bonds
for which this Prospectus is delivered ("Offered Bonds"), there
will be an accompanying Prospectus Supplement ("Prospectus
Supplement") that will set forth the aggregate principal amount,
interest rate or rates (which may be fixed or variable) and
payment dates, maturity date or dates, initial public offering
price, the net proceeds to the Company, redemption provisions,
provisions for repayment or redemption at the option of the
holder and other specific provisions for and terms of the Offered
Bonds.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Bonds will be sold in accordance with the plan of
distribution described in "Plan of Distribution" herein.
This Prospectus may not be used to
consummate sales of Bonds unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is March , 1998
<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, proxy statements and
other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Suite 1400, 500 West Madison
Street, Chicago, IL 60601; and Seven World Trade Center, Suite
1300, New York, NY 10048. The Commission maintains a web site on
the Internet that contains reports, proxy and information
statements and other information regarding registrants, including
the Company; the address of such site is http://www.sec.gov.
Copies of this material can also be obtained at prescribed rates
from the Public Reference Section of the Commission at its
principal office 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. Reports, proxy statements
and other information concerning the Company can be inspected and
copied at the respective offices of those exchanges at 20 Broad
Street, New York, NY, and at 1900 Market Street, Philadelphia,
PA. In addition, reports, proxy statements and other information
concerning the Company can be inspected at the offices of the
Company, Two North Ninth Street, Allentown, PA.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to
the Exchange Act are hereby incorporated by reference herein and
made a part hereof:
(1) The Company's Annual Report on Form 10-K for the year
ended December 31, 1997; and
(2) The Company's Current Report on Form 8-K dated February
2, 1998.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of the offering made by this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to
be a part hereof from the date of filing of such documents (such
documents, and the documents referred to above, being hereinafter
referred to as "Incorporated Documents"). Any statement contained
in an Incorporated Document shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed
Incorporated Document or in the accompanying Prospectus Supplement
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.
COPIES OF THE DOCUMENTS REFERRED TO ABOVE (OTHER THAN EXHIBITS
TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN) WILL BE FURNISHED UPON REQUEST
WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS
DELIVERED. WRITTEN OR TELEPHONE REQUESTS SHOULD BE DIRECTED TO
PP&L, INC., TWO NORTH NINTH STREET, ALLENTOWN, PA 18101,
ATTENTION: INVESTOR SERVICES DEPARTMENT (800/345-3085).
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THE COMPANY
The Company, incorporated under the laws of the Commonwealth
of Pennsylvania in 1920, provides electricity delivery services
in eastern and central Pennsylvania. The Company provides
electricity delivery services to approximately 1.2 million
customers in a 10,000 square mile territory in 29 counties of
eastern and central Pennsylvania with a population of approximately
2.6 million persons. This service area has 129 communities with
populations over 5,000, the largest cities of which are Allentown,
Bethlehem, Harrisburg, Hazleton, Lancaster, Scranton, Wilkes-Barre
and Williamsport. PP&L also offers electricity and other services
to retail and wholesale customers throughout Pennsylvania and
neighboring states. All of the outstanding shares of common stock
of the Company are owned by PP&L Resources, Inc., a Pennsylvania
corporation. The Company's general offices are located at Two
North Ninth Street, Allentown, Pennsylvania 18101, and its
telephone number is 610-774-5151.
RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
3.47 3.50 3.48 2.70 3.31
APPLICATION OF PROCEEDS
The Company plans to issue and sell up to $200 million
aggregate principal amount of Bonds on terms to be determined at
the time of sale. The net proceeds from the sale of the Bonds will
be added to the Company's general funds and used for general
corporate purposes, including the retirement of $116 million of
unsecured notes bearing interest at variable rates that would
otherwise mature in 2001, or the reduction of short-term debt
incurred to provide interim financing. Pending such use, the net
proceeds will be invested by the Company in short-term money
market instruments.
DESCRIPTION OF BONDS
GENERAL. The Bonds will be issued under a Mortgage and Deed
of Trust, dated as of October 1, 1945, as supplemented (the
"Mortgage"), of which Bankers Trust Company (as successor to
Morgan Guaranty Trust Company of New York) is Trustee, and rank
on a parity with other series of the Company's First Mortgage
Bonds. Principal and interest will be payable in New York City at
the office or agency of the Company, which initially will be the
principal office of the Trustee. Interest also will be payable at
the general offices of the Company in Allentown, Pennsylvania.
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Statements herein concerning the Bonds and the Mortgage are
brief summaries and do not purport to be complete. They are
subject to the detailed provisions of the Bonds and the Mortgage.
References to article and section numbers herein are references
to article and section numbers of the Mortgage. The Bonds do
not have any sinking or improvement fund or other provision for
amortization prior to maturity.
FORM AND EXCHANGES. The Bonds will be issued in fully
registered form in denominations of $1,000 and multiples thereof.
Exchanges and transfers of the Bonds may be made at the principal
office of the Trustee or at the offices of such other companies
as the Company may designate from time to time. The Company does
not presently plan to designate any other company for such
purpose. There will be no charge by the Company for any exchange
or transfer of the Bonds.
MATURITY, INTEREST RATE AND PAYMENT DATES. See the
accompanying Prospectus Supplement.
REDEMPTION AND PURCHASE OF THE BONDS. See the accompanying
Prospectus Supplement.
MAINTENANCE AND REPLACEMENT FUND. The Mortgage provides
for an annual Maintenance and Replacement Fund requirement equal
to 15 1/2% of adjusted gross operating revenues (calculated in
accordance with the Mortgage). Such requirement may be
met by depositing cash with the Trustee; certifying expenditures
for maintenance and repairs of mortgaged property, for gross property
additions, and for certain automotive equipment; or by taking
credit for bonds and qualified prior lien bonds retired. Such
cash may be withdrawn on similar bases. The Company has the
right (without any consent or other action by the holders of any
series of bonds) to make such amendments to the Mortgage as shall
be necessary to delete the Maintenance and Replacement Fund
requirement. (See Section 39.)
The Company has agreed not to apply any cash deposited with
the Trustee pursuant to the Maintenance and Replacement Fund to
the redemption of the Bonds so long as any bonds of other series
Outstanding at the date of original issue of any series of the
Bonds remain Outstanding.
SPECIAL PROVISIONS FOR RETIREMENT OF THE BONDS. If, during
any twelve-month period, mortgaged property is disposed of by
order of or to any governmental authority, resulting in the
receipt of $10 million or more of proceeds, the Company (subject
to certain conditions) must apply such proceeds (less certain
deductions) to the retirement of bonds of any series. In that
event, the Bonds will be redeemable at special redemption prices
that will be set forth in the accompanying Prospectus Supplement,
and the Bonds may be subject to special call or put options as
described in the accompanying Prospectus Supplement. (See Section
64.)
SECURITY. The Bonds, together with all other bonds now or
hereafter issued under the Mortgage, will be secured by the
Mortgage, which constitutes, in the opinion of counsel for the
Company, a first mortgage lien on all of the Company's properties
(except those referred to below), subject to: (1) leases of minor
portions of the Company's property to others for uses which, in
such counsel's opinion, do not interfere with its business; (2)
leases of certain property of the Company not used in its
electric utility business; (3) minor defects, irregularities and
deficiencies in titles of properties and rights-of-way, which do
not materially impair the use of such property and rights-of-way
for the purposes of the Company; and (4) other excepted
encumbrances. In general, there are excepted from the lien of the
Mortgage all cash and securities; equipment, apparatus, materials
or supplies held for sale or other disposition; aircraft,
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automobiles and other vehicles; timber, minerals, mineral rights
and royalties; and receivables, contracts, leases and operating
agreements.
The Mortgage contains provisions for including
after-acquired property within the lien thereof, subject to any
pre-existing liens and to certain limitations in the case of
consolidation, merger or sale of substantially all of the
Company's assets.
ISSUANCE OF ADDITIONAL BONDS. Bonds of any series may be
issued from time to time on the bases of: (1) 60% of property
additions to electric, gas, steam or hot water property, acquired
after June 30, 1945, but not including natural gas production
property and after adjustments for retirements of funded property
other than property for supplying water; (2) retirement or
cancellation of bonds or qualified prior lien bonds; and (3)
deposit of cash. With certain exceptions in the case of (2)
above, the issuance of bonds is subject to an earnings coverage
test which requires adjusted net earnings before income taxes for
twelve out of the preceding fifteen months of at least twice the
annual interest requirements on all bonds at the time
outstanding, including those being issued, and on all
indebtedness of prior rank. In computing adjusted net earnings,
an amount equal to 15 1/2% of the adjusted gross operating revenues
(calculated as provided in the Mortgage) must be used in lieu of
actual expenditures for maintenance and repairs and provisions
for property retirement. The issuance of bonds on the basis of
property additions subject to liens is restricted. It is
expected that the Bonds will be issued against unfunded property
additions, which were in excess of $1.85 billion at December 31,
1997. The issuance tests contained in the Mortgage are not
expected to limit the Company's ability to issue the Bonds.
(See Articles V, VI and VII.)
The Company has reserved the right to amend the Mortgage
without any consent or other action by holders of any outstanding
series of bonds (including the Bonds): (1) to include nuclear
fuel (and similar or analogous devices or substances) as property
additions; and (2) to make available as property additions
various forms of space satellites, space stations and other
analogous facilities, various fuel transportation facilities
(primarily railroad cars and other railroad equipment, tankers
and other vessels), and generally, electric, gas and energy or
fuel property (including property for the development of
electricity, gas and fuel or energy in any form) and water and
steam heat property. Such property could be located anywhere if
duly subjected to the lien of the Mortgage and useful in connection
with the energy, fuel or water business. Excepted property would
continue to include property used principally for the production
or gathering of natural gas.
The amount of the obligations secured by prior liens on
mortgaged property may be increased, provided that, if any
property subject to such prior lien shall have been made the
basis of a credit under the Mortgage, all the additional
obligations are deposited with the Trustee or the trustee or
other holder of a qualified lien.
RELEASE AND SUBSTITUTION OF PROPERTY. Property may be
released upon the bases of: (1) the deposit of cash, or, to a
limited extent, purchase money mortgages; (2) property additions,
after adjustments in certain cases to offset retirements and
after making adjustments for qualified prior lien bonds
outstanding against property additions; and (3) waiver of the
right to issue bonds without applying any earnings tests. Cash
may be withdrawn upon the bases stated in (2) and (3) above. The
Company has reserved the right (without any consent or other
action by holders of any series of bonds created after September
30, 1989, including the Bonds) to amend the release provisions of
the Mortgage to permit releases of funded property at the lower
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of cost or fair value at the time of funding and to permit
release of unfunded property on the basis of an engineer's
certificate stating that the Company has at least one dollar
($1.00) of unfunded property after deducting the cost of the
property then being released. (See Article XI.)
DIVIDEND COVENANT. No cash dividends on common stock may be
paid unless after such payments the amount remaining in earned
surplus plus the provisions made subsequent to September 30, 1945
for depreciation and retirement of property shall equal the
Maintenance and Replacement Fund requirements of the Mortgage for
such period, less maintenance expenditures. (See Section 39.)
MODIFICATION OF MORTGAGE. Bondholders' rights may be
modified with the consent of the holders of 66 2/3% of the bonds.
If less than all series of bonds are affected, the consent of the
holders of 66 2/3% of each series affected is also required. The
Company has reserved the right (without any consent or other
action by holders of any series of bonds created after 1991,
including the Bonds) to substitute for the foregoing provisions
the following: Bondholders' rights may be modified with the
consent of the holders of a majority of the bonds, but if less
than all series of the bonds are so affected, only the consent of
a majority of the affected bonds is required. In general, no
modification of the terms of payment of principal or interest and
no modification affecting the lien or reducing the percentage
required for modification is effective against any bondholder
without his consent. (See Article XIX.)
DEFAULTS AND NOTICE THEREOF. Defaults are: default in
payment of principal; default for 60 days in payment of interest
or of installments of funds for retirement of bonds; certain
defaults with respect to qualified lien bonds; certain events of
bankruptcy, insolvency or reorganization; and default for 90 days
after notice by the Trustee in other covenants. The Trustee may
withhold notice of default (except in payment of principal,
interest or any fund for retirement of bonds), if it thinks it
is in the interests of the bondholders.
Holders of 25% of the bonds may declare the principal and
interest due on default, but a majority may annul such
declaration if such default has been cured. No holder of bonds
may enforce the lien of the Mortgage unless (1) such holder has
given the Trustee written notice of a default; (2) holders of 25%
of the bonds have requested the Trustee to act and offered it
reasonable opportunity to act and indemnity satisfactory to the
Trustee against the costs, expenses and liabilities to be
incurred thereby; and (3) the Trustee has failed to act. The
Trustee is not required to risk its funds or incur personal
liability if there is reasonable ground for believing that the
repayment is not reasonably assured. The holders of a majority of
the bonds may direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee. (See
Article XIII.)
EVIDENCE TO BE FURNISHED TO THE TRUSTEE. Compliance with
Mortgage provisions is evidenced by written statements of the
Company's officers or persons selected or paid by the Company. In
certain major matters, the accountant, appraiser, engineer or
counsel must be independent. Various certificates and other
papers are required to be filed annually and in certain events,
including an annual certificate with reference to compliance with
the terms of the Mortgage and absence of Defaults.
----------------------------------------
6
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CERTAIN TAX MATTERS. In the opinion of Michael A. McGrail,
Esq., Senior Counsel of the Company, Bonds owned by individuals
residing in Pennsylvania are subject to the 4 mills ($4.00 on
each $1,000 of principal amount) Pennsylvania corporate loans
tax. Such tax will be withheld from interest payments to such
individuals. Counsel for the Company is also of the opinion that
the Bonds are exempt from existing personal property taxes in
Pennsylvania.
EXPERTS
The consolidated financial statements of the Company
incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997
have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in accounting and auditing.
Statements made herein and in the documents incorporated by
reference in this Prospectus as to matters of law and legal
conclusions have been reviewed by Michael A. McGrail, Esq.,
Senior Counsel of the Company, and have been made in reliance
upon his authority as an expert.
VALIDITY OF THE BONDS
The validity of the Bonds will be passed upon for the
Company by Michael A. McGrail, Esq., Senior Counsel of the
Company, and Reid & Priest LLP, New York, New York, and for any
agent, underwriter or dealer by Sullivan & Cromwell, New York,
New York. However, all matters pertaining to the organization of
the Company and titles and the lien of the Mortgage will be
passed upon only by Mr. McGrail. As to matters involving the law
of the Commonwealth of Pennsylvania, Reid & Priest LLP and
Sullivan & Cromwell will rely on the opinion of Mr. McGrail. Mr.
McGrail is a full-time employee of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Bonds in any of three ways: (1)
through underwriters or dealers; (2) directly to a limited number
of purchasers or to a single purchaser; or (3) through agents.
The Prospectus Supplement with respect to the Offered Bonds will
set forth the terms of the offering and the proceeds to the
Company from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial public
offering price, any discounts or concessions allowed or reallowed
or paid to dealers and any securities exchanges on which such
offered bonds may be listed. 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 Offered Bonds will
be acquired by the underwriters for their own account and may be
resold 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 sale. The Offered Bonds
may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or
directly by one or more firms acting as underwriters. The
underwriter or underwriters with respect to the Offered Bonds
will be named in the Prospectus Supplement relating to such
offering, and compensation payable to such underwriters will be
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set forth in the Prospectus Supplement. If an underwriting
syndicate is used, the managing underwriter or underwriters will
be set forth on the cover page of the Prospectus Supplement. Any
underwriting agreement will provide that the obligations of the
underwriters will be subject to certain conditions precedent and
that the underwriters will be obligated to purchase all of the
Offered Bonds if any are purchased. The Company will agree to
indemnify any underwriters against certain civil liabilities,
including liabilities under the Securities Act of 1933.
Bonds may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved
in an offer or sale in respect of which this Prospectus is
delivered will be named and any commissions payable by the
Company to such agent will be set forth in the Prospectus
Supplement relating thereto. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
--------------------------------
No dealer, salesman or other person has been authorized to
give any information or to make any representation not contained
in this Prospectus or in the accompanying Prospectus Supplement
and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company or
any underwriter. This Prospectus and the accompanying Prospectus
Supplement do not constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby in any
jurisdiction in which it is unlawful to make such an offer or
solicitation.
Neither the delivery of this Prospectus and the accompanying
Prospectus Supplement nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no
change in the affairs of the Company since the date of the
accompanying Prospectus Supplement.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission
registration fee . . . . . . . . . . . . . . $59,000
Printing expenses . . . . . . . . . . . . . . . 30,000
Fees and expenses of Trustee, including counsel
and authentication fees . . . . . . . . . . . 12,000
Legal fees . . . . . . . . . . . . . . . . . . 50,000
Accounting fees . . . . . . . . . . . . . . . . 15,000
Postage . . . . . . . . . . . . . . . . . . . . 4,000
Rating agency fees . . . . . . . . . . . . . . 100,000
Blue Sky fees and expenses . . . . . . . . . . 10,000
Recording fees . . . . . . . . . . . . . . . . 2,000
Miscellaneous . . . . . . . . . . . . . . . . . 23,000
--------
Total . . . . . . . . . . . . . . . . . . $305,000
========
All of the above except the Securities and Exchange
Commission registration fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7.02 of the By-laws of the registrant reads as
follows:
"Section 7.02. Indemnification of Directors and Officers.
(a) Right to Indemnification. Except as prohibited by law,
every director and officer of the Company shall be entitled as of
right to be indemnified by the Company against reasonable expense
and any liability paid or incurred by such person in connection
with any actual or threatened claim, action, suit or proceeding,
civil, criminal, administrative, investigative or other, whether
brought by or in the right of the Company or otherwise, in which
he or she may be involved, as a party or otherwise, by reason of
such person being or having been a director or officer of the
Company or by reason of the fact that such person is or was
serving at the request of the Company as a director, officer,
employee, fiduciary or other representative of another
corporation, partnership, joint venture, trust, employee benefit
plan or other entity (such claim, action, suit or proceeding
hereinafter being referred to as "action"). Such indemnification
shall include the right to have expenses incurred by such person
in connection with an action paid in advance by the Company prior
to final disposition of such action, subject to such conditions
as may be prescribed by law. Persons who are not directors or
officers of the Company may be similarly indemnified in respect
of service to the Company or to another such entity at the
request of the Company to the extent the Board of Directors at
any time denominates such person as entitled to the benefits of
this Section 7.02. As used herein, "expense" shall include fees
and expenses of counsel selected by such person; and "liability"
shall include amounts of judgments, excise taxes, fines and
penalties, and amounts paid in settlement.
(b) Right of Claimant to Bring Suit. If a claim under
paragraph (a) of this Section 7.02 is not paid in full by the
Company within thirty days after a written claim has been
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received by the Company, the claimant may at any time thereafter
bring suit against the Company to recover the unpaid amount of
the claim, and, if successful in whole or in part, the claimant
shall also be entitled to be paid the expense of prosecuting such
claim. It shall be a defense to any such action that the conduct
of the claimant was such that under Pennsylvania law the Company
would be prohibited from indemnifying the claimant for the amount
claimed, but the burden of proving such defense shall be on the
Company. Neither the failure of the Company (including its Board
of Directors, independent legal counsel and its shareholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because the conduct of the claimant was not such
that indemnification would be prohibited by law, nor an actual
determination by the Company (including its Board of Directors,
independent legal counsel or its shareholders) that the conduct
of the claimant was such that indemnification would be prohibited
by law, shall be a defense to the action or create a presumption
that the conduct of the claimant was such that indemnification
would be prohibited by law.
(c) Insurance and Funding. The Company may purchase and
maintain insurance to protect itself and any person eligible to
be indemnified hereunder against any liability or expense
asserted or incurred by such person in connection with any
action, whether or not the Company would have the power to
indemnify such person against such liability or expense by law or
under the provisions of this Section 7.02. The Company may create
a trust fund, grant a security interest, cause a letter of credit
to be issued or use other means (whether or not similar to the
foregoing) to ensure the payment of such sums as may become
necessary to effect indemnification as provided herein.
(d) Non-Exclusivity; Nature and Extent of Rights. The right
of indemnification provided for herein (1) shall not be deemed
exclusive of any other rights, whether now existing or hereafter
created, to which those seeking indemnification hereunder may be
entitled under any agreement, by-law or charter provision, vote
of shareholders or directors or otherwise, (2) shall be deemed to
create contractual rights in favor of persons entitled to
indemnification hereunder, (3) shall continue as to persons who
have ceased to have the status pursuant to which they were
entitled or were denominated as entitled to indemnification
hereunder and shall inure to the benefit of the heirs and legal
representatives of persons entitled to indemnification hereunder
and (4) shall be applicable to actions, suits or proceedings
commenced after the adoption hereof, whether arising from acts or
omissions occurring before or after the adoption hereof. The
right of indemnification provided for herein may not be amended,
modified or repealed so as to limit in any way the
indemnification provided for herein with respect to any acts or
omissions occurring prior to the effective date of any such
amendment, modification or repeal."
Directors and officers of the registrant may also be
indemnified in certain circumstances pursuant to the statutory
provisions of general application contained in Pennsylvania law.
Furthermore, the Company as well as its directors and officers,
may be entitled to indemnification by any underwriters named in
the Prospectus Supplement against certain civil liabilities under
the Securities Act of 1933, under agreements entered into between
the Company and such underwriters.
The registrant presently has insurance policies which, among
other things, include liability insurance coverage for officers
and directors under which officers and directors are covered
against any "loss" by reason of payment of damages, judgments,
II-2
<PAGE>
settlements and defense costs. "Loss" is specifically defined
to exclude fines and penalties, as well as matters deemed
uninsurable under the law pursuant to which the insurance
policy shall be construed. The policies also contain other
specific exclusions, including illegally obtained personal
profit or advantage, and dishonesty.
ITEM 16. EXHIBITS.
Reference is made to the information contained in the
Exhibit index filed as part of this Registration Statement, which
information is incorporated herein by reference pursuant to the
Commission's Rules and Regulations under the Securities Act of 1933,
as amended (the "ACT").
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby, a
post-effective amendment to this Registration Statement;
(i) to include any prospectus required by Section
10(a)(3) of the Act;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this
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 this Registration
Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b), if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in
paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability
under the Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
II-3
<PAGE>
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered hereby which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Act, each filing
of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by
reference in 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.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance
upon Rule 430A and contained in the form of prospectus filed
by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this
Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under
the Act, 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.
Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions of the
By-laws of the registrant and the provisions of Pennsylvania law
described under Item 15 above, or otherwise, the registrant has
been advised that in the opinion of the 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
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.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
AS AMENDED, 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 ALLENTOWN, AND
COMMONWEALTH OF PENNSYLVANIA, ON THE 27TH DAY OF MARCH, 1998.
PP&L, INC.
By /s/ William F. Hecht
--------------------------------
WILLIAM F. HECHT, CHAIRMAN,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933,
AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY
THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 27TH
DAY OF MARCH, 1998.
SIGNATURE TITLE
--------- -----
/s/ William F. Hecht
------------------------- Principal Executive Officer and
William F. Hecht, Chairman, Director
President and Chief Executive
Officer
/s/ John R. Biggar
------------------------- Principal Financial Officer
John R. Biggar, Senior Vice
President - Financial
/s/ Joseph J. McCabe
------------------------- Principal Accounting Officer
Joseph J. McCabe,
Vice President
and Controller
E. Allen Deaver Ruth Leventhal )
Nance K. Dicciani Marilyn Ware Lewis )
William J. Flood Frank A. Long ) Directors
Elmer D. Gates Norman Robertson )
Stuart Heydt )
By /s/ William F. Hecht
--------------------------------------
William F. Hecht, Attorney-in-fact
II-5
<PAGE>
PP&L, INC.
REGISTRATION STATEMENT ON FORM S-3
EXHIBIT INDEX
-------------
The following Exhibits indicated by an asterisk preceding
the Exhibit number are filed herewith. The balance of the
Exhibits have heretofore been filed with the Commission as
indicated and are incorporated herein by reference.
*1 - Form of Underwriting Agreement
4(a) - Mortgage and Deed of Trust dated as of
October 1, 1945, between Pennsylvania Power
and Light Company (now PP&L, Inc. and
referred to in this Index as the "Company")
and Guaranty Trust Company of New York (now
Morgan Guaranty Trust Company of New York),
as Trustee (Exhibit 2(a)-4 to Registration
Statement No. 2-60291)
4(a)-1 - Supplement, dated as of July 1, 1954, to said
Mortgage and Deed of Trust (Exhibit 2(b)-5 to
Registration Statement No. 2-19255)
4(a)-2 - Supplement, dated as of March 1, 1964, to
said Mortgage and Deed of Trust (Exhibit
2(a)-12 to Registration Statement No. 2-
60291)
4(a)-3 - Supplement, dated as of June 1, 1966, to said
Mortgage and Deed of Trust (Exhibit 2(a)-13
to Registration Statement No. 2-60291)
4(a)-4 - Supplement, dated as of November 1, 1967, to
said Mortgage and Deed of Trust (Exhibit
2(a)-14 to Registration Statement No. 2-
60291)
4(a)-5 - Supplement, dated as of January 1, 1969, to
said Mortgage and Deed of Trust (Exhibit
2(a)-16 to Registration Statement No. 2-
60291)
4(a)-6 - Supplement, dated as of June 1, 1969, to said
Mortgage and Deed of Trust (Exhibit 2(a)-17
to Registration Statement No. 2-60291)
4(a)-7 - Supplement, dated as of March 1, 1970, to
said Mortgage and Deed of Trust (Exhibit
2(a)-18 to Registration Statement No. 2-
60291)
4(a)-8 - Supplement, dated as of February 1, 1971, to
said Mortgage and Deed of Trust (Exhibit
2(a)-19 to Registration Statement No. 2-
60291)
4(a)-9 - Supplement, dated as of February 1, 1972, to
said Mortgage and Deed of Trust (Exhibit
2(a)-20 to Registration Statement No. 2-
60291)
4(a)-10 - Supplement, dated as of January 1, 1973, to
said Mortgage and Deed of Trust (Exhibit
2(a)-21 to Registration Statement No. 2-
60291)
II-6
<PAGE>
4(a)-11 - Supplement, dated as of May 1, 1973, to said
Mortgage and Deed of Trust (Exhibit 2(a)-22
to Registration Statement No. 2-60291)
4(a)-12 - Supplement, dated as of December 1, 1976, to
said Mortgage and Deed of Trust (Exhibit
2(a)-26 to Registration Statement No. 2-
57633)
4(a)-13 - Supplement, dated as of December 1, 1976, to
said Mortgage and Deed of Trust (Exhibit
2(a)-28 to Registration Statement No. 2-
60291)
4(a)-14 - Supplement, dated as of March 1, 1984, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated April 24, 1984)
4(a)-15 - Supplement, dated as of August 15, 1984, to
said Mortgage and Deed of Trust (Exhibit 4(b)
to the Company's Form 10-Q Report (File No.
1-905) for the quarter ended September 30,
1984)
4(a)-16 - Supplement, dated as of June 15, 1985, to
said Mortgage and Deed of Trust (Exhibit
4(a)-35 to the Company's Form 10-K Report
(File No. 1-905) for the year ended December
31, 1985)
4(a)-17 - Supplement, dated as of April 1, 1986, to
said Mortgage and Deed of Trust (Exhibit
4(a)-37 to the Company's Form 10-K Report
(File No. 1-905) for the year ended December
31, 1986)
4(a)-18 - Supplement, dated as of January 1, 1989, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated February 2, 1989)
4(a)-19 - Supplement, dated as of October 1, 1989, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated November 6, 1989)
4(a)-20 - Supplement, dated as of July 1, 1991, to said
Mortgage and Deed of Trust (Exhibit 4(a) to
the Company's Form 8-K Report (File No. 1-
905) dated July 29, 1991)
4(a)-21 - Supplement, dated as of May 1, 1992, to said
Mortgage and Deed of Trust (Exhibit 4(a) to
the Company's Form 8-K Report (File No. 1-
905) dated June 1, 1992)
4(a)-22 - Supplement, dated as of November 1, 1992, to
said Mortgage and Deed of Trust (Exhibit
4(b)-29 to the Company's Form 10-K Report
(File No. 1-905) dated June 1, 1992)
4(a)-23 - Supplement, dated as of February 1, 1992, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated February 16, 1993)
4(a)-24 - Supplement, dated as of April 1, 1993, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated April 30, 1993)
II-7
<PAGE>
4(a)-25 - Supplement, dated as of June 1, 1993, to said
Mortgage and Deed of Trust (Exhibit 4(a) to
the Company's Form 8-K Report (File No. 1-
905) dated July 7, 1993)
4(a)-26 - Supplement, dated as of October 1, 1993, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-
905) dated October 29, 1993)
4(a)-27 - Supplement, dated as of February 15, 1994, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-905)
dated March 11, 1994)
4(a)-28 - Supplement, dated as of March 1, 1994, to
said Mortgage and Deed of Trust (Exhibit 4(b)
to the Company's Form 8-K Report (File No. 1-905)
dated March 11, 1994)
4(a)-29 - Supplement, dated as of March 15, 1994, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-905)
dated March 30, 1994)
4(a)-30 - Supplement, dated as of September 1, 1994, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-905)
dated October 3, 1994)
4(a)-31 - Supplement, dated as of October 1, 1994, to
said Mortgage and Deed of Trust (Exhibit 4(a)
to the Company's Form 8-K Report (File No. 1-905)
dated October 3, 1994)
4(a)-32 - Supplement, dated as of August 1, 1995, to
said Mortgage and Deed of Trust (Exhibit 6(a)
to Company's Form 10-Q Report (File No. 1-905)
for the quarter ended September 30, 1995)
4(a)-33 - Supplement, dated as of April 1, 1997, to
said Mortgage and Deed of Trust (Exhibit 4(b)
to the Company's Form 10-K Report (File No. 1-905)
for the year ended December 31, 1997)
*4(a)-34 - Proposed Form of Supplement to said Mortgage
and Deed of Trust
*5(a) - Opinion of Michael A. McGrail, Esq. with
respect to legality of securities being
registered hereunder
*5(b) - Opinion of Reid & Priest LLP with respect to
legality of securities being registered
hereunder
*12 - Computation of Ratio of Earnings to Fixed
Charges
*23(a) - Consent of Price Waterhouse LLP
23(b) - Consent of Michael A. McGrail, Esq.
(reference is made to Exhibit 5(a) filed
herewith)
23(c) - Consent of Reid & Priest LLP (reference is
made to Exhibit 5(b) filed herewith)
*24 - Power of Attorney
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<PAGE>
*25 - Statement of Eligibility of Trustee
II-9
Exhibit 1
PP&L, INC.
$__________ First Mortgage Bonds, ____% Series due 20__
UNDERWRITING AGREEMENT
----------------------
April __, 1998
Morgan Stanley & Co. Incorporated,
[others to come],
As Underwriters,
c/o Morgan Stanley & Co. Incorporated,
1585 Broadway,
New York, New York 10036.
Ladies and Gentlemen:
1. Introductory.
------------
PP&L, Inc., a Pennsylvania corporation ("Company"),
proposes to issue and sell $___________ principal amount of its
First Mortgage Bonds, ____% Series due ____ (the "Bonds"), to be
issued under the Company's Mortgage and Deed of Trust, dated as
of October 1, 1945, to Bankers Trust Company (successor to Morgan
Guaranty Trust Company of New York), as Trustee, as amended and
supplemented by sixty-five indentures supplemental thereto (the
"Mortgage"), and as to be amended and supplemented by a
Sixty-Sixth Supplemental Indenture to be dated as of April __,
1998 (the "Sixty-Sixth Supplemental Indenture") (such Mortgage
and Deed of Trust, as amended and supplemented by such sixty-six
supplemental indentures, being hereinafter called the
"Indenture"), and hereby agrees with the several Underwriters
named above ("Underwriters") as follows:
2. Representations and Warranties.
------------------------------
The Company represents and warrants to, and agrees
with, the several Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement (No. 333-_____) on Form S-3, including a
prospectus, covering the registration of the Bonds under the
Securities Act of 1933, as amended (the "Act"), and such
registration statement has become effective. Such
registration statement, as amended at the time of its
effectiveness, is hereinafter referred to as the
"Registration Statement" and such prospectus, as
supplemented to reflect the terms of offering and sale of
the Bonds by a prospectus supplement to be filed with the
Commission pursuant to Rule 424(b) ("Rule 424(b)") under the
Act, including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus"
(including, in each case, all documents incorporated or
deemed to be incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act and the information, if
any, deemed to be part thereof pursuant to Rule 430A(b) of
the published rules and regulations of the Commission under
the Act).
(b) On its effective date, the Registration Statement
conformed in all material respects to the requirements of
the Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the published rules and
regulations ("Rules and Regulations") of the Commission
thereunder and did 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, and on the date of this Agreement,
the Prospectus and the Indenture conform in all material
respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, and the Prospectus does
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 and,
as of the date of this Agreement, no post-effective
amendment to the Registration Statement was required to be
filed under the Act and the Rules and Regulations; provided
that the foregoing representations and warranties in this
subsection (b) shall not apply to statements or omissions
made in reliance upon and in conformity with information
furnished hereunder or otherwise in writing to the Company
by or on behalf of any Underwriter for use in connection
with the preparation of the Registration Statement or the
Prospectus or to any statements in or omissions from the
Statement of Eligibility of the Trustee under the Indenture.
Each of the several Underwriters represents and
warrants to, and agrees with, the Company, its directors and such
of its officers as shall have signed the Registration Statement,
and to each other Underwriter, that the information furnished in
writing to the Company by, or through you on behalf of, such
Underwriter expressly for use in the Registration Statement or
the Prospectus does not contain an untrue statement of a material
fact and does not omit to state a material fact in connection
with such information required to be stated therein or necessary
to make such information not misleading.
3. Purchase and Sale of Bonds.
--------------------------
On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein contained, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Company, (i) at a purchase price of
______% of the principal amount thereof, plus accrued interest,
if any, from the date of the first authentication of the Bonds to
the Closing Date (as hereinafter defined), the respective
principal amounts of the Bonds set forth below opposite the names
of such Underwriters.
Principal
Amount of
Underwriter Bonds
----------- ---------
Morgan Stanley & Co. Incorporated $
[others] __________
Total $
4. Public Offering.
---------------
The several Underwriters agree that as soon as
practicable, in their judgment, they will make a public offering
of their respective portions of the Bonds in accordance with the
terms set forth in the Prospectus.
5. Delivery and Payment.
--------------------
Payment of the full purchase price of the Bonds shall
be made by the wire transfer of immediately available funds to
the Company's account (No. __________) at The Chase Manhattan
Bank (ABA Routing Number ___________) by 10:00 A.M., New York
Time, on the Closing Date, as hereinafter defined. Such payment
shall be made upon delivery of the Bonds to you or upon your
order at the office of Reid & Priest, 40 West 57th Street, New
York, New York 10019, for the account of the Underwriters. The
Bonds so to be delivered will be in fully registered form in such
authorized denominations and registered in such names as you may
timely request, or to the extent not so requested, registered in
the names of the respective Underwriters in such authorized
denominations as the Company shall determine. For the purpose of
expediting the checking and packaging of the Bonds, the Company
will make the Bonds available for inspection by you at the office
of Bankers Trust Company, Four Albany Street, New York, New York
10006, Attention: ________________ not later than 10:00 A.M.,
New York Time, on the business day next preceding the Closing
Date.
The term "Closing Date" wherever used in this Agreement
shall mean April __, 1998 or such other date (i) not later than
the seventh full business day thereafter as may be agreed upon in
writing by the Company and you, or (ii) as shall be determined by
postponement pursuant to the provisions of Section 10 hereof.
6. Certain Covenants of the Company.
--------------------------------
The Company covenants and agrees with the several
Underwriters:
(a) To file the Prospectus with the Commission
pursuant to Rule 424(b) not later than the second business
day following the execution and delivery of this Agreement;
to advise you promptly of any such filing pursuant to Rule
424(b); to advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus
(including through the filing of any document that would as
a result of such filing be incorporated or deemed to be
incorporated by reference into the Prospectus), and not to
effect such amendment or supplement if you have reasonably
objected in writing; also to advise you promptly of (i) any
amendment or supplement to the Registration Statement or the
Prospectus (including through the filing of any document
that would as a result of such filing be incorporated or
deemed to be incorporated by reference into the Prospectus),
(ii) any request by the Commission for any amendment or
supplement to the Registration Statement or the Prospectus
or for additional information, and (iii) the institution by
the Commission of any stop order proceedings in respect of
the Registration Statement or the initiation of any
proceedings for that purpose, and to use its best efforts to
prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued;
(b) To use its best efforts to qualify the Bonds and
to assist in the qualification of the Bonds by you or on
your behalf for offer and sale under the securities or blue
sky laws of such States as you may designate, to continue
such qualification in effect so long as required for the
distribution of the Bonds and to reimburse you for any
expenses (including filing fees and fees and disbursements
of counsel) paid by you or on your behalf to qualify the
Bonds for offer and sale, to continue such qualification, to
determine its eligibility for investment and to print the
memoranda relating thereto; provided that the Company shall
not be required to qualify as a foreign corporation in any
State, to consent to service of process in any State other
than with respect to claims arising out of the offering or
sale of the Bonds, or to meet any other requirement in
connection with this paragraph (b) deemed by the Company to
be unduly burdensome;
(c) Promptly to deliver to you one signed copy of the
registration statement as originally filed and of all
amendments thereto heretofore or hereafter filed, including
conformed copies of all exhibits except those incorporated
by reference, and such number of unsigned copies of the
Registration Statement (but excluding the exhibits), each
related preliminary prospectus, the Prospectus, and any
amendments and supplements thereto, as you may reasonably
request;
(d) If at any time when a prospectus relating to the
Bonds is required to be delivered under the Act in
connection with sales by an Underwriter or dealer, any event
occurs 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
to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if it is necessary at any time to amend the Prospectus to
comply with the Act in connection with sales by an
Underwriter or dealer, to advise you of such event or
necessity, as the case may be, and, promptly upon request
made by you, to prepare and file with the Commission an
amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance,
provided that the expense of preparing and filing any such
amendment or supplement (i) which is necessary in connection
with such a delivery of a prospectus more than nine months
after the date of this Agreement or (ii) which relates
solely to the activities of any Underwriter shall be borne
by the Underwriter or Underwriters or the dealer or dealers
requiring the same; and provided further that you shall,
upon inquiry by the Company, advise the Company whether or
not any Underwriter or dealer which shall have been selected
by you retains any unsold Bonds and, for the purposes of
this subsection (d), the Company shall be entitled to assume
that the distribution of the Bonds has been completed when
it is advised by you that no Underwriter or such dealer
retains any Bonds;
(e) As soon as practicable, to make generally
available to its security holders an earnings statement
covering a period of at least twelve months beginning after
the "effective date of the registration statement" within
the meaning of Rule 158 under the Act which will satisfy the
provisions of Section 11(a) of the Act;
(f) To pay or bear (i) all expenses in connection with
the matters herein required to be performed by it, including
all expenses (except as provided in Section 6(d) hereof) in
connection with the preparation and filing of the
Registration Statement and the Prospectus, and any amendment
or supplement thereto, and the furnishing of copies thereof
to the Underwriters, and all audits, statements or reports
in connection therewith, and all expenses in connection with
the original issue and delivery of the Bonds to the
Underwriters at the place designated in Section 5 hereof,
and all Federal and State taxes (if any) payable (not
including any transfer taxes) upon the original issue of the
Bonds, and (ii) all expenses in connection with the printing
of this Agreement and to reimburse the Underwriters for
expenses incurred in distributing any preliminary prospectus
or supplement to the Underwriters; and
(g) During the period from the date of this Agreement
through the Closing Date, the Company shall not, without the
Underwriters' prior written consent, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or
otherwise dispose of, any Bonds, any security convertible
into or exchangeable into or exercisable for Bonds or any
debt securities substantially similar to the Bonds (except
for the Bonds issued pursuant to this Agreement).
7. Conditions of Underwriters' Obligations.
---------------------------------------
The obligations of the several Underwriters to purchase
and pay for the Bonds on the Closing Date shall be subject to the
following conditions:
(a) You shall have received from Price Waterhouse LLP
a letter, dated the date of this Agreement, confirming that
they are independent public accountants within the meaning
of the Act and the Rules and Regulations, and stating in
effect that:
(i) in their opinion the consolidated financial
statements and supplemental financial statement
schedules examined by them and included or incorporated
by reference in the Registration Statement comply as to
form in all material respects with the applicable
accounting requirements of the Act and the Securities
Exchange Act of 1934, as amended, and the related
published rules and regulations thereunder;
(ii) they have made a review of the unaudited
interim financial statements included or incorporated
by reference in the Registration Statement in
accordance with standards established by the American
Institute of Certified Public Accountants;
(iii) on the basis of the review referred to
in clause (ii) above, a reading of the latest available
financial statements of the Company, inquiries of
officials of the Company who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that caused
them to believe that:
(A) any material modifications should be
made to the unaudited interim financial statements
included or incorporated by reference in the
Registration Statement for them to be in
conformity with generally accepted accounting
principles;
(B) the unaudited interim financial
statements included or incorporated by reference
in the Registration Statement do not comply as to
form in all material respects with the applicable
accounting requirements of the Act and the related
published Rules and Regulations;
(C) (i) at the date of the latest available
balance sheet of the Company read by such
accountants, there was any decrease in the capital
stock (except for shares of certain series of the
Company's preferred and preference stocks redeemed
for, or purchased and retired in anticipation of,
sinking fund requirements for such series or for
shares of common stock issued to PP&L Resources,
Inc.), or any increase in long-term debt, as
compared with amounts shown on the latest
consolidated balance sheet included or
incorporated by reference in the Registration
Statement; and (ii) for the twelve-month period
ended on the date of the latest available balance
sheet of the Company, there was any decrease in
net income before dividends on preferred and
preference stock as compared with the applicable
amounts for the twelve-month periods ended on the
corresponding date of the prior year and on the
date of the latest consolidated balance sheet of
the Company included or incorporated by reference
in the Registration Statement; except in all cases
for changes, increases or decreases that the
Prospectus discloses have occurred or may occur or
that are described in such letter); or
(D) at a date not more than five days prior
to the date of this Agreement, there was any
decrease in the capital stock (except for shares
of certain series of the Company's preferred and
preference stocks redeemed for, or purchased and
retired in anticipation of, sinking fund
requirements for such series or for shares of
common stock issued to PP&L Resources, Inc.), or
any increase in long-term debt, as compared with
amounts shown on the latest consolidated balance
sheet included or incorporated by reference in the
Registration Statement; except in all cases for
changes, increases or decreases that the
Prospectus discloses have occurred or may occur or
that are described in such letter; and
(iv) they have compared certain financial and
statistical amounts included or incorporated by
reference in the Registration Statement and the
Prospectus, which amounts are set forth in Schedule A
hereto, with the results obtained from inquiries,
reading of the general accounting records and financial
statements of the Company and other procedures
specified in such letter and have found such amounts to
be in agreement with such results, except as otherwise
specified in such letter.
(b) The Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and
Section 6(a) of this Agreement; and prior to such closing no
stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been instituted, or, to the knowledge of
the Company, shall be contemplated by the Commission and you
shall have received at such closing, a certificate, dated
the Closing Date, of the Company to such effect.
(c) Subsequent to the execution of this Agreement,
there shall not have occurred (i) any material adverse
change not contemplated by the Prospectus in or affecting
particularly the business or properties of the Company
which, in the judgment of Morgan Stanley & Co. Incorporated,
materially impairs the investment quality of the Bonds; (ii)
any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such Exchange, or any
suspension of trading of any securities of the Company on
any exchange or in the over-the-counter market; (iii) a
general banking moratorium declared by Federal or New York
authorities; (iv) any outbreak or escalation of major
hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the
reasonable judgment of Morgan Stanley & Co. Incorporated,
the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical and inadvisable
to proceed with completion of the sale of and payment for
the Bonds and Morgan Stanley & Co. Incorporated shall have
made a similar determination with respect to all other
underwritings of debt securities in which they are
participating and have the contractual right to make such a
determination; or (v) any decrease in the ratings of the
Bonds by Standard & Poor's Ratings Group or Moody's
Investors Service, Inc. or either such organization shall
have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of
the Bonds.
(d) At or before the Closing Date, the Pennsylvania
Public Utility Commission and any other regulatory authority
whose consent or approval shall be required for the issue
and sale of the Bonds by the Company as herein provided
shall have taken all requisite action, or all such requisite
action shall be deemed in fact and law to have been taken,
to authorize such issue and sale on the terms set forth in
the Prospectus.
(e) You shall have received from Michael A. McGrail,
Esq., Senior Counsel, or such other counsel for the Company
as may be acceptable to you, an opinion, dated the Closing
Date, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania,
with power and authority (corporate and other) to own
its properties and conduct its business as described in
the Prospectus;
(ii) The Bonds have been duly authorized,
authenticated and delivered and are valid and legally
binding obligations of the Company entitled to the
benefits and security of the Indenture, enforceable in
accordance with their terms (except to the extent
limited by bankruptcy, insolvency or reorganization
laws or by laws relating to or affecting the
enforcement of creditors' rights and by general equity
principles) and are secured equally and ratably with
all other bonds outstanding under the Mortgage except
insofar as any sinking or other fund may afford
additional security for the bonds of any particular
series;
(iii) The Indenture has been duly authorized,
executed and delivered, and constitutes a valid and
legally binding obligation of the Company enforceable
in accordance with its terms (except to the extent
limited by bankruptcy, insolvency or reorganization
laws or by laws relating to or affecting the
enforcement of creditors' rights and by general equity
principles); and no authorization, vote, consent or
action by the holders of any of the outstanding shares
of capital stock of the Company is necessary with
respect thereto;
(iv) The Mortgage constitutes, and together with
the Sixty-Sixth Supplemental Indenture, when the latter
has been duly recorded, will constitute, the valid
direct first mortgage lien such instruments purport to
create upon the interest of the Company in the property
and franchises therein described (except any which have
been duly released from the lien thereof);
(v) The Company has fee title to all the real
property and has good and valid title to all of the
personal property described in the Indenture as owned
by it and as subject to the lien thereof, subject only
to (1) minor leases which, in the opinion of such
counsel, do not interfere with the Company's business;
(2) minor defects, irregularities and deficiencies in
titles of properties and rights-of-way which, in the
opinion of such counsel, do not materially impair the
use of such property and rights-of-way for the purposes
for which they are held by the Company; (3) other
excepted encumbrances as defined in Section 6 of the
Company's Mortgage; and (4) the provisions of the
licenses and the limited power permits covering the
Company's Wallenpaupack and Holtwood hydroelectric
projects; the Mortgage, subject only as set forth
above, constitutes, and the Sixty-Sixth Supplemental
Indenture, subject only as set forth above, when it
shall have been duly recorded, will constitute,
together and as a single instrument, a valid direct
first mortgage lien upon said properties, which include
all of the physical properties and franchises of the
Company (except such property as may have been duly
released from the lien thereof and such property as may
not be subjected to the lien thereof under the laws of
the Commonwealth of Pennsylvania without the delivery
thereof to the Trustee, and certain other classes of
property expressly excepted in the Indenture); and all
physical properties and franchises (other than those of
the character not subject to the lien of the Mortgage
as aforesaid) acquired by the Company after the
respective dates of the Mortgage and the Sixty-Sixth
Supplemental Indenture have become or will, upon such
acquisition, become subject to the lien thereof,
subject, however, to excepted encumbrances and to
liens, if any, existing or placed thereon at the time
of the acquisition thereof by the Company;
(vi) The Mortgage has been duly filed and recorded
in all jurisdictions in which it is necessary to be
filed and recorded in order to constitute a lien of
record on the property subject thereto;
(vii) The portions of the information
contained in the Prospectus, which are stated therein
to have been made on his authority, have been reviewed
by him and, as to matters of law and legal conclusions,
are correct;
(viii) The descriptions in the Registration
Statement and the Prospectus of statutes, legal and
governmental proceedings and contracts and other
documents are accurate and fairly present the
information required to be shown; and such counsel does
not know of any legal or governmental proceedings
required to be described in the Registration Statement
or Prospectus which are not described, or of any
contracts or documents of a character required to be
described in the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement which are not described and
filed as required; it being understood that such
counsel need express no opinion as to the financial
statements and other financial data contained in the
Registration Statement or the Prospectus;
(ix) This Agreement has been duly authorized,
executed and delivered by the Company;
(x) All legally required proceedings in
connection with the authorization and issue of the
Bonds and the sale of the Bonds by the Company in the
manner set forth herein, have been had and remain in
effect, the Securities Certificate of the Company with
respect to the Bonds has been duly registered pursuant
to Section 1903 of the Pennsylvania Public Utility Code
(66 Pa. C.S. ^U 1903), as amended, and such
registration remains in effect, and all requisite
action of public boards or bodies (other than in
connection or in compliance with the provisions of the
securities or "blue sky" laws of any jurisdiction) as
may be legally required with respect to all or any of
such matters or related thereto has been taken and
remains in effect, and the Company is exempt from the
provisions of the Public Utility Holding Company Act of
1935 applicable to it as a holding company and with
respect to such authorization, issue and sale;
(xi) Except as described in the Registration
Statement and the Prospectus, the Company holds all
franchises, certificates of public convenience,
licenses and permits necessary to carry on the utility
business in which it is engaged; and
(xii) All taxes payable to any State or
subdivision thereof in connection with the execution,
delivery and recordation of the Mortgage and the
Sixty-Sixth Supplemental Indenture, the execution,
authentication, issuance and delivery of the Bonds
being delivered on this date, and the mortgaging of
property under the Mortgage and the Sixty-Sixth
Supplemental Indenture have been paid, except that a
Commonwealth of Pennsylvania tax of fifty cents must be
paid in each county in which the Sixty-Sixth
Supplemental Indenture is recorded, at the time of
recording.
(f) You shall have received from Reid & Priest LLP,
special counsel to the Company, an opinion, dated the
Closing Date, to the effect that:
(i) The Bonds have been duly authorized,
authenticated and delivered and are valid and legally
binding obligations of the Company entitled to the
benefits and security of the Indenture, enforceable in
accordance with their terms (except to the extent
limited by bankruptcy, insolvency or reorganization
laws or by laws relating to or affecting the
enforcement of creditors' rights and by general equity
principles);
(ii) The Indenture has been duly authorized,
executed and delivered, is duly qualified under the
Trust Indenture Act and constitutes a valid and legally
binding obligation of the Company enforceable in
accordance with its terms (except to the extent limited
by bankruptcy, insolvency or reorganization laws or by
laws relating to or affecting the enforcement of
creditors' rights and by general equity principles);
(iii) The Registration Statement has become
effective under the Act and the Prospectus was filed
with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date
specified therein, and, to the best of the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that
purpose have been instituted or are pending or
contemplated under the Act, and the Registration
Statement, as of its effective date, the Prospectus, as
of the date of this Agreement, and any amendment or
supplement thereto, as of its date, complied as to form
in all material respects with the requirements of the
Act, the Trust Indenture Act and the Rules and
Regulations and nothing has come to the attention of
such counsel which would lead such counsel to believe
either that the Registration Statement, at its
effective date, contained any untrue statement of a
material fact or omitted to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the
Prospectus, as supplemented, as of the date of this
Agreement, and as it shall have been amended or
supplemented, as of the Closing Date, contained any
untrue statement of a material fact or omits or omitted
to state any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; it being
understood that such counsel need express no opinion as
to the financial statements and other financial or
statistical data contained or incorporated by reference
in the Registration Statement or the Prospectus;
(iv) The Indenture and the Bonds conform, as to
legal matters, in all material respects, with the
statements concerning them made in the Prospectus;
(v) This Agreement has been duly authorized,
executed and delivered by the Company; and
(vi) The Securities Certificate of the Company
with respect to the Bonds has been duly registered
pursuant to Section 1903 of the Pennsylvania Public
Utility Code (66 Pa. C.S. ^U 1903), as amended, and no
further approval, authorization, consent or other order
of any public board or body (other than in connection
or compliance with the provisions of the securities or
"blue sky" laws of any jurisdiction) is legally
required for the authorization of the issuance and sale
of the Bonds.
In rendering such opinion, Reid & Priest LLP may rely as to
matters governed by Pennsylvania law upon the opinion of Michael
A. McGrail, Esq. or such other counsel referred to in subsection
(e).
(g) You shall have received from Sullivan & Cromwell,
counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the validity of the
Bonds, the Registration Statement, the Prospectus, this
Agreement and other related matters as you may require, and
the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them
to pass upon such matters. In rendering such opinion or
opinions, Sullivan & Cromwell may rely as to matters
governed by Pennsylvania law upon the opinion of Michael A.
McGrail, Esq. or such other counsel referred to above.
(h) You shall have received a certificate, dated the
Closing Date, of the President or a Vice President and a
financial or accounting officer of the Company, in which
such officers, to the best of their knowledge after
reasonable investigation, shall state that (i) the
representations and warranties of the Company in this
Agreement are true and correct (except for immaterial
details) as of the Closing Date, (ii) the Company has
complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date, (iii) no stop
order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for that
purpose have been instituted or are pending by the
Commission, and, (iv) subsequent to the date of the latest
financial statements in the Prospectus, there has been no
material adverse change in the financial position or results
of operations of the Company except as set forth or
contemplated in the Prospectus or as described in such
certificate.
(i) You shall have received a letter from Price
Waterhouse LLP, dated the Closing Date, which meets the
requirements of subsection (a) of this Section, except that
the specified date referred to in such subsection will be a
date not more than five days prior to the Closing Date for
the purposes of this subsection and references to the
prospectus shall be changed to refer to the Prospectus.
The Company will furnish you as promptly as practicable
after the Closing Date with such conformed copies of such
opinions, certificates, letters and documents as you may
reasonably request.
In case any such condition shall not have been
satisfied, this Agreement may be terminated by you upon notice in
writing or by telegram to the Company without liability or
obligation on the part of the Company or any Underwriter, except
as provided in Sections 6(b), 6(f), 9, 11 and 13 hereof.
8. Conditions of Company's Obligations.
-----------------------------------
The obligations of the Company to sell and deliver the
Bonds on the Closing Date are subject to the following
conditions:
(a) At the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall be in
effect or proceeding therefor shall have been instituted or,
to the knowledge of the Company, shall be contemplated.
(b) At or before the Closing Date, the Pennsylvania
Public Utility Commission and any other regulatory authority
whose consent or approval shall be required for the issue
and the sale of the Bonds by the Company as herein provided
shall have taken all requisite action, or all requisite
action shall be deemed in fact and law to have been taken,
to authorize such issue and sale on the terms set forth in
the Prospectus.
If any such conditions shall not have been satisfied,
then the Company shall be entitled, by notice in writing or by
telegram to you, to terminate this Agreement without any
liability on the part of the Company or any Underwriter, except
as provided in Sections 6(b), 6(f), 9, 11 and 13 hereof.
9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees that it will indemnify and hold
harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of
the Act, against any loss, expense, claim, damage or
liability to which, jointly or severally, such Underwriter
or such controlling person may become subject, under the Act
or otherwise, insofar as such loss, expense, claim, damage
or liability (or actions in respect thereof) arises out of
or is based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, the Prospectus, any related preliminary
prospectus, or any amendment or supplement to any thereof,
or arises out of or is based upon the omission or alleged
omission to state therein any material fact required to be
stated therein or necessary to make the statements therein
not misleading; and, except as hereinafter in this Section
provided, the Company agrees to reimburse each Underwriter
and each person who controls any Underwriter as aforesaid
for any reasonable legal or other expenses incurred by such
Underwriter or such controlling person in connection with
investigating or defending any such loss, expense, claim,
damage or liability; provided, however, that the Company
shall not be liable in any such case to the extent that any
such loss, expense, claim, damage or liability arises out of
or is based on an untrue statement or alleged untrue
statement or omission or alleged omission made in any such
document in reliance upon, and in conformity with, written
information furnished to the Company by or through you on
behalf of any Underwriter expressly for use in any such
document or arises out of, or is based on, statements in or
omissions from that part of the Registration Statement which
shall constitute the Statement of Eligibility under the
Trust Indenture Act of the Trustee under the Indenture; and
provided further, that with respect to any untrue statement
or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus or supplement, the
indemnity agreement contained in this subsection (a) shall
not inure to the benefit of any Underwriter from whom the
person asserting any such loss, expense, claim, damage or
liability purchased the Bonds concerned (or to the benefit
of any person controlling such Underwriter), if a copy of
the Prospectus (not including documents incorporated by
reference therein) or of the Prospectus as then amended or
supplemented (not including documents incorporated by
reference therein) was not sent or given to such person at
or prior to the written confirmation of the sale of such
Bonds to such person.
(b) Each Underwriter agrees that it will indemnify and
hold harmless the Company and its officers and directors,
and each of them, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act, against
any loss, expense, claim, damage or liability to which it or
they may become subject, under the Act or otherwise, insofar
as such loss, expense, claim, damage or liability (or
actions in respect thereof) arises out of or is based on any
untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the
Prospectus, any related preliminary prospectus, or any
amendment or supplement to any thereof, or arises out of or
is based upon the omission or alleged omission to state
therein any material fact required to be stated therein or
necessary to make the statements therein not misleading, in
each case to the extent, and only to the extent, that such
untrue statement or alleged untrue statement or omission or
alleged omission was made in any such documents in reliance
upon, and in conformity with, written information furnished
to the Company by or through you on behalf of such
Underwriter expressly for use in any such document; and,
except as hereinafter in this Section provided, each
Underwriter agrees to reimburse the Company and its officers
and directors, and each of them, and each person, if any,
who controls the Company within the meaning of Section 15 of
the Act, for any reasonable legal or other expenses incurred
by it or them in connection with investigating or defending
any such loss, expense, claim, damage or liability.
(c) Upon receipt of notice of the commencement of any
action against an indemnified party, the indemnified party
shall, with reasonable promptness, if a claim in respect
thereof is to be made against an indemnifying party under
its agreement contained in this Section 9, notify such
indemnifying party in writing of the commencement thereof;
but the omission so to notify an indemnifying party shall
not relieve it from any liability which it may have to the
indemnified party otherwise than under its agreement
contained in this Section 9. In the case of any such notice
to an indemnifying party, it shall be entitled to
participate at its own expense in the defense, or if it so
elects, to assume the defense, of any such action, but, if
it elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the
indemnified party and to any other indemnifying party,
defendant in the suit. In the event that any indemnifying
party elects to assume the defense of any such action and
retain such counsel, the indemnified party shall bear the
fees and expenses of any additional counsel retained by it.
No indemnifying party shall be liable in the event of any
settlement of any such action effected without its consent.
Each indemnified party agrees promptly to notify each
indemnifying party of the commencement of any litigation or
proceedings against it in connection with the issue and sale
of the Bonds.
(d) If any Underwriter or person entitled to
indemnification by the terms of subsection (a) of this
Section 9 shall have given notice to the Company of a claim
in respect thereof pursuant to subsection (c) of this
Section 9, and if such claim for indemnification is
thereafter held by a court to be unavailable for any reason
other than by reason of the terms of this Section 9 or if
such claim is unavailable under controlling precedent, such
Underwriter or person shall be entitled to contribution from
the Company to liabilities and expenses, except to the
extent that contribution is not permitted under Section
11(f) of the Act. In determining the amount of contribution
to which such Underwriter or person is entitled, there shall
be considered the relative benefits received by such
Underwriter or person and the Company from the offering of
the Bonds (taking into account the portion of the proceeds
of the offering realized by each), the Underwriter or
person's relative knowledge and access to information
concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable
considerations appropriate under the circumstances. The
Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined
by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose).
10. Default of Underwriters.
-----------------------
If any Underwriter or Underwriters default in their
obligations to purchase Bonds hereunder, you may make
arrangements satisfactory to the Company for the purchase of such
Bonds by other persons, including any of the Underwriters, but if
no such arrangements are made by the Closing Date, the other
Underwriters shall be obligated, severally in the proportion
which their respective commitments hereunder bear to the total
commitment of the non-defaulting Underwriters, to purchase the
Bonds which such defaulting Underwriter or Underwriters agreed
but failed to purchase. In the event that any Underwriter or
Underwriters default in their obligations to purchase Bonds
hereunder, the Company may by prompt written notice to the
non-defaulting Underwriters postpone the Closing Date for a
period of not more than seven 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, and the Company will promptly file any amendments to
the Registration Statement or supplements to the Prospectus which
may thereby be made necessary. As used in this Agreement, the
term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve an
Underwriter from liability for its default.
11. Survival of Certain Representations and Obligations.
---------------------------------------------------
The respective indemnities, agreements, representations
and warranties of the Company and of or on behalf of the several
Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of
any Underwriter or the Company or any of its officers or
directors or any controlling person, and will survive delivery of
and payment for the Bonds. If for any reason the purchase of the
Bonds by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 6 and the respective obligations of the
Company and the Underwriters pursuant to Section 9 hereof shall
remain in effect.
12. Notices.
-------
The Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of each of the
Underwriters if the same shall have been made or given by you
jointly or by Morgan Stanley & Co. Incorporated. All statements,
requests, notices, consents and agreements hereunder shall be in
writing, or by telegraph subsequently confirmed in writing, and,
if to the Company, shall be sufficient in all respects if
delivered or mailed to the Company, attention of its Treasurer,
at Two North Ninth Street, Allentown, Pennsylvania 18101, and, if
to you, shall be sufficient in all respects if delivered or
mailed to you at the address set forth on the first page hereof;
provided, however, that any notice to an Underwriter pursuant to
Section 9 hereof will also be delivered or mailed to such
Underwriter at the address, if any, of such Underwriter furnished
to the Company in writing for the purpose of communications
hereunder.
13. Parties in Interest.
-------------------
This Agreement shall inure solely to the benefit of the
Company and the Underwriters and, to the extent provided in
Section 9 hereof, to any person who controls any Underwriter, to
the officers and directors of the Company, and to any person who
controls the Company, and their respective successors. No other
person, partnership, association or corporation shall acquire or
have any right under or by virtue of this Agreement. The term
"successor" shall not include any assignee of an Underwriter
(other than one who shall acquire all or substantially all of
such Underwriter's business and properties), nor shall it include
any purchaser of Bonds from any Underwriter merely because of
such purchase.
14. Representation of Underwriters.
------------------------------
Any action under this Agreement taken by Morgan Stanley
& Co. Incorporated will be binding upon all the Underwriters.
15. Applicable Law.
--------------
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
Please confirm that the foregoing correctly sets forth
the agreement between us by signing in the space provided below
for that purpose, whereupon this letter shall constitute a
binding agreement between the Company and the several
Underwriters in accordance with its terms.
Yours very truly,
PP&L, INC.
By:
-------------------------------
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the date
first above written.
MORGAN STANLEY & CO. INCORPORATED
[OTHERS]
By MORGAN STANLEY & CO. INCORPORATED
By:
-----------------------------
Name:
Title:
<PAGE>
SCHEDULE A
----------
Additional Matters to be Included
in Accountants' Comfort Letter Pursuant to
Section 7(a)(iv) of Underwriting Agreement
_________________________________
PROSPECTUS CAPTION PAGE ITEMS
------------------ ---- -----
"SUMMARY FINANCIAL
INFORMATION". "Ratio of
Earnings to Fixed Charges --
Total Enterprise Basis" and
supporting calculations
shown on Exhibit 12 to the
Registration Statement.
"Capitalization" --dollar
amounts and percentages in
"As Adjusted" columns after
giving effect to footnote (b)
thereto.
<PAGE>
FORM 10-K CAPTION PAGE ITEMS
----------------- ---- -----
"REVIEW OF THE
COMPANY'S FINANCIAL
CONDITION AND
RESULTS OF
OPERATIONS --Operating
Revenues" Table entitled
"Changes in Operating
Revenues". "REVIEW OF
THE COMPANY'S
FINANCIAL CONDITION
AND RESULTS OF
OPERATIONS --Capital
Expenditures Requirements"
The Company's actual
construction expenditures
during the three years 1995-
1997. "REVIEW OF THE
COMPANY'S FINANCIAL
CONDITION AND
RESULTS OF
OPERATIONS --Financial
Indicators"
The Company's ratio of pre-
tax income to interest
charges for 1996 and 1997.
Exhibit 4(a)-34
=================================================================
PP&L, INC.
(FORMERLY PENNSYLVANIA POWER & LIGHT COMPANY)
TO
BANKERS TRUST COMPANY
(SUCCESSOR TO MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
FORMERLY GUARANTY TRUST COMPANY OF NEW YORK)
AS TRUSTEE UNDER PP&L, INC.'S
MORTGAGE AND DEED OF TRUST,
DATED AS OF OCTOBER 1, 1945
-----------------------------
SUPPLEMENTAL INDENTURE
------------
PROVIDING AMONG OTHER THINGS FOR
FIRST MORTGAGE BONDS, SERIES
------- -----------
-----------------------------
DATED AS OF ,
------------ ----
=================================================================
<PAGE>
SUPPLEMENTAL INDENTURE
------------
SUPPLEMENTAL INDENTURE, dated as of the
------------
day of , made and entered into by and between
---- --------- ----
PP&L, INC. (formerly Pennsylvania Power & Light Company), a
corporation of the Commonwealth of Pennsylvania, whose address is
Two North Ninth Street, Allentown, Pennsylvania 18101
(hereinafter sometimes called the Company), and BANKERS TRUST
COMPANY (successor to Morgan Guaranty Trust Company of New York,
formerly Guaranty Trust Company of New York), a corporation of
the State of New York, whose address is 4 Albany Street, New
York, New York 10006 (hereinafter sometimes called the Trustee),
as Trustee under the Mortgage and Deed of Trust, dated as of
October 1, 1945 (hereinafter called the Mortgage and, together
with any indentures supplemental thereto, hereinafter called the
Indenture), which Mortgage was executed and delivered by PP&L,
Inc. to secure the payment of bonds issued or to be issued under
and in accordance with the provisions of the Mortgage, reference
to which said Mortgage is hereby made, this instrument
(hereinafter called the Supplemental Indenture)
------------
being supplemental thereto;
WHEREAS, said Mortgage was or is to be recorded in
various Counties in the Commonwealth of Pennsylvania, which
Counties include or will include all Counties in which this
Supplemental Indenture is to be recorded; and
-------------
WHEREAS, an instrument, dated August 5, 1994, was
executed by the Company appointing Bankers Trust Company as
Trustee in succession to said Morgan Guaranty Trust Company of
New York (resigned) under the Indenture, and by Bankers Trust
Company accepting said appointment, which instrument was or is to
be recorded in various Counties in the Commonwealth of
Pennsylvania; and
WHEREAS, by an amendment to its Articles of
Incorporation filed with the Office of the Secretary of State of
Pennsylvania on , 1997, the Company changed its name to
----------
PP&L, Inc.; and
WHEREAS, by the Mortgage the Company covenanted that it
would execute and deliver such supplemental indenture or
indentures and such further instruments and do such further acts
as might be necessary or proper to carry out more effectually the
purposes of the Indenture and to make subject to the lien of the
Indenture any property thereafter acquired and intended to be
subject to the lien thereof; and
<PAGE>
-2-
WHEREAS, the Company executed and delivered to the
Trustee, as supplements to the Mortgage, the following
supplemental indentures:
Designation Dated as of
----------- -----------
First Supplemental Indenture . . . . July 1, 1947
Second Supplemental Indenture . . . December 1, 1948
Third Supplemental Indenture . . . . February 1, 1950
Fourth Supplemental Indenture . . . March 1, 1953
Fifth Supplemental Indenture . . . . August 1, 1955
Sixth Supplemental Indenture . . . . December 1, 1961
Seventh Supplemental Indenture . . . March 1, 1964
Eighth Supplemental Indenture . . . June 1, 1966
Ninth Supplemental Indenture . . . . November 1, 1967
Tenth Supplemental Indenture . . . . December 1, 1967
Eleventh Supplemental Indenture . . January 1, 1969
Twelfth Supplemental Indenture . . . June 1, 1969
Thirteenth Supplemental Indenture . March 1, 1970
Fourteenth Supplemental Indenture . February 1, 1971
Fifteenth Supplemental Indenture . . February 1, 1972
Sixteenth Supplemental Indenture . . January 1, 1973
Seventeenth Supplemental Indenture . May 1, 1973
Eighteenth Supplemental Indenture . April 1, 1974
Nineteenth Supplemental Indenture . October 1, 1974
Twentieth Supplemental Indenture . . May 1, 1975
Twenty-first Supplemental Indenture November 1, 1975
Twenty-second Supplemental Indenture December 1, 1976
Twenty-third Supplemental Indenture December 1, 1977
Twenty-fourth Supplemental Indenture April 1, 1979
Twenty-fifth Supplemental Indenture April 1, 1980
Twenty-sixth Supplemental Indenture June 1, 1980
Twenty-seventh Supplemental Indenture June 1, 1980
Twenty-eighth Supplemental Indenture December 1, 1980
Twenty-ninth Supplemental Indenture February 1, 1981
Thirtieth Supplemental Indenture . . February 1, 1981
Thirty-first Supplemental Indenture September 1, 1981
Thirty-second Supplemental Indenture April 1, 1982
Thirty-third Supplemental Indenture August 1, 1982
Thirty-fourth Supplemental Indenture October 1, 1982
Thirty-fifth Supplemental Indenture November 1, 1982
Thirty-sixth Supplemental Indenture February 1, 1983
Thirty-seventh Supplemental Indenture November 1, 1983
Thirty-eighth Supplemental Indenture March 1, 1984
Thirty-ninth Supplemental Indenture April 1, 1984
Fortieth Supplemental Indenture . . August 15, 1984
Forty-first Supplemental Indenture . December 1, 1984
<PAGE>
-3-
Designation Dated as of
----------- -----------
Forty-second Supplemental Indenture June 15, 1985
Forty-third Supplemental Indenture . October 1, 1985
Forty-fourth Supplemental Indenture January 1, 1986
Forty-fifth Supplemental Indenture . February 1, 1986
Forty-sixth Supplemental Indenture . April 1, 1986
Forty-seventh Supplemental Indenture October 1, 1986
Forty-eighth Supplemental Indenture March 1, 1988
Forty-ninth Supplemental Indenture . June 1, 1988
Fiftieth Supplemental Indenture . . January 1, 1989
Fifty-first Supplemental Indenture . October 1, 1989
Fifty-second Supplemental Indenture July 1, 1991
Fifty-third Supplemental Indenture . May 1, 1992
Fifty-fourth Supplemental Indenture November 1, 1992
Fifty-fifth Supplemental Indenture . February 1, 1993
Fifty-sixth Supplemental Indenture . April 1, 1993
Fifty-seventh Supplemental Indenture June 1, 1993
Fifty-eighth Supplemental Indenture October 1, 1993
Fifty-ninth Supplemental Indenture . February 15, 1994
Sixtieth Supplemental Indenture . . March 1, 1994
Sixty-first Supplemental Indenture . March 15, 1994
Sixty-second Supplemental Indenture September 1, 1994
Sixty-third Supplemental Indenture . October 1, 1994
Sixty-fourth Supplemental Indenture August 1, 1995
Sixty-fifth Supplemental Indenture . April 1, 1997
<footnote>1
which supplemental indentures were recorded in various Counties
in the Commonwealth of Pennsylvania; and
WHEREAS, the Company executed and delivered to the
Trustee its Supplemental Indenture, dated July 1, 1954, creating
a security interest in certain personal property of the Company,
pursuant to the provisions of the Pennsylvania Uniform Commercial
Code, as a supplement to the Mortgage, which Supplemental
Indenture was filed in the Office of the Secretary of the
Commonwealth of Pennsylvania on July 1, 1954, and all subsequent
supplemental indentures were so filed; and
-------------------------
1 Here shall be inserted future supplemental indentures, if
any.
<PAGE>
-4-
WHEREAS, in addition to the property described in the
Mortgage, as heretofore supplemented, the Company has acquired
certain other property, rights and interests in property; and
WHEREAS, the Company has heretofore issued, in
accordance with the provisions of the Mortgage, as supplemented,
the following series of First Mortgage Bonds:
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ---------- -----------
3% Series due 1975 . . . . . . $93,000,000 None
2-3/4% Series due 1977 . . . . 20,000,000 None
3-1/4% Series due 1978 . . . . 10,000,000 None
2-3/4% Series due 1980 . . . . 37,000,000 None
3-1/2% Series due 1983 . . . . 25,000,000 None
3-3/8% Series due 1985 . . . . 25,000,000 None
4-5/8% Series due 1991 . . . . 30,000,000 None
4-5/8% Series due 1994 . . . . 30,000,000 None
5-5/8% Series due 1996 . . . . 30,000,000 None
6-3/4% Series due 1997 . . . . 30,000,000 None
6-1/2% Series due 1972 . . . . 15,000,000 None
7% Series due 1999 . . . . . . 40,000,000 None
8-1/8% Series due
June 1, 1999 . . . . . . . . 40,000,000 None
9% Series due 2000 . . . . . . 50,000,000 None
7-1/4% Series due 2001 . . . . 60,000,000 None
7-5/8% Series due 2002 . . . . 75,000,000 None
7-1/2% Series due 2003 . . . . 80,000,000 None
Pollution Control Series A . . 28,000,000 None
9-1/4% Series due 2004 . . . . 80,000,000 None
10-1/8% Series due 1982 . . . 100,000,000 None
9-3/4% Series due 2005 . . . . 125,000,000 None
9-3/4% Series due
November 1, 2005 . . . . . . 100,000,000 None
8-1/4% Series due 2006 . . . . 150,000,000 None
8-1/2% Series due 2007 . . . . 100,000,000 None
9-7/8% Series due 1983-1985 . 100,000,000 None
15-5/8% Series due 2010 . . . 100,000,000 None
11-3/4% Series due 1984 . . . 30,000,000 None
Pollution Control Series B . . 70,000,000 None
Pollution Control Series C . . 20,000,000 None
14% Series due
December 1, 1990 . . . . . 125,000,000 None
15% Series due 1984-1986 . . . 50,000,000 None
14-3/4% Series A due 1986 . . 30,000,000 None
14-3/4% Series B due 1986 . . 20,000,000 None
16-1/2% Series due 1987-1991 . 52,000,000 None
<PAGE>
-5-
PRINCIPAL PRINCIPAL
AMOUNT AMOUNT
SERIES ISSUED OUTSTANDING
------ ---------- -----------
16-1/8% Series due 1992 . . .$100,000,000 None
16-1/2% Series due 1986-1990 . 92,500,000 None
13-1/4% Series due 2012 . . . 100,000,000 None
Pollution Control Series D . . 70,000,000 None
12-1/8% Series due 1989-1993 . 50,000,000 None
13-1/8% Series due 2013 . . . 125,000,000 None
Pollution Control Series E . . 37,750,000 None
13-1/2% Series due 1994 . . . 125,000,000 None
Pollution Control Series F . . 115,500,000 None
12-3/4% Series due 2014 . . . 125,000,000 None
Pollution Control Series G . . 55,000,000 None
12% Series due 2015 . . . . . 125,000,000 None
10-7/8% Series due 2016 . . . 125,000,000 None
9-5/8% Series due 1996 . . . . 125,000,000 None
9% Series due 2016 . . . . . . 125,000,000 None
9-1/2% Series due 2016 . . . . 125,000,000 None
9-1/4% Series due 1998 . . . . 125,000,000 None
9-5/8% Series due 1998 . . . . 125,000,000 None
10% Series due 2019 . . . . . 125,000,000 None
9-1/4% Series due 2019 . . . . 250,000,000 $250,000,000
9-3/8% Series due 2021 . . . . 150,000,000 150,000,000
7-3/4% Series due 2002 . . . . 150,000,000 150,000,000
8-1/2% Series due 2022 . . . . 150,000,000 150,000,000
Pollution Control Series H . . 90,000,000 90,000,000
6-7/8% Series due 2003 . . . . 100,000,000 100,000,000
7-7/8% Series due 2023 . . . . 200,000,000 200,000,000
5-1/2% Series due 1998 . . . . 150,000,000 150,000,000
6-1/2% Series due 2005 . . . . 125,000,000 125,000,000
6% Series due 2000 . . . . . . 125,000,000 125,000,000
6-3/4% Series due 2023 . . . . 150,000,000 150,000,000
Pollution Control Series I . . 53,250,000 53,250,000
6.55% Series due 2006 . . . . 150,000,000 150,000,000
7.30% Series due 2024 . . . . 150,000,000 150,000,000
6-7/8% Series due 2004 . . . . 150,000,000 150,000,000
7-3/8% Series due 2014 . . . . 100,000,000 100,000,000
Pollution Control Series J . . 115,500,000 115,500,000
7.70% Series due 2009 . . . . 200,000,000 200,000,000
Pollution Control Series K . . 55,000,000 55,000,000
Short-Term Series A . . . . . 800,000,000 None
<footnote>2
-------------------------
2 Here shall be inserted future series of bonds, if any.
<PAGE>
-6-
which bonds are also sometimes called bonds of the First through
Series, respectively; and
---------------
WHEREAS, Section 8 of the Mortgage provides that the
form of each series of bonds (other than the First Series) issued
thereunder shall be established by Resolution of the Board of
Directors of the Company and that the form of such series, as
established by said Board of Directors, shall specify the
descriptive title of the bonds and various other terms thereof,
and may also contain such provisions not inconsistent with the
provisions of the Indenture as the Board of Directors may, in its
discretion, cause to be inserted therein expressing or referring
to the terms and conditions upon which such bonds are to be
issued and/or secured under the Indenture; and
WHEREAS, Section 120 of the Mortgage provides, among
other things, that any power, privilege or right expressly or
impliedly reserved to or in any way conferred upon the Company by
any provision of the Indenture, whether such power, privilege or
right is in any way restricted or is unrestricted, may be in
whole or in part waived or surrendered or subjected to any
restriction if at the time unrestricted or to additional
restriction if already restricted, and the Company may enter into
any future covenants, limitations or restrictions for the benefit
of any one or more series of bonds issued thereunder, or the
Company may cure any ambiguity contained therein or in any
supplemental indenture or may establish the terms and provisions
of any series of bonds other than said First Series, by an
instrument in writing executed and acknowledged by the Company in
such manner as would be necessary to entitle a conveyance of real
estate to record in all of the States in which any property at
the time subject to the lien of the Indenture shall be situated;
and
WHEREAS, the Company now desires to create
---------
new series of bonds and to add to its covenants and agreements
contained in the Mortgage, as heretofore supplemented, certain
other covenants and agreements to be observed by it and to alter
and amend in certain respects the covenants and provisions
contained in the Mortgage; and
WHEREAS, the execution and delivery by the Company of
this Supplemental Indenture, and the terms of the
--------------
bonds of the Series, hereinafter referred to, have
--------------
been duly authorized by the Board of Directors of the Company by
appropriate Resolutions of said Board of Directors;
NOW, THEREFORE, THIS INDENTURE WITNESSETH: That PP&L,
Inc., in consideration of the premises and of One Dollar to it
duly paid by the Trustee at or before the ensealing and delivery
of these presents, the receipt whereof is hereby acknowledged,
and in further evidence of assurance of the estate, title and
rights of the Trustee and in order further to secure the payment
<PAGE>
-7-
both of the principal of and interest and premium, if any, on the
bonds from time to time issued under the Indenture, according to
their tenor and effect and the performance of all the provisions
of the Indenture (including any modification made as in the
Mortgage provided) and of said bonds, hereby grants, bargains,
sells, releases, conveys, assigns, transfers, mortgages, pledges,
sets over and confirms (subject, however, to Excepted
Encumbrances as defined in Section 6 of the Mortgage) unto
Bankers Trust Company, as Trustee under the Indenture, and to its
successor or successors in said trust, and to said Trustee and
its successors and assigns forever, all property, real, personal
and mixed, of the kind or nature specifically mentioned in the
Mortgage, as heretofore supplemented, or of any other kind or
nature, acquired by the Company after the date of the execution
and delivery of the Supplemental
----------------------------
Indenture (except any herein or in the Mortgage, as heretofore
supplemented, expressly excepted and except any which may not
lawfully be mortgaged or pledged under the Indenture), now owned
or, subject to the provisions of Section 87 of the Mortgage,
hereafter acquired by the Company (by purchase, consolidation,
merger, donation, construction, erection or in any other way) and
wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of
the foregoing) all lands, power sites, flowage rights, water
rights, water locations, water appropriations, ditches, flumes,
reservoirs, reservoir sites, canals, raceways, dams, dam sites,
aqueducts, and all other rights or means for appropriating,
conveying, storing and supplying water; all rights of way and
roads; all plants for the generation of electricity by steam,
water and/or other power; all power houses, gas plants, street
lighting systems, standards and other equipment incidental
thereto, telephone, radio and television systems,
air-conditioning systems and equipment incidental thereto, water
works, water systems, steam heat and hot water plants,
substations, lines, service and supply systems, bridges,
culverts, tracks, ice or refrigeration plants and equipment,
offices, buildings and other structures and the equipment
thereof; all machinery, engines, boilers, dynamos, electric, gas
and other machines, regulators, meters, transformers, generators,
motors, electrical, gas and mechanical appliances, conduits,
cables, water, steam heat, gas or other pipes, gas mains and
pipes, service pipes, fittings, valves and connections, pole and
transmission lines, wires, cables, tools, implements, apparatus,
furniture and chattels; all municipal and other franchises,
consents or permits; all lines for the transmission and
distribution of electric current, gas, steam heat or water for
any purpose including towers, poles, wires, cables, pipes,
conduits, ducts and all apparatus for use in connection
therewith; all real estate, lands, easements, servitudes,
licenses, permits, franchises, privileges, rights of way and
other rights in or relating to real estate or the occupancy of
the same and (except as herein or in the Mortgage, as heretofore
supplemented, expressly excepted) all the right, title and
interest of the Company 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 or in the
Mortgage, as heretofore supplemented, described.
<PAGE>
-8-
TOGETHER with all and singular the tenements,
hereditaments, prescriptions, servitudes, 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 57 of
the Mortgage) 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, subject to the
provisions of Section 87 of the Mortgage and to the extent
permitted by law, all the property, rights, and franchises
acquired by the Company (by purchase, consolidation, merger,
donation, construction, erection or in any other way) after the
date hereof, except any herein or in the Mortgage, as heretofore
supplemented, expressly excepted, shall be and are as fully
granted and conveyed hereby and as fully embraced within the lien
hereof and the lien of the Indenture, as if such property, rights
and franchises were now owned by the Company and were
specifically described herein and conveyed hereby.
IT IS HEREBY DECLARED by the Company that all the
property, rights and franchises now owned or hereafter acquired
by the Company have been, or are, or will be owned or acquired
with the intention to use the same in carrying on the business or
branches of business of the Company, and it is hereby declared
that it is the intention of the Company that all thereof, except
any herein or in the Mortgage, as heretofore supplemented,
expressly excepted, shall (subject to the provisions of Section
87 of the Mortgage and to the extent permitted by law) be
embraced within the lien of this Supplemental
--------------
Indenture and the lien of the Indenture.
PROVIDED that the following are not and are not
intended to be now or hereafter 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 this Supplemental
--------------
Indenture and from the lien and operation of the Indenture, viz:
---
(1) cash, shares of stock, bonds, notes and other obligations and
other securities not hereafter specifically pledged, paid,
deposited, delivered or held under the Indenture or covenanted so
to be; (2) goods, wares, merchandise, equipment, apparatus,
materials, or supplies held for the purpose of sale or other
disposition in the usual course of business; fuel, oil and
similar materials and supplies consumable in the operation of any
of the properties of the Company; construction equipment acquired
for temporary use; all aircraft, rolling stock, trolley coaches,
buses, motor coaches, automobiles and other vehicles and
materials and supplies held for the purposes of repairing or
replacing (in whole or part) any of the same; all timber,
minerals, mineral rights and royalties; (3) bills, notes and
accounts receivable, judgments, demands and choses in action, and
<PAGE>
-9-
all contracts, leases and operating agreements not specifically
pledged under the Indenture or covenanted so to be; the Company's
contractual rights or other interest in or with respect to tires
not owned by the Company; (4) the last day of the term of any
lease or leasehold which may be or become subject to the lien of
the Indenture; and (5) electric energy, gas, steam, ice, and
other materials or products generated, manufactured, produced or
purchased by the Company for sale, distribution or use in the
ordinary course of its business; provided, however, that the
property and rights expressly excepted from the lien and
operation of the Indenture in the above subdivisions (2) and (3)
shall (to the extent permitted by law) cease to be so excepted in
the event and as of the date that the Trustee or a receiver or
trustee shall enter upon and take possession of the Mortgaged and
Pledged Property in the manner provided in Article XIII of the
Mortgage by reason of the occurrence of a Default as defined in
Section 65 thereof, as supplemented by the provisions of this
Supplemental Indenture.
--------------
TO HAVE AND TO HOLD all such properties, real, personal
and 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 Bankers
Trust Company, as Trustee, and its successors and assigns
forever.
IN TRUST NEVERTHELESS for the same purposes and upon
the same terms, trusts and conditions and subject to and with the
same provisos and covenants as are set forth in the Mortgage, as
heretofore supplemented, this Supplemental
--------------
Indenture being supplemental to the Mortgage.
AND IT IS HEREBY COVENANTED by the Company that all the
terms, conditions, provisos, covenants and provisions contained
in the Mortgage, as heretofore supplemented, shall affect and
apply to the property hereinbefore described and conveyed and to
the estate, rights, obligations and duties of the Company and the
Trustee and the beneficiaries of the trust with respect to said
property, and to the Trustee and its successors as Trustee of
said property in the same manner and with the same effect as if
the said property had been owned by the Company at the time of
the execution of the Mortgage, and had been specifically and at
length described in and conveyed to the Trustee, by the Mortgage
as a part of the property therein stated to be conveyed.
The Company further covenants and agrees to and with
the Trustee and its successors in said trust under the Indenture,
as follows:
<PAGE>
-10-
ARTICLE I<footnote>3
SERIES OF BONDS
------------
SECTION 1. There shall be a series of bonds designated
" Series " (herein sometimes referred
-------------- ------------
to as the " Series"), each of which shall also bear
--------------
the descriptive title First Mortgage Bonds, and the form thereof,
which shall be established by Resolution of the Board of
Directors of the Company, shall contain suitable provisions with
respect to the matters hereinafter in this Section specified.
Bonds of the Series shall be limited to
--------------
$ in aggregate principal amount except as provided in
----------
Section 16 of the Mortgage and shall mature [on ,
----------
,]<footnote>4 and shall be issued as fully registered bonds
-----
in denominations of One Thousand Dollars and in any multiple or
multiples of One Thousand Dollars; they shall bear interest [at
the rate of % per annum, payable semi-annually on
-------
and of each year]<footnote>5; the
------------ ----------
principal of and interest on each said bond to be payable at the
office or agency of the Company in the Borough of Manhattan, The
City of New York, and interest on each said bond to be also
payable at the office of the Company in the City of Allentown,
Pennsylvania, in such coin or currency of the United States of
America as at the time of payment is legal tender for public and
private debts. Bonds of the Series shall be dated
------------
as in Section 10 of the Mortgage provided.
<footnote>6 [(I) Bonds of the Series
--------------
shall be redeemable either at the option of the Company or
pursuant to the requirements of the Indenture in whole at any
time, or in part from time to time, prior to maturity, upon
notice, as provided in Section 52 of the Mortgage, mailed at
least thirty (30) and not more than sixty (60) days prior to the
date fixed for redemption, at the following general redemption
prices, expressed in percentages of the principal amount of the
bonds to be redeemed:
---------------------------
3 Each supplemental indenture executed after the effectiveness
of the registration statement to which this document is an
exhibit may create more than one series of bonds.
4 Alternative maturity provisions may be substituted for
particular series.
5 Alternative interest rate provisions may be substituted for
particular series.
6 This section will be omitted or changed if the bonds of the
series to which this Supplemental Indenture relates shall
not be subject to redemption or shall be subject to
redemption on terms different from those described herein.
<PAGE>
-11-
GENERAL REDEMPTION PRICES
If redeemed during the 12 months period ending ,
-----------------
in each case, together with accrued interest to the date fixed
for redemption; provided that no bonds of the
--------------
Series shall be redeemable at the general redemption prices prior
to , , with borrowed funds, or in anticipation
-------------- ----
of funds to be borrowed, having an effective interest cost to the
Company (calculated in accordance with acceptable financial
practice) of less than % per annum. In the case of any
-----
redemption pursuant to this Section 1(I) prior to ,
----------
, the Company will deliver to the Trustee at the time of the
----
deposit of any moneys for such redemption, an Officers'
Certificate stating that such redemption will comply with the
limitations set forth in the proviso of the immediately preceding
sentence.
(II) Bonds of the Series shall also be
---------------
redeemable in whole at any time, or in part from time to time,
prior to maturity, upon like notice, by the application (either
at the option of the Company or pursuant to the requirements of
the Indenture) of cash delivered to or deposited with the Trustee
pursuant to the provisions of Section 39 or Section 64 of the
Mortgage or with the Proceeds of Released Property, as defined in
the First Supplemental Indenture, at the following special
redemption prices, expressed in percentages of the principal
amount of the bonds to be redeemed:
SPECIAL REDEMPTION PRICES
If redeemed during the 12 months period ending
,
-----------------
in each case, together with accrued interest to the date fixed
for redemption.
The Company covenants that any cash delivered to the
Trustee under the provisions of subsection (I) of Section 39 of
the Mortgage, as supplemented, will not be applied to the
redemption of any bonds of the Series so long as
--------------
any bonds of the Eighth through Tenth, Twelfth through
Nineteenth, Twenty-first through Twenty-fourth, Twenty-ninth,
<PAGE>
-12-
Thirty-eighth, Forty-first, Forty-third, Forty-fifth or Forty-
ninth through Series remain Outstanding.]
--------------
<footnote>7
[(III)] At the option of the registered owner, any
bonds of the Series, upon surrender thereof, for
--------------
cancellation, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, shall be exchangeable
for a like aggregate principal amount of bonds of the same
series, interest rate and maturity of other authorized
denominations.
Bonds of the Series shall be
--------------
transferable, upon the surrender thereof for cancellation,
together with a written instrument of transfer in form approved
by the registrar duly executed by the registered owner or by his
duly authorized attorney, at the office or agency of the Company
in the Borough of Manhattan, The City of New York.
Upon any transfer or exchange of bonds of the
Series, the Company may make a charge therefor
--------------
sufficient to reimburse it for any tax or taxes or other
governmental charge, as provided in Section 12 of the Mortgage,
but the Company hereby waives any right to make a charge in
addition thereto for any exchange or transfer of bonds of the
Series.
--------------
<footnote>8 [The holders of bonds of the
Series consent that the Company may, but shall
---------------
not be obligated to, fix a record date for the purpose of
determining the holders of bonds of the Series
---------------
entitled to consent to any amendment, supplement or waiver. If a
record date is fixed, those persons who were holders at such
record date (or their duly designated proxies), and only those
persons, shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be holders after such
record date. No such consent shall be valid or effective for
more than 90 days after such record date.]
-----------------------
7 Other special terms and provisions may be inserted here,
including any special put or call options.
8 This paragraph may be inserted for any series that may be
issued to the Depositary Trust Company or its nominee.
<PAGE>
-13-
ARTICLE II
MAINTENANCE AND REPLACEMENT FUND COVENANT -- DIVIDEND COVENANT --
OTHER RELATED PROVISIONS OF THE MORTGAGE
SECTION 2. Subject to the provisions of Section [3]
hereof, the Company covenants and agrees that the provisions of
Section 39 of the Mortgage, which were to remain in effect so
long as any bonds of the First Series remained Outstanding, shall
remain in full force and effect so long as any bonds of the
Series are Outstanding.
--------------
Clause (d) of subsection (II) of Section 4 of the
Mortgage, as heretofore amended, is hereby further amended by
inserting the words "and Series" after the words
-------------
"and Series" each time such words appear therein.
-------------
Clause (6) and clause (e) of Section 5 of the Mortgage
and Section 29 of the Mortgage, as heretofore amended, are hereby
further amended by inserting therein " " before
-------------
" " each time such words occur therein.
--------------
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION [3]. The Company reserves the right to make
such amendments to the Mortgage, as supplemented, as shall be
necessary in order to delete subsection (I) of Section 39 of the
Mortgage, and each holder of bonds of the Series hereby
---------
consents to such deletion without any other or further action by
any holder of bonds of the Series.
---------
<footnote>9[SECTION [ ]. Pursuant to the right
reserved in Section 4 of the Thirteenth Supplemental Indenture,
the Company hereby amends the Mortgage, as supplemented, to
insert the provisions described in subsections (A), (B) and (C)
of said Section 4.]
<footnote>9[SECTION [ ]. Pursuant to the right
reserved in Section 4 of the Fourteenth Supplemental Indenture,
the Company hereby amends the Mortgage, as supplemented, to amend
Article XIX to read as described in said Section 4.]
-------------------
9 This provision may be inserted in a future Supplemental
Indenture.
<PAGE>
-14-
<footnote>9[SECTION [ ]. Pursuant to the right
reserved in Section 3 of the Twenty-second Supplemental
Indenture, the Company hereby amends the Mortgage, as
supplemented, to modify the provisions of Section 4(I) as
described in said Section 3.]
<footnote>9[SECTION [ ]. Pursuant to the right
reserved in Section 3 of the Seventeenth, Eighteenth, Nineteenth,
Twentieth, Twenty-first, Twenty-third, Twenty-fifth, Twenty-
eighth, Thirty-second, Thirty-fourth, Thirty-fifth, Thirty-
seventh, Thirty-eighth, Thirty-ninth, Fortieth, Forty-first,
Forty-second, Forty-third, Forty-fourth, Forty-fifth, Forty-
sixth, Forty-seventh, Forty-eighth, Forty-ninth, Fiftieth, Fifty-
first, Fifty-second, Fifty-fourth, Fifty-seventh, Fifty-eighth,
Fifty-ninth, Sixty-second, Sixty-fourth, and Sixty-fifth
Supplemental Indentures, Section 4 of the Twenty-second, Twenty-
sixth, Twenty-seventh, Twenty-ninth, Thirty-first, Thirty-third,
Thirty-sixth, Fifty-fifth, Fifty-sixth, Sixtieth, Sixty-first,
and Sixty-third Supplemental Indentures, Section 5 of the Fifty-
third Supplemental Indenture, Section 8 of the Twenty-fourth
Supplemental Indenture, and Section 13 of the Thirtieth
Supplemental Indenture, the Company hereby amends the Mortgage,
as supplemented, as shall be necessary in order to delete
subsection (I) of Section 39 of the Mortgage.]
SECTION [4]. The terms defined in the Mortgage, as
heretofore supplemented, shall, for all purposes of this
Supplemental Indenture, have the meanings
--------------
specified in the Mortgage, as heretofore supplemented.
SECTION [5]. Whenever in this
---------------
Supplemental Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of Articles
XVI and XVII of the Mortgage, be deemed to include the successors
and assigns of such party, and all the covenants and agreements
in this Supplemental Indenture contained by or on
--------------
behalf of the Company, or by or on behalf of the Trustee shall,
subject as aforesaid, bind and inure to the respective benefits
of the respective successors and assigns of such parties, whether
so expressed or not.
SECTION [6]. So long as any bonds of the
Series remain Outstanding, unless this provision
--------------
shall have been waived in writing by the holders of seventy per
centum (70%) in aggregate principal amount of bonds of the
Series Outstanding at the time of such consent,
--------------
subdivision (c) of Section 65 of the Mortgage shall read as
follows:
"(c) Failure to pay interest or premium, if any,
upon or principal (whether at maturity as therein
expressed or by declaration, or otherwise) of any
Outstanding Qualified Lien Bonds or of any outstanding
indebtedness secured by any mortgage or other lien (not
included in the term Excepted Encumbrances) prior to
<PAGE>
-15-
the lien of this Indenture, existing upon any property
of the Company which is subject to the lien and
operation of this Indenture continued beyond the period
of grace, if any, specified in such mortgage or
Qualified Lien or other lien securing the same;"
SECTION [7]. A breach of a specified covenant or
agreement of the Company contained in this
--------------
Supplemental Indenture shall become a Default under the Indenture
upon the happening of the events provided in Section 65(g) of the
Mortgage with respect to such a covenant or agreement.
SECTION [8]. The Trustee hereby accepts the trusts
herein declared, provided, created or supplemented and agrees to
perform the same upon the terms and conditions herein and in the
Mortgage, as heretofore supplemented, set forth and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of
this Supplemental Indenture or for or in respect
--------------
of the recitals contained herein, all of which recitals are made
by the Company solely. Each and every term and condition
contained in Article XVII of the Mortgage, as heretofore amended
by said First through Supplemental Indentures, shall
----------
apply to and form part of this Supplemental
---------------
Indenture with the same force and effect as if the same were
herein set forth in full with such omissions, variations and
insertions, if any, as may be appropriate to make the same
conform to the provisions of this Supplemental
--------------
Indenture.
SECTION [9]. Nothing in this
--------------
Supplemental Indenture, expressed or implied, is intended, or
shall be construed, to confer upon, or to give to, any person,
firm or corporation, other than the parties hereto and the
holders of the bonds and coupons Outstanding under the Indenture,
any right, remedy or claim under or by reason of this
Supplemental Indenture or by any covenant,
--------------
condition, stipulation, promise or agreement hereof, and all the
covenants, conditions, stipulations, promises and agreements in
this Supplemental Indenture contained by or on
--------------
behalf of the Company shall be for the sole and exclusive benefit
of the parties hereto, and of the holders of the bonds and
coupons Outstanding under the Indenture.
SECTION [10]. This Supplemental
--------------
Indenture shall be executed in several counterparts, each of
which shall be an original and all of which shall constitute but
one and the same instrument.
<PAGE>
-16-
PP&L, INC. does hereby constitute and appoint
to be its attorney for it, and in its name and as
------------
and for its corporate act and deed to acknowledge this
Supplemental Indenture before any person having
--------------
authority by the laws of the Commonwealth of Pennsylvania to take
such acknowledgment, to the intent that the same may be duly
recorded, and BANKERS TRUST COMPANY does hereby constitute and
appoint to be its attorney for it, and in its name
--------------
and as and for its corporate act and deed to acknowledge this
Supplemental Indenture before any person having
--------------
authority by the laws of the Commonwealth of Pennsylvania to take
such acknowledgment, to the intent that the same may be duly
recorded.
<PAGE>
-17-
IN WITNESS WHEREOF, PP&L, INC. has caused its corporate
name to be hereunto affixed, and this instrument to be signed and
sealed by its President or one of its Vice Presidents, and its
corporate seal to be attested by its Secretary or one of its
Assistant Secretaries for and in its behalf, in the City of
Allentown, Pennsylvania, and BANKERS TRUST COMPANY has caused its
corporate name to be hereunto affixed, and this instrument to be
signed and sealed by one of its Vice Presidents or one of its
Trust Officers, and its corporate seal to be attested by one of
its Assistant Vice Presidents, in The City of New York, as of the
day and year first above written.
PP&L, INC.
By
----------------------------
[Vice] President
Attest:
---------------------------------------
[Assistant] Secretary
BANKERS TRUST COMPANY,
as Trustee
By
----------------------------
[Vice President or Trust
Officer]
Attest:
----------------------------------------
Vice President
<PAGE>
-18-
COMMONWEALTH OF PENNSYLVANIA )
) ss.:
COUNTY OF LEHIGH )
On this day of , , before me, a
----- -------- ----
notary public, the undersigned officer, personally appeared
, who acknowledged himself to be a [Vice]
-------------------
President of PP&L INC., a corporation and that he, as such [Vice]
President, being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the
name of the corporation by himself as [Vice] President.
In witness whereof, I hereunto set my hand and official
seal.
------------------------------
Notary Public
<PAGE>
-19-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , , before me, a
---- ----------- ----
notary public, the undersigned officer, personally appeared
, who acknowledged himself to be a
-------------------------------
[Vice President or Trust Officer] of BANKERS TRUST COMPANY, a
corporation and that he, as such [Vice President or Trust
Officer], being authorized to do so, executed the foregoing
instrument for the purposes therein contained, by signing the
name of the corporation by himself as [Vice President or Trust
Officer].
In witness whereof, I hereunto set my hand and official
seal.
-----------------------------------------------------------------
Notary Public, State of
-------
No.
-----------
Qualified in
--------------
Commission Expires
--------
Bankers Trust Company hereby certifies that its precise name
and address as Trustee hereunder are:
Bankers Trust Company
4 Albany Street
New York, New York 10006
BANKERS TRUST COMPANY
By
----------------------------
[Vice President or Trust
Officer]
EXHIBIT 5(A)
[LETTERHEAD OF PP&L, INC.]
March 27, 1998
PP&L, Inc.
Two North Ninth Street
Allentown, Pennsylvania 18101
Ladies and Gentlemen:
I am Senior Counsel of PP&L, Inc. (the "Company") and,
as such, am familiar with its affairs. I have acted as counsel
to the Company with respect to the Registration Statement on Form
S-3 to be filed by the Company on or about the date hereof with
the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Act"), in connection with the proposed
issuance and sale by the Company of not in excess of $200,000,000
principal amount of its First Mortgage Bonds (the "Bonds").
I have examined such corporate records, certificates
and other documents and have reviewed such questions of law as I
have considered necessary or appropriate for purposes of the
opinions expressed below. Based on such examination and review,
I advise you as follows:
I am of the opinion that the Company is a corporation
validly organized and existing under the laws of the Commonwealth
of Pennsylvania and is duly qualified to carry on the business
which it is now conducting in that Commonwealth.
I am further of the opinion that appropriate action has
been taken by the Company's Finance Committee of the Board of
Directors to authorize the issuance and sale of the Bonds, the
execution and delivery of the form of proposed Supplemental
Indentures to the Mortgage and Deed of Trust under which the
Bonds of each series are to be issued, and any other action which
may be required to consummate the proposed issuance and sale of
such Bonds, subject to final action by the Board of Directors or
the Finance Committee of the Board of Directors with respect to
certain terms of the Bonds.
I am further of the opinion that all action necessary
to make valid the issuance and sale of such Bonds will have been
taken when the said Registration Statement on Form S-3 has become
<PAGE>
PP&L, Inc. -2- March 27, 1998
effective and the terms of offering of the Bonds have been
specified in a post-effective amendment thereto or a supplement
to the Prospectus included in such Registration Statement, and
such post-effective amendment or such supplement has been filed
with the Securities and Exchange Commission; the aforementioned
Supplemental Indentures have been executed and delivered; the
Securities Certificate of the Company with respect to the Bonds
shall have been duly registered by the Pennsylvania Public
Utility Commission pursuant to Section 1903 of the Pennsylvania
Public Utility Code, as amended; appropriate action has been
taken by the Board of Directors or the Finance Committee of the
Board of Directors with respect to certain terms of the Bonds;
and such Bonds have been appropriately issued and delivered for
the consideration contemplated.
When the steps indicated above have been taken, the
Bonds in my opinion will become legal, valid and binding
obligations of the Company, enforceable in accordance with their
terms, except to the extent limited by bankruptcy, insolvency or
reorganization laws or other laws relating to or affecting
generally the enforcement of creditors' and mortgagees' rights
and by general equity principles.
I am further of the opinion that, except as stated
above, and except for such actions as are legally required under
the securities or "blue sky" laws of states, no further approval,
authorization or consent of any other commission or any other
governmental body is requisite in connection with the issuance
and sale by the Company of said Bonds.
I have reviewed those statements of law and legal
conclusions stated to be made upon my authority in the
Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission in connection with the
issuance and sale of such Bonds, and, in my opinion, such
statements are correct.
I hereby consent to the use of this opinion as an
exhibit to said Registration Statement and to the use of my name
in the Registration Statement and in the Prospectus constituting
a part thereof under the captions "Certain Tax Matters,"
"Experts" and "Validity of the Bonds." I also hereby give my
consent to the use of my name in the opinion of Reid & Priest
LLP, filed as Exhibit 5(b) to said Registration Statement.
Very truly yours,
/s/ Michael A. McGrail
Michael A. McGrail, Esq.
EXHIBIT 5(B)
REID & PRIEST LLP
40 WEST 57TH STREET
NEW YORK, NY 10019
TELEPHONE 212 603-2000
FAX 212 603-2001
New York, New York
March 27, 1998
PP&L, Inc.
Two North Ninth Street
Allentown, Pennsylvania 18101
Ladies and Gentlemen:
We are acting as special counsel to PP&L, Inc. (the
"Company") with respect to the Registration Statement on Form S-3
to be filed by the Company on or about the date hereof with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, in connection with the proposed issuance and
sale, from time to time, of not to exceed $200,000,000 aggregate
principal amount of one or more series of the Company's First
Mortgage Bonds (hereinafter called the "Bonds").
We have examined such corporate records, certificates
and other documents and have reviewed such questions of law as we
have considered necessary or appropriate for purposes of the
opinions as expressed below. Based on such examination and
review, we advise you as follows:
We are of the opinion with respect to the Bonds to be
issued at any one time that all action necessary to make valid
the issuance and sale of the Bonds will have been taken when said
Registration Statement on Form S-3, and any amendment or
amendments thereto, shall have become effective and a supplement
to the prospectus which specifies the terms of the offering of
such Bonds shall have been filed with the Securities and Exchange
Commission; appropriate action has been taken by the Company's
Board of Directors or the Finance Committee of such Board of
Directors to authorize certain final terms relating to the
proposed issuance and sale of such Bonds; the Securities
Certificate of the Company with respect to such Bonds shall have
<PAGE>
PP&L, Inc. -2- March 27, 1998
been duly registered by the Pennsylvania Public Utility
Commission pursuant to Section 1903 of the Pennsylvania Public
Utility Code, as amended; one or more appropriate Supplemental
Indentures relating to such Bonds have been executed and
delivered; and such Bonds have been appropriately issued and
delivered for the consideration contemplated.
When the steps indicated above have been taken, the
Bonds to be issued at any one time in our opinion will become
legal, valid and binding obligations of the Company, enforceable
in accordance with their terms, except to the extent limited by
bankruptcy, insolvency or reorganization laws or by other laws
relating to or affecting generally the enforcement of creditors'
and mortgagees' rights and by general equity principles.
We are members of the New York Bar and do not hold
ourselves out as experts on the laws of Pennsylvania. As to all
matters relating to the laws of Pennsylvania involved in the
opinions listed above, we have relied, with your consent, upon
the opinion of Michael A. McGrail, Esq., of even date herewith,
which is being delivered to you on or about this date.
We hereby consent to the use of this opinion as Exhibit
5(b) to the aforesaid Registration Statement on Form S-3 in
connection with the issuance and sale of the Bonds. We further
consent to the use of our name in said Registration Statement and
the Prospectus constituting a part thereof.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
Exhibit 12
PP&L, INC. AND SUBSIDIARIES, CONSOLIDATED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS)
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Fixed charges, as defined:
Interest on long-term debt . . . . $195 $207 $213 $214 $226
Interest on short-term debt and
other interest . . . . . . . . . . 17 11 18 18 13
Amortization of debt discount,
expense and premium--net . . . . . 2 2 2 2 2
Interest on capital lease
obligations
Charged to expense . . . . . . . 9 13 15 12 9
Capitalized . . . . . . . . . . 2 2 2 1 1
Estimated interest component
of operating rentals . . . . . . . 15 8 8 6 5
Proportionate share of fixed
charges of 50-percent-or-less 1 1 1 1 1
owned persons . . . . . . . . . . ---- ---- ---- ---- ----
Total fixed charges . . . . . . $241 $244 $259 $254 $257
==== ==== ==== ==== ====
Earnings, as defined:
Net income . . . . . . . . . . . . $348 $357 $352 $243 $348
Less undistributed income of - - - - -
less than 50-percent-owned persons ---- ---- ---- ---- ----
348 357 352 243 348
Add (Deduct):
Federal income taxes . . . . . . . 169 189 195 199 163
State income taxes . . . . . . . . 59 64 62 77 64
Deferred income taxes . . . . . . 29 10 15 (45) 22
Investment tax credit -- net . . . (10) (10) (11) (12) (14)
Income taxes on other income
and deductions -- net . . . . . . 1 (2) 26 (38) (1)
Amortization of capitalized
interest on capital leases . . . 2 4 6 9 12
Total fixed charges as above
(excluding capitalized interest 239 243 257 253 256
on capital lease obligations) . . ---- ---- ---- ---- ----
Total earnings . . . . . . . . . $837 $855 $902 $686 $850
==== ==== ==== ==== ====
Ratio of earnings to fixed 3.47 3.50 3.48 2.70 3.31
charges . . . . . . . . . . . . . . ==== ==== ==== ==== ====
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on
Form S-3 of our report dated February 2, 1998 appearing on page
41 of PP&L, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997. We also consent to the reference to us under
the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Philadelphia, Pennsylvania
March 27, 1998
EXHIBIT 24
PP&L, INC.
SALE OF FIRST MORTGAGE BONDS
POWER OF ATTORNEY
-----------------
The undersigned directors of PP&L, Inc., a Pennsylvania
corporation, hereby appoint William F. Hecht, John R. Biggar and
Robert J. Grey their true and lawful attorney, and each of them
their true and lawful attorney, with power to act without the
other and with full power of substitution and resubstitution, to
execute for the undersigned directors and in their names to file
with the Securities and Exchange Commission, Washington, D.C.,
under provisions of the Securities Act of 1933, as amended, a
registration statement or registration statements for the
registration under provisions of the Securities Act of 1933, as
amended, and any other rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, of not in
excess of $200 million principal amount of First Mortgage Bonds
of PP&L, Inc., and any and all amendments thereto, whether said
amendments add to, delete from or otherwise alter any such
registration statement or registration statements, or add or
withdraw any exhibits or schedules to be filed therewith and any
and all instruments in connection therewith. The undersigned
hereby grant to said attorneys and each of them full power and
authority to do and perform in the name of and on behalf of the
undersigned, and in any and all capabilities, any act and thing
whatsoever required or necessary to be done in and about the
premises, as fully and to all intents and purposes as the
undersigned might do, hereby ratifying and approving the acts of
said attorneys and each of them.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands and seals this 27th day of March, 1998.
/s/ Frederick M. Bernthal L.S. /s/ Stuart Heydt L.S.
---------------------------- -----------------------
Frederick M. Bernthal Stuart Heydt
/s/ E. Allen Deaver L.S. /s/ Ruth Leventhal L.S.
---------------------------- -----------------------
E. Allen Deaver Ruth Leventhal
/s/ Nance K. Dicciani L.S. /s/ Marilyn Ware Lewis L.S.
---------------------------- ------------------------
Nance K. Dicciani Marilyn Ware Lewis
/s/ William J. Flood L.S. /s/ Frank A. Long L.S.
--------------------------- -----------------------
William J. Flood Frank A. Long
/s/ Elmer D. Gates L.S. /s/ Norman Robertson L.S.
---------------------------- -----------------------
Elmer D. Gates Norman Robertson
/s/ William F. Hecht L.S.
----------------------------
William F. Hecht
Exhibit 25
-----------------------------------------------------------------
UNITED STATES
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)
-----------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
PP&L, INC.
(Exact name of obligor as specified in its charter)
PENNSYLVANIA 23-0959590
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA 18107
(Address of principal executive offices)
FIRST MORTGAGE BONDS
(Title of the indenture securities)
<PAGE>
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.
NAME ADDRESS
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
Item 16. List of Exhibits.
EXHIBIT 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, incorporate by referenced to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate of
Amendment of the Organization Certificate of
Bankers Trust Company dated June 19, 1997,
copy attached.
EXHIBIT 2 - Certificate of Authority to commence business
- Incorporated herein by reference to Exhibit
2 filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as
amended on November 18, 1997. Copy attached.
-2-
<PAGE>
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated
herein by reference to Exhibit 4 filed with
Form T-1 Statement, Registration No.
22-18864.
EXHIBIT 7 - The latest report of condition of Bankers
Trust Company dated as of December 31, 1997.
Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the trustee, Bankers Trust Company, 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 25th day of March, 1998.
BANKERS TRUST COMPANY
By: Scott Thiel
-----------
Scott Thiel
Assistant Vice President
-4-
<PAGE>
STATE OF NEW YORK,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the
State of New York, DO HEREBY APPROVE the annexed Certificate
entitled "CERTIFICATE OF AMENDMENT OF THE ORGANIZATION
CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION 8005 OF THE
BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of
100,166,667 shares with a par value of $10 each designated as
Common Stock and 600 shares with a par value of $1,000,000 each
designated as Series Preferred Stock to $2,001,666,670 consisting
of 100,166,667 shares with a par value of $10 each designated as
Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at
the City of New York,
this 27TH day of June in the Year of our Lord one
--------- -----------
thousand nine hundred and NINETY-SEVEN.
Manuel Kursky
------------------------------
Deputy Superintendent of Banks
<PAGE>
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively
a Managing Director and an Assistant Secretary of Bankers Trust
Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was
filed by the Superintendent of Banks on the 5th of march, 1903.
3. The organization certificate as heretofore amended is
hereby amended to increase the aggregate number of shares which
the corporation shall have authority to issue and to increase the
amount of its authorized capital stock in conformity therewith.
4. Article III of the organization certificate with
reference to the authorized capital stock, the number of shares
into which the capital stock shall be divided, the par value of
the shares and the capital stock outstanding, which reads as
follows:
"III. The amount of capital stock which the corporation is
hereafter to have is One Billion, Six Hundred and One
Million, Six Hundred Sixty-Six Thousand, Six Hundred
Seventy Dollars ($1,601,666,670), divided into One
Hundred Million, One Hundred Sixty-Six Thousand, Six
Hundred Sixty-Seven (100,166,667) shares with a par
value of $10 each designated as Common Stock and 600
shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is
hereafter to have is Two Billion One Million, Six
Hundred Sixty-Six Thousand, Six Hundred Seventy Dollars
($2,001,666,670), divided into One Hundred Million, One
Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each
designated as Common Stock and 1000 shares with a par
value of One Million Dollars ($1,000,000) each
designated as Series Preferred Stock."
<PAGE>
5. The foregoing amendment of the organization certificate
was authorized by unanimous written consent signed by the holder
of all outstanding shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this
certificate this 19th day of June, 1997.
James T. Byrne, Jr.
-------------------------
James T. Byrne, Jr.
Managing Director
Lea Lahtinen
-------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she
is an Assistant Secretary of Bankers Trust Company, the
corporation described in the foregoing certificate; that she has
read the foregoing certificate and knows the contents thereof,
and that the statements herein contained are true.
Lea Lahtinen
-------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
Sandra L. West
---------------------
Notary Public
SANDRA L. WEST
Notary Public State
of New York
No. 31-4942101
Qualified in New
York County
Commission Expires
September 19, 1998
<PAGE>
BY-LAWS
NOVEMBER 18, 1997
Bankers Trust Company
New York
<PAGE>
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this
Company shall be held at the office of the Company in the Borough
of Manhattan, City of New York, on the third Tuesday in January
of each year, for the election of directors and such other
business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those
regulated by statute may be called at any time by a majority of
the directors. It shall be the duty of the Chairman of the
Board, the Chief Executive Officer or the President to call such
meetings whenever requested in writing to do so by stockholders
owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be
present, either in person or by proxy, stockholders owning a
majority of the capital stock of the Company, in order to
constitute a quorum, except at special elections of directors, as
provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the
Chief Executive Officer or, in his absence, the President or, in
their absence, the senior officer present, shall preside at
meetings of the stockholders and shall direct the proceedings and
the order of business. The Secretary shall act as secretary of
such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its
corporate powers exercised by a Board of Directors consisting of
such number of directors, but not less than ten nor more than
twenty-five, as may from time to time be fixed by resolution
adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of
directors, additional directors may be elected within the
limitations so fixed, either by the stockholders or within the
limitations imposed by law, by a majority of directors then in
office. One-third of the number of directors, as fixed from time
to time, shall constitute a quorum. Any one or more members of
the Board of Directors or any Committee thereof may participate
in a meeting of the Board of Directors or Committee thereof by
means of a conference telephone or similar communications
equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means
shall constitute presence in person at such a meeting.
<PAGE>
All directors hereafter elected shall hold office until the next
annual meeting of the stockholders and until their successors are
elected and have qualified. No person who shall have attained
age 72 shall be eligible to be elected or re-elected a director.
Such director may, however, remain a director of the Company
until the next annual meeting of the stockholders of Bankers
Trust New York Corporation (the Company s parent) so that such
director s retirement will coincide with the retirement date from
Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier
relinquishes his responsibilities and title, shall be eligible to
serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number
of the Board of Directors may be filled by the affirmative vote
of a majority of the directors then in office, and the directors
so elected shall hold office for the balance of the unexpired
term.
SECTION 3. The Chairman of the Board shall preside at meetings
of the Board of Directors. In his absence, the Chief Executive
Officer or, in his absence, such other director as the Board of
Directors from time to time may designate shall preside at such
meetings.
SECTION 4. The Board of Directors may adopt such Rules and
Regulations for the conduct of its meetings and the management of
the affairs of the Company as it may deem proper, not
inconsistent with the laws of the State of New York, or these By-
Laws, and all officers and employees shall strictly adhere to,
and be bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be
held from time to time on the third Tuesday of the month. If the
day appointed for holding such regular meetings shall be a legal
holiday, the regular meeting to be held on such day shall be held
on the next business day thereafter. Special meetings of the
Board of Directors may be called upon at least two day's notice
whenever it may be deemed proper by the Chairman of the Board or,
the Chief Executive Officer or, in their absence, by such other
director as the Board of Directors may have designated pursuant
to Section 3 of this Article, and shall be called upon like
notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members
of committees shall be fixed from time to time by resolution of
the Board of Directors.
<PAGE>
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board
consisting of not less than five directors who shall be appointed
annually by the Board of Directors. The Chairman of the Board
shall preside at meetings of the Executive Committee. In his
absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time
may designate shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent
permitted by law all of the powers of the Board of Directors,
except when the latter is in session, and shall keep minutes of
its proceedings, which shall be presented to the Board of
Directors at its next subsequent meeting. All acts done and
powers and authority conferred by the Executive Committee from
time to time shall be and be deemed to be, and may be certified
as being, the act and under the authority of the Board of
Directors.
A majority of the Committee shall constitute a quorum, but the
Committee may act only by the concurrent vote of not less than
one-third of its members, at least one of whom must be a director
other than an officer. Any one or more directors, even though not
members of the Executive Committee, may attend any meeting of the
Committee, and the member or members of the Committee present,
even though less than a quorum, may designate any one or more of
such directors as a substitute or substitutes for any absent
member or members of the Committee, and each such substitute or
substitutes shall be counted for quorum, voting, and all other
purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually
by resolution adopted by a majority of the entire Board of
Directors which shall consist of such number of directors, who
are not also officers of the Company, as may from time to time be
fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall
also from time to time fix a quorum for meetings of the
Committee. Such Committee shall conduct the annual directors'
examinations of the Company as required by the New York State
Banking Law; shall review the reports of all examinations made of
the Company by public authorities and report thereon to the Board
of Directors; and shall report to the Board of Directors such
other matters as it deems advisable with respect to the Company,
its various departments and the conduct of its operations.
In the performance of its duties, the Audit Committee may employ
or retain, from time to time, expert assistants, independent of
the officers or personnel of the Company, to make studies of the
Company's assets and liabilities as the Committee may request and
to make an examination of the accounting and auditing methods of
the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine
that the operations of the Company, including its fiduciary
departments, are being audited by the General Auditor in such a
manner as to provide prudent and adequate protection. The
Committee also may direct the General Auditor to make such
investigation as it deems necessary or advisable with respect to
the Company, its various departments and the conduct of its
<PAGE>
operations. The Committee shall hold regular quarterly meetings
and during the intervals thereof shall meet at other times on
call of the Chairman.
SECTION 3. The Board of Directors shall have the power to
appoint any other Committees as may seem necessary, and from time
to time to suspend or continue the powers and duties of such
Committees. Each Committee appointed pursuant to this Article
shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their
number a Chairman of the Board and a Chief Executive Officer; and
shall also elect a President, and may also elect a Senior Vice
Chairman, one or more Vice Chairmen, one or more Executive Vice
Presidents, one or more Senior Managing Directors, one or more
Managing Directors, one or more Senior Vice Presidents, one or
more Principals, one or more Vice Presidents, one or more General
Managers, a Secretary, a Controller, a Treasurer, a General
Counsel, one or more Associate General Counsels, a General
Auditor, a General Credit Auditor, and one or more Deputy
Auditors, who need not be directors. The officers of the
corporation may also include such other officers or assistant
officers as shall from time to time be elected or appointed by
the Board. The Chairman of the Board or the Chief Executive
Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint
assistant officers. All officers elected or appointed by the
Board of Directors shall hold their respective offices during the
pleasure of the Board of Directors, and all assistant officers
shall hold office at the pleasure of the Board or the Chairman of
the Board or the Chief Executive Officer or, in their absence,
the President, the Senior Vice Chairman or any Vice Chairman.
The Board of Directors may require any and all officers and
employees to give security for the faithful performance of their
duties.
SECTION 2. The Board of Directors shall designate the Chief
Executive Officer of the Company who may also hold the additional
title of Chairman of the Board, President, Senior Vice Chairman
or Vice Chairman and such person shall have, subject to the
supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief
Executive Officer by law or by these By-Laws, or which usually
attach or pertain to such office. The other officers shall have,
subject to the supervision and direction of the Board of
Directors or the Executive Committee or the Chairman of the Board
or, the Chief Executive Officer, the powers vested by law or by
these By-Laws in them as holders of their respective offices and,
in addition, shall perform such other duties as shall be assigned
to them by the Board of Directors or the Executive Committee or
the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit
Committee, to the Board of Directors for the determination of the
program of the internal audit function and the evaluation of the
adequacy of the system of internal controls. Subject to the
Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to
such office and shall have such other powers as may be prescribed
or assigned to him from time to time by the Board of Directors or
vested in him by law or by these By-Laws. He shall perform such
other duties and shall make such investigations, examinations and
reports as may be prescribed or required by the Audit Committee.
The General Auditor shall have unrestricted access to all records
<PAGE>
and premises of the Company and shall delegate such authority to
his subordinates. He shall have the duty to report to the Audit
Committee on all matters concerning the internal audit program
and the adequacy of the system of internal controls of the
Company which he deems advisable or which the Audit Committee may
request. Additionally, the General Auditor shall have the duty
of reporting independently of all officers of the Company to the
Audit Committee at least quarterly on any matters concerning the
internal audit program and the adequacy of the system of internal
controls of the Company that should be brought to the attention
of the directors except those matters responsibility for which
has been vested in the General Credit Auditor. Should the
General Auditor deem any matter to be of special immediate
importance, he shall report thereon forthwith to the Audit
Committee. The General Auditor shall report to the Chief
Financial Officer only for administrative purposes.
The General Credit Auditor shall be responsible to the Chief
Executive Officer and, through the Audit Committee, to the Board
of Directors for the systems of internal credit audit, shall
perform such other duties as the Chief Executive Officer may
prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor
shall have unrestricted access to all records and may delegate
such authority to subordinates.
SECTION 3. The compensation of all officers shall be fixed under
such plan or plans of position evaluation and salary
administration as shall be approved from time to time by
resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the
Chairman of the Board, the Chief Executive Officer or any person
authorized for this purpose by the Chief Executive Officer, shall
appoint or engage all other employees and agents and fix their
compensation. The employment of all such employees and agents
shall continue during the pleasure of the Board of Directors or
the Executive Committee or the Chairman of the Board or the Chief
Executive Officer or any such authorized person; and the Board of
Directors, the Executive Committee, the Chairman of the Board,
the Chief Executive Officer or any such authorized person may
discharge any such employees and agents at will.
<PAGE>
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by
Section 7018 of the New York Banking Law, indemnify any person
who is or was made, or threatened to be made, a party to an
action or proceeding, whether civil or criminal, whether
involving any actual or alleged breach of duty, neglect or error,
any accountability, or any actual or alleged misstatement,
misleading statement or other act or omission and whether brought
or threatened in any court or administrative or legislative body
or agency, including an action by or in the right of the Company
to procure a judgment in its favor and an action by or in the
right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer
of the Company is servicing or served in any capacity at the
request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the
Company, or is serving or served such other corporation, partner-
ship, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgments, fines, amounts
paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that
no indemnification shall be provided to any such person if a
judgment or other final adjudication adverse to the director or
officer establishes that (i) his acts were committed in bad faith
or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated,
or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom
the Company is permitted to provide indemnification or the
advancement of expenses by applicable law, whether pursuant to
rights granted pursuant to, or provided by, the New York Banking
Law or other rights created by (i) a resolution of stockholders,
(ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these
By-Laws authorize the creation of other rights in any such
manner.
SECTION 3. The Company shall, from time to time, reimburse or
advance to any person referred to in Section 1 the funds
necessary for payment of expenses, including attorneys' fees,
incurred in connection with any action or proceeding referred to
in Section 1, upon receipt of a written undertaking by or on
behalf of such person to repay such amount(s) if a judgment or
other final adjudication adverse to the director or officer
establishes that (i) his acts were committed in bad faith or were
the result of active and deliberate dishonesty and, in either
case, were material to the cause of action so adjudicated, or
(ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 4. Any director or officer of the Company serving (i)
another corporation, of which a majority of the shares entitled
to vote in the election of its directors is held by the Company,
or (ii) any employee benefit plan of the Company or any
corporation referred to in clause (i) in any capacity shall be
deemed to be doing so at the request of the Company. In all
other cases, the provisions of this Article V will apply (i) only
if the person serving another corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise
so served at the specific request of the Company, evidenced by a
<PAGE>
written communication signed by the Chairman of the Board, the
Chief Executive Officer or the President, and (ii) only if and to
the extent that, after making such efforts as the Chairman of the
Board, the Chief Executive Officer or the President shall deem
adequate in the circumstances, such person shall be unable to
obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the
reimbursement or advancement of expenses as a matter of right
pursuant to this Article V may elect to have the right to
indemnification (or advancement of expenses) interpreted on the
basis of the applicable law in effect at the time of occurrence
of the event or events giving rise to the action or proceeding,
to the extent permitted by law, or on the basis of the applicable
law in effect at the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement
or advancement of expense pursuant to this Article V (i) is a
contract right pursuant to which the person entitled thereto may
bring suit as if the provisions hereof were set forth in a
separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be
available with respect to events occurring prior to the adoption
hereof, and (iii) shall continue to exist after the rescission or
restrictive modification hereof with respect to events occurring
prior thereto.
SECTION 7. If a request to be indemnified or for the reimburse-
ment or advancement of expenses pursuant hereto is not paid in
full by the Company within thirty days after a written claim has
been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid
amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prose-
cuting such claim. Neither the failure of the Company (including
its Board of Directors, independent legal counsel, or its stock-
holders) to have made a determination prior to the commencement
of such action that indemnification of or reimbursement or
advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company
(including its Board of Directors, independent legal counsel, or
its stockholders) that the claimant is not entitled to
indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a
presumption that the claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or
otherwise, in the defense of a civil or criminal action or
proceeding of the character described in Section 1 shall be
entitled to indemnification only as provided in Sections 1 and 3,
notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE>
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the
Company, the counterpart dies of which shall be in the charge of
the Secretary of the Company and such officers as the Chairman of
the Board, the Chief Executive Officer or the Secretary may from
time to time direct in writing, to be affixed to certificates of
stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases
on a specified occasion and for a specified transaction or
transactions, for the use of a printed or engraved facsimile seal
of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made
upon the books of the Company by the registered holder in person,
or by power of attorney, duly executed, witnessed and filed with
the Secretary or other proper officer of the Company, on the
surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-
Laws, shall be deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by
the Board of Directors at any meeting, or by the stockholders at
any annual or special meeting, provided notice thereof has been
given.
<PAGE>
I, Sandra L. West , Assistant
----------------------------------------------------
Secretary of Bankers Trust Company, New York, New York, hereby
certify that the foregoing is a complete, true and correct copy
of the By-Laws of Bankers Trust Company, and that the same are in
full force and effect at this date.
Sandra L. West
--------------
ASSISTANT SECRETARY
DATED: March 25, 1998
---------------------------------------
<PAGE>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/97
Address: 130 Liberty Street ST-BK: 36-4840 FFIEC 031
City, State ZIP: New York, NY 10006 Vendor ID: D CERT: 00623
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 | Page RC-1 11
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1997
All schedules are to be reported in thousands of dollars.
Unless otherwise indicated, reported the amount outstanding
as of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET
-------------
C400
---------------------
Dollar Amounts in Thousands RCFD Bil Mil Thou
---------------------------------------- ---------------------
ASSETS / / / / / / / / / /
1. Cash and balances due from depository
institutions (from Schedule RC-A): / / / / / / / / / /
a. Noninterest-bearing balances and
currency and coin (1) . . . . . . . 0081 2,121,000 1.a.
b. Interest-bearing balances (2) . . 0071 4,770,000 1.b.
2. Securities: / / / / / / / / / /
a. Held-to-maturity securities (from
Schedule RC-B, column A) . . . . . . 1754 0 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D) . . . . . . 1773 4,015,000 2.b.
3. Federal funds sold and securities
purchased under agreements to resell . . 1350 28,927,000 3.
4. Loans and lease financing
receivables: / / / / / / / /
a. Loans and leases, net of unearned
income (from Schedule RC-C)
RCFD 2122 17,692,000 / / / / / / / / 4.a.
b. LESS: Allowance for loan and lease
losses . . . RCFD 3123 659,000 / / / / / / / / 4.b.
c. LESS: Allocated transfer risk
reserve . . RCFD 3128 0 / / / / / / / / 4.c.
d. Loans and leases, net of unearned
income, allowance, and reserve (item / / / / / / / /
4.a minus 4.b and 4.c) . . . . . . . 2125 17,033,000 4.d.
5. Trading Assets (from schedule RC-D) . 3545 45,488,000 5.
6. Premises and fixed assets (including
capitalized leases) . . . . . . . . . 2145 766,000 6.
7. Other real estate owned (from Schedule
RC-M) . . . . . . . . . . . . . . . . 2150 188,000 7.
8. Investments in unconsolidated
subsidiaries and associated companies
(from Schedule RC-M) . . . . . . . . . 2130 58,000 8.
9. Customers' liability to this bank on
acceptances outstanding . . . . . . . 2155 633,000 9.
10. Intangible assets (from Schedule
RC-M) . . . . . . . . . . . . . . . . 2143 83,000 10.
11. Other assets (from Schedule RC-F) . . 2160 5,957,000 11.
12. Total assets (sum of items 1 through
11) . . . . . . . . . . . . . . . . . 2170 110,039,000 12.
--------------------------
(1) Includes cash items in process of collection and unposted
debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
Legal Title of Bank: Bankers Trust Company Call Date: 12/31/97
Address: 130 Liberty Street ST-BK: 36-4840 FFIEC 031
City, State ZIP: New York, NY 10006 Vendor ID: D CERT: 00623
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3 | Page RC-2 12
SCHEDULE RC--CONTINUED
---------------------
Dollar Amounts in Thousands / / / / Bil Mil Thou
---------------------------------------- ---------------------
LIABILITIES / / / / / / / / / /
13. Deposits: / / / / / / / / / /
a. In domestic offices (sum of totals
of columns A and C from Schedule
RC-E, part I) RCON 2200 24,608,000 13.a.
(1) Noninterest-bearing(1) . . . . .
. RCON 6631 2,856,000 / / / / / / / / / / 13.a.(1)
(2) Interest-bearing
. RCON 6636 21,752,000 / / / / / / / / / 13.a.(2)
b. In foreign offices, Edge and
Agreement subsidiaries, and IBFs / / / / /
(from Schedule RC-E part II) RCFN 2200 20,529,000
(1) Noninterest-bearing
. RCFN 6631 2,122,000 / / / / / / / / / 13.b.(1)
(2) Interest-bearing
. RCFN 6636 18,407,000 / / / / / / / / /
14. Federal funds purchased and
securities sold under agreements to
repurchase RCFD 2800 13,777,000
15. a. Demand notes issued to the U.S.
Treasury . . . . . . . . . . . . . RCON 2840 0 15.a.
b. Trading liabilities (from Schedule
RC-D) . . . . . . . . . . . . . . RCFD 3548 24,968,000
16. Other borrowed money (includes
mortgage indebtedness and obligations
under capitalized leases): / / / / / / / / / /
a. With a remaining maturity of one
year or less . . . . . . . . . . . RCFD 2332 5,810,000 16.a.
b. With a remaining maturity of more
than one year through three
years . . . . . . . . . . . . . . A547 4,702,000
c. With a remaining maturity of more
than three years . . . . . . . . . A548 1,750,000
17. Not Applicable . . . . . . . . . . . . / / / / / / / / / 17.
18. Bank's liability on acceptances
executed and outstanding . . . . . . RCFD 2920 633,000 18.
19. Subordinated notes and
debentures (2) . . . . . . . . . . . RCFD 3200 1,307,000 19.
20. Other liabilities (from Schedule
RC-G) . . . . . . . . . . . . . . . . RCDF 2930 5,961,000 20.
21. Total liabilities (sum of items 13
through 20) . . . . . . . . . . . . . RCFD 2948 104,045,000 21.
22. Not Applicable . . . . . . . . . . . / / / / / / / / / /
/ / / / / / / / / /
EQUITY CAPITAL / / / / / / / / / /
23. Perpetual preferred stock and related
surplus . . . . . . . . . . . . . . . RCFD 3838 1,000,000 23.
24. Common stock . . . . . . . . . . . . RCFD 3230 1,352,000 24.
25. Surplus (exclude all surplus related
to preferred stock) . . . . . . . . . RCFD 3839 540,000 25.
26. a. Undivided profits and capital
reserves . . . . . . . . . . . . . RCFD 3632 3,526,000 26.a.
b. Net unrealized holding gains
(losses) on available-for-sale
securities . . . . . . . . . . . . RCFD 8434 ( 45,000) 26.b.
27. Cumulative foreign currency
translation adjustments . . . . . . . RCFD 3284 ( 379,000) 27.
28. Total equity capital (sum of items 23
through 27) . . . . . . . . . . . . . RCFD 3210 5,994,000 28.
29. Total liabilities and equity capital
(sum of items 21 and 28) . . . . . . RCFD 3300 110,039,000 29.
----------------------
Memorandum
To be reported only with the March
Report of Condition.
1. Indicate in the box at the right the
number of the statement below that
best describes the most comprehensive
level of auditing work performed for
the bank by independent external Number
auditors as of any date during ---------
1996 . . . . . . . . . . . . . . . . RCFD 6724 N/A M.1
1 = Independent audit of the bank 4 = Directors'
conducted in accordance with examination of
generally accepted auditing standards the bank
by a certified public accounting firm performed by
which submits a report on the bank other external
auditors (may be
required by state
chartering
authority)
2 = Independent audit of the bank's 5 = Review of the
parent holding company conducted in bank's financial
accordance with generally accepted statements by
auditing standards by a certified external auditors
public accounting firm which submits
a report on the consolidated holding 6 = Compilation of
company (but not on the bank the bank's
separately) financial
statements by
external auditors
3 = Directors' examination of the bank 7 = Other audit
conducted in accordance with procedures
generally accepted auditing standards (excluding tax
by a certified public accounting firm preparation work)
(may be required by state chartering
authority) 8 = No external audit
work
--------------------------
(1) Including total demand deposits and noninterest-bearing time
and savings deposits.
(2) Includes limited-life preferred stock and related surplus.
