Registration Nos. 33-57905
33-57905-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
JERSEY CENTRAL POWER & LIGHT COMPANY JCP&L CAPITAL, L.P.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
NEW JERSEY DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
21-0485010 51-0364870
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
300 Madison Avenue Mellon Bank Center
Morristown, New Jersey 07962-1911 Second Floor
(201) 455-8200 919 N. Market Street
Wilmington, Delaware 19801
(302) 654-5893
(Addresses, including zip codes, and telephone numbers, including
area codes, of registrants' principal executive offices)
TERRANCE G. HOWSON
Vice President and Treasurer
GPU Service Corporation
100 Interpace Parkway
Parsippany, New Jersey 07054-1149
(201) 263-6500
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each registrant)
Please send copies of all communications to:
RICHARD S. COHEN, ESQ.
Secretary and Corporate Counsel
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
(201) 455-8200<PAGE>
DOUGLAS E. DAVIDSON, ESQ. STEPHEN K. WAITE, ESQ.
Berlack, Israels & Liberman Winthrop, Stimson, Putnam &
120 West 45th Street Roberts
New York, New York 10036-4003 One Battery Park Plaza
(212) 704-0100 New York, New York 10004-1490
(212) 858-1000
____________________
Approximate date of commencement of proposed sale to the
public: to be determined by market conditions after the effective
date of this Registration Statement.
____________________
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/
____________________
The Registrants hereby amend this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrants shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
2<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 21, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED _________, 1995
___________ Preferred Securities
JCP&L Capital
__% Cumulative Monthly Income Preferred Securities,
Series A
(liquidation preference $25 per Preferred Security)
guaranteed to the extent the issuer has funds
as set forth herein by
JERSEY CENTRAL POWER & LIGHT COMPANY
__________________
The __% Cumulative Monthly Income Preferred Securities,
Series A (the "Series A Preferred Securities"), representing the
limited partner interests offered hereby, are being issued by
JCP&L Capital, L.P., a limited partnership formed under the laws
of the State of Delaware ("JCP&L Capital"). All of the general
partner interests in JCP&L Capital are owned by JCP&L Preferred
Capital, Inc. (the "General Partner"), a Delaware corporation and
a wholly owned subsidiary of Jersey Central Power & Light
Company, a New Jersey corporation (the "Company"). JCP&L Capital
exists for the sole purpose of issuing its partner interests and
using the proceeds thereof to purchase the Company's subordinated
debentures. The limited partner interests represented by the
Series A Preferred Securities will have a preference with respect
to cash distributions (hereinafter called "Dividends") and
amounts payable on liquidation over the general partner interests
in JCP&L Capital, and will rank pari passu with all other series
of Preferred Securities which may be issued by JCP&L Capital.
See "Description of Preferred Securities" in the accompanying
Prospectus.
Holders of the Series A Preferred Securities will be
entitled to receive cumulative preferential cash Dividends at an
annual rate of __% of the liquidation preference of $25 per
Series A Preferred Security, accruing from the date of original
issuance and payable monthly in arrears on the last day of each
calendar month of each year, commencing ___________, 1995. The
payment of Dividends, to the extent that JCP&L Capital has
sufficient cash on hand to permit such payments and funds legally
available therefor, and payments on liquidation or redemption
with respect to the Series A Preferred Securities are guaranteed
on a limited basis by the Company to the extent set forth herein
and in the accompanying Prospectus (the "Guarantee"). See
"Description of the Guarantee" in the accompanying Prospectus.
If the Company fails to make interest payments on the ___%
Deferrable Interest Subordinated Debentures, Series A ("Series A
Subordinated Debentures") purchased by JCP&L Capital with the
S-1<PAGE>
proceeds of this offering, JCP&L Capital will have insufficient
funds to pay Dividends on the Series A Preferred Securities, and,
since the Guarantee does not cover the payment of Dividends for
which JCP&L Capital does not have sufficient funds available, the
Company would not be obligated under the Guarantee to make such
undeclared Dividend payments. In such event, the remedy of a
holder of Series A Preferred Securities is to enforce JCP&L
Capital's rights under the Series A Subordinated Debentures. See
"Description of the Subordinated Debentures - Enforcement of
Certain Rights by Holders of Preferred Securities" in the
accompanying Prospectus.
The Company's obligations under the Guarantee and the Series
A Subordinated Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined
herein) of the Company (which aggregated approximately
$1,547,000,000 at December 31, 1994). In addition, the Company
has the right to extend from time to time the interest payment
period on the Series A Subordinated Debentures for up to 60
consecutive months, at the end of which period all accrued and
unpaid interest is required to be paid in full. As a
consequence, Dividends on the Series A Preferred Securities will
be deferred by JCP&L Capital during any such extended interest
payment period. However, during any such extended interest
payment period, the Company may not declare or pay any dividends
on, or redeem or acquire, any of its preferred or common stock.
The Series A Preferred Securities are redeemable at the
option of JCP&L Capital, in whole or in part, from time to time,
on or after ___________, 2000, at $25 per Series A Preferred
Security plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date fixed for
redemption (the "Redemption Price"), and will be redeemed at such
price from the proceeds of any repayment or redemption of the
Series A Subordinated Debentures. See "Description of Preferred
Securities-Mandatory Redemption; Optional Redemption" in the
accompanying Prospectus.
Upon the occurrence of certain special events arising from a
change in law or a pronouncement or decision interpreting or
applying such law, the Series A Preferred Securities are
redeemable in whole at the Redemption Price at the option of
JCP&L Capital. In such event, JCP&L Capital may dissolve and
cause Series A Subordinated Debentures to be distributed to the
holders of the Series A Preferred Securities in liquidation of
their interests in JCP&L Capital. See "Description of Preferred
Securities-Optional Redemption; Special Event Redemption or
Distribution" and "Description of the Subordinated Debentures" in
the accompanying Prospectus. If the Series A Subordinated
Debentures are so distributed, the Company will use its best
efforts to have them listed on the same exchange on which the
Series A Preferred Securities are then listed.
In the event of the dissolution of JCP&L Capital, the
holders of Series A Preferred Securities will be entitled to a
S-2<PAGE>
liquidation preference for each Series A Preferred Security of
$25 plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date of payment,
unless, in connection with such dissolution, Series A
Subordinated Debentures are distributed to the holders of the
Series A Preferred Securities. See "Description of Preferred
Securities-Liquidation Distribution" in the accompanying
Prospectus.
___________________
See "Certain Investment Considerations" for certain
considerations relevant to an investment in the Series A
Preferred Securities, including circumstances under which payment
of Dividends on the Series A Preferred Securities may be deferred
and optional redemption events.
___________________
The Series A Preferred Securities have been approved for
listing on the New York Stock Exchange, subject to official
notice of issuance.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
____________________
Proceeds to
Initial Public Underwriting JCP&L
Offering Price Commission(1) Capital (2)(3)
Per Series A
Preferred
Security..........$ 25.00 (2) $ 25.00
Total..............$ _______ (2) $ _______
________
(1) JCP&L Capital and the Company have agreed to indemnify the
several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting".
(2) In view of the fact that the proceeds of the sale of the
Series A Preferred Securities will be used to purchase the
Company's Series A Subordinated Debentures, the Company will pay
the Underwriters, as compensation for their services, the amount
of $____ per Series A Preferred Security (or $____ in the
aggregate), except that such compensation will be $___ per Series
A Preferred Security sold to certain institutions, thus reducing
the aggregate compensation specified above. See "Underwriting".
S-3<PAGE>
(3) Expenses of the offering which are payable by the Company
are estimated to be $360,000.
The Series A Preferred Securities offered hereby are offered
severally by the Underwriters, as specified herein, subject to
receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that
delivery of certificates for the Series A Preferred Securities
will be made only in book-entry form through the facilities of
The Depository Trust Company on or about ___________, 1995.
Merrill Lynch & Co.
The date of this Prospectus Supplement is ___________, 1995.
___________________
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 supplement shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such state.
___________________
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN
THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-4<PAGE>
The following information concerning the Series A Preferred
Securities, the Guarantee and the Series A Subordinated
Debentures supplements and should be read in conjunction with the
information contained in the accompanying Prospectus.
Capitalized terms used in this Prospectus Supplement have the
same meanings as in the accompanying Prospectus.
JCP&L CAPITAL
JCP&L Capital is a limited partnership formed under the laws
of the State of Delaware, all of the general partner interests in
which are owned by the General Partner, a wholly owned special
purpose subsidiary of the Company. JCP&L Capital exists solely
for the purpose of issuing its partner interests and utilizing
the proceeds thereof to acquire the Company's Subordinated
Debentures. All of the business and affairs of JCP&L Capital
will be managed by the General Partner, subject to JCP&L
Capital's Amended and Restated Limited Partnership Agreement,
which will be substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus Supplement
and the accompanying Prospectus form a part.
JERSEY CENTRAL POWER & LIGHT COMPANY
The Company, a public utility furnishing electric service
wholly within the State of New Jersey, is a subsidiary of General
Public Utilities Corporation ("GPU"), a holding company
registered under the Public Utility Holding Company Act of 1935.
In 1994, the Company provided retail service to approximately
917,000 customers in an area in northern, western and east
central New Jersey having an estimated population of
approximately 2,600,000. The Company is affiliated with
Metropolitan Edison Company and Pennsylvania Electric Company,
which are also wholly owned subsidiaries of GPU.
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasers of the Series A Preferred Securities
should carefully review the information contained elsewhere in
this Prospectus Supplement and in the accompanying Prospectus and
should particularly consider the following matters:
Obligations Under the Guarantee and the Series A Subordinated
Debentures are Subordinated to Senior Debt.
The Company's obligations under the Guarantee and the Series
A Subordinated Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness of the
Company. At December 31, 1994, Senior Indebtedness of the
Company aggregated approximately $1,547,000,000. There are no
terms in the Series A Preferred Securities, the Series A
Subordinated Debentures or the Guarantee that limit the Company's
S-5<PAGE>
ability to incur additional indebtedness, including indebtedness
that ranks senior to the Series A Subordinated Debentures and the
Guarantee. See "Description of the Guarantee-Status of the
Guarantee" and "Description of the Subordinated Debentures-
Subordination" in the accompanying Prospectus.
Limited Nature of Guarantee.
The Guarantee guarantees payment to the holders of the
Series A Preferred Securities of accumulated and unpaid monthly
Dividends, amounts payable on redemption, and amounts payable on
liquidation of JCP&L Capital, in each case, however, only to the
extent that JCP&L Capital has funds on hand legally available
therefor. JCP&L Capital will have such legally available funds
on hand only if JCP&L pays interest or amounts payable on
redemption or maturity of the Series A Subordinated Debentures,
as the case may be. If JCP&L were to default in its obligation
to pay interest or amounts payable on redemption or maturity of
the Series A Subordinated Debentures, JCP&L Capital would lack
legally available funds for the payment of Dividends or amounts
payable on redemption of the Series A Preferred Securities or on
liquidation of JCP&L Capital, and in such event holders of the
Series A Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, holders of the
Series A Preferred Securities may appoint a special
representative who would be required to seek enforcement of JCP&L
Capital's rights against JCP&L pursuant to the terms of the
Indenture. See "Description of the Guarantee -- Status of the
Guarantee" and "Description of the Subordinated Debentures --
Subordination" in the accompanying Prospectus.
Option to Extend Interest Payment Period for Series A
Subordinated Debentures; Resulting Deferral of Dividends; Tax
Consequences.
The Company has the right under the Indenture to extend
the interest payment period on the Series A Subordinated
Debentures at any time and from time to time for up to 60
consecutive months, and, as a consequence, monthly Dividends on
the Series A Preferred Securities can be deferred by JCP&L
Capital during any such extended interest payment period (but
will continue to accumulate, with Dividends accruing thereon at
the rate applicable to the Series A Preferred Securities). In
the event that the Company exercises its right to extend, the
Company may not declare or pay dividends on any shares of its
preferred or common stock until deferred interest on the Series A
Subordinated Debentures is paid in full. See "Description of
Preferred Securities-Dividends" and "Description of the
Subordinated Debentures-Option to Extend Interest Payment Period"
in the accompanying Prospectus.
Should an extended interest payment period occur, JCP&L
Capital will continue to accrue income for United States federal
income tax purposes with respect to such deferred interest which
income will be allocated, but not distributed, to holders of
S-6<PAGE>
Series A Preferred Securities. As a result, such a holder will
include such interest in gross income for United States federal
income tax purposes in advance of the receipt of cash, and will
not receive the cash related to such income from JCP&L Capital if
such a holder disposes of the Series A Preferred Securities prior
to the record date for payment of Dividends. See "United States
Taxation-Potential Extension of Interest Payment Period" in the
accompanying Prospectus.
Special Event Redemption or Distribution.
Upon the occurrence and continuation of a Special Event
arising from a change in law or a pronouncement or decision
interpreting or applying any applicable law (see "Description of
Preferred Securities-Special Event Redemption or Distribution" in
the accompanying Prospectus), the General Partner shall either:
(i) redeem the Series A Preferred Securities in whole (and not in
part); or (ii) dissolve JCP&L Capital and cause the Series A
Subordinated Debentures to be distributed to the holders of the
Series A Preferred Securities in liquidation of such holders'
interests in JCP&L Capital, provided that JCP&L Capital shall
have received an opinion of tax counsel (which may be regular tax
counsel to the Company or an affiliate but not an employee
thereof) to the effect that the holders of the Series A Preferred
Securities will not recognize any gain or loss for federal income
tax purposes as a result of such dissolution and distribution.
Alternatively, in the case of a Tax Event only, JCP&L Capital may
elect to cause the Series A Preferred Securities to remain
outstanding.
USE OF PROCEEDS
The proceeds to be received by JCP&L Capital from the sale
of the Series A Preferred Securities will be used to purchase
Series A Subordinated Debentures of the Company and will be
applied by the Company to the repayment of outstanding short-term
debt incurred to fund the Company's construction program and
retirement of senior securities.
CERTAIN TERMS OF THE SERIES A PREFERRED SECURITIES
The following information should be read in conjunction with
the statements under "Description of Preferred Securities" in the
accompanying Prospectus.
General
All of the general partner interests in JCP&L Capital are
owned by the General Partner. The Limited Partnership Agreement
authorizes the General Partner to cause JCP&L Capital to issue
one or more series of Preferred Securities. The Series A
Preferred Securities are the first series so issued. All series
of Preferred Securities will rank equally, and will have a
S-7<PAGE>
preference over the general partner interests in JCP&L Capital,
with respect to Dividends and amounts payable on redemption or
liquidation.
S-8<PAGE>
Amount, Dividends, Redemption
An aggregate of ___________ Series A Preferred Securities,
having an aggregate stated liquidation preference of $__________
($25 per Series A Preferred Security), are being offered hereby.
Dividends on the Series A Preferred Securities will be
cumulative, will accrue from the date of original issuance and
will be payable monthly in arrears on the last day of each
calendar month of each year, commencing ______________, 1995,
except as otherwise described in the accompanying Prospectus.
The Dividends payable on each Series A Preferred Security
will be fixed at a rate per annum of __% of the $25 stated
liquidation preference thereof.
The Series A Preferred Securities will be redeemable at the
option of JCP&L Capital, in whole or in part from time to time,
on or after _________________, 2000 at the Redemption Price. In
addition, the Series A Preferred Securities are subject to
redemption at the Redemption Price under circumstances described
under "Description of Preferred Securities-Mandatory Redemption;
Special Event Redemption or Distribution" in the accompanying
Prospectus.
CERTAIN TERMS OF THE SERIES A
SUBORDINATED DEBENTURES
The following information should be read in conjunction with
the statements under "Description of the Subordinated Debentures"
in the accompanying Prospectus.
General
The Series A Subordinated Debentures will be issued under
the Indenture dated as of ______________, 1995 between the
Company and United States Trust Company of New York, as Trustee,
and may be distributed to the holders of Series A Preferred
Securities upon a dissolution of JCP&L Capital under
circumstances described under "Description of Preferred
Securities-Special Event Redemption or Distribution" in the
accompanying Prospectus.
Principal Amount, Interest, Maturity, Redemption
An aggregate of $_____________ principal amount of Series A
Subordinated Debentures will be issued, such amount being the sum
of the aggregate stated liquidation preference of the Series A
Preferred Securities and the General Partner's related capital
contribution.
Each Series A Subordinated Debenture will bear interest at
the rate of __% per annum from the original date of issuance,
payable monthly in arrears on the last day of each calendar month
S-9<PAGE>
of each year, except as otherwise provided in the accompanying
Prospectus.
The Series A Subordinated Debentures will mature on
__________, 2044 and will be redeemable at the option of the
Company at any time on or after _________________, 2000 at a
Debenture Redemption Price equal to 100% of their principal
amount plus accrued and unpaid interest to the Redemption Date,
together with any additional interest accrued thereon. The
Series A Subordinated Debentures are also redeemable upon the
occurrence of certain events which cause the Series A Preferred
Securities to become redeemable. Proceeds from the repayment or
redemption of Series A Subordinated Debentures will be applied to
redeem the Series A Preferred Securities.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, JCP&L Capital has agreed to sell to each of the
several Underwriters named below, and each of the Underwriters,
for whom Merrill Lynch & Co. and ________________ are acting as
Representatives, has severally agreed to purchase from JCP&L
Capital the respective number of Series A Preferred Securities
set forth opposite its name below:
Number of
Series A
Preferred
Underwriter Securities
Merrill Lynch & Co. . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . .
___________
Under the terms and conditions of the Underwriting
Agreement, the Underwriters are committed to take and pay for all
such Series A Preferred Securities offered hereby, if any are
taken.
The Underwriters propose to offer the Series A Preferred
Securities in part directly to the public at the initial public
offering price set forth on the cover page of this Prospectus
Supplement, and in part to certain securities dealers at such
price less a concession of $____ per Series A Preferred Security,
except that such concession will be $___ per Series A Preferred
Security sold to certain institutions. The Underwriters may
S-10<PAGE>
allow, and such dealers may reallow, a concession not in excess
of $____ per Series A Preferred Security to certain brokers and
dealers. After the Series A Preferred Securities are released
for sale to the public, the offering price and other selling
terms may from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the
Series A Preferred Securities will be used to purchase the
Company's Series A Subordinated Debentures, the Company will pay
to the Underwriters, as compensation for their services, the
amount of $____ per Series A Preferred Security for the accounts
of the several Underwriters, except that such compensation will
be $___ per Series A Preferred Security sold to certain
institutions.
The Company and JCP&L Capital have agreed, during the period
beginning from the date of the Underwriting Agreement and
continuing to and including the earlier of (i) the date, after
the closing date, on which the distribution of the Series A
Preferred Securities and the Guarantee ceases, as determined by
the Underwriters, or (ii) 90 days after the closing date, not to
offer, sell, contract to sell, or otherwise dispose of any Series
A Preferred Securities, any limited partner interests of JCP&L
Capital, or any preferred stock or any other securities of JCP&L
Capital or the Company which are substantially similar to the
Series A Preferred Securities or the Guarantee, or any securities
convertible into or exchangeable for Series A Preferred
Securities, limited partner interests, preferred stock or such
substantially similar securities of either JCP&L Capital or the
Company without the prior written consent of the Underwriters.
Prior to this offering, there has been no public market for
the Series A Preferred Securities. The Series A Preferred
Securities have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance. In order to
meet one of the requirements for listing the Series A Preferred
Securities on the New York Stock Exchange, the Underwriters will
undertake to sell lots of 100 or more Series A Preferred
Securities to a minimum of 400 beneficial holders. Trading of
the Series A Preferred Securities on the New York Stock Exchange
is expected to commence within a seven-day period after the
initial delivery of the Series A Preferred Securities.
JCP&L Capital and the Company have agreed to indemnify the
Underwriters against certain liabilities, including liabilities
under the Securities Act.
Certain of the Underwriters engage in transactions with, and
from time to time have performed services for, the Company and
its affiliates in the ordinary course of business.
S-11<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 21, 1995
PROSPECTUS
$125,000,000
JCP&L CAPITAL
Preferred Securities
guaranteed to the extent the issuer has funds as
set forth herein by
JERSEY CENTRAL POWER & LIGHT COMPANY
JCP&L Capital, L.P. ("JCP&L Capital"), a Delaware limited
partnership, all of the general partner interests in which are
owned by a wholly owned subsidiary of Jersey Central Power &
Light Company (the "Company"), may offer, from time to time, its
preferred securities, representing limited partner interests
("Preferred Securities"), in one or more series. The payment of
periodic cash distributions (hereinafter called "Dividends") with
respect to Preferred Securities of any series, out of funds held
by JCP&L Capital and legally available therefor, and payments on
liquidation or redemption with respect to the Preferred
Securities are guaranteed on a limited basis by the Company to
the extent described herein ("Guarantee"). The Company's
obligations under the Guarantee are subordinate and junior in
right of payment to all present and future Senior Indebtedness
(as defined herein) of the Company but senior in right of payment
to the Company's preferred and common stock. Deferrable Interest
Subordinated Debentures of the Company ("Subordinated
Debentures") will also be issued and sold from time to time in
one or more series by the Company to JCP&L Capital in connection
with the investment of the proceeds from the offering of
Preferred Securities. Subordinated Debentures subsequently may
be distributed to holders of Preferred Securities in connection
with a dissolution of JCP&L Capital upon the occurrence of
certain events as described under "Description of Preferred
Securities-Special Event Redemption or Distribution". The
Subordinated Debentures will be unsecured and subordinate and
junior in right of payment to all present and future Senior
Indebtedness of the Company. The Preferred Securities may be
offered in amounts, at prices and on terms to be determined at
the time of offering; provided, however, that the aggregate
initial public offering price of all Preferred Securities offered
hereby shall not exceed $125,000,000.
- 1 -<PAGE>
The specific designation, Dividend rate (or method of
determination thereof), and any other rights, preferences,
privileges, limitations and restrictions relating to the
Preferred Securities of the particular series in respect of which
this Prospectus is being delivered will be set forth in a
Prospectus Supplement pertaining to such series (a "Prospectus
Supplement").
_________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_________________________
The Preferred Securities may be sold to or through
underwriters or dealers as designated from time to time. See
"Plan of Distribution". The names of any such underwriters or
dealers involved in the sale of the Preferred Securities of the
particular series in respect of which this Prospectus is being
delivered, the number of Preferred Securities to be purchased by
any such underwriters or dealers and any applicable commissions
or discounts will be set forth in a Prospectus Supplement. The
net proceeds to the Company will also be set forth in a
Prospectus Supplement.
The date of this Prospectus is ___________, 1995.
- 2 -<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 an offer to buy nor shall there be any
sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
- 3 -<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information filed by the
Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Seven World Trade Center, New York,
New York 10048; and 500 West Madison Street, Chicago, Illinois
60661-2511. Copies of such material can also be obtained from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
Certain of the Company's securities are listed on, and reports
and other information concerning the Company may also be
inspected at the offices of, the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005.
This Prospectus does not contain all the information set
forth in the Registration Statement on Form S-3 (herein, together
with all amendments and exhibits thereto, referred to as the
"Registration Statement"), which the Company and JCP&L Capital
have filed with the Commission under the Securities Act of 1933,
as amended (the "Securities Act"). Statements contained or
incorporated by reference herein concerning the provisions of
documents are necessarily summaries of such documents, and each
statement is qualified in its entirety by reference to the
Registration Statement.
No separate financial statements of JCP&L Capital have been
included herein. The Company and JCP&L Capital do not consider
that such financial statements would be material to holders of
Preferred Securities because JCP&L Capital is a newly formed
special purpose entity, has no operating history and no
independent operations and is not engaged in, and does not
propose to engage in, any activity other than as set forth below.
See "JCP&L Capital".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with
the Commission pursuant to the Exchange Act are incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K for
the year ended December 31, 1994; and
2. The Company's Current Report on Form 8-K
dated April 20, 1995.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
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the termination of the offering of the securities offered hereby
shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of filing of such documents. Any
statement contained herein or in a document all or a portion of
which is incorporated or deemed to be incorporated by reference
herein 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 document which also is
or is deemed to be incorporated by reference herein or in a
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.
Any person receiving a copy of this Prospectus or any
Prospectus Supplement may obtain, without charge, upon written or
oral request, a copy of any or all of the documents incorporated
herein or therein by reference (not including the exhibits to
such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such
copies should be directed to Jersey Central Power & Light
Company, 300 Madison Avenue, Morristown, New Jersey 07962-1911,
Attention: Secretary. The Company's telephone number is (201)
455-8200.
JERSEY CENTRAL POWER & LIGHT COMPANY
The Company, a public utility furnishing electric service
wholly within the State of New Jersey, is a subsidiary of General
Public Utilities Corporation ("GPU"), a holding company
registered under the Public Utility Holding Company Act of 1935.
In 1994, the Company provided retail service to approximately
917,000 customers in an area in northern, western and east
central New Jersey having an estimated population of
approximately 2,600,000. The Company's principal executive
offices are located at 300 Madison Avenue, Morristown, New Jersey
07962-1911 and its telephone number is (201) 455-8200.
During 1994, residential sales accounted for approximately
44% of the Company's operating revenues from customers and 41% of
kilowatt-hour ("kwh") sales to customers; commercial sales
accounted for approximately 38% of operating revenues from
customers and 38% of kwh sales to customers; industrial sales
accounted for approximately 17% of operating revenues from
customers and 21% of kwh sales to customers; and sales to a rural
electric cooperative, municipalities (primarily for street and
highway lighting) and others accounted for approximately 1% of
operating revenues from customers and less than 1% of kwh sales
to customers. The Company also makes interchange and spot market
sales of electricity to other utilities. The revenues derived
from the largest single customer accounted for less than 3% of
the electric operating revenues for the year and the 25 largest
customers, in the aggregate, accounted for approximately 10% of
such revenues.
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The electric generating and transmission facilities of the
Company and its affiliates, Metropolitan Edison Company and
Pennsylvania Electric Company, are physically interconnected and
are operated as a single integrated and coordinated system. The
transmission facilities of the integrated system are physically
interconnected with neighboring nonaffiliated utilities in
Pennsylvania, New Jersey, Maryland, New York and Ohio. The
Company is a member of the Pennsylvania-New Jersey-Maryland
Interconnection ("PJM") and the Mid-Atlantic Area Council, an
organization providing coordinated review of the planning by
utilities in the PJM area. The interconnection facilities are
used for substantial capacity and energy interchange and
purchased power transactions as well as emergency assistance.
The Company owns the Oyster Creek nuclear generating station
in Lacey Township, New Jersey, and 25% undivided interests in
Unit 1 and the inactive Unit 2 of the Three Mile Island nuclear
generating station near Middletown, Pennsylvania. The Company's
nuclear generating facilities are operated by GPU Nuclear
Corporation, a subsidiary of GPU. The Company and its affiliates
are seeking regulatory approval for GPU Generation Corporation, a
newly formed subsidiary of GPU, to operate and maintain their
fossil-fueled and hydroelectric generating facilities.
FINANCING PROGRAM
Depending upon market conditions, during 1995 JCP&L Capital
expects to offer up to $125,000,000 stated liquidation preference
of Preferred Securities, the proceeds of which would be used to
purchase the Company's Subordinated Debentures. Pursuant to one
or more separate offerings, the Company may also offer during
1995-96 up to a maximum aggregate principal amount and stated
value of $275,000,000 of first mortgage bonds, which may be in
the form of secured medium-term notes, and cumulative preferred
stock. The Company also expects to have short-term borrowings
outstanding from time to time during such period.
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CERTAIN COMPANY CONSOLIDATED FINANCIAL INFORMATION (1)
(Dollars In Thousands)
Years Ended December 31,
1992 1993 1994
Income Summary:
Operating
Revenues $1,774,071 $1,935,909 $1,952,425
Net Income 117,361 158,344 162,841
December 31, 1994
Actual Pro Forma (2)
Amount % Amount %
Capital Structure:
Long-term debt
(including unamortized
net discount)(3) $1,215,883 44.0% $1,215,883 42.1%
Preferred Stock
(including premium) 187,741 6.8 187,741 6.5
Preferred Securities of
Subsidiary - - 125,000 4.3
Common Equity 1,361,668 49.2 1,361,668 47.1
Total $2,765,292 100.0% $2,890,292 100.0%
____________________
(1) This information should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(2) Gives effect to the issuance of $125,000,000 aggregate
stated liquidation preference of Preferred Securities and
the use of the proceeds thereof to purchase the Company's
Subordinated Debentures.
(3) Includes obligations due within one year.
COMPANY COVERAGE RATIOS
(Dollars in Thousands)
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The Company's Ratio of Earnings to Fixed Charges for each of
the periods indicated was as follows:
Years Ended December 31,
1990 1991 1992 1993 1994
2.71 2.69 2.54 3.03 3.09
The Ratio of Earnings to Fixed Charges represents, on a pre-
tax basis, the number of times earnings cover fixed charges.
Earnings consist of Income Before Cumulative Effect of Accounting
Change, to which has been added fixed charges and taxes based on
income. Fixed charges consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt and the interest portion of all rentals charged to income.
The Company's Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends for each of the periods indicated
was as follows:
Years Ended December 31,
1990 1991 1992 1993 1994
2.22 2.13 2.00 2.49 2.60
The Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends represents, on a pre-tax basis, the
number of times earnings cover fixed charges and preferred stock
dividends. Earnings consist of Income Before Cumulative Effect
of Accounting Change, to which has been added fixed charges and
taxes based on income of the Company. Combined fixed charges and
preferred stock dividends consist of interest on funded
indebtedness, other interest, amortization of net discount on
debt, preferred stock dividends (increased to reflect the pre-tax
earnings required to cover such dividend requirements) and the
interest portion of all rentals charged to income.
USE OF PROCEEDS
The proceeds to be received by JCP&L Capital from the sale
of the Preferred Securities will be used to purchase Subordinated
Debentures of the Company and, unless otherwise specified in any
Prospectus Supplement, will be applied by the Company to the
repayment of outstanding short-term debt incurred to fund the
Company's construction program and retirement of senior
securities.
JCP&L CAPITAL
JCP&L Capital is a limited partnership formed under the laws
of the State of Delaware. All of its general partner interests,
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which are non-transferable, are owned by JCP&L Preferred Capital,
Inc. (the "General Partner"), a Delaware corporation and a wholly
owned special purpose subsidiary of the Company, which will be
the sole general partner of JCP&L Capital. JCP&L Capital's
principal executive offices are located at Mellon Bank Center,
Second Floor, 919 N. Market Street, Wilmington, Delaware 19801,
and its telephone number is (302) 654-5893. As a limited
partnership, all of the business and affairs of JCP&L Capital
will be managed by the General Partner. JCP&L Capital exists
solely for the purpose of issuing its partner interests and
utilizing the proceeds thereof to acquire the Company's
Subordinated Debentures, which will be issued under and pursuant
to the Indenture (the "Indenture") dated as of
___________________, 1995 between the Company and United States
Trust Company of New York, as Trustee (the "Trustee").
JCP&L Capital has received an opinion of its special
Delaware counsel, Richards, Layton & Finger, that, assuming that
a holder of Preferred Securities does not participate in the
control of the business of JCP&L Capital, (i) the holder of
Preferred Securities, as a limited partner of JCP&L Capital, will
have no liability in excess of its obligations to make payments
provided for in JCP&L Capital's Amended and Restated Limited
Partnership Agreement, which will be substantially in the form
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part (the "Limited Partnership Agreement"),
and its share of JCP&L Capital's assets and undistributed profits
(subject to the obligation of a holder of Preferred Securities to
repay any funds wrongfully distributed to it), and (ii) subject
to the liabilities described above, the holder of Preferred
Securities, as a limited partner of JCP&L Capital, will have no
personal liability for the debts, obligations or liabilities of
JCP&L Capital. Such opinion also provides in substance that
there are no provisions in the Limited Partnership Agreement the
inclusion or exercise of which, in accordance with the terms and
conditions therein, would cause a holder of Preferred Securities,
as a limited partner of JCP&L Capital, to be deemed to be
participating in the control of the business of JCP&L Capital.
Pursuant to the Limited Partnership Agreement, each holder
of Preferred Securities, upon acquisition thereof, will be deemed
to have appointed the General Partner as such holder's attorney-
in-fact to execute, in the name, place and stead of such holder,
certain instruments, documents and certificates as may be
required from time to time for the purposes contemplated in the
Limited Partnership Agreement.
DESCRIPTION OF PREFERRED SECURITIES
General
All of the general partner interests of JCP&L Capital will
be owned by the General Partner. The Limited Partnership
Agreement will authorize the General Partner to establish series
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of Preferred Securities having such designations, rights,
privileges, restrictions, and other terms and provisions, whether
in regard to distributions, return of capital or otherwise, as
the General Partner may determine. JCP&L Capital will therefore
be authorized to issue and sell additional Preferred Securities
from time to time, pursuant to the Registration Statement of
which this Prospectus forms a part or otherwise; provided,
however, that all Preferred Securities shall be of equal rank
with regard to participation in the profits and the assets of
JCP&L Capital including any payments upon the voluntary or
involuntary dissolution and winding up of JCP&L Capital. The
summary of certain terms and provisions of the Preferred
Securities set forth below does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
Limited Partnership Agreement.
Dividends
Dividends on each series of Preferred Securities will be
cumulative, will accrue from the date of issuance thereof and
will be payable monthly in arrears on the last day of each
calendar month of each year, except as otherwise described below.
The Dividend rate applicable to a series of Preferred
Securities shall be specified in a Prospectus Supplement.
The Company, in its sole and absolute discretion, has the
right under the Indenture to extend the interest payment period
on the Subordinated Debentures at any time and from time to time
for up to 60 consecutive months (but not beyond the maturity date
of the Subordinated Debentures) and, as a consequence, monthly
Dividends on the Preferred Securities can be deferred (but will
continue to accumulate) by JCP&L Capital during any such extended
interest payment period. Accrued and unpaid Dividends on the
Preferred Securities will accrue additional Dividends in respect
thereof after the monthly payment date therefor at the Dividend
rate per annum applicable to the Preferred Securities. In the
event that the Company exercises its right to extend the interest
payment period, the Company may not declare or pay dividends on,
or redeem, purchase or acquire, any of its preferred or common
stock. JCP&L Capital and the Company currently believe that an
extension of an interest payment period on the Subordinated
Debentures and thus on the Preferred Securities is remote. See
"Voting Rights" and "Description of the Subordinated Debentures-
Option to Extend Interest Payment Period".
The amount of the Dividends payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year
and, for any period shorter than a full monthly Dividend period,
will be computed on the basis of the actual number of days
elapsed in such period.
JCP&L Capital may not pay a Dividend or make a distribution
to a partner to the extent that at the time of the Dividend or
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distribution, after giving effect thereto, all liabilities of
JCP&L Capital, other than liabilities to partners on account of
their partner interests and liabilities for which the recourse of
creditors is limited to specified property of JCP&L Capital,
exceed the fair value of the assets of JCP&L Capital, except that
the fair value of property that is subject to a liability for
which the recourse of creditors is limited shall be included in
the assets of JCP&L Capital only to the extent that the fair
value of that property exceeds that liability.
Dividends on the Preferred Securities must be paid by JCP&L
Capital in any calendar year or portion thereof to the extent
that JCP&L Capital has cash on hand sufficient to permit such
payments and funds legally available therefor. It is anticipated
that JCP&L Capital's earnings will consist only of interest
payable by the Company under the Subordinated Debentures. See
"Description of the Subordinated Debentures-Interest".
Dividends on the Preferred Securities will be payable to the
holders thereof as they appear on the books and records of JCP&L
Capital on the relevant record dates, which, so long as the
Preferred Securities remain in book-entry-only form, will be one
Business Day prior to the relevant payment dates. Subject to any
applicable laws and regulations and the provisions of the Limited
Partnership Agreement, each such payment will be made as
described under "Book-Entry-Only Issuance-The Depository Trust
Company". In the event that the Preferred Securities do not
remain in book-entry-only form, the record dates will be the
fifteenth day of each month. In the event that any date on which
Dividends are payable on the Preferred Securities is not a
Business Day, then payment of the Dividend payable on such date
will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date. A "Business Day" shall
mean any day other than a day on which banking institutions in
The City of New York are authorized or required by law to close.
Certain Restrictions on JCP&L Capital
If Dividends have not been paid in full on any series of
Preferred Securities, JCP&L Capital may not:
(i) pay or declare any Dividends on any other
series of Preferred Securities unless the amount of any
Dividends paid or declared on any Preferred Securities
is paid or declared on all Preferred Securities then
outstanding on a pro rata basis on the date such
Dividends are paid or declared, so that
(x) (a) the aggregate amount of Dividends
paid or declared on such series of Preferred
Securities bears to (b) the aggregate amount of
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Dividends paid or declared on all such Preferred
Securities outstanding the same ratio as
(y) (a) the aggregate of all accumulated
arrears of unpaid Dividends in respect of such
series of Preferred Securities bears to (b) the
aggregate of all accumulated arrears of unpaid
Dividends in respect of all such Preferred
Securities outstanding;
(ii) pay or declare any distributions on any of
its general partner interests; or
(iii) redeem, purchase or otherwise acquire any
Preferred Securities or its general partner interests;
until, in each case, such time as all accumulated and unpaid
Dividends on all series of Preferred Securities shall have been
paid in full for all prior Dividend periods. As of the date of
this Prospectus, there are no Preferred Securities outstanding.
Mandatory Redemption
If the Company pays when due the Subordinated Debentures
purchased by JCP&L Capital with the proceeds of the sale of a
series of Preferred Securities or redeems such Subordinated
Debentures at any time as described under "Description of the
Subordinated Debentures-Optional Redemption", the proceeds will
be applied to redeem the related series of Preferred Securities
at a redemption price equal to the stated liquidation preference
thereof, plus any accumulated and unpaid Dividends (including any
additional Dividends accruing thereon) to the date fixed for
redemption (the "Redemption Price").
Optional Redemption
The Preferred Securities of each series will be redeemable,
at the option of JCP&L Capital, in whole or in part, at such time
or times as shall be specified in a Prospectus Supplement, at the
Redemption Price.
Special Event Redemption or Distribution
If a Special Event (as defined below) shall occur and be
continuing, JCP&L Capital shall either: (i) redeem the Preferred
Securities in whole (but not in part) at the Redemption Price
within 90 days following the occurrence of such Special Event;
provided that, if at the time there is available to the General
Partner the opportunity to eliminate, within such 90 day period,
the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other
similar reasonable measure which would not involve unreasonable
cost or expense, which has no adverse effect on JCP&L Capital or
the Company, the General Partner will pursue such measure in lieu
of redemption; or (ii) dissolve JCP&L Capital and cause
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Subordinated Debentures with an aggregate principal amount equal
to the aggregate stated liquidation preference of, and with an
interest rate identical to, the Preferred Securities, to be
distributed to the holders of the Preferred Securities in
liquidation of such holders' interests in JCP&L Capital, within
90 days following the occurrence of such Special Event, provided,
however, that JCP&L Capital shall have received an opinion of tax
counsel (which may be regular tax counsel to the Company or an
affiliate but not an employee thereof) to the effect that the
holders of the Preferred Securities will not recognize any gain
or loss for federal income tax purposes as a result of such
dissolution and distribution. Alternatively, in the case of a
Tax Event only, JCP&L Capital may elect to have the Preferred
Securities remain outstanding. Either a Tax Event or an
Investment Company Act Event shall be deemed a "Special Event".
"Tax Event" means, with respect to any series of Preferred
Securities, that JCP&L Capital shall have received an opinion of
tax counsel (which may be regular tax counsel to the Company or
an affiliate but not an employee thereof) to the effect that, as
a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or as a result
of any official administrative pronouncement or judicial decision
interpreting or applying any applicable laws or regulations,
which amendment or change is effective, or which pronouncement or
decision has been issued or rendered, on or after the date of
issuance of such series of Preferred Securities, there is more
than an insubstantial risk that (i) JCP&L Capital will be subject
to federal income tax with respect to interest received on the
Subordinated Debentures or JCP&L Capital will otherwise not be
taxed as a partnership, (ii) interest payable on the Subordinated
Debentures will not be deductible for federal income tax purposes
or (iii) JCP&L Capital is subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Act Event" means the occurrence of a
change in law or regulation or a change in an official
interpretation of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in
40 Act Law") to the effect that JCP&L Capital is or will be
considered an "investment company" required to be registered
under the Investment Company Act of 1940, as amended (the "1940
Act"), which Change in 40 Act Law becomes effective on or after
the date of issuance of any series of Preferred Securities;
provided that no Investment Company Act Event shall be deemed to
have occurred if JCP&L Capital shall have received an opinion of
counsel (which may be regular counsel to the Company or an
affiliate but not an employee thereof) to the effect that the
Company and/or JCP&L Capital have taken reasonable measures, in
their discretion, to avoid such Change in 40 Act Law so that in
the opinion of such counsel, notwithstanding such Change in 40
Act Law, JCP&L Capital is not required to be registered as an
"investment company" within the meaning of the 1940 Act.
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After the date fixed for any such dissolution of JCP&L
Capital and distribution of Subordinated Debentures, (i) the
Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company or its nominee, as the record
holder of the Preferred Securities, will exchange the global
certificate or certificates representing the Preferred Securities
for a registered global certificate or certificates representing
the Subordinated Debentures to be so delivered and (iii) any
certificates representing Preferred Securities not held by The
Depository Trust Company or its nominee will be deemed to
represent Subordinated Debentures having a principal amount equal
to the stated liquidation preference of such Preferred Securities
until such certificates are presented to the Company or its agent
for replacement.
Redemption Procedures
JCP&L Capital may not redeem any outstanding Preferred
Securities unless all accumulated and unpaid Dividends have been
paid on all Preferred Securities for all monthly Dividend periods
terminating on or prior to the date of redemption.
If JCP&L Capital gives a notice of redemption in respect of
a series of Preferred Securities (which notice will be given not
less than 30 nor more than 90 days prior to the redemption date),
then, on or before the redemption date, JCP&L Capital will
irrevocably deposit with The Depository Trust Company or its
successor securities depository funds sufficient to pay the
applicable Redemption Price and will give The Depository Trust
Company or its successor securities depository irrevocable
instructions and authority to pay the Redemption Price to the
Beneficial Owners (as defined under "Book-Entry-Only Issuance-The
Depository Trust Company"). Notwithstanding the foregoing,
however, any such notice may state that it is subject to the
receipt by JCP&L Capital of redemption funds on or before such
date fixed for redemption, which notice shall be of no effect
unless such funds are so received on or before such date.
If notice of redemption shall have been given and funds
deposited in the required amount, then on the date of such
deposit, all rights of holders of such series of Preferred
Securities so called for redemption will cease, except the right
of the holders of such series of Preferred Securities to receive
the Redemption Price, but without interest. In the event that
any date fixed for redemption of such series of Preferred
Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that if such
Business Day falls in the next succeeding calendar year, such
payment will be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in
respect of any Preferred Securities is not made either by JCP&L
Capital or by the Company pursuant to the Guarantee described
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under "Description of the Guarantee", Dividends on such Preferred
Securities will continue to accrue at the then applicable rate,
from the original redemption date to the date of payment, in
which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption
Price.
In the event that less than all of a series of outstanding
Preferred Securities are to be so redeemed, the Preferred
Securities to be redeemed will be selected as described under
"Book-Entry-Only Issuance-The Depository Trust Company".
Subject to applicable law, the Company or its subsidiaries
may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private
agreement.
If a partial redemption or a purchase of outstanding
Preferred Securities by tender, in the open market or by private
agreement would result in a delisting of such series of Preferred
Securities from any national securities exchange on which such
series of Preferred Securities is then listed, JCP&L Capital may
then only redeem or purchase such series of Preferred Securities
in whole.
Liquidation Distribution
In the event of any voluntary or involuntary dissolution and
winding up of JCP&L Capital, other than in connection with the
distribution of Subordinated Debentures in liquidation of all of
the interests of the holders of Preferred Securities as described
under "Special Event Redemption or Distribution" ("Distribution
Event"), the holders of a series of Preferred Securities at the
time outstanding will be entitled to receive out of the assets of
JCP&L Capital, after satisfaction of liabilities to creditors as
required by Delaware law, before any distribution of assets is
made to holders of its general partner interests, but together
with the holders of every other series of Preferred Securities
outstanding, an amount equal to the aggregate of the stated
liquidation preference thereof and any accumulated and unpaid
Dividends (including any additional Dividends accruing thereon)
to the date of payment (the "Liquidation Distribution").
If, upon such liquidation, the Liquidation Distribution can
be paid only in part because JCP&L Capital has insufficient
assets available to pay in full the aggregate Liquidation
Distribution and the aggregate liquidation distributions on all
other Preferred Securities then outstanding, then the amounts
payable directly by JCP&L Capital on such series of Preferred
Securities and on all other Preferred Securities then outstanding
shall be paid on a pro rata basis, so that
(i) (x) the aggregate amount paid in respect of
the Liquidation Distribution bears to (y) the aggregate
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amount paid as liquidation distributions on all other
Preferred Securities then outstanding the same ratio as
(ii) (x) the aggregate Liquidation Distribution
bears to (y) the aggregate liquidation distributions on
all other Preferred Securities then outstanding.
Pursuant to the Limited Partnership Agreement, JCP&L Capital
shall be dissolved and its affairs shall be wound up: (i) upon
the expiration of the term of JCP&L Capital on June 30, 2060,
(ii) upon the bankruptcy, liquidation, dissolution or winding up
of the Company, (iii) upon the occurrence of an event that causes
the General Partner to cease being the general partner of JCP&L
Capital (provided that JCP&L Capital will not be so dissolved
under certain circumstances, including, without limitation, a
transfer of the general partner interest to a permitted successor
of the General Partner as set forth in the Limited Partnership
Agreement), (iv) upon the entry of a decree of judicial
dissolution, (v) in connection with a Distribution Event or a
Substitution Event (as defined under "Merger, Consolidation,
Amalgamation, etc. of JCP&L Capital"), or (vi) upon the written
consent of the General Partner and all of the holders of the
Preferred Securities.
Merger, Consolidation, Amalgamation, etc. of JCP&L Capital
JCP&L Capital may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any
corporation, limited liability company, limited partnership,
trust (including a business trust) or other entity, except with
the prior approval of the holders of not less than 66-2/3% of the
aggregate stated liquidation preference of the outstanding
Preferred Securities or except as described below. The General
Partner may, without the consent of the holders of the Preferred
Securities, cause JCP&L Capital to consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to, a corpor-
ation, a limited liability company, a limited partnership, a
trust (including a business trust) or other entity organized as
such under the laws of the United States or any state thereof or
the District of Columbia (a "Successor Entity"), provided that
(i) such Successor Entity either (x) expressly assumes all of the
terms and provisions of the Preferred Securities by which JCP&L
Capital is bound and the other obligations of JCP&L Capital or
(y) substitutes for the Preferred Securities other securities
(the "Successor Securities") so long as the Successor Securities
rank, with regard to participation in the profits and the assets
of the Successor Entity, at least as high as the Preferred
Securities rank, with regard to participation in the profits and
the assets of JCP&L Capital, (ii) the Company confirms its
obligation under the Guarantee with regard to the Preferred
Securities or Successor Securities, if any, (iii) the Preferred
Partner Interests or the Successor Securities will not be
delisted from, or will be listed upon notification of issuance
- 16 -<PAGE>
on, any national securities exchange on which the Preferred
Partner Interests or Successor Securities are then listed, (iv)
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease does not cause the Preferred
Securities or Successor Securities, if any, to be downgraded by
any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act, (v) such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease
does not adversely affect in any material respect the material
powers, preferences and special rights of the holders of the
Preferred Partner Interests or Successor Securities under the
documents governing the Preferred Partner Interests or Successor
Securities (other than with respect to any dilution of the
holders of the Preferred Partner Interests or Successor
Securities in the Successor Entity), (vi) such Successor Entity
has a purpose substantially identical to that of JCP&L Capital
and (vii) prior to such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease, JCP&L Capital shall
have received an opinion of counsel (which may be regular tax or
other counsel to the Company or an affiliate but not an employee
thereof) to the effect that (w) the holders of outstanding
Preferred Securities will not recognize any gain or loss for
federal income tax purposes as a result of the consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease,
(x) such Successor Entity will be treated as either a partnership
or a grantor trust for federal income tax purposes, (y) following
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease, the Company and such Successor
Entity will be in compliance with the 1940 Act without
registering thereunder as an investment company, and (z) such
consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease will not cause the holders of Preferred
Securities or Successor Securities to be generally liable for the
debts, obligations or liabilities of the Partnership or the
Successor Entity.
In addition, the General Partner may, without the consent of
the holders of the Preferred Securities, (a) form or cause to be
formed a Successor Entity and contribute or cause to be
contributed the Subordinated Debentures (and any rights to
receive interest payments on such Subordinated Debentures) to the
Successor Entity in exchange for all of the equity or beneficial
interests in the Successor Entity, and (b) dissolve the
Partnership and cause the equity or beneficial interests in the
Successor Entity to be distributed to the General Partner and the
holders of each series of Preferred Partner Interests in
liquidation of such holders' respective Interests in the
Partnership (a "Substitution Event"), provided that a
Substitution Event shall not be permitted to occur unless the
conditions set forth in the proviso in the second sentence of the
immediately preceding paragraph shall have been satisfied. The
General Partner may, without the consent of the holders of the
Preferred Securities, take any other action having similar
consequences to the foregoing.
- 17 -<PAGE>
Voting Rights
Except as provided below and under "Merger, Consolidation,
Amalgamation, etc. of JCP&L Capital", "Description of the
Guarantee-Amendments and Assignment" and "Description of the
Subordinated Debentures-Amendment of the Indenture" and as
otherwise required by law and the Limited Partnership Agreement,
the holders of the Preferred Securities will have no voting
rights.
If (i) JCP&L Capital fails to pay Dividends in full on the
Preferred Securities for 18 consecutive monthly Dividend periods,
or (ii) an Event of Default (as defined in the Indenture) occurs
and is continuing, or (iii) the Company is in default on any of
its payment or other obligations under the Guarantee (as
described under "Description of the Guarantee-Certain Covenants
of the Company"), then the holders of all Preferred Securities,
acting as a single class, will be entitled, by a vote of the
holders of a majority of the aggregate stated liquidation
preference thereof, to appoint and authorize a special
representative of JCP&L Capital and the holders of Preferred
Securities (a "Special Representative") to enforce JCP&L
Capital's rights under the Indenture, including, after failure to
pay interest for 60 consecutive monthly interest periods, the
payment of interest on the Subordinated Debentures, and to
enforce the obligations of the Company under the Guarantee.
Unless otherwise required by applicable law, the Special
Representative shall not by virtue of acting in such capacity be
admitted as a general partner in JCP&L Capital or otherwise be
deemed to be a general partner in JCP&L Capital and shall have no
liability for the debts, obligations or liabilities of JCP&L
Capital.
For purposes of determining whether JCP&L Capital has failed
to pay Dividends in full for 18 consecutive monthly Dividend
periods, Dividends shall be deemed to remain in arrears, notwith-
standing any payments in respect thereof, until full cumulative
Dividends have been or contemporaneously are paid with respect to
all monthly Dividend periods terminating on or prior to the date
of payment of such full cumulative Dividends. Subject to
requirements of applicable law, not later than 30 days after such
right to appoint a Special Representative arises, the General
Partner will convene a general meeting for the above purpose. If
the General Partner fails to convene such meeting within such 30-
day period, the holders of 10% of the aggregate stated
liquidation preference of the Preferred Securities will be
entitled to convene such meeting. The provisions of the Limited
Partnership Agreement relating to the convening and conduct of
the general meetings of partners will apply with respect to any
such meeting. Any Special Representative so appointed shall
cease to act in such capacity immediately if JCP&L Capital (or
the Company pursuant to the Guarantee) shall have paid in full
all accumulated and unpaid Dividends on the Preferred Securities
or such default or breach, as the case may be, shall have been
cured. Notwithstanding the appointment of any such Special
- 18 -<PAGE>
Representative, the Company shall retain all rights under the
Indenture, including the right to extend the interest payment
period on the Subordinated Debentures as provided under
"Description of the Subordinated Debentures-Option to Extend
Interest Payment Period".
If any proposed amendment to the Limited Partnership
Agreement provides for, or the General Partner otherwise proposes
to effect, any action which would materially adversely affect the
powers, preferences or special rights of any series of Preferred
Securities, then the holders of such series of Preferred
Securities will be entitled to vote on such amendment or action
of the General Partner (but not on any other amendment or action)
and, in the case of an amendment or action which would equally
materially adversely affect the powers, preferences or special
rights of any other series of Preferred Securities outstanding,
all such series of Preferred Securities will be entitled to vote
together as a single class on such amendment or action of the
General Partner (but not on any other amendment or action), and
such amendment or action shall not be effective except with the
approval of the holders of not less than 66-2/3% of the aggregate
stated liquidation preference of such Preferred Securities.
Except in certain circumstances described under "Liquidation
Distribution", which include a dissolution in connection with a
Distribution Event, JCP&L Capital will be dissolved and wound up
only with the consent of the holders of all Preferred Securities
then outstanding.
The rights attached to any Preferred Securities will be
deemed not to be adversely affected by the creation or issue of,
and no vote will be required for the creation or issue of, any
further series of Preferred Securities or any general partner
interests of JCP&L Capital. Holders of Preferred Securities have
no preemptive rights.
The Limited Partnership Agreement provides that the General
Partner will not permit or cause JCP&L Capital to file a
voluntary petition in bankruptcy without the approval of the
holders of not less than 66-2/3% of the aggregate stated
liquidation preference of the outstanding Preferred Securities.
So long as any Subordinated Debentures are held by JCP&L
Capital, the General Partner shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or executing any trust or power
conferred on the Trustee with respect to such series, (ii) waive
any past default which is available under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the
principal of all the Subordinated Debentures shall be due and
payable, or (iv) consent to any amendment, modification or
termination of the Indenture, where such consent shall be
required, without, in each case, obtaining the prior approval of
the holders of not less than 66-2/3% of the aggregate stated
liquidation preference of all Preferred Securities affected
thereby, acting as a single class (or the Special Representative
- 19 -<PAGE>
acting on their behalf); provided, however, that where a consent
under the Indenture would require the consent of each holder
affected thereby, no such consent shall be given by the General
Partner without the prior consent of each holder of Preferred
Securities affected thereby. The General Partner shall not
revoke any action previously authorized or approved by a vote of
any holders of Preferred Securities. The General Partner shall
notify all holders of Preferred Securities of any notice of
default received from the Trustee with respect to the
Subordinated Debentures.
Any required approval of holders of Preferred Securities may
be given at a separate meeting of such holders convened for such
purposes, at a general meeting of holders of JCP&L Capital's
partner interests or pursuant to written consent. JCP&L Capital
will cause a notice of any meeting at which holders of any series
of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be
taken, to be mailed to each holder of record of such series of
Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which
such action is to be taken, (ii) a description of any matter to
be voted on at such meeting or upon which written consent is
sought, and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the holders of the Preferred
Securities will be required for JCP&L Capital to redeem and
cancel Preferred Securities in accordance with the Limited
Partnership Agreement.
Notwithstanding that holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are owned
by the Company or the Company's parent, GPU, or any entity owned
more than 50% by the Company, either directly or indirectly,
shall not be entitled to vote or consent and shall, for the
purposes of such vote or consent, be treated as if they were not
outstanding.
Holders of Preferred Securities will have no rights to
remove or replace the General Partner.
Book-Entry-Only Issuance-The Depository Trust Company
The Depository Trust Company ("DTC") will act as securities
depository for the Preferred Securities. Each series of
Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee).
One or more fully-registered global Preferred Security
certificates will be issued, representing in the aggregate the
total number of Preferred Securities of each series, and will be
deposited with DTC.
- 20 -<PAGE>
DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other
organizations ("Direct Participants"). DTC is owned by a number
of its Direct Participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system
is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain
a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the
Commission.
Purchases of Preferred Securities under the DTC system must
be made by or through Direct Participants, which will receive a
credit for the Preferred Securities on DTC's records. The
ownership interest of each actual purchaser of each Preferred
Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests
in the Preferred Securities are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Preferred Securities,
except in the event that use of the book-entry system for the
Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the
Preferred Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial
Owners. Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
- 21 -<PAGE>
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. If less than
all of a series of Preferred Securities are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such series to be redeemed.
Although voting with respect to the Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor
Cede & Co. will consent or vote with respect to Preferred
Securities. Under its usual procedure, DTC would mail an Omnibus
Proxy to JCP&L Capital as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the
Preferred Securities are credited on the record date (identified
in a listing attached to the Omnibus Proxy).
Dividend payments on the Preferred Securities will be made
to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payable date in accordance with their
respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payments on such payable
date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customer practices and will
be the responsibility of such Participants and not of DTC, JCP&L
Capital, the General Partner or the Company, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment of Dividends to DTC is the responsibility
of JCP&L Capital, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources, including DTC,
that JCP&L Capital and the Company believe to be reliable, but
neither JCP&L Capital nor the Company takes any responsibility
for the accuracy thereof.
DTC may discontinue providing its services as securities
depository with respect to the Preferred Securities at any time
by giving reasonable notice to JCP&L Capital. Under such circum-
stances, in the event that a successor securities depository is
not obtained, Preferred Security certificates are required to be
printed and delivered. Additionally, JCP&L Capital (with the
consent of the General Partner) may decide to discontinue use of
the system of book-entry transfers through DTC (or a successor
depository). In that event, certificates for the Preferred
Securities will be printed and delivered.
Registrar, Transfer Agent and Paying Agent
- 22 -<PAGE>
In the event that the Preferred Securities do not remain in
book-entry-only form, the following provisions would apply:
Chemical Bank will act as registrar, transfer agent and
paying agent for the Preferred Securities, but the Company may
designate an additional or substitute registrar, transfer agent
and paying agent at any time.
Registration of transfers of Preferred Securities will be
effected without charge by or on behalf of JCP&L Capital, but
upon payment (with the giving of such indemnity as JCP&L Capital
or the transfer agent may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
JCP&L Capital will not be required to register or cause to
be registered the transfer of Preferred Securities after such
Preferred Securities have been called for redemption.
Miscellaneous
The General Partner is authorized and directed to use its
best efforts to conduct the affairs of, and to operate, JCP&L
Capital in such a way that JCP&L Capital would not be deemed to
be an "investment company" required to be registered under the
1940 Act or taxed as a corporation for federal income tax
purposes and so that the Subordinated Debentures will be treated
as indebtedness of the Company for federal income tax purposes.
In this connection, the General Partner is authorized, in its
sole and absolute discretion, to take any action not inconsistent
with applicable law, the Certificate of Limited Partnership of
JCP&L Capital or the Limited Partnership Agreement, that does not
materially adversely affect the interests of holders of Preferred
Securities, that the General Partner determines in its sole and
absolute discretion to be necessary, advisable or desirable for
such purposes.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the
Guarantee which will be executed and delivered by the Company in
connection with each series of Preferred Securities for the
benefit of the holders from time to time of the series of
Preferred Securities to which it relates. This summary describes
certain terms and provisions of the Guarantee, but does not
purport to be complete. References to provisions of the
Guarantee are qualified in their entirety by reference to the
text of the Guarantee, which will be substantially in the form
filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
General
The Company will agree, on a limited basis as set forth
therein, to pay in full, to the holders of the Preferred
- 23 -<PAGE>
Securities, the Guarantee Payments (as defined below) (except to
the extent paid by JCP&L Capital), as and when due, regardless of
any defense, right of set-off or counterclaim which the Company
or JCP&L Capital may have or assert. The following payments to
the extent not paid by JCP&L Capital (the "Guarantee Payments")
will be subject to the Guarantee (without duplication): (i) any
accumulated and unpaid monthly Dividends on the Preferred
Securities (except for monthly Dividends which are not paid
during an Extension Period (as defined under "Description of the
Subordinated Debentures-Option to Extend Interest Payment
Period")) to the extent that JCP&L Capital has sufficient cash on
hand to permit such payments and funds legally available
therefor, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption by JCP&L Capital to the extent
that JCP&L Capital has sufficient cash on hand to permit such
payments and funds legally available therefor, and (iii) upon a
liquidation of JCP&L Capital other than in connection with a
Distribution Event, the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of JCP&L Capital
available for distribution to holders of Preferred Securities in
liquidation of JCP&L Capital. The Guarantee further provides
that the Company shall (a) cause the General Partner to declare
and pay Dividends to the extent that JCP&L Capital has legally
available funds and sufficient cash on hand and (b) so long as
any of the Preferred Securities are outstanding, cause the
General Partner to remain the general partner of JCP&L Capital
and timely perform all its duties as such (including the duty to
pay Dividends on the Preferred Securities) in all material
respects, which include, among other things, the General
Partner's duties under the Limited Partnership Agreement to
directly pay all costs and expenses of JCP&L Capital (thereby
insuring that the full amount of the Company's payments on its
Subordinated Debentures will be available to allow payment to the
holders of the Preferred Securities) and the covenant of the
General Partner in the Limited Partnership Agreement to at all
times maintain a "fair market value net worth" of, initially, at
least 10% of the total contributions (less redemptions) to JCP&L
Capital. While the assets of the General Partner will not be
available for making distributions on the Preferred Securities,
they will be available for the payment of expenses of JCP&L
Capital. Accordingly, the Guarantee, together with the related
covenants contained in the Limited Partnership Agreement and the
Company's obligations under the Subordinated Debentures, provides
for the Company's full and unconditional guarantee of the
Preferred Securities as set forth above.
The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the
Company to the holders of Preferred Securities or by payment of
such amounts by JCP&L Capital to such holders, and may be
enforced directly by or for the benefit of the holders of
Preferred Securities.
Effect of Obligations under Subordinated Debentures and Guarantee
- 24 -<PAGE>
As set forth in the Limited Partnership Agreement, the sole
purpose of JCP&L Capital is to issue its Preferred Securities and
use the proceeds thereof, plus the General Partner's capital
contributions, to purchase Subordinated Debentures.
As long as payments of principal and interest are made when
due on the Subordinated Debentures corresponding to the Preferred
Securities, such payments will be sufficient to enable JCP&L
Capital to make all payments of Dividends on the Preferred
Securities, because (i) the aggregate principal amount of such
Subordinated Debentures will be equal to the sum of the aggregate
liquidation preference of the Preferred Securities plus the
General Partner's capital contributions to JCP&L Capital; (ii)
the interest rate and interest and other payment dates of the
Subordinated Debentures of each series will correspond to the
Dividend rate and Dividend and other payment dates for the
Preferred Securities of the related series; and (iii) the Limited
Partnership Agreement provides that the General Partner will pay
for all costs and expenses of JCP&L Capital.
If JCP&L Capital fails to pay Dividends in full on any
series of the Preferred Securities for 18 consecutive months or
if a default under the Indenture occurs and is continuing, the
Limited Partnership Agreement provides a mechanism whereby the
holders of the Preferred Securities may elect a Special
Representative to enforce the rights of JCP&L Capital under the
Indenture. Payments of Dividends on the Preferred Securities out
of monies held by JCP&L Capital are guaranteed by the Company to
the extent set forth under "Description of the Guarantee --
General" above. The Limited Partnership Agreement also provides
that, if JCP&L is in default on any payment or other obligation
under the Guarantee, a Special Representative may be appointed;
and the Company, under the Guarantee, acknowledges that such
Special Representative may enforce the Guarantee on behalf of the
holders of the Preferred Securities. In addition, if the General
Partner or the Special Representative fails to enforce the
Guarantee, a holder of Preferred Securities may institute a legal
proceeding directly against the Company to enforce such holder's
rights under the Guarantee without first instituting a legal
proceeding against JCP&L Capital or any other person or entity.
Certain Covenants of the Company
So long as any Preferred Securities remain outstanding,
neither the Company, nor any majority owned subsidiary of the
Company, will declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its preferred or common stock (other than dividends to the
Company by a wholly owned subsidiary of the Company) (i) during
an Extension Period (as defined under "Description of the
Subordinated Debentures-Option to Extend Interest Payment
Period") or (ii) if at such time the Company shall be in default
with respect to its payment or other obligations under the
Guarantee or there shall have occurred any event that, with the
- 25 -<PAGE>
giving of notice or the lapse of time or both, would constitute
an Event of Default under the Indenture.
In addition, so long as any Preferred Securities remain
outstanding, the Company will (i) maintain direct or indirect
100% ownership of the general partner interests in JCP&L Capital;
(ii) cause at least 3% of the total value of JCP&L Capital and at
least 3% of all interests in the capital, income, gain, loss,
deduction and credit of JCP&L Capital to be represented by
general partner interests; (iii) not cause JCP&L Capital to be
voluntarily dissolved and wound-up except upon the entry of a
decree of judicial dissolution, in connection with a Distribution
Event or certain mergers, consolidations or similar transactions
permitted by the Limited Partnership Agreement or as otherwise
described under "Description of Preferred Securities-Liquidation
Distribution"; (iv) except as otherwise provided in the Limited
Partnership Agreement, cause the General Partner to remain the
general partner of JCP&L Capital and timely perform all of its
duties as general partner of JCP&L Capital (including the duty to
pay Dividends on the Preferred Securities out of cash on hand and
funds legally available therefor) in all material respects,
provided that any permitted successor of the Company under the
Indenture may directly or indirectly succeed to the duties as
general partner of JCP&L Capital; and (v) use its reasonable
efforts to cause JCP&L Capital to remain a limited partnership
and otherwise continue to be treated as a partnership for United
States federal income tax purposes.
- 26 -<PAGE>
Amendments and Assignment
The Guarantee may only be amended by a written instrument
executed by the Company; provided that, so long as any of the
Preferred Securities remain outstanding, any such amendment that
materially adversely affects the holders of the related series of
Preferred Securities, any termination of the Guarantee and any
waiver of compliance with any covenant thereunder shall be
effected only with the prior approval of the holders of not less
than 66-2/3% of the aggregate stated liquidation preference of
the affected series of Preferred Securities. Except in
connection with a merger, sale, transfer or lease involving the
Company as may be permitted under the Indenture (see "Description
of the Subordinated Debentures-Consolidation, Merger, Sale or
Conveyance"), the Company may not assign its obligations under
the Guarantee without the approval of the holders of not less
than 66-2/3% of the aggregate stated liquidation preference of
the related series of Preferred Securities. See "Description of
Preferred Securities-Voting Rights". All guarantees and
agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company
and shall inure to the benefit of the holders of the Preferred
Securities.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and
effect upon full payment of the Redemption Price of all of the
related series of Preferred Securities or upon full payment of
the amounts payable upon liquidation of JCP&L Capital or upon
consummation of a Distribution Event. The Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any holder of such series of Preferred
Securities must restore payment of any sums paid under such
Preferred Securities or the Guarantee.
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of
payment to all present and future Senior Indebtedness of the
Company, and (ii) senior in right of payment to the Company's
preferred and common stock. The Limited Partnership Agreement
provides that each holder of Preferred Securities by acceptance
thereof agrees to the subordination provisions and other terms of
the Guarantee.
The Guarantee will constitute a limited guarantee of payment
and not of collection. The Guarantee will be held for the
benefit of the holders of the related series of Preferred
Securities. If appointed, a Special Representative may enforce
the Guarantee. If no Special Representative has been appointed
to enforce the Guarantee, the General Partner has the right to
enforce the Guarantee on behalf of the holders of the Preferred
Securities. If the General Partner or the Special Representative
- 27 -<PAGE>
fails to enforce the Guarantee, any holder of Preferred
Securities may institute a legal proceeding directly against the
Company to enforce its rights under the Guarantee, without first
instituting a legal proceeding against JCP&L Capital or any other
person or entity.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is a description of the Subordinated
Debentures which will be purchased by JCP&L Capital with the
proceeds of the sale of the Preferred Securities and the General
Partner's related capital contribution. This description is a
brief summary of certain provisions contained in the Indenture,
does not purport to be complete and is qualified in its entirety
by reference to the text of the Indenture, including the
definition therein of certain capitalized terms, a copy of which
is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
Under certain circumstances following the occurrence of a
Special Event, JCP&L Capital may dissolve and cause Subordinated
Debentures to be distributed to the holders of the Preferred
Securities in liquidation of their interests in JCP&L Capital.
See "Description of Preferred Securities-Special Event Redemption
or Distribution".
General
The Subordinated Debentures will be issued in series under
the Indenture. Each series of Subordinated Debentures will be
limited in aggregate principal amount to the amount of the
aggregate stated liquidation preference of the related series of
Preferred Securities together with any related capital
contribution from the General Partner.
So long as any Preferred Securities remain outstanding, any
Special Representative appointed by the holders of Preferred
Securities, as described under "Description of Preferred
Securities-Voting Rights", will be entitled to enforce the
Company's obligations under the Indenture and the Subordinated
Debentures directly against the Company.
The Subordinated Debentures will become due and payable,
together with (i) all accrued and unpaid interest to the date of
payment and (ii) any accrued interest thereon, on the 49th
anniversary of the date of issuance thereof.
Mandatory Prepayment
If JCP&L Capital redeems Preferred Securities in accordance
with their terms, the related Subordinated Debentures will become
due and payable in a principal amount equal to the aggregate
stated liquidation preference of the Preferred Securities so
redeemed, together with (i) all accrued and unpaid interest to
the date of payment and (ii) any accrued interest thereon.
- 28 -<PAGE>
- 29 -<PAGE>
Optional Redemption
The Company will have the right to redeem the Subordinated
Debentures, without premium or penalty, at a price equal to 100%
of their principal amount, together with (i) all accrued and
unpaid interest on the Subordinated Debentures being redeemed to
the Redemption Date and (ii) any accrued interest thereon
(collectively, the "Debenture Redemption Price") in whole or in
part at such time or times as shall be specified in a Prospectus
Supplement.
Redemption Procedures
If the Company gives a notice of redemption in respect of a
series of Subordinated Debentures (which notice will be given not
less than 30 nor more than 90 days prior to the redemption date),
then, on or before the redemption date, the Company will
irrevocably deposit with the Trustee funds sufficient to pay the
applicable Debenture Redemption Price. If notice of redemption
shall have been given and funds deposited as required, then on
the redemption date, all rights of holders of such Subordinated
Debentures so called for redemption will cease, except the right
of the holders of such Subordinated Debentures to receive the
Debenture Redemption Price, but without interest. Notwith-
standing the foregoing, however, any such notice may state that
it is subject to the receipt by the Trustee of redemption funds
on or before such date fixed for redemption, which notice shall
be of no effect unless such funds are so received on or before
such date. In the event that any date fixed for redemption of
Subordinated Debentures is not a Business Day, then payment of
the Debenture Redemption Price payable on such date will be made
on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date.
In the event that less than all of a series of outstanding
Subordinated Debentures are to be so redeemed following a
Distribution Event, the Subordinated Debentures to be redeemed
will be selected as described under "Description of Preferred
Securities-Book-Entry-Only Issuance-The Depository Trust
Company".
Subject to applicable law, after a Distribution Event the
Company or its subsidiaries may at any time and from time to time
purchase outstanding Subordinated Debentures by tender, in the
open market or by private agreement.
If a partial redemption or a purchase of outstanding
Subordinated Debentures by tender, in the open market or by
private agreement would result in a delisting of such series of
Subordinated Debentures from any national securities exchange on
which such series of Subordinated Debentures is then listed, the
- 30 -<PAGE>
Company may then only redeem or purchase such series of
Subordinated Debentures in whole.
Interest
Each Subordinated Debenture will bear interest at a rate per
annum equal to the Dividend rate on the related series of
Preferred Securities, payable monthly in arrears on the last day
of each calendar month of each year (each an "Interest Payment
Date"), to the person in whose name such Subordinated Debenture
is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment
Date (the "Regular Record Date"). In the event that the
Subordinated Debentures do not remain in book-entry-only form,
the record dates will be the fifteenth day of each month.
The amount of interest payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year
and, for any period shorter than a full monthly interest period,
on the basis of the actual number of days elapsed. In the event
that any date on which interest is payable on the Subordinated
Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such
Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on such
date.
If at any time JCP&L Capital would be required to pay any
taxes, duties, assessments or governmental charges of whatever
nature (other than withholding taxes) imposed by the United
States, or any other taxing authority, then, in any such case,
the Company will also pay as additional interest such amounts as
shall be required so that the net amounts received and retained
by JCP&L Capital after paying any such taxes, duties, assessments
or governmental charges will be not less than the amounts JCP&L
Capital would have received had no such taxes, duties,
assessments or governmental charges been imposed.
Option to Extend Interest Payment Period
The Company will have the right at any time and from time to
time during the term of the Subordinated Debentures, so long as
the Company is not in default in the payment of interest on the
Subordinated Debentures, to extend the interest payment period on
the Subordinated Debentures for up to 60 consecutive months,
provided that at the end of each such period (an "Extension
Period") the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for
the Subordinated Debentures to the extent permitted by
applicable law). During any such Extension Period, neither the
Company, nor any majority owned subsidiary of the Company, may
declare or pay any dividends on, or redeem, purchase, acquire or
- 31 -<PAGE>
make a liquidation payment with respect to, any of its preferred
or common stock (other than dividends to the Company by a wholly
owned subsidiary of the Company). No interest shall be due and
payable during an Extension Period, except at the end thereof.
If JCP&L Capital shall be the sole holder of the Subordinated
Debentures, the Company shall give JCP&L Capital notice of its
selection of such extended interest payment period one Business
Day prior to the earlier of (i) the date the related Dividend on
the Preferred Securities is payable or (ii) the date JCP&L
Capital is required to give notice to any national securities
exchange on which the Preferred Securities are listed or other
applicable self-regulatory organization or to the holders of the
Preferred Securities of the record date or the date such Dividend
is payable, but in any event not less than one Business Day prior
to such record date. The Company shall cause JCP&L Capital to
give notice of the Company's selection of such extended interest
payment period to the holders of the Preferred Securities. If
JCP&L Capital shall not be the sole holder of the Subordinated
Debentures, the Company will give the holders of the
Subordinated Debentures notice of its selection of such extended
interest payment period ten Business Days prior to the earlier of
(i) the Interest Payment Date or (ii) the date the Company is
required to give notice of the record or payment date of such
related interest payment to any national securities exchange on
which the Subordinated Debentures are then listed or other
applicable self-regulatory organization or to holders of the
Subordinated Debentures, but in any event not less than two
Business Days prior to such record date.
Credit
Prior to a Distribution Event, the Company shall receive a
credit against any payment it is otherwise required to make under
the Subordinated Debentures to the extent it has theretofore
made, or is concurrently making, a payment under the Guarantee.
Subordination
All payments by the Company in respect of the Subordinated
Debentures shall be subordinated to the prior payment in full of
all amounts payable on Senior Indebtedness. "Senior
Indebtedness" consists of (i) the principal of and premium (if
any) in respect of (A) indebtedness of the Company for money
borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments (including
purchase money obligations) for payment of which the Company is
responsible or liable; (ii) all capital lease obligations of the
Company; (iii) all obligations of the Company issued or assumed
as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) certain
obligations of the Company for the reimbursement of any obligor
on any letter of credit, banker's acceptance, security purchase
- 32 -<PAGE>
facility or similar credit transaction; (v) all obligations of
the type referred to in clauses (i) through (iv) of other persons
for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the
type referred to in clauses (i) through (v) of other persons
secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company),
except for any such indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Debentures.
Upon any payment or distribution of assets or securities of
the Company or upon any dissolution or winding up or total or
partial liquidation or reorganization of the Company, whether
voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts payable on Senior
Indebtedness (including any interest accruing on such Senior
Indebtedness subsequent to the commencement of a bankruptcy,
insolvency or similar proceeding) shall first be paid in full
before the Trustee or the holders of Preferred Securities or
Subordinated Debentures (or the Special Representative) will be
entitled to receive from the Company any payment of principal of,
or interest on, or any other amounts in respect of, the
Subordinated Debentures.
No direct or indirect payment by or on behalf of the Company
of principal of or interest on the Subordinated Debentures
whether pursuant to the terms of the Subordinated Debentures or
upon acceleration or otherwise may be made if, at the time of
such payment, there exists, (i) a default in the payment of all
or any portion of any Senior Indebtedness or (ii) any other
default (other than a default of the nature described in clause
(i) above) affecting Senior Indebtedness permitting its
acceleration, as the result of which the maturity of Senior
Indebtedness has been accelerated, and in either case requisite
notice has been given to the Company and the Trustee and such
default shall not have been cured or waived by or on behalf of
the holders of such Senior Indebtedness.
If the Trustee or any holder of Preferred Securities or
Subordinated Debentures (or the Special Representative) has
received any payment on account of the principal of or interest
on the Subordinated Debentures when such payment is prohibited
and before all amounts payable on Senior Indebtedness are paid in
full, then and in such event such payment or distribution shall
be received and held in trust for the holders of Senior
Indebtedness and shall be paid over or delivered first to the
holders of the Senior Indebtedness remaining unpaid to the extent
necessary to pay such Senior Indebtedness in full.
Upon the payment in full of all Senior Indebtedness, the
Trustee and the holders of Preferred Securities or Subordinated
Debentures (and the Special Representative) shall be subrogated
to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of assets of the Company made
- 33 -<PAGE>
on such Senior Indebtedness until the Subordinated Debentures are
paid in full.
Certain Covenants of the Company
Neither the Company nor any majority owned subsidiary shall
declare or pay any dividend on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its preferred
or common stock (other than dividends to the Company by a wholly
owned subsidiary of the Company) (i) during an Extension Period,
(ii) if there shall have occurred and is continuing any event
that, with the giving of notice or the lapse of time or both,
would constitute an Event of Default under the Indenture or (iii)
so long as any Preferred Securities remain outstanding, if the
Company shall be in default with respect to its payment or other
obligations under the Guarantee.
Book-Entry and Settlement
If Subordinated Debentures are distributed to holders of
Preferred Securities, the Subordinated Debentures will be issued
in book-entry-only form. For a description of DTC and the
specific terms of the depository arrangements, see "Description
of Preferred Securities-Book-Entry-Only Issuance-The Depository
Trust Company", which would also apply to the Subordinated
Debentures in book-entry-only form.
Neither the Company, the Trustee, any paying agent nor any
other agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interests in a global security for such Subordinated Debentures
or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Discontinuance of the Depository's Services. A global
security will be exchangeable for Subordinated Debentures
registered in the names of persons other than the depository or
its nominee only if (i) the depository notifies the Company that
it is unwilling or unable to continue as depository for such
global security or if at any time the depository ceases to be a
clearing agency registered under the Exchange Act at a time when
the depository is required to be so registered to act as such
depository, (ii) the Company in its sole discretion determines
that such global security shall be so exchangeable or (iii) there
shall have occurred and be continuing a default in the payment of
principal of, or interest on, such Subordinated Debentures or an
Event of Default or an event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default
with respect to such Subordinated Debentures. Any global
security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Subordinated Debentures registered in
such names as the depository shall direct. It is expected that
such instructions will be based upon directions received by the
- 34 -<PAGE>
depository from its Participants with respect to ownership of
beneficial interests in such global security.
Payment; Registration and Transfer
In the event that the Subordinated Debentures do not remain
in book-entry-only form, the following provisions would apply:
Payment of principal of any Subordinated Debenture will be
made only against surrender to the Trustee or the Paying Agent
appointed by the Company, if not the Trustee, of such
Subordinated Debenture. Principal of, and interest on,
Subordinated Debentures will be payable, subject to any
applicable laws and regulations, at the office of the Trustee or
such Paying Agent as the Company may designate from time to time,
except that at the option of the Company payment of any interest
may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the security Register
with respect to such Subordinated Debentures. Payment of
interest on a Subordinated Debenture on any Interest Payment Date
will be made to the person in whose name such Subordinated
Debenture is registered at the close of business on the Regular
Record Date for such interest, with certain exceptions.
The Corporate Trust Office of the Trustee in The City of New
York shall initially be designated as the Company's sole Paying
Agent for payments with respect to Subordinated Debentures of
each series. The Company may at any time designate other or
additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying
Agent acts.
Subordinated Debentures may be presented for registration
of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Registrar appointed by the
Company without service charge and upon payment of any taxes and
other governmental charges as described in the Indenture. The
Company has initially appointed the Trustee as Registrar with
respect to the Subordinated Debentures. The Company shall not be
required to make, and the Registrar need not register, the
transfer or exchange of (i) any Subordinated Debenture during a
period beginning at the opening of business five days before the
mailing of a notice of redemption of Subordinated Debentures, and
ending at the close of business on the day of such mailing, or
(ii) any Subordinated Debenture selected, called or being called
for redemption, in whole or in part, except in the case of any
Subordinated Debenture to be redeemed in part, the portion
thereof not to be redeemed.
Amendment of the Indenture
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in principal amount of the Subordinated Debentures which
are affected by the amendment or waiver, to amend the Indenture
- 35 -<PAGE>
or the Subordinated Debentures or to waive compliance by the
Company with any provision of the Indenture or the Subordinated
Debentures; provided that no such amendment or waiver may,
without the consent of the holder of each outstanding
Subordinated Debenture affected thereby, (a) reduce the principal
amount of the Subordinated Debentures, (b) reduce the percentage
of principal amount of outstanding Subordinated Debentures of any
series, the consent of holders of which is required for amendment
of the Indenture or for waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults,
(c) change the stated maturity date of the principal of, or the
interest or the rate of interest on, the Subordinated Debentures,
(d) change the redemption provisions applicable to the
Subordinated Debentures adversely to the holders thereof, (e)
impair the right to institute suit for the enforcement of any
payment with respect to the Subordinated Debentures, (f) change
the currency in which payments with respect to the Subordinated
Debentures are to be made, (g) change the subordination
provisions applicable to the Subordinated Debentures adversely to
the holders thereof, or (h) waive a default in the payment of the
principal of, or interest on, any Subordinated Debenture. The
Indenture or the Subordinated Debentures may be amended, without
the consent of the holders of the Subordinated Debentures, to
cure any ambiguity, defect or inconsistency or to make other
changes that do not adversely affect the rights of such holders.
Events of Default
The following are Events of Default under the Indenture:
(i) default for 15 days in payment of any interest (including any
accrued interest thereon) on Subordinated Debentures (whether by
virtue of the provisions described above under "Subordination" or
otherwise); provided that an extension of the interest payment
period by the Company as described under "Option to Extend
Interest Payment Period" shall not constitute a default in the
payment of interest for this purpose; (ii) default in payment of
principal of Subordinated Debentures when due (whether by virtue
of the provisions described above under "Subordination" or
otherwise); (iii) default for 30 days after notice in the
performance of any other covenant in the Indenture; or (iv)
certain events of bankruptcy, insolvency or reorganization of the
Company. If an Event of Default shall occur and be continuing,
the Trustee or the holders of not less than a majority in
principal amount of the Subordinated Debentures then outstanding
may declare the principal of, and all accrued and unpaid interest
(including any interest accrued but not paid during an Extension
Period and any accrued interest thereon) on, the Subordinated
Debentures to be due and payable; provided that, upon certain
events of bankruptcy, insolvency or reorganization of the
Company, such amounts shall immediately become due and payable
without any declaration or other action by the Trustee or such
holders. The Company is required to furnish to the Trustee
annually a statement as to the performance by the Company of its
obligations under the Indenture and as to any default in such
performance. Under certain circumstances, any declaration of
- 36 -<PAGE>
acceleration with respect to the Subordinated Debentures may be
rescinded and past defaults (except, unless theretofore cured, a
default in the payment of principal of, or interest on, the
Subordinated Debentures) may be waived by the holders of a
majority in principal amount of the Subordinated Debentures then
outstanding. The Indenture provides that the Trustee may
withhold notice to the holders of the Subordinated Debentures of
any continuing default (except in the payment of the principal
of, or interest on, the Subordinated Debentures) if the Trustee
considers it in the interests of holders of Subordinated
Debentures to do so.
Enforcement of Certain Rights by Holders of Preferred Securities
So long as any Subordinated Debentures are held by JCP&L
Capital, the holders of any outstanding Preferred Securities will
have the rights referred to under "Description of Preferred
Securities-Voting Rights", including the right to appoint a
Special Representative authorized to exercise JCP&L Capital's
right, as the holder of Subordinated Debentures, to accelerate
the principal amount of the Subordinated Debentures and to
enforce the Company's obligations under the Indenture and the
Subordinated Debentures directly against the Company, without
first proceeding against JCP&L Capital or any other person or
entity.
Consolidation, Merger, Sale or Conveyance
The Indenture provides that the Company may not consolidate
with or merge into any other Person or sell, convey, transfer or
lease all or substantially all of its properties and assets to
any Person, unless (i) the successor Person shall be organized
and existing under the laws of the United States or any state
thereof or the District of Columbia; (ii) the successor Person
shall expressly assume (x) by a supplemental indenture, all of
the Company's obligations under the Subordinated Debentures and
the Indenture and (y) so long as any Preferred Securities or
Successor Securities remain outstanding, the Company's
obligations under the Guarantee; (iii) so long as any Preferred
Securities or Successor Securities remain outstanding, the
successor Person becomes or acquires the General Partner or the
Person with substantially equivalent authority to act for any
successor entity to JCP&L Capital; and (iv) the Company shall
have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger,
sale, conveyance, transfer or lease and such supplemental
indenture comply with the Indenture. In case of any such
consolidation, merger, sale, conveyance, transfer or lease, such
successor Person will succeed to and be substituted for the
Company as obligor on the Subordinated Debentures, with the same
effect as if it had been named in the Indenture as the issuer in
place of the Company.
The Indenture does not contain any other covenant which
restricts the Company's ability to consolidate or merge with, or
- 37 -<PAGE>
sell, convey, transfer or lease all or substantially all of its
assets to, any Person, firm or corporation or otherwise engage in
restructuring transactions.
Title
The Company, the Trustee and any agent of the Company or the
Trustee may treat the registered owner of any Subordinated
Debenture as the absolute owner thereof (whether or not such
Subordinated Debenture shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for
all other purposes.
- 38 -<PAGE>
Defeasance and Discharge
Under the terms of the Indenture, the Company will be
discharged from any and all obligations in respect of the
Subordinated Debentures of any series (except in each case for
certain obligations to register the transfer or exchange of
Subordinated Debentures, replace stolen, lost or mutilated
Subordinated Debentures, maintain paying agencies and hold monies
for payment in trust) if the Company deposits with the Trustee,
in trust, (i) money and/or (ii) U. S. Government Obligations (as
defined in the Indenture) sufficient to pay all the principal of,
and interest on, the Subordinated Debentures of such series on
the dates such payments are due; provided that no Event of
Default has occurred and is continuing. In connection with such
a defeasance and discharge, the Company, among other things, will
deliver to the Trustee an Opinion of Counsel to the effect that
(i) the deposit and related defeasance would not cause the
holders of the Subordinated Debentures of such series to
recognize income, gain or loss for federal income tax purposes,
or a copy of a ruling or other formal statement or action to such
effect received from or published by the Internal Revenue
Service; and (ii) the trust resulting from the defeasance is a
valid trust and will not constitute a regulated investment
company under the 1940 Act.
Replacement of Subordinated Debentures
Any mutilated Subordinated Debenture will be replaced by the
Company at the expense of the holder upon its surrender to the
Trustee. Subordinated Debentures that become destroyed, lost or
stolen will be replaced by the Company at the expense of the
holder upon delivery to the Trustee of evidence of the
destruction, loss or theft thereof satisfactory to the Company
and the Trustee. In the case of a destroyed, lost or stolen
Subordinated Debenture, an indemnity satisfactory to the Trustee
and the Company may be required at the expense of the holder of
such Subordinated Debenture before a replacement Subordinated
Debenture will be issued.
Governing Law
The Indenture and the Subordinated Debentures will be
governed by and construed in accordance with the laws of the
State of New York.
Information Concerning the Trustee
Subject to the provisions of the Indenture relating to its
duties, the Trustee will be under no obligation to exercise any
of its rights or powers under the Indenture at the request, order
or direction of any of the holders thereunder, unless such
holders shall have offered to the Trustee reasonable indemnity.
Subject to such provision for indemnification, the holders of a
majority in principal amount of the Subordinated Debentures then
outstanding thereunder will have the right to direct the time,
- 39 -<PAGE>
method and place of conducting any proceeding for any remedy
available to the Trustee thereunder, or exercising any trust or
power conferred on the Trustee.
The Indenture contains limitations on the right of the
Trustee, as a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property
received in respect of any such claim as security or otherwise.
In addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time
of default under the Indenture it is a creditor of the Company.
United States Trust Company of New York, the Trustee under
the Indenture, has from time to time engaged in transactions
with, or performed services for, the Company and its affiliates
in the ordinary course of business.
Miscellaneous
For restrictions on certain actions of the General Partner
with respect to Subordinated Debentures held by JCP&L Capital,
see "Description of Preferred Securities-Voting Rights".
UNITED STATES TAXATION
General
This section is a summary of certain United States federal
income tax considerations that may be relevant to prospective
purchasers of Preferred Securities and represents the opinion of
Carter, Ledyard & Milburn, special tax counsel to the Company and
JCP&L Capital, insofar as it relates to matters of law and legal
conclusions. This section is based upon current provisions of
the Internal Revenue Code of 1986, as amended ("Code"), existing
and proposed regulations thereunder and current administrative
rulings and court decisions, all of which are subject to change.
Subsequent changes may cause tax consequences to vary
substantially from the consequences described below.
No attempt has been made in the following discussion to
comment on all United States federal income tax matters affecting
purchasers of Preferred Securities. Moreover, the discussion
focuses on holders of Preferred Securities who are individual
citizens or residents of the United States and has only limited
application to corporations, estates, trusts or non-resident
aliens. Accordingly, each prospective purchaser of Preferred
Securities should consult, and should depend on, his or her own
tax advisor in analyzing the federal, state, local and foreign
tax consequences of the purchase, ownership or disposition of
Preferred Securities.
In April 1994, the Internal Revenue Service ("IRS")
issued certain notices generally addressing the characteristics
which distinguish debt from equity for various purposes under the
federal income tax laws. In these notices, the IRS indicated
- 40 -<PAGE>
that transactions involving securities that, like the securities
offered hereunder, have both debt and equity characteristics
would be reviewed with scrutiny to determine how they would be
treated for tax purposes. Based upon advice from Carter, Ledyard
& Milburn, the Company's special tax counsel, the Company
believes that interest on the Subordinated Debentures will be
deductible under the tests referred to in these notices. If, as
a result of a change in law or a pronouncement or decision
interpreting or applying any applicable law, JCP&L Capital
receives an opinion of tax counsel to the effect that interest on
any Subordinated Debentures would not be deductible, JCP&L
Capital would have the option to redeem the related Preferred
Securities or to dissolve and cause Subordinated Debentures to
be distributed to the holders of the Preferred Securities, as
described under "Description of Preferred Securities-Special
Event Redemption or Distribution".
Income from Preferred Securities
In the opinion of Carter, Ledyard & Milburn, JCP&L Capital
will be treated as a partnership for federal income tax purposes.
Accordingly, each holder of Preferred Securities (a "Preferred
Securityholder") will be required to include in gross income such
holder's distributive share of the income of JCP&L Capital. Such
income will not exceed Dividends received on such Preferred
Securities, except in limited circumstances as described below
under "Potential Extension of Interest Payment Period". No
portion of such income will be eligible for the dividends
received deduction.
If the Subordinated Debentures were not treated as debt, or
if JCP&L Capital were not treated as a partnership, for United
States income tax purposes, holders of Preferred Securities could
experience tax consequences different from those described below.
Disposition of Preferred Securities
Gain or loss will be recognized on a sale (including a
redemption for cash) of Preferred Securities in an amount equal
to the difference between the amount realized and the Preferred
Securityholder's tax basis in the Preferred Securities sold.
Gain or loss recognized by a Preferred Securityholder on the sale
or exchange of a Preferred Security held for more than one year
will generally be taxable as long-term capital gain or loss.
Receipt of Subordinated Debentures Upon Liquidation of JCP&L
Capital
Under certain circumstances described under the caption
"Description of Preferred Securities-Special Event Redemption or
Distribution", JCP&L Capital may dissolve and cause Subordinated
Debentures to be distributed to the holders of Preferred
Securities in liquidation of such holders' interests in JCP&L
Capital. As described in "Description of Preferred Securities-
Special Event Redemption or Distribution", in the case of a
- 41 -<PAGE>
Special Event, Subordinated Debentures may not be distributed to
the holders of Preferred Securities in connection with a
dissolution of JCP&L Capital unless JCP&L Capital receives an
opinion of tax counsel to the effect that the holders of the
Preferred Securities will not recognize any gain or loss for
federal income tax purposes as a result of such dissolution and
distribution. Such a tax-free transaction would result in the
holder of Preferred Securities receiving an aggregate tax basis
in the Subordinated Debentures equal to such holder's aggregate
tax basis in the holder's Preferred Securities. A holder's
holding period in such Subordinated Debentures would include the
period for which the Preferred Securities were held by such
holder.
JCP&L Capital Information Returns and Audit Procedures
The General Partner will furnish each Preferred Security-
holder with a Schedule K-1 each year setting forth such Preferred
Securityholder's allocable share of income for the prior calendar
year. The General Partner is required to furnish such schedules
as soon as practicable following the end of the year, but in any
event prior to March 31.
Any person who holds Preferred Securities as a nominee for
another person is required to furnish to JCP&L Capital (a) the
name, address and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether
the beneficial owner is (i) a person that is not a United States
person, (ii) a foreign government, an international organization
or any wholly owned agency or instrumentality of either of the
foregoing, or (iii) a tax-exempt entity; (c) the amount and
description of Preferred Securities held, acquired or transferred
for the beneficial owner; and (d) certain information including
the dates of acquisitions and transfers, means of acquisitions
and transfers, and acquisition cost for purchases, as well as the
amount of net proceeds from sales. Brokers and financial
institutions are required to furnish additional information,
including whether they are United States persons and certain
information on Preferred Securities they acquire, hold or
transfer for their own accounts. A penalty of $50 per failure
(up to a maximum of $100,000 per calendar year) is imposed by the
Code for failure to report such information to JCP&L Capital.
The nominee is required to supply the beneficial owners of
Preferred Securities with the information furnished to JCP&L
Capital.
Potential Extension of Interest Payment Period
Under the terms of the Indenture, the Company has the right
to extend from time to time the interest payment period on the
Subordinated Debentures for up to 60 consecutive months. JCP&L
Capital and the Company currently believe that the extension of
an interest payment period is remote. Because the interest
payment period is extendable by the Company, the interest on the
Subordinated Debentures will be treated as "original issue
- 42 -<PAGE>
discount" pursuant to Code sections 1271 et seq. and the Treasury
Regulations promulgated thereunder. In the event that the
interest payment period is extended, JCP&L Capital will continue
to accrue income, on an economic accrual basis, generally equal
to the amount of the interest payment due at the end of the
extended interest payment period, over the length of the extended
interest payment period. Similar treatment would apply to
Subordinated Debentures distributed to holders of Preferred
Securities.
Accrued income will be allocated, but not distributed, to
holders of record on the Business Day preceding the last day of
each calendar month. As a result, holders of record during an
extended interest payment period will include interest in gross
income in advance of the receipt of cash, and any such holders
who dispose of Preferred Securities prior to the record date for
the payment of Dividends following such extended interest payment
period will include interest in gross income but will not receive
any cash related thereto from the Company or JCP&L Capital. A
holder's tax basis in a Preferred Security will be increased by
the amount of any interest that is included in income without a
receipt of cash, and will be decreased when and if such cash is
subsequently received from JCP&L Capital. The subsequent receipt
of such cash will not be includible in gross income.
United States Alien Holders
For purposes of this discussion, a "United States Alien
Holder" is any holder who or which is (i) a nonresident alien
individual or (ii) a foreign corporation, partnership or estate
or trust, in each case not subject to United States federal
income tax on a net income basis in respect of a Preferred
Security.
Under current United States federal income tax law, subject
to the discussion below with respect to backup withholding, and
assuming satisfaction by the Company of its withholding tax
obligations, if any:
(i) payments by JCP&L Capital or any of its paying
agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be
subject to United States federal withholding tax
provided that (a) the beneficial owner of the Preferred
Security does not actually or constructively own 10% or
more of the total combined voting power of all classes
of stock of the Company or 10% or more of the Preferred
Securities entitled to vote, (b) the beneficial owner
of the Preferred Security is not a controlled foreign
corporation that is related to the Company or JCP&L
Capital through stock ownership, and (c) either: (x)
the beneficial owner of the Preferred Security
certifies to JCP&L Capital or its agent, under
penalties of perjury, that it is a United States Alien
Holder and provides its name and address or (y) the
- 43 -<PAGE>
holder of the Preferred Security is a securities
clearing organization, bank or other financial
institution that holds customers' securities in the
ordinary course of its trade or business (a "financial
institution"), and such holder certifies to JCP&L
Capital or its agent, under penalties of perjury, that
such statement has been received from the beneficial
owner by it or by a financial institution between it
and the beneficial owner and furnishes JCP&L Capital or
its agent with a copy thereof; and
(ii) a United States Alien Holder of a Preferred
Security will generally not be subject to United States
federal withholding or income tax on any gain realized
on the sale or exchange of a Preferred Security unless
such holder is present in the United States for 183
days or more in the taxable year of sale and either has
a "tax home" in the United States or certain other
requirements are met.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to
payments of the proceeds of the sale of Preferred Securities
within the United States to noncorporate United States holders,
and "backup withholding" at a rate of 31% will apply to such
payments if the United States holder fails to provide an accurate
taxpayer identification number.
Payments of the proceeds from the sale by a United States
Alien Holder of Preferred Securities made to or through a foreign
office of a broker will not be subject to information reporting
or backup withholding, except that, if the broker is a United
States person, a controlled foreign corporation for United States
tax purposes or a foreign person 50% or more of whose gross
income is effectively connected with a United States trade or
business for a specified three-year period, information reporting
may apply to such payments. Payments of the proceeds from the
sale of Preferred Securities to or through the United States
office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner certifies as to
its non-United States status or otherwise establishes an
exemption from information reporting and backup withholding.
Similar backup withholding and information reporting would also
apply to Subordinated Debentures distributed to holders of
Preferred Securities.
PLAN OF DISTRIBUTION
JCP&L Capital may offer or sell Preferred Securities to one
or more underwriters for public offering and sale by them. JCP&L
Capital may sell Preferred Securities as soon as practicable
after effectiveness of the Registration Statement, provided that
favorable market conditions exist. Any such underwriter involved
- 44 -<PAGE>
in the offer and sale of the Preferred Securities will be named
in an applicable Prospectus Supplement.
Underwriters may offer and sell the Preferred Securities at
a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
In connection with the sale of Preferred Securities, underwriters
may be deemed to have received compensation from the Company
and/or JCP&L Capital in the form of underwriting discounts or
commissions. Underwriters may sell Preferred Securities to or
through dealers, and such dealers may receive compensation in the
form of discounts, concessions or commissions from the
underwriters.
Any underwriting compensation paid by the Company and/or
JCP&L Capital to underwriters in connection with the offering of
Preferred Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement.
Underwriters and dealers participating in the distribution of the
Preferred Securities may be deemed to be underwriters, and any
discounts and commissions received by them and any profit
realized by them on resale of the Preferred Securities may be
deemed to be underwriting discounts and commissions, under the
Securities Act. Underwriters and dealers may be entitled, under
agreement with the Company and/or JCP&L Capital, to
indemnification against and contribution toward certain
liabilities, including liabilities under the Securities Act, and
to reimbursement by the Company and/or JCP&L Capital for certain
expenses.
Underwriters and dealers may engage in transactions with, or
perform services for, the Company and/or JCP&L Capital and/or any
of their affiliates in the ordinary course of business.
Each series of Preferred Securities will be a new issue of
securities and will have no established trading market. Any
underwriters to whom Preferred Securities are sold by JCP&L
Capital for public offering and sale may make a market in such
Preferred Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time
without notice. The Preferred Securities may or may not be
listed on a national securities exchange. No assurance can be
given as to the liquidity of or the trading markets for any
Preferred Securities.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Company
and JCP&L Capital by Berlack, Israels & Liberman, New York, New
York, and Richard S. Cohen, Esq., Corporate Counsel of the
Company, and for any underwriters by Winthrop, Stimson, Putnam &
Roberts, New York, New York. Certain matters of Delaware law
relating to the validity of the Preferred Securities will be
- 45 -<PAGE>
passed upon by Richards, Layton & Finger, Wilmington, Delaware,
special Delaware counsel to JCP&L Capital and the General
Partner. Berlack, Israels & Liberman and Winthrop, Stimson,
Putnam & Roberts may rely on the opinion of Richard S. Cohen,
Esq., as to matters of New Jersey law, and Berlack, Israels &
Liberman, Richard S. Cohen, Esq., and Winthrop, Stimson, Putnam &
Roberts may rely on the opinion of Richards, Layton & Finger as
to matters of Delaware law. Members and attorneys of Berlack,
Israels & Liberman own an aggregate of 12,595 shares of the
Common Stock of the Company's parent, GPU. In addition, one such
member holds 986 such shares as custodian for his children.
Richard S. Cohen, Esq., owns an aggregate of 970 shares, and
units representing 1,499 shares, of the Common Stock of GPU.
EXPERTS
The financial statements and financial statement schedules
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 are incorporated herein by reference in
reliance on the report of Coopers & Lybrand, independent
accountants, given on the authority of said firm as experts in
auditing and accounting. The report of Coopers & Lybrand,
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 incorporated herein by reference,
contains explanatory paragraphs related to a contingency which
has resulted from the accident at Unit 2 of the Three Mile Island
nuclear generating station and the required adoption of the
provisions of the Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes", and the
provisions of SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" in 1993.
- 46 -<PAGE>
No person has been authorized to
give any information or to make any ______ Preferred
representations other than those Securities
contained in this Prospectus Supplement
or the Prospectus, and, if given or JCP&L Capital
made, such information or
representations must not be relied upon % Cumulative
as having been authorized. This Monthly Income
Prospectus Supplement and the Prospectus PreferredSecurities,
do not constitute an offer to sell or a Series A
solicitation of an offer to buy any guaranteed to the
securities other than the securities extent the issuer
described in this Prospectus Supplement has funds as set
or an offer to sell or the solicitation forth herein by
of an offer to buy such securities in
any circumstances in which such offer
or solicitation is unlawful. Neither JERSEY CENTRAL
the delivery of this Prospectus POWER & LIGHT
Supplement or the Prospectus nor any COMPANY
sale made hereunder or thereunder
shall, under any circumstances, create
any implication that the information
contained herein or therein is correct
as of any time subsequent to the date
of such information.
___________________ PROSPECTUS
SUPPLEMENT
TABLE OF CONTENTS
Prospectus Supplement
Page
JCP&L Capital . . . . . . . . . . . .
Jersey Central Power & Light Company
Certain Investment Considerations . .
Use of Proceeds . . . . . . . . . . .
Certain Terms of the Series A
Preferred Securities . . . . . . .
Certain Terms of the Series A
Subordinated Debentures . . . . .
Underwriting . . . . . . . . . . . .
Prospectus
Available Information . . . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . .
Jersey Central Power & Light Company
Financing Program . . . . . . . . . .
Certain Company Consolidated Financial
Information . . . . . . . . . . .
Company Coverage Ratios . . . . . . .
Use of Proceeds . . . . . . . . . . .
JCP&L Capital . . . . . . . . . . . .
Description of Preferred Securities .
Description of the Guarantee . . . .
Description of the Subordinated Debentures
United States Taxation . . . . . . .
Plan of Distribution . . . . . . . . Merrill Lynch & Co.
Legal Opinions . . . . . . . . . . . Representatives of the
Experts . . . . . . . . . . . . . . . Underwriters <PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits:
Exhibit No. Description
1-A -Form of Underwriting Agreement relating to
Preferred Securities.
3-I -Revised form of Amended and Restated Limited
Partnership Agreement of JCP&L Capital.
3-J -Revised form of Action Creating Series A
Preferred Securities.
4-A -Revised form of Subordinated Debenture Indenture.
4-A(1) -Cross-reference sheet showing location in the
Subordinated Debenture Indenture of provisions of
Sections 310(a) through 318(a) of the Trust
Indenture Act of 1939.
4-B -Revised form of Preferred Security Certificate -
Incorporated by reference to Exhibit A to Exhibit
3-I hereto.
4-C -Revised form of Subordinated Debenture -
Incorporated by reference to form of Subordinated
Debenture contained in Exhibit 4-A.
4-D -Revised form of Payment and Guarantee Agreement.
5-A -Opinion of Berlack, Israels & Liberman.
5-B -Opinion of Richard S. Cohen, Esq.
5-C -Opinion of Richards, Layton & Finger.
8 -Opinion of Carter, Ledyard & Milburn.
23-A -Consent of Berlack, Israels & Liberman (included
in their opinion filed as Exhibit 5-A).
23-B -Consent of Richard S. Cohen, Esq. (included in
his opinion filed as Exhibit 5-B).
23-C -Consent of Richards, Layton & Finger (included in
their opinion filed as Exhibit 5-C).
23-D -Consent of Carter, Ledyard & Milburn (included in
their opinion filed as Exhibit 8).
II-1<PAGE>
24-A -Certified copy of resolution of the Company's
Board of Directors authorizing attorney-in-fact to
sign the registration statement.
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(5) That for purposes of determining any liability
under the Securities Act of 1933, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part
of this registration statement as of the time it was declared
effective.
(6) That, for purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-2<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Township of Morris, State of New Jersey on the 21st day of
April, 1995.
JERSEY CENTRAL POWER & LIGHT COMPANY
By: *
D. Baldassari, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities with respect to Jersey
Central Power & Light Company and on the dates indicated.
Signature Title Date
* Chairman (Principal April 21,1995
(J.R. Leva) Executive Officer) and
Director
* President and Director April 21,1995
(D. Baldassari)
* Vice President April 21,1995
(J.G. Graham) (Principal Financial
Officer) and Director
* Vice President, April 21,1995
(D.W. Myers) Comptroller (Principal
Accounting Officer) and
Director
* Vice President and April 21,1995
(M.P. Morrell) Director
* Director April 21,1995
(R.C. Arnold)
* Director April 21,1995
(G.E. Persson)
* Director April 21,1995
(S.C. Van Ness)
II-3<PAGE>
* Director April 21,1995
(S.B. Wiley)
By:
Terrance G. Howson, attorney-in-fact
II-4<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the Township of Morris, State of New Jersey on the 21st day of
April, 1995.
JCP&L CAPITAL, L.P.
By: JCP&L Preferred Capital, Inc.,
its general partner
By:
D. Baldassari, President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity on behalf of JCP&L Preferred
Capital, Inc., as the general partner of JCP&L Capital, L.P., and
on the date indicated.
Signature Title Date
_______________________ Sole Director April 21, 1995
D. Baldassari
II-5<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1-A -Form of Underwriting Agreement relating to
Preferred Securities.
3-I -Revised form of Amended and Restated Limited
Partnership Agreement of JCP&L Capital.
3-J -Revised form of Action Creating Series A
Preferred Securities.
4-A -Revised form of Subordinated Debenture Indenture.
4-A(1) -Cross-reference sheet showing location in the
Subordinated Debenture Indenture of provisions of
Sections 310(a) through 318(a) of the Trust
Indenture Act of 1939.
4-B -Revised form of Preferred Security Certificate -
Incorporated by reference to Exhibit A to Exhibit
3-I hereto.
4-C -Revised form of Subordinated Debenture -
Incorporated by reference to form of Subordinated
Debenture contained in Exhibit 4-A.
4-D -Revised form of Payment and Guarantee Agreement.
5-A -Opinion of Berlack, Israels & Liberman.
5-B -Opinion of Richard S. Cohen, Esq.
5-C -Opinion of Richards, Layton & Finger.
8 -Opinion of Carter, Ledyard & Milburn.
23-A -Consent of Berlack, Israels & Liberman (included
in their opinion filed as Exhibit 5-A).
23-B -Consent of Richard S. Cohen, Esq. (included in
his opinion filed as Exhibit 5-B).
23-C -Consent of Richards, Layton & Finger (included in
their opinion filed as Exhibit 5-C).
23-D -Consent of Carter, Ledyard & Milburn (included in
their opinion filed as Exhibit 8).
24-A -Certified copy of resolution of the Company's
Board of Directors authorizing attorney-in-fact to
sign the registration statement.<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
1-A -Form of Underwriting Agreement relating to
Preferred Securities.
3-I -Revised form of Amended and Restated Limited
Partnership Agreement of JCP&L Capital.
3-J -Revised form of Action Creating Series A
Preferred Securities.
4-A -Revised form of Subordinated Debenture Indenture.
4-A(1) -Cross-reference sheet showing location in the
Subordinated Debenture Indenture of provisions of
Sections 310(a) through 318(a) of the Trust
Indenture Act of 1939.
4-D -Revised form of Payment and Guarantee Agreement.
5-A -Opinion of Berlack, Israels & Liberman.
5-B -Opinion of Richard S. Cohen, Esq.
5-C -Opinion of Richards, Layton & Finger.
8 -Opinion of Carter, Ledyard & Milburn.
24-A -Certified copy of resolution of the Company's
Board of Directors authorizing attorney-in-fact to
sign the registration statement.<PAGE>
Exhibit 1-A
JCP&L CAPITAL, L.P.
__% Cumulative Monthly Income
Preferred Securities, Series A
(liquidation preference $25 per Preferred Security)
guaranteed to the extent described in the prospectus
by Jersey Central Power & Light Company
Underwriting Agreement
________ __, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto,
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
World Financial Center
North Tower
New York, New York 10281-1316
Ladies and Gentlemen:
JCP&L Capital, L.P. ("JCP&L Capital"), a limited
partnership formed under the laws of the State of Delaware, and
Jersey Central Power and Light Company, a New Jersey corporation,
as guarantor (the "Guarantor"), propose, subject to the terms and
conditions stated herein, that JCP&L Capital issue and sell to
the Underwriters named in Schedule l hereto (the "Underwriters")
an aggregate of _________ preferred partner interests of JCP&L
Capital of a series designated the __% Cumulative Monthly Income
Preferred Securities, Series A (liquidation preference $25 per
Preferred Security) (the "Preferred Securities"), guaranteed by
the Guarantor as to the payment of distributions, to the extent
JCP&L Capital has sufficient cash on hand to permit such payments
and funds legally available therefor, and as to payments on
liquidation or redemption described in any Final Supplemented
Prospectus (as defined in Section 1(a) hereof) (the "Guarantee").<PAGE>
1. Each of JCP&L Capital and the Guarantor jointly and
severally represents and warrants to, and agrees with, each of
the several Underwriters that:
(a) A registration statement on Form S-3, as amended
by Amendment No. 1 thereto, in respect of, among other
things, the Preferred Securities, the Guarantee and the __%
Deferrable Interest Subordinated Debentures due 2044 of the
Guarantor (the "__% Subordinated Debentures", and
collectively with the Preferred Securities and the
Guarantee, the "Securities") (File Nos. 33-57905 and 33-
57905-01), has been filed by JCP&L Capital and the Guarantor
with the Securities and Exchange Commission (the
"Commission"); such registration statement, any pre-
effective amendment thereto and any post-effective amendment
thereto, each in the form heretofore delivered to you, and,
excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have
been declared effective by the Commission in such form; as
of the date of this Agreement, no other document with
respect to such registration statement or document
incorporated by reference therein had heretofore been filed
with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued
and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of
1933, as amended (the "Act"), is hereinafter called a
"Preliminary Prospectus" or a "Preliminary Supplemented
Prospectus," as the case may be; the various parts of such
registration statement, including all exhibits thereto and
the documents incorporated by reference in the prospectus
contained in the registration statement at the time such
part of the registration statement became effective (but
excluding the Form T-1 of the Trustee (as defined below)),
each as amended at the time such part of the registration
statement became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating
to the Securities, in the form in which it was included in
the Registration Statement at the time it became effective,
is hereinafter called the "Prospectus"; any reference herein
to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange
-2-<PAGE>
Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference
to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the
Guarantor filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the
Registration Statement; and the Prospectus as amended or
supplemented in final form in relation to the Securities in
the form in which it is filed with the Commission pursuant
to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference
therein as of the date of such filing, being hereinafter
called the "Final Supplemented Prospectus");
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission,
and each Preliminary Prospectus, at the time of filing
thereof, 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 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, in the light of
the circumstances under which they were made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information
furnished in writing to JCP&L Capital or the Guarantor by an
Underwriter through you expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder; and any further documents so filed
and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents
are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to JCP&L Capital or the Guarantor by an
Underwriter through you expressly for use in the Prospectus;
(d) The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
-3-<PAGE>
Registration Statement or the Prospectus will conform, in
all material respects to the requirements of the Act, the
Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to JCP&L Capital or the Guarantor by an
Underwriter through you expressly for use therein, or to any
statements in or omissions from the Form T-1 of the Trustee
(as defined below), but nothing contained herein is intended
as a waiver of compliance with the Act, the Exchange Act
regulations or any rule or regulation of the Commission
thereunder;
(e) JCP&L Capital has no subsidiaries. Since the
respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not
been any change in the capital stock or material change in
the long-term debt of the Guarantor (including all of its
subsidiaries taken as a whole) (except for such preferred
stock and long-term debt acquired for sinking fund purposes
or redeemed pursuant to sinking fund or optional redemption
provisions or changes in obligations under capital leases
incurred in the ordinary course of the Guarantor's business
or for any increase in common stock as a result of capital
contributions or any decrease in capital stock as a result
of the declaration by the Guarantor of either regular
quarterly dividends on the Guarantor's preferred stock or
dividends on its common stock) or in the capital accounts or
long-term debt of JCP&L Capital, or any material adverse
change in or affecting (i) the condition (financial or
otherwise), stockholder's equity, business affairs,
operating properties, business prospects or results of
operations of the Guarantor and its subsidiaries taken as a
whole or (ii) the condition (financial or otherwise),
capital accounts, business affairs, operating properties,
business prospects or results of operations of JCP&L
Capital, in any such case otherwise than as set forth or
contemplated in the Final Supplemented Prospectus;
(f) JCP&L Capital has been duly formed and is validly
existing in good standing as a limited partnership under the
laws of the State of Delaware, with power and authority to
own its properties and conduct its business as described in
the Final Supplemented Prospectus, and is duly qualified as
a foreign limited partnership for the transaction of
business and is in good standing under the laws of each
-4-<PAGE>
other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification,
or is subject to no material liability or disability by
reason of the failure to be so qualified in any such
jurisdiction; JCP&L Preferred Capital, Inc., a Delaware
corporation, is the sole general partner (the "General
Partner") of JCP&L Capital; the General Partner is a wholly
owned subsidiary of the Guarantor; and the General Partner
has been duly incorporated and is validly existing in good
standing as a corporation under the laws of the State of
Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Final Supplemented Prospectus;
(g) The Guarantor is duly incorporated and is validly
existing in good standing as a corporation under the laws of
its jurisdiction of incorporation, with corporate power and
authority to own its properties and conduct its business as
described in the Final Supplemented Prospectus and is duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification,
or is subject to no material liability or disability by
reason of the failure to be so qualified in any such
jurisdiction;
(h) The Guarantor has an authorized capitalization as
set forth in the Final Supplemented Prospectus; and all of
the issued limited partner interests of JCP&L Capital have
been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the descriptions thereof
contained in the Final Supplemented Prospectus;
(i) The Preferred Securities have been duly and
validly authorized by JCP&L Capital, and, when issued and
delivered against payment therefor at the Time of Delivery
(as defined herein) will be duly and validly issued and
fully paid and non-assessable and will conform to the
descriptions thereof contained in the Final Supplemented
Prospectus;
(j) The indenture (the "Indenture") to be dated as of
______ 1, 1995 between the Guarantor and United States Trust
Company of New York, as trustee (the "Trustee"), and the __%
Subordinated Debentures to be issued thereunder, have been
duly authorized; the Indenture, which is substantially in
the form filed as an exhibit to the Registration Statement,
has been duly qualified under the Trust Indenture Act, and,
at the Time of Delivery (as defined in Section 4 hereof),
will have been duly executed and delivered and will
constitute, and the __% Subordinated Debentures, when duly
executed and authenticated in accordance with the Indenture
and issued and delivered under the circumstances provided in
-5-<PAGE>
the Final Supplemented Prospectus, will constitute, valid
and legally binding obligations of the Guarantor enforceable
in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance,
moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles; and the Indenture conforms and the __%
Subordinated Debentures when duly executed, authenticated,
issued and delivered, will conform to the descriptions
thereof contained in the Final Supplemented Prospectus;
(k) The Amended and Restated Limited Partnership
Agreement, dated as of ______ __, 1995 (the "Limited
Partnership Agreement ), has been duly authorized by the
General Partner and constitutes a valid and legally binding
obligation of the General Partner, in its capacity as
general partner of JCP&L Capital, enforceable in accordance
with its terms, subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other
laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(l) The Guarantee has been duly authorized and when
executed and delivered by the Guarantor will constitute a
valid and legally binding obligation of the Guarantor,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Guarantee will conform
to the description thereof contained in the Final
Supplemented Prospectus;
(m) All of the issued general and limited partner
interests of JCP&L Capital (other than the Preferred
Securities) are owned indirectly by the Guarantor and the
Class A Limited Partner (as defined in the Limited
Partnership Agreement), respectively, and have been duly and
validly authorized and validly issued, free and clear of all
liens, encumbrances, equities or claims; and JCP&L Capital
is not a party to or otherwise bound by any agreement other
than those described in the Final Supplemented Prospectus;
(n) The issue and sale of the Preferred Securities by
JCP&L Capital, the compliance by JCP&L Capital with all of
the provisions of this Agreement, and the consummation of
the transactions herein contemplated have been duly
authorized by all necessary action of JCP&L Capital and will
not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which JCP&L
Capital is a party or by which JCP&L Capital is bound or to
which any of the property or assets of JCP&L Capital is
-6-<PAGE>
subject, nor will such action result in any violation of the
provisions of the Certificate of Limited Partnership of
JCP&L Capital or the Limited Partnership Agreement or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over JCP&L
Capital or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or
with any such court or governmental agency or body is
required for the issue and sale of the Preferred Securities
or the consummation by JCP&L Capital of the transactions
contemplated by this Agreement, except such as have been
obtained regarding the registration under the Act of the
Securities, the qualification of the Indenture under the
Trust Indenture Act, the approval of the Commission under
the Public Utility Holding Company Act of 1935, as amended
(the "1935 Act"), and the approvals of the New Jersey Board
of Public Utilities (the "NJBPU"), and such consents,
approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws
in connection with the purchase of the Preferred Securities
and distribution of the Securities by the Underwriters and
the filing of Certificates Pursuant to Rule 24 under the
1935 Act;
(o) The issue and sale of the Preferred Securities by
JCP&L Capital, the compliance by JCP&L Capital and the
Guarantor with all of the provisions of this Agreement, the
execution, delivery and performance by the Guarantor of the
Guarantee, the execution, delivery and performance by the
Guarantor of the Indenture and the issuance and delivery by
the Guarantor of the __% Subordinated Debentures thereunder
and the consummation of the transactions herein and therein
contemplated have been duly authorized by all necessary
action of the Guarantor, will not conflict with or result in
a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to
which the Guarantor is a party or by which the Guarantor is
bound or to which any of the property or assets of the
Guarantor is subject except for such conflicts, breaches or
violations which, individually or in the aggregate, would
not have a material adverse effect on the condition
(financial or otherwise), stockholder's equity, business
affairs, operating properties, business prospects or results
of operations of the Guarantor (including all of its
subsidiaries taken as a whole), nor will such action result
in any violation of the provisions of the Restated
Certificate of Incorporation or Bylaws of the Guarantor or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
Guarantor or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issuance of
-7-<PAGE>
the Guarantee, the issuance of the __% Subordinated
Debentures, or the consummation by the Guarantor of the
transactions contemplated by this Agreement, except such as
have been obtained regarding the registration under the Act
of the Securities, the qualification of the Indenture under
the Trust Indenture Act, the approval of the Commission
under the 1935 Act and the approvals of the NJBPU and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase of the
Preferred Securities and distribution of the Securities by
the Underwriters and the filing of Certificates Pursuant to
Rule 24 under the 1935 Act;
(p) Neither the General Partner nor the Guarantor is
in violation of its charter, or, in the case of JCP&L
Capital, its Certificate of Limited Partnership or the
Limited Partnership Agreement, or in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any material
contract, indenture, mortgage, loan agreement, note, lease,
or other instrument to which it or any of them is a party or
by which it or any of them or their properties may be bound;
(q) Other than as set forth in the Final Supplemented
Prospectus, there are no legal or governmental proceedings
pending to which JCP&L Capital or the Guarantor is a party
or of which any property of JCP&L Capital or the Guarantor
is the subject which, if determined adversely to JCP&L
Capital or the Guarantor, would individually or in the
aggregate have a material adverse effect on (i) the
consolidated financial position, stockholder's equity or
results of operations of the Guarantor (including all of its
subsidiaries taken as a whole) or (ii) the financial
position, capital accounts or results of operations of JCP&L
Capital; and, to the best of JCP&L Capital's and the
Guarantor's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(r) Neither JCP&L Capital nor the Guarantor is and,
after giving effect to the offering and sale of the
Securities, will be an investment company, unit investment
trust or face-amount certificate company that is or is
required to be registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"); and
neither JCP&L Capital nor the Guarantor is directly or
indirectly controlled by or acting on behalf of any person
that is such a company or trust;
(s) Neither JCP&L Capital nor the Guarantor nor their
affiliates does business with the government of Cuba or with
any person located in Cuba within the meaning of Section
-8-<PAGE>
517.075 of Florida Statutes (chapter 92-198, Laws of
Florida); and
(t) Coopers & Lybrand L.L.P., who have certified
certain financial statements of the Guarantor and its
subsidiaries, are independent public accountants as required
by the Act and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth,
JCP&L Capital agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from JCP&L Capital, at a purchase price
per Preferred Security of $25, the number of Preferred Securities
set forth opposite the name of such Underwriter in Schedule I
hereto. The Guarantor agrees to issue the Guarantee and the __%
Subordinated Debentures concurrently with the issue and sale of
the Preferred Securities as contemplated herein.
The Guarantor hereby guarantees the timely performance
by JCP&L Capital of its obligations under this Section 2 and
Section 6 and Section 11 hereof. As compensation to the
Underwriters for their commitments hereunder, and in view of the
fact that the proceeds of the sale of the Preferred Securities
will be used to purchase the __% Subordinated Debentures of the
Guarantor, the Guarantor hereby agrees to pay at the Time of
Delivery (as defined in Section 4 hereof) to Merrill Lynch & Co.
for the accounts of the several Underwriters, an amount equal to
$_____ per Preferred Security for the Preferred Securities to be
delivered by JCP&L Capital hereunder at such Time of Delivery,
except that such compensation will be $_____ per Preferred
Security sold to certain institutions.
3. Upon the authorization by you of the release of the
Preferred Securities, the several Underwriters propose to offer
the Preferred Securities for sale upon the terms and conditions
set forth in the Final Supplemented Prospectus.
4. The Preferred Securities to be purchased by each
Underwriter hereunder will be represented by a global certificate
in book-entry form which will be deposited by or on behalf of
JCP&L Capital with The Depository Trust Company ("DTC") or its
designated custodian and registered in the name of Cede & Co., as
nominee for DTC. JCP&L Capital will deliver the Preferred
Securities to Merrill Lynch & Co., for the account of each
Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by certified or official bank
check or checks, payable to the order of JCP&L Capital in New
York Clearing House (next day) funds, by causing DTC to credit
the Preferred Securities to the account of Merrill Lynch & Co. at
DTC. JCP&L Capital will cause the certificate representing the
Preferred Securities to be made available to Merrill Lynch & Co.
for checking at least twenty-four hours prior to the Time of
Delivery at the office of DTC or its designated custodian. The
-9-<PAGE>
time, date and location of such delivery and payment shall be
10:30 a.m., New York City time, on ______ __, 1995 or such other
time and date as Merrill Lynch & Co. and JCP&L Capital may agree
upon in writing at the offices of Berlack, Israels & Liberman,
120 West 45th Street, New York, New York 10036. Such time and
date are herein called the "Time of Delivery".
At the Time of Delivery, the Guarantor will pay, or
cause to be paid, the commission payable at the Time of Delivery
to the Underwriters under Section 2 hereof by certified or
official bank check or checks, payable to the order of Merrill
Lynch & Co.
5. Each of JCP&L Capital and the Guarantor jointly and
severally agrees with each of the Underwriters:
(a) To prepare the Final Supplemented Prospectus in a
form approved by you and to file such Final Supplemented
Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 424(b) under the Act; to make no further
amendment or any supplement to the Registration Statement or
Final Supplemented Prospectus prior to the Time of Delivery
which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies
thereof; in the case of the Guarantor, to file promptly all
reports and any definitive proxy or information statements
required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act and for so
long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and
during such same period to advise you, promptly after it
receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any
amendment to the Prospectus has been filed with the
Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of
any prospectus relating to the Securities, of the suspension
of the qualification of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of
any prospectus relating to the Securities or suspending any
-10-<PAGE>
such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as
you may reasonably request to qualify the Securities for
offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be
necessary to complete the distribution of the Securities,
provided that in connection therewith neither JCP&L Capital
nor the Guarantor shall be required to qualify as a foreign
corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of the
Final Supplemented Prospectus in such quantities as you may
from time to time reasonably request, and, if the delivery
of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange
Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies
as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3)
of the Act;
(d) In the case of the Guarantor, to make generally
available to its security holders as soon as practicable,
but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earning statement of the
Guarantor and its subsidiaries (which need not be audited)
-11-<PAGE>
complying with Section 11(a) of the Act and the rules and
regulations thereunder (including Rule 158);
(e) During the period beginning from the date hereof
and continuing to and including the earlier of (i) the date,
after the Time of Delivery, on which the distribution of the
Securities ceases, as determined by Merrill Lynch & Co., or
(ii) the date which is 90 days after the Time of Delivery,
not to offer, sell, contract to sell or otherwise dispose of
any Preferred Securities, any limited partner interests of
JCP&L Capital, or any preferred stock or any other
securities of JCP&L Capital or the Guarantor which are
substantially similar to the Preferred Securities or the
Guarantee, or any securities convertible into or
exchangeable for Preferred Securities, limited partner
interests, preferred stock or such substantially similar
securities of either JCP&L Capital or the Guarantor without
your prior written consent;
(f) To the extent necessary to comply with New York
Stock Exchange rules and regulations or the rules and
regulations of any other exchange on which the Preferred
Securities are listed, to furnish to the holders of the
Preferred Securities as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet
and statements of income, capital stock and cash flows of
the Guarantor and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable
after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after
the effective date of the Registration Statement),
consolidated summary financial information of the Guarantor
and its subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective
date of the Registration Statement, to furnish to you copies
of all reports or other communications (financial or other)
furnished to the holders of the Preferred Securities
generally, and deliver to you (i) as soon as they are
available, copies of any reports and financial statements
furnished to or filed with the Commission or any national
securities exchange on which any class of securities of
JCP&L Capital or the Guarantor is listed; and (ii) such
additional information concerning the business and financial
condition of the Guarantor as you may from time to time
reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the
Guarantor and its subsidiaries are consolidated in reports
furnished to the holders of the Preferred Securities
generally or to the Commission);
(h) To use its best efforts to list, subject to notice
of issuance, the Preferred Securities on the New York Stock
Exchange; and
-12-<PAGE>
(i) To use its best efforts to list the __%
Subordinated Debentures, upon issuance to the holders of the
Preferred Securities, on the same exchange on which the
Preferred Securities are then listed.
6. JCP&L Capital and the Guarantor jointly and severally
covenant and agree with the several Underwriters that JCP&L
Capital and the Guarantor will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of JCP&L
Capital's and the Guarantor's counsel and accountants in
connection with the registration of the Securities under the Act
and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any
Preliminary Prospectus, the Prospectus, the Preliminary
Supplemented Prospectus, the Final Supplemented Prospectus and
any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers;
(ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Preliminary (or any
Supplemental) Blue Sky Memorandum and any other documents in
connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the
fees and disbursements of counsel for the Underwriters not to
exceed $15,000 incurred in connection with such qualification and
in connection with the Blue Sky survey; (iv) any fees charged by
securities rating services for rating the Securities; (v) any
filing fees incident to securing any required review by the
National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing
certificates for the Preferred Securities; (vii) the cost and
charges of any transfer agent or registrar; (viii) the cost of
qualifying the Securities with DTC; (ix) the fees and expenses of
any Trustee and any agent of any Trustee and the fees or
disbursements of counsel for any Trustee in connection with the
Indenture and the __% Subordinated Debentures; and (x) all other
costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in
this Section 6. It is understood, however, that, except as
provided in this Section 6 and Section 8 and Section 11 hereof,
the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on
resale of any of the Preferred Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all
representations and warranties and other statements of JCP&L
Capital and the Guarantor herein are, at and as of the Time of
Delivery, true and correct, the condition that JCP&L Capital and
the Guarantor shall have performed all of their respective
obligations hereunder theretofore to be performed, and the
following additional conditions:
-13-<PAGE>
(a) The Final Supplemented Prospectus shall have been
electronically filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information
on the part of the Commission shall have been complied with
to your reasonable satisfaction;
(b) Winthrop, Stimson, Putnam & Roberts, counsel for
the Underwriters, shall have furnished to you such opinion,
dated the Time of Delivery, with respect to: the
incorporation of the Guarantor and the formation of JCP&L
Capital; insofar as the Federal laws of the United States
and the laws of the State of New York are concerned, the
validity of the __% Subordinated Debentures and the
Guarantee; this Agreement; the Preferred Securities; the
Indenture; the Registration Statement; the Final
Supplemented Prospectus; and other related matters as you
may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request
to enable them to pass upon such matters; provided, that in
rendering such opinion, Winthrop, Stimson, Putnam & Roberts
may rely upon the opinion of Richard S. Cohen, Esq.
delivered pursuant to subsection (c) hereof as to all
matters involving laws of the State of New Jersey and upon
the opinion of Richards, Layton & Finger delivered pursuant
to subsection (e) hereof as to all matters involving laws of
the State of Delaware relating to JCP&L Capital, the General
Partner, the Preferred Securities and the Limited
Partnership Agreement.
(c) Berlack, Israels & Liberman and, insofar as the
laws of the State of New Jersey are concerned, Richard S.
Cohen, Esq., counsel for JCP&L Capital and the Guarantor,
shall have furnished to you their written opinions, dated
the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) JCP&L Capital has been duly formed and is
validly existing as a limited partnership in good
standing under the Delaware Revised Uniform Limited
Partnership Act ("DRULPA"), with, under the Limited
Partnership Agreement and DRULPA, partnership power and
authority to own its properties and conduct its
business as described in the Final Supplemented
Prospectus, and is duly qualified as a foreign limited
partnership for the transaction of business and is in
good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is
-14-<PAGE>
subject to no material liability or disability by
reason of the failure to be so qualified in any such
jurisdiction;
(ii) The Guarantor is duly incorporated and is
validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its
properties and conduct its business as described in the
Final Supplemented Prospectus, and is duly qualified as
a foreign corporation for the transaction of business
and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or
conducts any business so as to require such
qualification, or is subject to no material liability
or disability by reason of the failure to be so
qualified in any such jurisdiction;
(iii) The Guarantor has the authorized capital
stock as set forth in the Final Supplemented
Prospectus; and all of the issued general partner
interests of JCP&L Capital have been duly and validly
authorized and validly issued and are owned by the
General Partner, free of all liens, encumbrances,
equities or claims;
(iv) The Preferred Securities have been duly and
validly authorized and are validly issued and, subject
to the qualifications set forth in Section 7(e)(iv)
hereof, are fully paid and nonassessable limited
partner interests in JCP&L Capital;
(v) The Indenture and the __% Subordinated
Debentures have been duly authorized by the Guarantor;
the Indenture has been duly qualified under the Trust
Indenture Act, and has been duly executed and delivered
by the Guarantor and constitutes, and the __%
Subordinated Debentures have been duly executed and
delivered by the Guarantor and, assuming the due
authentication thereof by the Trustee, constitute valid
and legally binding obligations of the Guarantor
enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws of general
applicability relating to or affecting creditors'
rights and to general equity principles; and the
Indenture and the __% Subordinated Debentures conform
to the descriptions thereof contained in the Final
Supplemented Prospectus;
(vi) The Limited Partnership Agreement has been
duly authorized by the General Partner and constitutes
a valid and legally binding obligation of the General
Partner, in its capacity as general partner of JCP&L
-15-<PAGE>
Capital, enforceable in accordance with its terms,
subject to (a) bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and other laws of
general applicability relating to or affecting
creditors' rights and to general equity principles and
(b) no opinion being expressed on the effect upon the
Limited Partnership Agreement of applicable law
relating to fiduciary duties;
(vii) The Guarantee has been duly authorized,
executed and delivered by the Guarantor and constitutes
a valid and legally binding obligation of the
Guarantor, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, moratorium,
fraudulent conveyance, reorganization and other laws of
general applicability relating to or affecting
creditors' rights and to general equity principles; and
the Guarantee conforms to the description thereof
contained in the Final Supplemented Prospectus;
(viii) The issue and sale of the Preferred
Securities by JCP&L Capital, the compliance by JCP&L
Capital with the provisions of this Agreement, and the
consummation of the transactions herein and therein
contemplated have been duly authorized by all necessary
action of JCP&L Capital and will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which JCP&L Capital is
a party or by which JCP&L Capital is bound or to which
any of the property or assets of JCP&L Capital is
subject, nor will such action result in any violation
of the provisions of the Certificate of Limited
Partnership of JCP&L Capital or Limited Partnership
Agreement of JCP&L Capital or any statute or any order,
of which such counsel is aware, or any rule or
regulation of any court or governmental agency or body
having jurisdiction over JCP&L Capital or any of its
properties;
(ix) The issue and sale of the Preferred
Securities by JCP&L Capital, the compliance by JCP&L
Capital and the Guarantor with the provisions of this
Agreement, the execution, delivery and performance by
the Guarantor of the Guarantee, the execution, delivery
and performance by the Guarantor of the Indenture and
the issuance and delivery by the Guarantor of the __%
Subordinated Debentures thereunder and the consummation
of the transactions herein and therein contemplated
have been duly authorized by all necessary action of
the Guarantor and will not conflict with or result in a
breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture,
-16-<PAGE>
mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Guarantor is a
party or by which the Guarantor is bound or to which
any of the property or assets of the Guarantor is
subject of which such counsel is aware except for such
conflicts, breaches or violations which, individually
or in the aggregate, would not have a material adverse
effect on the condition (financial or otherwise),
stockholder's equity, business affairs, operating
properties, business prospects or results of operations
of the Guarantor (including all of its subsidiaries
taken as a whole), nor will such action result in any
violation of the provisions of the Restated Certificate
of Incorporation or Bylaws of the Guarantor or any
statute or any order, of which such counsel is aware,
or any rule or regulation of any court or governmental
agency or body having jurisdiction over the Guarantor
or any of its subsidiaries or any of their properties;
(x) No consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation of the transactions contemplated
by this Agreement in connection with the issuance and
delivery of the Securities or the consummation by JCP&L
Capital and the Guarantor of the transactions
contemplated herein except (i) for an order of the
NJBPU which has been obtained and is in full force and
effect and informational filings with the NJBPU
pursuant to such order, (ii) such as have been made or
obtained under the Act, the 1935 Act and the Trust
Indenture Act, (iii) such as may be required under
state securities laws in connection with the purchase
of the Preferred Securities by the Underwriters and the
distribution of the Securities by the Underwriters, and
(iv) the filing of a Form 8-A to register the Preferred
Securities under the Exchange Act;
(xi) This Agreement has been duly authorized,
executed and delivered by each of JCP&L Capital and the
Guarantor;
(xii) The statements made in the Prospectus under
the caption "Description of Preferred Securities",
insofar as they purport to constitute summaries of the
terms of the Preferred Securities, are accurate and
fair summaries;
(xiii) The documents incorporated by reference in
the Final Supplemented Prospectus or any amendment or
supplement thereto (other than the financial statements
and related schedules therein and other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no
opinion), when they were filed with the Commission
-17-<PAGE>
complied as to form in all material respects with the
requirements of the Exchange Act and the rules and
regulations of the Commission thereunder;
(xiv) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made
by JCP&L Capital prior to the Time of Delivery (other
than the financial statements and related schedules
therein and other financial or statistical data
included or incorporated by reference therein, as to
which such counsel need express no opinion) comply as
to form in all material respects with the requirements
of the Act, the Trust Indenture Act and the rules and
regulations thereunder; and they do not know of any
amendment to the Registration Statement required to be
filed or of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated
by reference into the Prospectus or required to be
described in the Registration Statement or the
Prospectus which are not filed or incorporated by
reference or described as required; and
(xv) Neither JCP&L Capital nor the Guarantor is
and, after giving effect to the offering and sale of
the Preferred Securities, will be an investment
company, unit investment trust or face-amount
certificate company that is or is required to be
registered under the Investment Company Act; and
neither JCP&L Capital nor the Guarantor is directly or
indirectly controlled by or acting on behalf of any
person that is such a company or trust.
In addition, each such counsel shall state that to the
best of such counsel's knowledge and other than as set forth
in the Final Supplemented Prospectus, there are no legal or
governmental proceedings pending to which JCP&L Capital or
the Guarantor is a party or of which any property of JCP&L
Capital or the Guarantor is the subject which, if determined
adversely to JCP&L Capital or the Guarantor, would
individually or in the aggregate have a material adverse
effect on (i) the consolidated financial position,
stockholder's equity or results of operations of the
Guarantor and the Guarantor's subsidiaries taken as a whole
or (ii) the financial position, capital accounts or results
of operations of JCP&L Capital; and, to the best of such
counsel's knowledge, no such proceedings are overtly
threatened or contemplated by governmental authorities or
overtly threatened by others;
In addition, each such counsel shall state that
although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus,
-18-<PAGE>
except for those covered by their opinion in subsection
(xii) of this section 7(c), they have no reason to believe
that, as of its effective date, the Registration Statement
or any further amendment thereto made by JCP&L Capital or
the Guarantor prior to the Time of Delivery (other than the
financial statements and related schedules and other
financial or statistical data included or incorporated by
reference therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by JCP&L
Capital or the Guarantor prior to the Time of Delivery
(other than the financial statements and related schedules
and other financial or statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of the Time of Delivery, the Prospectus or any
further amendment or supplement thereto made by JCP&L
Capital or the Guarantor prior to the Time of Delivery
(other than the financial statements and related schedules
and other financial or statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading;
In rendering their opinions, (A) Berlack, Israels &
Liberman may rely upon the opinion of Richard S. Cohen, Esq.
as to all matters involving laws of the State of New Jersey,
and (B) such counsel may rely, as to all matters involving
laws of the State of Delaware relating to JCP&L Capital, the
General Partner, the Preferred Securities and the Limited
Partnership Agreement, upon the opinion of Richards, Layton
& Finger, delivered pursuant to subsection (e) hereof;
(d) Carter, Ledyard & Milburn, special tax counsel for
JCP&L Capital and the Guarantor, shall have furnished to you
their written opinion, dated the Time of Delivery, in form
and substance satisfactory to you, to the effect that such
counsel confirms its opinion as set forth under "United
States Taxation" in the Final Supplemented Prospectus;
(e) Richards, Layton & Finger, special Delaware
counsel for JCP&L Capital and the Guarantor, shall have
furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the
effect that:
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(i) JCP&L Capital has been duly formed and is
validly existing in good standing as a limited
partnership under DRULPA;
(ii) Under the Limited Partnership Agreement and
DRULPA, JCP&L Capital has all necessary partnership
power and authority to own its properties and conduct
its business, all as described in the Final
Supplemented Prospectus;
(iii) The general partner and limited partner
interests in JCP&L Capital issued to the General
Partner and the Class A Limited Partner (as defined in
the Limited Partnership Agreement) have been duly and
validly authorized and are validly issued;
(iv) The Preferred Securities issued to the
limited partners of JCP&L Capital who hold the
Preferred Securities (the "Preferred Security Holders")
have been duly and validly authorized and are validly
issued and, subject to the qualifications set forth
herein, are fully paid and nonassessable limited
partner interests in JCP&L Capital, as to which,
assuming that the Preferred Security Holders, as
limited partners of JCP&L Capital, do not participate
in the control of the business of JCP&L Capital, the
Preferred Security Holders, as limited partners of
JCP&L Capital, will have no liability in excess of
their obligations to make payments provided for in the
Limited Partnership Agreement and their share of JCP&L
Capital's assets and undistributed profits (subject to
the obligation of a Preferred Security Holder to repay
any funds wrongfully distributed to it);
(v) There are no provisions in the Limited
Partnership Agreement the inclusion of which, subject
to the terms and conditions therein, or, assuming that
the Preferred Security Holders, as limited partners of
JCP&L Capital, take no action other than actions
permitted by the Limited Partnership Agreement, the
exercise of which, in accordance with the terms and
conditions therein, would cause the Preferred Security
Holders, as limited partners of JCP&L Capital, to be
deemed to be participating in the control of the
business of JCP&L Capital;
(vi) The Limited Partnership Agreement constitutes
a legal, valid and binding agreement of the General
Partner, and is enforceable against the General
Partner, in its capacity as general partner of JCP&L
Capital, in accordance with its terms subject to (a)
bankruptcy, insolvency, moratorium, fraudulent
conveyance, receivership, reorganization, liquidation
and other similar laws relating to or affecting the
-20-<PAGE>
rights and remedies of creditors generally and to
principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law) and
(b) no opinion being expressed on the effect upon the
Limited Partnership Agreement of applicable law
relating to fiduciary duties;
(vii) Under the Limited Partnership Agreement and
DRULPA, JCP&L Capital has all necessary partnership
power and authority to execute and deliver, and to
perform its obligations under, this Agreement;
(viii) Under the Limited Partnership Agreement and
DRULPA, the execution and delivery by JCP&L Capital of
this Agreement, and the performance by JCP&L Capital of
its obligations hereunder, have been duly authorized by
all necessary partnership action on the part of JCP&L
Capital;
(ix) The issuance and sale by JCP&L Capital of the
Preferred Securities pursuant to this Agreement and the
execution, delivery and performance by JCP&L Capital of
this Agreement will not violate (i) any Delaware
statute, rule or regulation, or (ii) the Certificate of
Limited Partnership of JCP&L Capital or the Limited
Partnership Agreement;
(x) No consent, approval, authorization, order,
registration or qualification of or with any Delaware
court or Delaware governmental agency or body is
required solely as a result of the issuance and sale by
JCP&L Capital of the Preferred Securities pursuant to
this Agreement, the execution, delivery and performance
by JCP&L Capital of this Agreement or the consummation
of the transactions contemplated in this Agreement;
(xi) Such counsel has reviewed the statements in
the Final Supplemented Prospectus under the caption
"JCP&L Capital" and, insofar as it contains statements
of Delaware law, such statements are fairly presented;
and
(xii) Assuming that JCP&L Capital is treated as a
partnership for Federal income tax purposes, and
assuming that JCP&L Capital derives no income from or
connected with sources within the State of Delaware,
the Preferred Security Holders (other than those
Preferred Security Holders who reside or are domiciled
in the State of Delaware), will have no liability for
income taxes imposed by the State of Delaware solely as
a result of their participation in JCP&L Capital, and
JCP&L Capital will not be liable for any income tax
imposed by the State of Delaware.
-21-<PAGE>
(f) On the date of this Agreement and at the Time of
Delivery, Coopers & Lybrand L.L.P. shall have furnished to
you a letter, dated the date of delivery thereof, in form
and substance satisfactory to you, to the effect set forth
in Annex l hereto;
(g) Since the respective dates as of which information
is given in the Prospectus there shall not have been any
change in the capital stock or material change in the long-
term debt of the Guarantor (including all of its
subsidiaries taken as a whole) (except for such preferred
stock and long-term debt acquired for sinking fund purposes
or redeemed pursuant to sinking fund or optional redemption
provisions or changes in obligations under capital leases
incurred in the ordinary course of the Guarantor's business
or for any increase in common stock as a result of capital
contributions or any decrease in capital stock as a result
of the declaration by the Guarantor either of regular
quarterly dividends on the Guarantor's preferred stock or
dividends on its common stock) or in the capital accounts or
long-term debt of JCP&L Capital, or any change in or
affecting (x) the condition (financial or otherwise),
stockholder's equity, business affairs, operating
properties, business prospects or results of operations of
the Guarantor and its subsidiaries taken as a whole or (y)
the condition (financial or otherwise), capital accounts,
business affairs, operating properties, business prospects
or results of operations of JCP&L Capital, in any such case
otherwise than as set forth or contemplated in the Final
Supplemented Prospectus, the effect of which is in your
judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering of the
Securities or the delivery of the Preferred Securities on
the terms and in the manner contemplated in the Final
Supplemented Prospectus;
(h) On or after the date hereof (i) no downgrading
shall have occurred in the rating accorded the Guarantor's
debt securities or preferred stock or JCP&L Capital's
Preferred Securities by any "nationally recognized
statistical rating organization", as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the Act
and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible
negative implications, its rating of any of the Guarantor's
debt securities or preferred stock or JCP&L Capital's
Preferred Securities;
(i) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New
York Stock Exchange (ii) a suspension or material limitation
in trading in JCP&L Capital's Preferred Securities or the
Guarantor's preferred stock on the New York Stock Exchange;
-22-<PAGE>
(iii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration
by the United States of a national emergency or war, if the
effect of any such event specified in this clause (iv) in
your judgment makes it impracticable or inadvisable to
proceed with the public offering of the Securities or the
delivery of the Preferred Securities on the terms and in the
manner contemplated in the Final Supplemented Prospectus;
(j) Provided the listing requirement concerning the
minimum number of Preferred Security Holders shall have been
satisfied, the Preferred Securities shall have been duly
listed, subject to notice of issuance, on the New York Stock
Exchange;
(k) JCP&L Capital and the Guarantor shall have
furnished or caused to be furnished to you at the Time of
Delivery, a certificate or certificates of the General
Partner and a certificate or certificates of officers of the
Guarantor, respectively, satisfactory to you as to the
accuracy of the representations and warranties of JCP&L
Capital and the Guarantor herein at and as of such Time of
Delivery, as to the performance by each of JCP&L Capital and
the Guarantor of all of their obligations hereunder to be
performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (g) of this Section
and as to such other matters as you may reasonably request;
and
(l) A Special Event (as defined in the Final
Supplemented Prospectus) shall not have occurred and be
continuing; provided that it shall also be a condition of
the obligations of JCP&L Capital and the Guarantor
hereunder, to issue and sell the Preferred Securities, that
such a Special Event shall not have occurred and be
continuing.
8. (a) JCP&L Capital and the Guarantor will jointly and
severally indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the
Prospectus, the Preliminary Supplemented Prospectus, the
Final Supplemented Prospectus or any other prospectus
relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
-23-<PAGE>
therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending
any such action or claim as such expenses are incurred;
provided, however, that neither JCP&L Capital nor the
Guarantor shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the
Prospectus, the Preliminary Supplemented Prospectus, the
Final Supplemented Prospectus or any other prospectus
relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to JCP&L Capital or the Guarantor by
any Underwriter through you expressly for use therein; and
provided, further, that neither JCP&L Capital nor the
Guarantor shall be liable to any Underwriter under this
subsection (a) with respect to any Preliminary Prospectus or
Preliminary Supplemented Prospectus to the extent that any
such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold the
Securities to a person as to whom it shall be established
that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Final Supplemented
Prospectus (excluding documents incorporated by reference)
or of the Final Supplemented Prospectus as then amended or
supplemented (excluding documents incorporated by reference)
in any case where such delivery is required by the Act if
JCP&L Capital or the Guarantor has previously furnished
copies thereof in sufficient quantity to such Underwriter
and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material
fact contained in the Preliminary Prospectus or Preliminary
Supplemented Prospectus and corrected in the Final
Supplemented Prospectus (excluding documents incorporated by
reference) or in the Prospectus as then amended or
supplemented (excluding documents incorporated by
reference).
(b) Each Underwriter will indemnify and hold harmless
JCP&L Capital and the Guarantor against any losses, claims,
damages or liabilities to which JCP&L Capital or the
Guarantor may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Preliminary
Supplemented Prospectus, the Final Supplemented Prospectus
or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary
-24-<PAGE>
to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Preliminary
Supplemented Prospectus, the Final Supplemented Prospectus
or any other prospectus relating to the Securities, or any
such amendment or supplement in reliance upon and in
conformity with written information furnished to JCP&L
Capital or the Guarantor by such Underwriter through you
expressly for use therein; and will reimburse JCP&L Capital
and the Guarantor for any legal or other expenses reasonably
incurred by JCP&L Capital or the Guarantor in connection
with investigating or defending any such action or claim as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party shall
not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In
case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select
separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt
of notice from the indemnifying party to such indemnified
party of its election to so assume the defense thereof, the
indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the
defense thereof unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of
more than one separate counsel (plus any local counsel
-25-<PAGE>
retained in the indemnified party's reasonable judgment),
approved by you in the case of paragraph (a) of this Section
8 representing the indemnified parties under such paragraph
(a) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) If the indemnification provided for in this
Section 8 is held unavailable, in whole or in part, to hold
harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by
JCP&L Capital and the Guarantor on the one hand and the
Underwriters on the other from the offering of the
Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but
also the relative fault of JCP&L Capital and the Guarantor
on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by JCP&L
Capital and the Guarantor on the one hand and the
Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering
(before deducting expenses) received by JCP&L Capital bear
to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table
on the cover page of the Final Supplemented Prospectus. The
relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by
JCP&L Capital and the Guarantor on the one hand or the
Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission. JCP&L Capital, the
-26-<PAGE>
Guarantor and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
above in this subsection (d). The amount paid or payable by
an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by
which the total price at which the Preferred Securities
underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of JCP&L Capital and the Guarantor
under this Section 8 shall be in addition to any liability
which JCP&L Capital and the Guarantor may otherwise have and
shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each
officer and director of JCP&L Capital and the Guarantor and
to each person, if any, who controls JCP&L Capital and the
Guarantor within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation
to purchase the Preferred Securities which it has agreed to
purchase hereunder, you may in your discretion arrange for
you or another party or other parties to purchase such
Preferred Securities on the terms contained herein. If
within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such
Preferred Securities, then JCP&L Capital and the Guarantor
shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties
satisfactory to you to purchase such Preferred Securities on
such terms. In the event that, within the respective
prescribed periods, you notify JCP&L Capital and the
-27-<PAGE>
Guarantor that you have so arranged for the purchase of such
Preferred Securities, or JCP&L Capital or the Guarantor
notifies you that it has so arranged for the purchase of
such Preferred Securities, you or JCP&L Capital and the
Guarantor shall have the right to postpone the Time of
Delivery for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in
the Registration Statement or the Final Supplemented
Prospectus, or in any other documents or arrangements, and
JCP&L Capital and the Guarantor agree to file promptly any
amendments or supplements to the Registration Statement or
the Prospectus which in your opinion may thereby be made
necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with
like effect as if such person had originally been a party to
this Agreement with respect to such Preferred Securities.
(b) If, after giving effect to any arrangements for
the purchase of the Preferred Securities of a defaulting
Underwriter or Underwriters by you and JCP&L Capital and the
Guarantor as provided in subsection (a) above, the aggregate
number of such Preferred Securities which remains
unpurchased does not exceed one-eleventh of the aggregate
number of all the Preferred Securities, then JCP&L Capital
and the Guarantor shall have the right to require each non-
defaulting Underwriter to purchase the number of Preferred
Securities which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the
number of Preferred Securities which such Underwriter agreed
to purchase hereunder) of the Preferred Securities of such
defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for
the purchase of the Preferred Securities of a defaulting
Underwriter or Underwriters by you and JCP&L Capital and the
Guarantor as provided in subsection (a) above, the aggregate
number of such Preferred Securities which remains
unpurchased exceeds one-eleventh of the aggregate number of
all the Preferred Securities, or if JCP&L Capital and the
Guarantor shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters
to purchase Preferred Securities of a defaulting Underwriter
or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-
defaulting Underwriter, JCP&L Capital or the Guarantor
except for the expenses to be borne by JCP&L Capital, the
Guarantor and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
-28-<PAGE>
10. The respective indemnities, agreements,
representations, warranties and other statements of JCP&L
Capital, the Guarantor and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or JCP&L Capital, the
Guarantor, or any officer or director or controlling person of
JCP&L Capital or the Guarantor, and shall survive delivery of and
payment for the Preferred Securities.
11. If this Agreement shall be terminated pursuant to
Section 9 hereof, JCP&L Capital and the Guarantor shall not then
be under any liability to any Underwriter except as provided in
Section 6 and Section 8 hereof; but, if for any other reason
(including the issuance of any stop order suspending the
effectiveness of the Registration Statement under the Act or
proceedings therefor initiated or threatened by the Commission,
or, if for any reason there shall not be in full force and effect
appropriate orders of the Commission under the 1935 Act and of
the NJBPU authorizing the issuance and sale of the Securities and
to the extent necessary the other transactions contemplated
hereby), Preferred Securities are not delivered by or on behalf
of JCP&L Capital (or the related Guarantee and __% Subordinated
Debentures issuable by the Guarantor are not concurrently issued
by the Guarantor) as provided herein, JCP&L Capital and the
Guarantor will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and
delivery of the Preferred Securities (or the Guarantee and __%
Subordinated Debentures not so issued), but JCP&L Capital and the
Guarantor shall then be under no further liability to any
Underwriter except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by you
jointly or by Merrill Lynch & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Underwriters shall
be delivered or sent by mail, telex or facsimile transmission to
you as the representatives in care of Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, at World
Financial Center, North Tower, New York, N.Y. 10281-1316,
Attention: ______________________; and if to JCP&L Capital or the
Guarantor shall be delivered or sent by mail to the address of
the Guarantor set forth in the Registration Statement, Attention:
Treasurer; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by
-29-<PAGE>
mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied
to JCP&L Capital or the Guarantor by you upon request. Any such
statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, JCP&L Capital, the Guarantor
and, to the extent provided in Sections 8 and 10 hereof, the
officers and directors of the Guarantor and each person who
controls JCP&L Capital and the Guarantor or any Underwriter, and
their respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the
Preferred Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As
used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument.
-30-<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return to us twelve (12) counterparts hereof, and
upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters,
on one hand, and JCP&L Capital and the Guarantor, on the other
hand. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to JCP&L Capital and the Guarantor for
examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
JCP&L CAPITAL, L. P.
By: JCP&L Preferred Capital, Inc.,
its General Partner
By:
Name:
Title:
JERSEY CENTRAL POWER & LIGHTCOMPANY
By:
Name:
Title:
Accepted as of the date hereof:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
Acting on its own behalf and
as representatives of the
several Underwriters referred
to in the foregoing Agreement
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
Name:
-31-<PAGE>
SCHEDULE I
Total Number of
Preferred Securities
Underwriter to be Purchased
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED . . . . . . .
GOLDMAN, SACHS & CO. . . . . . . . . . . . . .
DEAN WITTER REYNOLDS INC. . . . . . . . . . . . . . . . .
A.G. EDWARDS & SONS, INC. . . . . . . . . . . . . . . . .
MORGAN STANLEY & CO. INCORPORATED . . . . . . . . . . . . .
PAINEWEBBER INCORPORATED . . . . . . . . . . . . . . . . .
TOTAL<PAGE>
ANNEX 1
[FORM OF LETTER OF ACCOUNTANTS]
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the
effect that:
(1) They are independent certified public accountants with
respect to the Guarantor and its subsidiaries within the meaning
of the Act and the applicable published rules and regulations
thereunder;
(2) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if
applicable, prospective financial statements and/or pro forma
financial information) audited by them and included or
incorporated by reference in the Prospectus or the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations thereunder;
(3) On the basis of procedures referred to in such letter,
including a reading of the minutes and the latest available
interim financial statements of the Guarantor and inquiries of
officials of the Guarantor responsible for financial and
accounting matters, nothing caused them to believe that:
(A) Any material modifications should be made to the
unaudited financial statements, if any, included or
incorporated by reference in the Prospectus, for them to be
in conformity with generally accepted accounting principles;
(B) the unaudited financial statements, if any,
included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the
applicable accounting requirements of the Act or the
Exchange Act and the published rules and regulations of the
Commission thereunder;
(C) the unaudited pro forma condensed consolidated
financial statements, if any, included or incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting
requirements of the Act or the Exchange Act and the
published rules and regulations of the Commission thereunder
or the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements;
(D) at the date of the latest available internal
balance sheet of the Guarantor and at a subsequent specified
date not more than five days prior to the date of such
letter, there was any change in the common stock, preferred
stock without mandatory redemption, preferred stock with<PAGE>
mandatory redemption or long-term debt (other than from
currency fluctuations and normal repurchases of long-term
debt and preferred stock for sinking fund purposes and
scheduled repayments or changes in obligations under capital
leases incurred in the ordinary course of the Guarantor's
business) of the Guarantor and its subsidiaries consolidated
or any decrease in its common stockholder's equity
(excluding any decrease as a result of the declaration by
the Guarantor of regular quarterly dividends on its
preferred stock and dividends on its common stock) as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in all cases for changes, increases or decreases that
the Prospectus discloses have occurred or may occur or as
may be set forth in such letter; and
(4) In addition to their audit referred to in their reports
included or incorporated by reference in the Registration
Statement and Prospectus and the procedures referred to in (3)
above, they have carried out certain other specified procedures,
not constituting an audit, with respect to certain specified
dollar amounts, percentages and other financial information (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived, directly or by analysis
or computation, from the general accounting records of the
Guarantor and its subsidiaries) that are included or incorporated
by reference in the Prospectus and appear in the Prospectus or
incorporated documents and have found such dollar amounts,
percentages and financial information to be in agreement with the
general accounting records of the Guarantor and its subsidiaries.
For purposes of this letter, all references in this Annex I
to the Prospectus shall be deemed to refer to the Final
Supplemented Prospectus in the form in which it is proposed to be
filed but otherwise as defined in the Underwriting Agreement
(including all documents incorporated by reference therein) as of
the date of the letter delivered on the date of the Underwriting
Agreement and to the Final Supplemented Prospectus as defined in
the Underwriting Agreement (including all documents incorporated
by reference therein), or, if the Prospectus has at such time
been further amended or supplemented, to the Prospectus as so
further amended or supplemented, as of the date of the letter
delivered at the Time of Delivery.
-2-<PAGE>
Exhibit 3-I
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF JCP&L CAPITAL, L.P.
This AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT, dated as of _______, 1995, of JCP&L Capital, L.P., a
Delaware limited partnership (the "Partnership"), is made by and
among JCP&L Preferred Capital, Inc., as General Partner, Terrance
G. Howson, as Class A Limited Partner, and the Persons (as
defined below) who become limited partners of the Partnership in
accordance with the provisions hereof.
WHEREAS, JCP&L Preferred Capital, Inc. and Terrance G.
Howson have heretofore formed a limited partnership pursuant to
the Delaware Act (as defined below), by filing a Certificate of
Limited Partnership (as defined below) with the Secretary of
State of the State of Delaware on February 21, 1995, and entering
into a Limited Partnership Agreement of the Partnership dated as
of February 21, 1995 (the "Limited Partnership Agreement"); and
WHEREAS, the parties hereto desire to continue the
Partnership as a limited partnership under the Delaware Act and
to amend and restate the Limited Partnership Agreement in its
entirety.
NOW, THEREFORE, the parties hereto, intending to be
legally bound hereby, agree to amend and restate the Limited
Partnership Agreement in its entirety as follows:
ARTICLE I - Definitions
For purposes of this Agreement, each of the following
terms shall have the meaning set forth below (such meaning to be
equally applicable to both singular and plural forms of the terms
so defined).
"Action" shall have the meaning set forth in Section
13.01(b).
"Affiliate" shall mean, with respect to the Person to
which it refers, a Person that directly or indirectly through one
or more intermediaries, controls or is controlled by, or is under
common control with, such subject Person.
"Agreement" shall mean this Amended and Restated
Limited Partnership Agreement, as amended, modified, supplemented
or restated from time to time, including, without limitation, by
any Action establishing a series of Preferred Partner Interests.
"Book Entry Interests" shall mean a beneficial interest
in the Certificates, ownership and transfers of which shall be<PAGE>
made through book entries by a Clearing Agency as described in
Section 14.04.
"Business Day" shall mean any day other than a day on
which banking institutions in The City of New York are authorized
or required by law to close.
"Capital Account" shall have the meaning set forth in
Section 4.01. For purposes of determining the Capital Accounts
as set forth in Article IV, partnership items shall be computed
in the same manner as the Partnership computes its income for
Federal income tax purposes, rather than generally accepted
accounting principles, except that (1) a distribution in kind of
Partnership property shall be treated as a taxable disposition of
such property for its fair market value (taking into account
Section 7701(g) of the Code) on the date of distribution, and (2)
adjustments shall be made in accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv), which adjustments shall include any
income which is exempt from United States Federal income tax, all
Partnership losses and all expenses properly chargeable to the
Partnership, whether deductible or non-deductible and whether
described in Section 705(a)(2)(B) of the Code, treated as so
described pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(i), or otherwise.
"Certificate" shall mean a certificate substantially in
the form attached hereto as Exhibit A, evidencing a Preferred
Partner Interest.
"Certificate of Limited Partnership" shall mean the
Certificate of Limited Partnership of the Partnership and any and
all amendments thereto and restatements thereof filed with the
Secretary of State of the State of Delaware.
"Class A Limited Partner" shall mean Terrance G. Howson
in his capacity as a limited partner of the Partnership.
"Clearing Agency" shall mean an organization registered
as a "Clearing Agency" pursuant to Section 17A of the Exchange
Act.
"Clearing Agency Participant" shall mean a broker
dealer, bank, other financial institution or other Person for
whom from time to time a Clearing Agency effects book entry
transfers and pledges of securities deposited with the Clearing
Agency.
"Code" shall mean the United States Internal Revenue
Code of 1986 and (unless the context requires otherwise) the
rules and regulations promulgated thereunder, as amended from
time to time.
"Commission" shall mean the Securities and Exchange
Commission.
2<PAGE>
"Covered Person" shall mean any Partner, any Affiliate
of a Partner or any officers, directors, shareholders, partners,
members, employees, representatives or agents of a Partner or
their respective Affiliates, or any employee or agent of the
Partnership or its Affiliates.
"Definitive Certificate" shall have the meaning set
forth in Section 14.04.
"Delaware Act" shall mean the Delaware Revised Uniform
Limited Partnership Act, 6 Del. C. Section 17-101, et seq., as
amended from time to time or any successor statute thereto.
"Economic Risk of Loss" shall mean the "economic risk
of loss" that any Partner is treated as bearing under Treasury
Regulation Section 1.752-2 with respect to any Partnership
liability.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Fiscal Year" shall have the meaning set forth in
Section 7.01.
"General Partner" shall mean JCP&L Preferred, in its
capacity as general partner of the Partnership, together with any
successor thereto that becomes a general partner of the
Partnership pursuant to the terms of this Agreement.
"Guarantee" shall mean the Payment and Guarantee
Agreement to be dated as of ______, 1995 of JCP&L, as amended or
supplemented from time to time, and any additional Payment and
Guarantee Agreements entered into by JCP&L for the benefit of the
Preferred Partners.
"Indenture" shall mean the Indenture to be dated as of
______, 1995, as amended or supplemented from time to time,
between JCP&L and United States Trust Company of New York as
Trustee and any additional Indentures entered into by JCP&L
pursuant to which Subordinated Debentures of JCP&L are to be
issued.
"Indemnified Person" shall mean the General Partner,
any Affiliate of the General Partner or any officers, directors,
shareholders, partners, members, employees, representatives or
agents of the General Partner, or any employee or agent of the
Partnership or its Affiliates.
"Interest" shall mean the entire partnership interest
of a Partner in the Partnership at any particular time, including
the right of such Partner to any and all benefits to which a
Partner may be entitled as provided in this Agreement, together
with the obligations of such Partner to comply with all of the
terms and provisions of this Agreement.
3<PAGE>
"Investment Company Act Event" shall mean the
occurrence of a change in law or regulation or a change in an
official interpretation of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a
"Change in 40 Act Law") to the effect that the Partnership is or
will be considered an "investment company" required to be
registered under the 1940 Act, which Change in 40 Act Law becomes
effective on or after the date of issuance of any series of
Preferred Partner Interests; provided that no Investment Company
Act Event shall be deemed to have occurred if the Partnership
shall have received an opinion of counsel (which may be regular
counsel to JCP&L or an Affiliate, but not an employee thereof),
to the effect that JCP&L and/or the Partnership have taken
reasonable measures, in their discretion, to avoid such Change in
40 Act Law so that in the opinion of such counsel,
notwithstanding such Change in 40 Act Law, the Partnership is not
required to be registered as an "investment company" within the
meaning of the 1940 Act.
"Limited Partners" shall mean the Class A Limited
Partner, if any, and the Preferred Partners.
"Liquidating Distributions" shall mean distributions of
Partnership property made upon a liquidation and dissolution of
the Partnership as provided in Article XII.
"Liquidation Distribution" shall mean the liquidation
preference of each series of Preferred Partner Interests as set
forth in the Action for such series.
"Liquidating Trustee" shall have the meaning set forth
in Section 12.01.
"JCP&L" shall mean Jersey Central Power & Light Company
and its successors.
"JCP&L Preferred" shall mean JCP&L Preferred Capital,
Inc. and its successors.
"1940 Act" shall mean the Investment Company Act of
1940, as amended.
"Partners" shall mean the General Partner and the
Limited Partners.
"Partnership" shall mean JCP&L Capital, L.P., a limited
partnership formed under the laws of the State of Delaware.
"Person" shall mean any individual, general
partnership, limited partnership, corporation, limited liability
company, joint venture, trust, business trust, cooperative or
association and the heirs, executors, administrators, legal
representatives, successors and assigns of such Person where the
context so admits.
4<PAGE>
"Preferred Partner" shall mean a limited partner of the
Partnership who holds one or more Preferred Partner Interests.
"Preferred Partner Distribution" shall have the meaning
set forth in Section 13.02(a)(i).
"Preferred Partner Interest Owner" shall mean, with
respect to a Book Entry Interest, a Person who is the beneficial
owner of such Book Entry Interest, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Partner Interests" shall mean the Interests
described in Article XIII.
"Purchase Price" shall mean the amount paid for each
Preferred Partner Interest.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Special Event" shall mean a Tax Event or an Investment
Company Act Event.
"Special Representative" shall have the meaning set
forth in Section 13.02(d).
"Subordinated Debentures" shall mean the Subordinated
Debentures of JCP&L issued under the Indenture.
"Tax Event" shall mean, with respect to any series of
Preferred Partner interests, that the Partnership shall have
obtained an opinion of tax counsel (which may be regular tax
counsel to JCP&L or an Affiliate, but not an employee thereof) to
the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting
taxation, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying any
applicable laws or regulations, which amendment or change is
effective, or which pronouncement or decision has been issued or
rendered, on or after the date of issuance of such series of
Preferred Partner Interests, there is more than an insubstantial
risk that (i) the Partnership will be subject to Federal income
tax with respect to interest received on the related Subordinated
Debentures or the Partnership will otherwise not be taxed as a
partnership or (ii) interest payable by JCP&L to the Partnership
on the related Subordinated Debentures will not be deductible for
Federal income tax purposes, or (iii) the Partnership is subject
to more than a de minimis amount of other taxes, duties or other
governmental charges.
5<PAGE>
"Tax Matters Partner" shall have the meaning set forth
in Section 7.05.
"Transfer" shall mean any transfer, sale, assignment,
gift, pledge, hypothecation or other disposition or encumbrance
of an interest in the Partnership.
"Treasury Regulations" shall mean the final and
temporary income tax regulations, as well as the procedural and
administrative regulations, promulgated by the United States
Department of the Treasury under the Code, as amended from time
to time.
"Trustee" shall mean United States Trust Company of New
York or any other trustee under the Indenture.
"Underwriting Agreement" shall mean the Underwriting
Agreement entered into on _______, 1995 among the Partnership,
JCP&L and the underwriters named therein with regard to the sale
of Preferred Partner Interests and related securities, and any
additional Underwriting Agreements entered into by the
Partnership and JCP&L with regard to the sale of additional
Preferred Partner Interests and related securities.
ARTICLE II - Continuation; Name; Purposes; Term; Definitions
Section 2.01. Formation. The parties hereto hereby
join together to continue the heretofore formed limited
partnership which shall exist under and be governed by the
Delaware Act. The Partnership shall make any and all filings or
disclosures required under the laws of Delaware or otherwise with
respect to its continuation as a limited partnership, its use of
a fictitious name or otherwise as may be required. The
Partnership shall be a limited partnership among the Partners
solely for the purposes specified in Section 2.03 hereof, and
this Agreement shall not be deemed to create a partnership among
the Partners with respect to any activities whatsoever other than
the activities within the business purposes of the Partnership as
specified in Section 2.03. No Partner shall have any power to
bind any other Partner with respect to any matter except as
specifically provided in this Agreement. No Partner shall be
responsible or liable for any indebtedness or obligation of any
other Partner incurred either before or after the execution of
this Agreement. The assets of the Partnership shall be owned by
the Partnership as an entity, and no Partner individually shall
own any direct interest in the assets of the Partnership.
Section 2.02. Name and Place of Business. The name of
the Partnership is "JCP&L Capital, L.P." The Partnership may
operate under the name of "JCP&L Capital" and such name shall be
used for no purposes other than those set forth herein. The
principal place of business of the Partnership shall be Mellon
Bank Center, Second Floor, 919 N. Market Street, Wilmington,
6<PAGE>
Delaware, or at such other place as may be selected by the
General Partner in its sole and absolute discretion.
Section 2.03. Purposes. The sole purposes of the
Partnership are to issue and sell Interests in the Partnership,
including, without limitation, Preferred Partner Interests, and
to use the proceeds of all sales of Interests in the Partnership
to purchase Subordinated Debentures issued by JCP&L pursuant to
the Indenture and to effect other similar arrangements permitted
by this Agreement, and to engage in any and all activities
necessary, convenient, advisable or incidental thereto. The
Partnership shall not incur debt for borrowed money.
Section 2.04. Term. The Partnership was formed on
February 21, 1995 and shall continue without dissolution through
June 30, 2060, unless sooner dissolved as provided in Article XI
hereof.
Section 2.05. Qualification in Other Jurisdictions.
The General Partner shall cause the Partnership to be qualified
or registered under assumed or fictitious name statutes or
similar laws in any jurisdiction in which the Partnership
transacts business. The General Partner shall execute, deliver
and file any certificates (and any amendments and/or restatements
thereof) necessary for the Partnership to qualify to do business
in a jurisdiction in which the Partnership may wish to conduct
business.
Section 2.06. Admission of Preferred Partners.
Without execution of this Agreement, upon receipt by a Person of
a Certificate and payment for the Preferred Partner Interest
being acquired by such Person, which shall be deemed to
constitute a request by such Person that the books and records of
the Partnership reflect its admission as a Preferred Partner,
such Person shall be admitted to the Partnership as a Preferred
Partner and shall become bound by this Agreement.
Section 2.07. Records. The name and mailing address
of each Partner and the amount contributed to the capital of the
Partnership shall be listed on the books and records of the
Partnership. The Partnership shall keep such other records as
are required by Section 17-305 of the Delaware Act. The General
Partner shall update the books and records from time to time as
necessary to accurately reflect the information therein.
ARTICLE III - Capital Contributions
Section 3.01. Capital Contributions. As of the date
of this Agreement, the General Partner has contributed the amount
of $99 to the capital of the Partnership and shall make any
further contributions required to satisfy its obligations under
Section 3.04. With respect to each Person who is issued a
Preferred Partner Interest by the Partnership in connection with
the initial issuance by the Partnership of such Preferred Partner
7<PAGE>
Interest, there shall be contributed to the capital of the
Partnership an amount equal to the Purchase Price for such
Preferred Partner Interest (such amount being such Person's
capital contribution to the Partnership).
Section 3.02. Additional Capital Contributions. No
Partner shall be required to make any additional contributions or
advances to the Partnership except as provided in Section 3.04.
or by law.
Section 3.03. No Interest or Withdrawals. No interest
shall accrue on any capital contribution made by or on behalf of
a Partner, and no Partner shall have the right to withdraw or to
be repaid any portions of its capital contributions so made,
except as specifically provided in this Agreement.
Section 3.04. Minimum Capital Account Balance of
General Partner. At all times throughout the term of the
Partnership, the General Partner shall maintain a Capital Account
balance equal to at least 3% of the total positive Capital
Account balances for the Partnership. If necessary, the General
Partner shall immediately make additional contributions to
satisfy this requirement, which contributions shall constitute
additional capital contributions made by the General Partner.
Section 3.05. Partnership Interests. Unless otherwise
provided herein, the percentage interests of the Partners shall
be determined in proportion to the capital contributions of the
Partners.
Section 3.06. Interests. Each Preferred Partner's
respective Preferred Partner Interests shall be set forth on the
books and records of the Partnership. Each Partner hereby agrees
that its Interests shall for all purposes be personal property.
No Partner has an interest in specific Partnership property. The
Partnership shall not issue any additional interest in the
Partnership after the date hereof other than General Partner
Interests or Preferred Partner Interests.
ARTICLE IV - Capital Accounts
Section 4.01. Capital Accounts. There shall be
established on the books of the Partnership a capital account
("Capital Account") for each Partner that shall consist of the
initial capital contribution to the Partnership made by such
Partner (or such Partner's predecessor in interest), increased
by: (a) any additional capital contributions made by such
Partner (or predecessor thereof), (b) the agreed value of any
property subsequently contributed to the capital of the
Partnership by such Partner (or predecessor thereof); and (c)
items of income and gain allocated to such Partner (or
predecessor thereof). A Partner's Capital Account shall be
decreased by: (a) items of loss and deduction allocated to such
Partner (or predecessor thereof); and (b) any distributions made
8<PAGE>
to such Partner (or predecessor thereof). In addition to and
notwithstanding the foregoing, Capital Accounts shall be
maintained at all times in accordance with the Capital Account
maintenance rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv).
Section 4.02. Compliance With Treasury Regulations.
The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended to comply with Section 704(b) of the Code and Treasury
Regulation Section 1.704-1(b) and shall be interpreted and
applied in a manner consistent with such regulations. In the
event that the General Partner shall determine that it is prudent
to modify the manner in which the Capital Accounts, or any debits
or credits thereto, are determined in order to comply with such
regulations, the General Partner may make such modification.
ARTICLE V - Allocations
Section 5.01. Profits and Losses. Each fiscal period,
items of income, gain, loss, deduction or credit of the
Partnership shall be allocated (i) first, items of income of the
Partnership to the Preferred Partners, pro rata in proportion to
the number of Preferred Partner Interests held by each Preferred
Partner and at the distribution rate specified in the Action for
each series of Preferred Partner Interests, in an amount equal to
the excess of (a) the Preferred Partner Distributions accrued on
such Preferred Partner Interests since their date of issuance
through and including the close of the current fiscal period
(whether or not paid) over (b) the items of income of the
Partnership allocated to the Preferred Partners pursuant to this
Section 5.01(i) in all prior fiscal periods; and (ii) thereafter,
all remaining items of income, gain, loss, deduction or credit to
the General Partner; provided however, that the percentage of
items of income, gain, loss, deduction or credit of the
Partnership allocated to the General Partner for any fiscal
period shall at least equal three percent.
Section 5.02. Allocation Rules. For purposes of
determining the profits, losses or any other items allocable to
any period, profits, losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by
the General Partner in its sole and absolute discretion using any
method that is permissible under Section 706 of the Code and the
Treasury Regulations thereunder. The Partners are aware of the
income tax consequences of the allocations made by this Article V
and hereby agree to be bound by the provisions of this Article V
in reporting their shares of Partnership income and loss for
income tax purposes.
Section 5.03. Adjustments to Reflect Changes in
Interests. Notwithstanding the foregoing, with respect to any
Fiscal Year during which any Partner's percentage interest in the
Partnership changes, whether by reason of the admission of a
9<PAGE>
Partner, the withdrawal of a Partner, a non-pro rata contribution
of capital to the Partnership or any other event described in
Section 706(d)(1) of the Code and the Treasury Regulations issued
thereunder, allocations of the items of income, gain, loss,
deduction or credit of the Partnership shall be adjusted
appropriately to take into account the varying interests of the
Partners during such Fiscal Year. The General Partner shall
consult with the Partnership's accountants and other advisors and
shall select the method of making such adjustments, which method
shall be used consistently thereafter.
Section 5.04. Tax Allocations. For purposes of this
Article V and Federal, state and local income tax purposes,
Partnership income, gain, loss, deduction or credit (or any item
thereof) for each Fiscal Year shall be determined in accordance
with Federal tax accounting principles rather than generally
accepted accounting principles and shall be allocated to and
among the Partners in order to reflect the allocations made
pursuant to the provisions of this Article V for such Fiscal Year
(other than allocations of items which are not deductible or are
excluded from taxable income), taking into account any variation
between the adjusted tax basis and book value of Partnership
property in accordance with the principles of Section 704(c) of
the Code.
Section 5.05. Qualified Income Offset. Notwithstanding
any other provision hereof, if any Partner unexpectedly receives
an adjustment, allocation or distribution described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6) which
creates or increases a deficit in the Capital Account of such
Partner (and, for this purpose, the existence of a deficit shall
be determined by increasing the Partner's Capital Account by any
amounts that the Partner is obligated to restore to the
Partnership pursuant to Treasury Regulation Section 1.704-
1(b)(2)(ii)(C) and reducing the Partner's Capital Account by the
items described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5), and (6)), the next available gross
income of the Partnership shall be allocated to the Partners
having such deficit balances, in proportion to the deficit
balances, until such deficit balances are eliminated as quickly
as possible. The provisions of this Section 5.05 are intended to
constitute a "qualified income offset" within the meaning of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted and implemented as therein provided.
ARTICLE VI - Distributions
Section 6.01. Distributions. Preferred Partners shall
receive periodic distributions, if any, in accordance with the
applicable terms of the applicable Action creating the series of
Preferred Partner Interests held by them, when, as and if
declared by the General Partner out of funds held by the
Partnership to the extent that the Partnership has cash on hand
sufficient to permit such payments and funds legally available
10<PAGE>
therefor. Subject to the rights of the holders of the Preferred
Partner Interests, the General Partner shall receive such
distributions, if any, as may be declared from time to time by
the General Partner.
Section 6.02. Certain Distributions Prohibited.
Notwithstanding anything in this Agreement to the contrary, all
Partnership distributions shall be subject to the following
limitations:
(a) No distribution shall be made to any Partner if,
and to the extent that, such distribution would not be permitted
under Section 17-607 of the Delaware Act or other applicable law.
(b) No distribution shall be made to any Partner to
the extent that such distribution, if made, would create or
increase a deficit balance in the Capital Account of such
Partner.
(c) Other than Liquidating Distributions, no
distribution of Partnership property shall be made in kind.
Notwithstanding anything in the Delaware Act or this Agreement to
the contrary, in the event of a Liquidating Distribution, a
Partner may be compelled in accordance with Section 12.01 to
accept a distribution of Subordinated Debentures, cash or any
other asset in kind from the Partnership even if the percentage
of the asset distributed to it exceeds a percentage of that asset
which is equal to the percentage in which such Partner shares in
distributions from the Partnership.
Section 6.03. Withholding. The Partnership shall
comply with all withholding requirements under Federal, state and
local law. To the extent that the Partnership is required to
withhold and pay over any amounts to any authority with respect
to distributions or allocations to or for the account of any
Partner, the amount withheld shall be deemed to be a distribution
in the amount of the withholding to or for the account of the
Partner. In the event of any claimed overwithholding, Partners
shall be limited to an action against the applicable
jurisdiction. If the amount withheld was not withheld from
actual distributions, the Partnership may reduce subsequent
distributions by the amount of such withholding.
ARTICLE VII - Accounting Matters; Banking
Section 7.01. Fiscal Year. The fiscal year ("Fiscal
Year") of the Partnership shall be the calendar year, or such
other year as is required by the Code.
Section 7.02. Certain Accounting Matters. (a) At all
times during the existence of the Partnership, the General
Partner shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in
reasonable detail each transaction of the Partnership. The books
11<PAGE>
of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting
principles, consistently applied. The Partnership shall use the
accrual method of accounting for United States Federal income tax
purposes. The books of account and the records of the
Partnership shall be examined by and reported upon as of the end
of each Fiscal Year by a firm of independent certified public
accountants selected by the General Partner.
(b) The General Partner shall cause to be prepared and
delivered to each of the Partners, within 90 days after the end
of each Fiscal Year of the Partnership, annual financial
statements of the Partnership, including a balance sheet of the
Partnership as of the end of such Fiscal Year and the related
statements of income or loss and a statement indicating such
Partner's share of each item of Partnership income, gain, loss,
deduction or credit for such Fiscal Year for income tax purposes.
(c) Notwithstanding anything in this Agreement to the
contrary, the General Partner may, to the maximum extent
permitted by applicable law, keep confidential from the Partners
for such period of time as the General Partner deems reasonable
any information which the General Partner reasonably believes to
be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is
not in the best interest of the Partnership or could damage the
Partnership or its business or which the Partnership is required
by law or by an agreement with a third party to keep
confidential.
(d) The General Partner may make, or revoke, in its
sole and absolute discretion, any elections for the Partnership
that are permitted under tax or other applicable laws, including
elections under Section 704(c) of the Code, provided that the
General Partner shall not make any elections pursuant to Section
754 of the Code.
Section 7.03. Banking. The Partnership shall maintain
one or more bank accounts in the name and for the sole benefit of
the Partnership. The signatories for such accounts shall be
designated by the General Partner. Reserve cash, cash held
pending the expenditure of funds for the business of the
Partnership or cash held pending a distribution to one or more of
the Partners may be invested in any manner at the sole and
absolute discretion of the General Partner.
Section 7.04. Right to Rely on Authority of General
Partner. No Person that is not a Partner, in dealing with the
General Partner, shall be required to determine such General
Partner's authority to make any commitment or engage in any
undertaking on behalf of the Partnership, or to determine any
fact or circumstance bearing upon the existence of the authority
of the General Partner.
12<PAGE>
Section 7.05. Tax Matters Partner. The "tax matters
partner," as defined in Section 6231 of the Code, of the
Partnership shall be the General Partner (the "Tax Matters
Partner"). The Tax Matters Partner shall receive no compensation
from the Partnership for its services in that capacity. The Tax
Matters Partner is authorized to employ such accountants,
attorneys and agents as it, in its sole and absolute discretion,
deems necessary or appropriate. Any Person who serves as Tax
Matters Partner shall not be liable to the Partnership or to any
Partner for any action it takes or fails to take as Tax Matters
Partner with respect to any administrative or judicial proceeding
involving "partnership items" (as defined in Section 6231 of the
Code) of the Partnership.
Section 7.06. Taxpayer Information. Any Person who
holds a Preferred Partner Interest as a nominee for another
Person is required to furnish to the Partnership (a) the name,
address and taxpayer identification number of the beneficial
owner and the nominee; (b) information as to whether the
beneficial owner is (1) a Person that is not subject to United
States taxation on its income regardless of source, (2) a foreign
government, an international organization or any wholly owned
agency or instrumentality of either of the foregoing, or (3) a
tax-exempt entity; (c) the amount and description of Preferred
Partner Interest held, acquired or transferred for the beneficial
owner; and (d) certain other information, including the dates of
acquisitions and transfers, means of acquisitions and transfers
and acquisition cost for purchases, as well as the amount of net
proceeds from sales.
ARTICLE VIII - Management
Section 8.01. Management. (a) The General Partner
shall have full and exclusive authority with respect to all
matters concerning the conduct of the business and affairs of the
Partnership, including (without limitation) the power, without
the consent of the Limited Partners, to make all decisions it
deems necessary, advisable, convenient or appropriate to
accomplish the purposes of the Partnership. The acts of the
General Partner acting alone shall serve to bind the Partnership
and shall constitute the acts of the Partners.
(b) The Limited Partners, in their capacity as such,
shall not take part in the management, operation or control of
the business of the Partnership or transact any business in the
name of the Partnership. In addition, the Limited Partners, in
their capacity as such, shall not be agents of the Partnership
and shall not have the power to sign or bind the Partnership to
any agreement or document. The Limited Partners shall have the
right to vote only with respect to those matters specifically
provided for in this Agreement. Notwithstanding anything herein
to the contrary, the Preferred Partners may exercise all rights
provided to them, if any, under the Indenture and the Guarantee.
13<PAGE>
(c) The General Partner is authorized and directed to
use its best efforts to conduct the affairs of, and to operate,
the Partnership in such a way that the Partnership would not be
deemed to be an "investment company" required to be registered
under the 1940 Act or taxed as a corporation for Federal income
tax purposes and so that the Subordinated Debentures will be
treated as indebtedness of JCP&L for Federal income tax purposes.
In this connection, the General Partner is authorized, in its
sole and absolute discretion, to take any action not inconsistent
with applicable law, the Certificate of Limited Partnership or
this Agreement that does not materially adversely affect the
interests of holders of Preferred Partner Interests that the
General Partner determines in its sole and absolute discretion to
be necessary, advisable or desirable for such purposes.
Section 8.02. Fiduciary Duty. (a) To the extent that,
at law or in equity, an Indemnified Person has duties (including
fiduciary duties) and liabilities relating thereto to the
Partnership or to any other Covered Person, an Indemnified Person
acting under this Agreement shall not be liable to the
Partnership or to any other Covered Person for its good faith
reliance on the provisions of this Agreement or the advice of
counsel selected by the Indemnified Person in good faith. The
provisions of this Agreement, to the extent that they restrict
the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein,
(i) whenever a conflict of interest exists or arises between
Covered Persons, or (ii) whenever this Agreement or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or provides
terms that are, fair and reasonable to the Partnership or any
Partner, the Indemnified Person shall resolve such conflict of
interest, taking such action or providing such terms, considering
in each case the relative interest of each party (including its
own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, the
advice of counsel selected by the Indemnified Person in good
faith, and any applicable generally accepted accounting practices
or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided
by the Indemnified Person shall not constitute a breach of this
Agreement or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity
or otherwise.
(c) Whenever in this Agreement an Indemnified Person
is permitted or required to make a decision (i) in its
"discretion" or under a grant of similar authority or latitude,
the Indemnified Person shall be entitled to consider only such
interests and factors as it desires, including its own interests,
14<PAGE>
and shall have no duty or obligation to give any consideration to
any interest of or factors affecting the Partnership or any other
Person, or (ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express
standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
Section 8.03. Specific Obligations of the General
Partner. The General Partner hereby undertakes:
(a) to devote to the affairs of the Partnership so
much of its time as shall be necessary to carry on properly the
Partnership's business and its responsibilities hereunder;
(b) subject to the terms of this Agreement, to cause
the Partnership to do or refrain from doing such acts as shall be
required by Delaware law in order to preserve the valid existence
of the Partnership as a Delaware limited partnership and to
preserve the limited liability of the Limited Partners; and,
(c) the General Partner shall pay directly (without
any obligation to first exhaust the assets of the Partnership)
all of the costs and expenses of the Partnership (including,
without limitation, costs and expenses relating to the
organization of, and offering of Preferred Partner Interests in,
the Partnership and costs and expenses relating to the operation
of the Partnership, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping
services and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and
telephone and costs and expenses incurred in connection with the
acquisition, financing, and disposition of Partnership assets).
Section 8.04. Powers of the General Partner. The
General Partner shall have the right, power and authority, in the
management of the business and affairs of the Partnership, to do
or cause to be done any and all acts deemed by the General
Partner to be necessary or appropriate to effectuate the
business, purposes and objectives of the Partnership. Without
limiting the generality of the foregoing, the General Partner
shall have the power and authority without any further act,
approval or vote of any Partner to:
(a) cause the Partnership to issue Interests,
including Preferred Partner Interests, and determine classes and
series thereof, in accordance with this Agreement;
(b) act as, or appoint another Person to act as,
registrar and transfer agent for the Preferred Partner Interests;
(c) establish a record date with respect to all
actions to be taken hereunder that require a record date to be
established, including with respect to allocations, distributions
and voting rights and declare distributions and make all other
15<PAGE>
required payments on General Partner, Class A Limited Partner and
Preferred Partner Interests as the Partnership's paying agent;
(d) enter into and perform one or more
Underwriting Agreements and use the proceeds from the issuance of
the Interests to purchase the Subordinated Debentures, in each
case on behalf of the Partnership;
(e) bring and defend on behalf of the Partnership
actions and proceedings at law or in equity before any court or
governmental, administrative or other regulatory agency, body or
commission or otherwise;
(f) employ or otherwise engage employees and
agents (who may be designated as officers with titles) and
managers, contractors, advisors and consultants and pay
reasonable compensation for such services;
(g) redeem each series of Preferred Partner
Interests (which shall constitute a return of capital and not a
distribution of income) in accordance with its terms and/or to
the extent that the related series of Subordinated Debentures is
redeemed or reaches maturity; and,
(h) execute all documents or instruments, perform
all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary, convenient, advisable or
incidental to the foregoing.
The expression of any power or authority of the General
Partner in this Agreement shall not in any way limit or exclude
any other power or authority which is not specifically or
expressly set forth in, or precluded by, this Agreement.
Section 8.05. Independent Affairs. Any Partner or
Affiliate thereof may engage in or possess an interest in any
other business venture of whatever nature and description,
independently or with others, wherever located and whether or not
comparable to or in competition with the Partnership or the
General Partner, or any Affiliate thereof, and neither the
Partnership nor any of the Partners shall, by virtue of this
Agreement, have any rights with respect to, or interests in, such
independent ventures or the income, profits or losses derived
therefrom. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to
the Partnership, could be taken by the Partnership, and any
Partner or Affiliate thereof shall have the right to take for its
own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment opportunity.
Section 8.06. Meetings of the Partners. Meetings of
the Partners of any class or series or of all classes or series
of the Partnership's Interests may be called at any time by the
Partners holding 10% in liquidation preference of such class or
16<PAGE>
series of Interests, or of all classes or series of Interests, as
the case may be, or as provided in any Action establishing a
series of Preferred Partner Interests. Except to the extent
otherwise provided in any such Action, the following provisions
shall apply to meetings of Partners.
(a) Notice of any meeting shall be given to all
Partners not less than ten (10) business days nor more than sixty
(60) days prior to the date of such meeting. Partners may vote
in person or by proxy at such meeting. Whenever a vote, consent
or approval of Partners is permitted or required under this
Agreement, such vote, consent or approval may be given at a
meeting of Partners or by written consent.
(b) Each Partner may authorize any Person to act
for it by proxy on all matters in which a Partner is entitled to
participate, including waiving notice of any meeting, or voting
or participating at a meeting. Every proxy must be signed by the
Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the Partner executing it.
(c) Each meeting of Partners shall be conducted
by the General Partner or by such other Person that the General
Partner may designate.
(d) Subject to the provisions of this Section
8.06, the General Partner, in its sole and absolute discretion,
shall establish all other provisions relating to meetings of
Partners, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Partners,
waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the
exercise of any such right to vote; provided, however, that
unless the General Partner has established a lower percentage, a
majority of the Partners entitled to vote thereat shall
constitute a quorum at all meetings of the Partners.
Section 8.07. Net Worth of General Partner. By
execution of this Agreement, the General Partner represents and
covenants that (a) as of the date hereof and at all times during
the existence of the Partnership it will maintain a fair market
value net worth (determined in accordance with generally accepted
accounting principles) of at least ten percent (10%) of the total
contributions to the Partnership less any redemptions, throughout
the life of the Partnership, in accordance with Rev. Proc. 89-12,
1989-1 C.B. 798, and Rev. Proc. 92-88, 1992-2 C.B. 496, or such
other amount as may be required from time to time pursuant to any
amendment, modification or successor to Rev. Proc. 89-12 and Rev.
Proc. 92-88 (such net worth being computed excluding any interest
in, or receivable due from, the Partnership and including any
income tax liabilities that would become due by the General
Partner upon disposition by the General Partner of all assets
17<PAGE>
included in determining such net worth), and (b) it will not make
any voluntary dispositions of assets which would reduce the net
worth below the amount described in (a).
Section 8.08. Restrictions on General Partner. So
long as any series of Subordinated Debentures are held by the
Partnership, the General Partner shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or executing any trust or power
conferred on the Trustee with respect to such series, (ii) waive
any past default which is waivable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the
principal of all of a series of Subordinated Debentures shall be
due and payable or (iv) consent to any amendment, modification or
termination of the Indenture, where such consent shall be
required, without, in each case, obtaining the prior approval of
the holders of not less than 66 2/3% of the aggregate stated
liquidation preference of all series of Preferred Partner
Interests affected thereby, acting as a single class (or the
Special Representative acting on their behalf); provided,
however, that where a consent under the Indenture would require
the consent of each holder affected thereby, no such consent
shall be given by the General Partner without the prior consent
of each holder of all series of Preferred Partner Interests
affected thereby. The General Partner shall not revoke any
action previously authorized or approved by a vote of any series
of Preferred Partner Interests. The General Partner shall notify
all holders of such Preferred Partner Interests of any notice of
default received from the Trustee with respect to such series of
Subordinated Debentures. In addition, the General Partner will
not permit or cause the Partnership to file a voluntary petition
in bankruptcy without the approval of the holders of not less
than 66 2/3% of the aggregate stated liquidation preference of
the outstanding Preferred Partner Interests.
ARTICLE IX - Liability and Indemnification
Section 9.01. Partnership Expenses and Liabilities.
(a) Except as provided in the Delaware Act, the General Partner
shall have the liabilities of a partner in a partnership without
limited partners to Persons other than the Partnership and the
other Partners. Except as provided in the Delaware Act or this
Agreement, the General Partner shall have the liabilities of a
partner in a partnership without limited partners to the
Partnership and to the other Partners.
(b) Except as otherwise expressly required by
law, a Limited Partner, in its capacity as such, shall have no
liability in excess of (i) the amount of its capital
contributions to the Partnership, (ii) its share of any assets
and undistributed profits of the Partnership, and (iii) the
amount of any distributions wrongfully distributed to it.
18<PAGE>
Section 9.02. No Liability. Except as otherwise
expressly provided by the Delaware Act or in Section 9.01(a), no
Covered Person shall be liable to the Partnership or to any other
Partner for any act or omission performed or omitted pursuant to
the authority granted to it hereunder or by law, or from a loss
resulting from any mistake or error in judgment on its part or
from the negligence, dishonesty, fraud or bad faith of any
employee, independent contractor, broker or other agent of the
Partnership, provided that such act or omission, such mistake or
error in judgment or the selection of such employee, independent
contractor, broker or other agent, as the case may be, did not
result from the willful misconduct, gross negligence or fraud of
such Covered Person. Any Covered Person shall be fully protected
in relying in good faith upon the records of the Partnership and
upon such information, opinions, reports or statements presented
to the Partnership by any Person as to matters the Covered Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Partnership, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
distributions to Partners might properly be paid.
Section 9.03. Indemnification. To the fullest extent
permitted by applicable law, except as set forth in Section
8.03(c), an Indemnified Person shall be entitled to
indemnification from the Partnership for any loss, damage or
claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good
faith on behalf of the Partnership and in a manner reasonably
believed to be within the scope of authority conferred on such
Indemnified Person by this Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by
reason of willful misconduct, gross negligence or fraud with
respect to such acts or omissions; provided, however, that any
indemnity under this Section 9.03 shall be provided out of and to
the extent of Partnership assets only, and except as otherwise
expressly provided in Section 9.01(a) or by the Delaware Act, no
Covered Person shall have any personal liability on account
thereof. To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to the
final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Partnership of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled
to be indemnified as authorized in this Section 9.03.
19<PAGE>
ARTICLE X - Withdrawal; Transfer Restrictions
Section 10.01. Transfer by General Partner; Admission
of Substituted General Partner. The General Partner may not
Transfer its Interest (in whole or in part) to any Person without
the consent of all other Partners, provided that the General
Partner may, without the consent of any Partner, Transfer its
Interest to JCP&L or any direct or indirect wholly owned
subsidiary of JCP&L. Notwithstanding anything else herein, the
General Partner may merge with or into another Person, may permit
another Person to merge with or into the General Partner and may
Transfer all or substantially all of its assets to another Person
if the General Partner is the survivor of such merger or the
Person into which the General Partner is merged or to which the
General Partner's assets are transferred is a Person organized
under the laws of the United States or any state thereof or the
District of Columbia. The General Partner shall have the right
to admit the assignee or transferee of its Interest which is
permitted hereunder as a substituted or additional general
partner of the Partnership, with or without the consent of the
Limited Partners. Any such assignee or transferee of all or a
part of the Interest of a General Partner shall be deemed
admitted to the Partnership as a general partner of the
Partnership immediately prior to the effective date of such
Transfer, and such additional or successor general partner of the
Partnership is hereby authorized and shall continue the business
of the Partnership without dissolution.
Section 10.02. Withdrawal of Limited Partners. A
Preferred Partner may not withdraw from the Partnership prior to
the dissolution and winding up of the Partnership except upon the
assignment of its Preferred Partner Interests (including any
redemption, repurchase, exchange or other acquisition by the
Partnership), as the case may be, in accordance with the
provisions of this Agreement. Any Person who has been assigned
one or more Interests shall provide the Partnership with a
completed Form W-8 or such other documents or information as are
requested by the Partnership for tax reporting purposes. A
withdrawing Preferred Partner shall not be entitled to receive
any distribution and shall not otherwise be entitled to receive
the fair value of its Preferred Partner Interest except as
otherwise expressly provided in this Agreement.
Section 10.03. Withdrawal of Class A Limited Partner.
Upon the admission of at least one Preferred Partner as a Limited
Partner of the Partnership, the Class A Limited Partner shall be
deemed to have withdrawn from the Partnership as a limited
partner of the Partnership, and upon such withdrawal, the Class A
Limited Partner shall have its capital contribution returned to
it without any interest or deduction and shall have no further
interest in the Partnership.
20<PAGE>
ARTICLE XI - Dissolution of the Partnership
Section 11.01. No Dissolution. The Partnership shall
not be dissolved by the admission of additional or successor
Partners in accordance with the terms of this Agreement. The
death, withdrawal, incompetency, bankruptcy, dissolution or other
cessation to exist as a legal entity of a Limited Partner, or the
occurrence of any other event that terminates the Interest of a
Limited Partner in the Partnership, shall not in and of itself
cause the Partnership to be dissolved and its affairs wound up.
To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner may, without
any further act, vote or approval of any Partner, subject to the
terms of this Agreement, admit any Person to the Partnership as
an additional or substitute Limited Partner, which admission
shall be effective as of the date of the occurrence of such
event, and the business of the Partnership shall be continued
without dissolution.
Section 11.02. Events Causing Dissolution. The
Partnership shall be dissolved and its affairs shall be wound up
upon the occurrence of any of the following events:
(a) The expiration of the term of the
Partnership, as provided in Section 2.04 hereof;
(b) The withdrawal, removal or bankruptcy of the
General Partner or Transfer (other than a grant of a security
interest) by the General Partner of its entire Interest in the
Partnership when the assignee is not admitted to the Partnership
as an additional or successor General Partner in accordance with
Section 10.01 hereof, or the occurrence of any other event that
results in the General Partner ceasing to be a general partner of
the Partnership under the Delaware Act, provided, the Partnership
shall not be dissolved and required to be wound up in connection
with any of the events specified in this clause (b) if (i) at the
time of the occurrence of such event there is at least one
remaining general partner of the Partnership who is hereby
authorized to, and agrees to, and does carry on the business of
the Partnership, or (ii) within ninety days after the occurrence
of such event, a majority in Interest of the remaining Partners
(or such greater percentage in Interest as is required by the
Delaware Act) agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of
such event, if required, of one or more additional general
partners of the Partnership;
(c) The entry of a decree of judicial dissolution
under the Delaware Act;
(d) The bankruptcy, liquidation, dissolution or
winding up of JCP&L;
(e) The written consent of the General Partner
and all of the Preferred Partners;
21<PAGE>
(f) In the sole and absolute discretion of the
General Partner upon the happening of a Special Event; or
(g) In accordance with Section 13.02(f).
Section 11.03. Notice of Dissolution. Upon the
dissolution of the Partnership, the General Partner shall
promptly notify the Partners of such dissolution.
ARTICLE XII - Liquidation of Partner Interests
Section 12.01. Liquidation. Upon dissolution of the
Partnership, the General Partner, or, in the event that the
dissolution is caused by an event described in Section 11.02(b)
and there is no other General Partner, a Person or Persons who
may be approved by Preferred Partners holding not less than a
majority in liquidation preference of the Preferred Partners
Interests, as liquidating trustee (the "Liquidating Trustee"),
shall immediately commence to wind up the Partnership's affairs;
provided, however, that a reasonable time shall be allowed for
the orderly liquidation of the assets of the Partnership and the
satisfaction of liabilities to creditors so as to enable the
Partners to minimize the normal losses attendant upon a
liquidation. The Preferred Partners shall continue to share
profits and losses during liquidation in the same proportions, as
specified in Articles V and VI hereof, as before liquidation.
The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to creditors of the Partnership, including
Preferred Partners who are creditors, to the extent otherwise
permitted by law, in satisfaction of the liabilities of the
Partnership (whether by payment or the making of reasonable
provision for payment thereof);
(b) to the holders of Preferred Partner Interests
of each series then outstanding in accordance with the terms of
this Agreement or the Action or Actions for such Series; and
(c) to all Partners in accordance with their
respective positive Capital Account balances, after giving effect
to all contributions, distributions and allocations for all
periods.
Section 12.02. Termination. The Partnership shall
terminate when all of the assets of the Partnership have been
distributed in the manner provided for in this Article XII, and
the Certificate of Limited Partnership shall have been cancelled
in the manner required by the Delaware Act.
Section 12.03. Duty of Care. The General Partner or
the Liquidating Trustee, as the case may be, shall not be liable
to the Partnership or any Partner for any loss attributable to
any act or omission of the General Partner or the Liquidating
22<PAGE>
Trustee, as the case may be, taken in good faith in connection
with the liquidation of the Partnership and distribution of its
assets in belief that such course of conduct was in the best
interest of the Partnership. The General Partner or the
Liquidating Trustee, as the case may be, may consult with counsel
and accountants with respect to liquidating the Partnership and
distributing its assets and shall be justified in acting or
omitting to act in accordance with the written opinion of such
counsel or accountants, provided they shall have been selected
with reasonable care.
Section 12.04. No Liability for Return of Capital.
The General Partner and its respective officers, directors,
members, shareholders, employees, representatives, agents,
partners and Affiliates shall not be personally liable for the
return of the capital contributions of any Partner to the
Partnership. No Partner shall be obligated to restore to the
Partnership any amount with respect to a negative Capital
Account.
ARTICLE XIII - Preferred Partner Interests
Section 13.01. Preferred Partner Interests.
(a) The aggregate number of Preferred Partner
Interests which the Partnership shall have authority to issue is
unlimited. Each series of Preferred Partner Interests shall rank
equally and all Preferred Partner Interests shall rank senior to
all other Interests in respect of the right to receive
distributions and the right to receive payments out of the assets
of the Partnership upon voluntary or involuntary dissolution and
winding up of the Partnership. The issuance of any Interests
ranking senior to the Preferred Partner Interest shall be deemed
to materially adversely affect the rights of the Preferred
Partner Interests under this Agreement.
(b) The General Partner on behalf of the Partnership
is authorized to issue Preferred Partner Interests, in one or
more series, having such designations, rights, privileges,
restrictions and other terms and provisions, whether in regard to
distributions, return of capital or otherwise, as may from time
to time be established in a written action or actions (each, an
"Action") of the General Partner providing for the issue of such
series. In connection with the foregoing, the General Partner is
expressly authorized, prior to issuance, to set forth in an
Action or Actions providing for the issue of such series, the
following:
(i) The distinctive designation of such series
which shall distinguish it from other series;
(ii) The number of Preferred Partner Interests
included in such series, which number may be increased or
23<PAGE>
decreased from time to time unless otherwise provided by the
General Partner in creating the series;
(iii) The Preferred Partner Distribution rate (or
method of determining such rate) for Preferred Partner
Interests of such series and the first date upon which such
Preferred Partner Distribution shall be payable;
(iv) The amount or amounts which shall be paid
out of the assets of the Partnership to the holders of such
series of Preferred Partner Interests upon voluntary or
involuntary dissolution and winding up of the Partnership;
(v) The price or prices at which, the period or
periods within which and the terms and conditions upon which
the Preferred Partner Interests of such series may be
redeemed or purchased, in whole or in part, at the option of
the Partnership;
(vi) The obligation of the Partnership to
purchase or redeem Preferred Partner Interests of such
series pursuant to a sinking fund or otherwise and the price
or prices at which, the period or periods within which and
the terms and conditions upon which the Preferred Partner
Interests of such series shall be redeemed, in whole or in
part, pursuant to such obligation;
(vii) The period or periods within which and the
terms and conditions, if any, including the price or prices
or the rate or rates of conversion or exchange and the terms
and conditions of any adjustments thereof, upon which the
Preferred Partner Interests of such series shall be
convertible or exchangeable at the option of the Preferred
Partner, or the Partnership, into any other Interests or
securities or other property or cash or into any other
series of Preferred Partner Interests;
(viii) The voting rights, if any, of the
Preferred Partner Interests of such series in addition to
those required by law and set forth in this Agreement, and
any requirement for the approval by the Preferred Partner
Interests, or of the Preferred Partner Interests of one or
more series, or of both, as a condition to specified Actions
or amendments to this Agreement; and
(ix) Any other relative rights, powers,
preferences or limitations of the Preferred Partner
Interests of the series not inconsistent with this Agreement
or with applicable law.
In connection with the foregoing and without limiting
the generality thereof, the General Partner is hereby expressly
authorized, without the vote or approval of any other Partner, to
take any Action to create under the provisions of this Agreement
a series of Preferred Partner Interests that was not previously
24<PAGE>
outstanding. Without the vote or approval of any other Partner,
the General Partner may execute, swear to, acknowledge, deliver,
file and record whatever documents may be required in connection
with the issue from time to time of Preferred Partner Interests
in one or more series as shall be necessary, convenient or
desirable to reflect the issue of such series. The General
Partner shall do all things it deems to be appropriate or
necessary to comply with the Delaware Act and is authorized and
directed to do all things it deems to be necessary or permissible
in connection with any future issuance, including compliance with
any statute, rule, regulation or guideline of any Federal, state
or other governmental agency or any securities exchange.
Any Action or Actions taken by the General Partner
pursuant to the provisions of this paragraph (b) shall be deemed
an amendment and supplement to and part of this Agreement.
(c) Except as otherwise provided in this Agreement or
in any Action in respect of any series of the Preferred Partner
Interests and as otherwise required by law, all rights to the
management and control of the Partnership shall be vested
exclusively in the General Partner.
(d) No holder of Interests shall be entitled as a
matter of right to subscribe for or purchase, or have any
preemptive right with respect to, any part of any new or
additional issue of Interests of any class or series whatsoever,
or of securities convertible into any Interests of any class or
series whatsoever, whether now or hereafter authorized and
whether issued for cash or other consideration or by way of
distribution. Any Person acquiring Preferred Partner Interests
shall be admitted to the Partnership as a Preferred Partner upon
compliance with Section 2.06.
13.02. Terms of Preferred Partner Interests.
Notwithstanding anything else in any Action to the contrary, all
Preferred Partner Interests of the Partnership shall have the
following voting rights, preferences, participating, optional and
other special rights and the qualifications, limitations or
restrictions of, and other matters relating to, the Preferred
Partner Interests as set forth below in this Section 13.02.
(a) Distributions.
(i) The Preferred Partners shall be entitled to
receive, when, as and if declared by the General
Partner out of funds held by the Partnership to
the extent that the Partnership has cash on hand
sufficient to permit such payments and funds
legally available therefor, cumulative cash
distributions ("Preferred Partner Distributions")
at a rate per annum established by the General
Partner, calculated on the basis of a 360-day year
consisting of twelve (12) months of thirty (30)
days each, and for any period shorter than a full
25<PAGE>
monthly distribution period, Preferred Partner
Distributions will be computed on the basis of the
actual number of days elapsed in such period, and
payable in United States dollars monthly in
arrears on the last day of each calendar month of
each year. In the event that any date on which
Preferred Partner Distributions are payable is not
a Business Day, then payment of such Preferred
Partner Distribution will be made on the next
succeeding day which is a Business Day (and
without any interest or other payment in respect
of any such delay) except that, if such Business
Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date. Such Preferred
Partner Distributions will accrue and be
cumulative from the original date of issue whether
or not they have been declared and whether or not
there are profits, surplus or other funds of the
Partnership legally available for the payment of
distributions, or whether they are deferred.
(ii) If distributions have not been paid in full
on any series of Preferred Partner Interests, the
Partnership may not:
(A) pay or declare and set aside for payment, any
distributions on any other series of Preferred
Partner Interests unless the amount of any
distributions paid or declared on any Preferred
Partner Interests is paid or declared on all
Preferred Partner Interests then outstanding on a
pro rata basis, on the date such distributions are
paid or declared, so that
(1) (x) the aggregate amount of
distributions paid or declared on such series
of Preferred Partner Interests bears to (y)
the aggregate amount of distributions paid or
declared on all such Preferred Partner
Interests outstanding the same ratio as
(2) (x) the aggregate of all accumulated
arrears of unpaid distributions in respect of
such series of Preferred Partner Interests
bears to (y) the aggregate of all accumulated
arrears of unpaid distributions in respect of
all such Preferred Partner Interests
outstanding;
(B) pay or declare any distribution on any
general partner Interest; or
26<PAGE>
(C) redeem, purchase or otherwise acquire any
Preferred Partner Interests or any general partner
Interests;
until, in each case, such time as all accumulated and unpaid
distributions on all series of Preferred Partner Interests shall
have been paid in full for all distribution periods terminating
on or prior to, in the case of clauses (A) and (B), such payment
and, in the case of clause (C), the date of such redemption,
purchase or acquisition.
(b) Notice of Redemption.
(i) The Partnership may not redeem any
outstanding Preferred Partner Interests unless all
accumulated and unpaid distributions have been
paid on all Preferred Partner Interests for all
monthly distribution periods terminating on or
prior to the date of redemption.
(ii) Notice of any redemption (a "Notice of
Redemption") of a series of Preferred Partner
Interests will be given by the Partnership by mail
to each record holder of such series of Preferred
Partner Interests to be redeemed not fewer than
thirty (30) nor more than ninety (90) days prior
to the date fixed for redemption thereof. For
purposes of the calculation of the date of
redemption and the dates on which notices are
given pursuant to this paragraph (b)(ii), a Notice
of Redemption shall be deemed to be given on the
day such notice is first mailed by first-class
mail, postage prepaid, or on the date it was
delivered in person, receipt acknowledged to the
record holders of such series of Preferred Partner
Interests. Each Notice of Redemption shall be
addressed to the record holders of such series of
Preferred Partner Interests at the address
appearing in the books and records of the
Partnership. No defect in the Notice of
Redemption or in the mailing thereof or
publication of its contents shall affect the
validity of the redemption proceedings.
(iii) Notwithstanding the foregoing, however, any
Notice of Redemption may state that it is subject
to the receipt by the Partnership of redemption
funds on or before such date fixed for redemption,
which Notice of Redemption shall be of no effect
unless such funds are so received on or before
such date. If Notice of Redemption shall have
been given and by 12:00 noon, New York time, on
the redemption date specified therein, the
Partnership shall have irrevocably deposited with
The Depository Trust Company or its successor
27<PAGE>
securities depository funds sufficient to pay the
applicable Redemption Price and shall have given
The Depository Trust Company or its successor
securities depository irrevocable instructions and
authority to pay the Redemption Price to the
holders of the Preferred Partner Interests, then
on the date of such deposit, all rights of the
Preferred Partner Interest Owners and the holders
of such series of Preferred Partner Interests so
called for redemption will cease, except the right
to receive the Redemption Price, but without
interest. In the event that any date fixed for
redemption of such series of Preferred Partner
Interests is not a Business Day, then payment of
the Redemption Price payable on such date will be
made on the next succeeding day which is a
Business Day (and without any interest or other
payment in respect of any such delay), except
that, if such Business Day falls in the next
succeeding calendar year, such payment will be
made on the immediately preceding Business Day, in
each case with the same force and effect as if
made on such date. In the event that payment of
the Redemption Price in respect of a series of
Preferred Partner Interests is not made either by
the Partnership or by JCP&L pursuant to the
Guarantee pertaining to the series of Preferred
Partner Interests, distributions on such series of
Preferred Partner Interests will continue to
accrue at the then applicable rate, from the
original redemption date to the date of payment,
in which case the actual payment date will be
considered the date fixed for redemption for
purposes of calculating the Redemption Price.
(iv) In the event that less than all the
outstanding series of Preferred Partner Interests
are to be redeemed, the series of Preferred
Partner Interests to be redeemed, will be selected
according to a determination by The Depository
Trust Company or its successor securities
depository. Subject to applicable law, JCP&L or
its subsidiaries may at any time and from time to
time purchase outstanding Preferred Partner
Interests by tender, in the open market or by
private agreement. If a partial redemption or a
purchase of outstanding Preferred Partner
Interests by tender, in the open market or by
private agreement would result in a delisting of a
series of Preferred Partner Interests from any
national securities exchange on which the series
of Preferred Partner Interests are then listed,
the Partnership may then only redeem or purchase
the series of Preferred Partner Interests in
whole.
28<PAGE>
(c) Liquidation Distribution. If, upon any
liquidation, the Liquidation Distribution on a series of
Preferred Partner Interests can be paid only in part because the
Partnership has insufficient assets available to pay in full the
aggregate liquidation distributions on all Preferred Partner
Interests then outstanding, then the amounts payable directly by
the Partnership on the such series of Preferred Partner Interests
and on all other Preferred Partner Interests then outstanding
shall be paid on a pro rata basis, so that
(i) (A) the aggregate amount paid in respect of
the Liquidation Distribution bears to (B) the
aggregate amount paid as liquidation distributions
on all other Preferred Partnership Interests then
outstanding the same ratio as
(ii) (A) the aggregate Liquidation Distribution
bears to (B) the aggregate maximum liquidation
distributions on all other Preferred Partner
Interests then outstanding.
(d) Voting Rights. If (i) the Partnership fails to
pay distributions in full on a series of Preferred Partner
Interests for eighteen (18) consecutive monthly distribution
periods; (ii) an event of default as defined in the Indenture
occurs and is continuing; or (iii) JCP&L is in default on any of
its payment or other obligations under the Guarantee, then the
holders of such series of Preferred Partner Interests, together
with the holders of all other series of Preferred Partner
Interests acting as a single class, will be entitled, by a vote
of the majority of the aggregate stated liquidation preference of
outstanding Preferred Partner Interests, to appoint and authorize
a special representative of the Partnership and the Preferred
Partners (the "Special Representative") to enforce the
Partnership's rights under the Indenture, including, after
failure to pay interest for sixty (60) consecutive monthly
interest periods, the payment of interest on the Subordinated
Debentures, and to enforce the obligations of JCP&L under the
Guarantee.
In furtherance of the foregoing, and without limiting
the powers of any Special Representative so appointed and for the
avoidance of any doubt concerning the powers of the Special
Representative, any Special Representative, in its own name, in
the name of the Partnership, in the name of the Preferred
Partners or otherwise, may institute or cause to be instituted
any proceedings, including, without limitation, any suit in
equity, an action at law or other judicial or administrative
proceeding, to enforce the Partnership's or the Preferred
Partners' rights directly against JCP&L (including, without
limitation, the Partnership's rights under the Indenture or as a
holder or beneficial owner of the Subordinated Debentures), or
any other obligor in connection with such obligations on behalf
of the Partnership or the Preferred Partners, and may prosecute
such proceeding to final judgment or decree, including any
29<PAGE>
appeals thereof, and enforce the same against JCP&L or any other
obligor in connection with such obligations and collect, out of
the property, wherever situated, of JCP&L or any such other
obligor upon such obligations, the monies adjudged or decreed to
be payable in the manner provided by law. The Special
Representative shall not by virtue of acting in such capacity be
admitted as a general partner in the Partnership or otherwise be
deemed to be a general partner in the Partnership and shall have
no liability for the debts, obligations or liabilities of the
Partnership.
For purposes of determining whether the
Partnership has failed to pay distributions in full for eighteen
(18) consecutive monthly distribution periods, distributions
shall be deemed to remain in arrears, notwithstanding any
payments in respect thereof, until full cumulative distributions
have been or contemporaneously are declared and paid with respect
to all monthly distribution periods terminating on or prior to
the date of payment of such full cumulative distributions.
Subject to requirements of applicable law, not later than thirty
(30) days after such right to appoint a Special Representative
arises, the General Partner will convene a general meeting for
the above purpose. If the General Partner fails to convene such
meeting within such 30-day period, the Preferred Partners who
hold 10% of the aggregate stated liquidation preference of such
outstanding series of Preferred Partner Interests will be
entitled to convene such meeting. The provisions of this
Agreement relating to the convening and conduct of meetings of
Partners will apply with respect to any such meeting. Any
Special Representative so appointed shall cease to act in such
capacity immediately if the Partnership (or JCP&L pursuant to the
Guarantee) shall have paid in full all accumulated and unpaid
distributions on the Preferred Partner Interests or such default
or breach by JCP&L, as the case may be, shall have been cured.
Notwithstanding the appointment of any such Special
Representative, JCP&L shall retain all rights under the
Indenture, including the right to extend the interest payment
period on the Subordinated Debentures as provided in the
Indenture.
If any proposed amendment of this Agreement
provides for, or the General Partner otherwise proposes to effect
any action which would materially adversely affect the powers,
preferences or special rights of such series of Preferred Partner
Interests, then holders of the outstanding series of Preferred
Partner Interests will be entitled to vote on such amendment or
action of the General Partner (but not on any other amendment or
action) and, in the case of an amendment or action which would
equally materially adversely affect the powers, preferences or
special rights of any other series of outstanding Preferred
Partner Interests, all holders of all such series of Preferred
Partner Interests, will be entitled to vote together as a class
on such amendment or action of the General Partner (but not on
any other amendment or action), and such amendment or action
shall not be effective except with the approval of Preferred
30<PAGE>
Partners holding not less than 66 2/3% of the aggregate stated
liquidation preference of such outstanding series of Preferred
Partner Interests. Except as otherwise provided under Section
11.02 or the Delaware Act, the Partnership will be dissolved and
wound up only with the consent of the holders of all Preferred
Partner Interests outstanding.
The powers, preferences or special rights of a series
of Preferred Partner Interests will be deemed not to be adversely
affected by the creation or issue of, and no vote will be
required for the creation or issue of, any further series of
Preferred Partner Interests or any general partner Interests.
Any required approval of a series of Preferred Partner
Interests may be given at a separate meeting of such holders
convened for such purpose, at a meeting of the holders of all
series of Preferred Partner Interests or pursuant to written
consent. The Partnership will cause a notice of any meeting at
which holders of a series of Preferred Partner Interests are
entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each
holder of Preferred Partner Interests. Each such notice will
include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description
of any matter to be voted on at such meeting or upon which
written consent is sought, and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the holders of a series of
Preferred Partner Interests will be required for the Partnership
to redeem and cancel such Series of Preferred Partner Interests
in accordance with this Agreement and the related Action.
Notwithstanding that holders of a series of Preferred
Partner Interests are entitled to vote or consent under any of
the circumstances described above, any Preferred Partner
Interests that are owned by JCP&L or JCP&L's parent, General
Public Utilities Corporation, or any Person owned more than 50%
by JCP&L, either directly or indirectly, shall not be entitled to
vote or consent and shall, for the purposes of such vote or
consent, be treated as if they were not outstanding.
(e) Mergers. The Partnership shall not consolidate,
amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an
entirety to any corporation, limited liability company, limited
partnership, trust (including a business trust) or other entity,
except with the prior approval of the Preferred Partners holding
not less than 66 2/3% of the aggregate stated liquidation
preference of such outstanding Preferred Partner Interests or as
described below. The General Partner may, without the consent of
any Person, cause the Partnership to consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or
lease its properties and assets substantially as an entirety to,
a corporation, a limited liability company, a limited partnership
31<PAGE>
or a trust (including a business trust) or other entity organized
as such under the laws of the United States or any state thereof
or the District of Columbia (a "Successor Entity"), provided that
(i) such Successor Entity either (A) expressly assumes all of the
terms and provisions of the Preferred Partner Interests by which
the Partnership is bound and the other obligations of the
Partnership or (B) substitutes for the Preferred Partner
Interests other securities (the "Successor Securities") so long
as the Successor Securities rank, with regard to participation in
the profits or assets of the Successor Entity, at least as high
as the Preferred Partner Interests rank, with regard to
participation in the profits or assets of the Partnership,
(ii) JCP&L confirms its obligations under the Guarantee with
regard to the Preferred Partner Interests or Successor
Securities, if any are issued, (iii) the Preferred Partner
Interests or the Successor Securities will not be delisted from,
or will be listed upon notification of issuance on, any national
securities exchange on which the Preferred Partner Interests or
Successor Securities are then listed, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Partner Interests or Successor
Securities to be downgraded by any nationally recognized
statistical rating organization, as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities
Act, (v) such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease does not adversely affect in any
material respect the material powers, preferences and special
rights of the holders of the Preferred Partner Interests or
Successor Securities under the documents governing the Preferred
Partner Interests or Successor Securities (other than with
respect to any dilution of the holders of the Preferred Partner
Interests or Successor Securities in the Successor Entity), (vi)
such Successor Entity has a purpose substantially identical to
that of the Partnership and (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease JCP&L has received an opinion of counsel (which may be
regular counsel to the Partnership or an Affiliate, but not an
employee thereof) experienced in such matters to the effect that
(A) holders of outstanding Preferred Partner Interests or
Successor Securities will not recognize any gain or loss for
Federal income tax proposes as a result of the merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease, (B) such Successor Entity will be treated as either a
partnership or a grantor trust for Federal income tax purposes,
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, JCP&L and such
Successor Entity will be in compliance with the 1940 Act without
registering thereunder as an "investment company," and (D) such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease will not cause the holders of Preferred Partner
Interests or Successor Securities to be generally liable for the
debts, obligations or liabilities of the Partnership or the
Successor Entity.
32<PAGE>
(f) Substitutions. Notwithstanding any other
provision of this Agreement to the contrary, the General Partner
may, without the consent of any Person, (i) form or cause to be
formed a Successor Entity and contribute or cause to be
contributed the Subordinated Debentures (and any rights to
receive interest payments on such Subordinated Debentures) to the
Successor Entity in exchange for all of the equity or beneficial
interests in the Successor Entity, and (ii) dissolve the
Partnership and, after satisfaction of liabilities to creditors
as required by the Delaware Act, cause the equity or beneficial
interests in the Successor Entity to be distributed to the
General Partner and the holders of each series of Preferred
Partner Interests in liquidation of such holders' respective
Interests in the Partnership (a "Substitution Event"), provided
that a Substitution Event shall not be permitted to occur unless
the conditions set forth in the proviso in the second sentence of
Section 13.02(e) shall have been satisfied. The General Partner
may, without the consent of any Person, take any other action
having similar consequences to the foregoing.
ARTICLE XIV - Transfers
Section 14.01. Transfers of Preferred Partner
Interests. Preferred Partner Interests may be freely transferred
by a Preferred Partner. No Interest shall be transferred, in
whole or in part, except in accordance with the terms and
conditions set forth in this Agreement. Any transfer or
purported transfer of any Interest not made in accordance with
this Agreement shall be null and void.
Section 14.02. Transfer of Certificates. The General
Partner shall provide for the registration of Certificates. Upon
surrender for registration of transfer of any Certificate, the
General Partner shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees.
Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer and agreement
to be bound by the provisions of this Agreement in form
satisfactory to the General Partner duly executed by the
Preferred Partner or his attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall
be cancelled by the General Partner. A transferee of a
Certificate shall provide the Partnership with a completed Form
W-8 or such other documents or information as are requested by
the Partnership for tax reporting purposes and thereafter shall
be admitted to the Partnership as a Preferred Partner and shall
be entitled to the rights and subject to the obligations of a
Preferred Partner hereunder upon the receipt by such transferee
of a Certificate. The transferor of a Certificate shall cease to
be a limited partner of the Partnership at the time that the
transferee of the Certificate is admitted to the Partnership as a
Preferred Partner in accordance with this Section 14.02.
33<PAGE>
Section 14.03. Persons Deemed Preferred Partners. The
Partnership may treat the Person in whose name any Certificate
shall be registered on the books and records of the Partnership
as the Preferred Partner and the sole holder of such Certificate
for purposes of receiving distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claims to or interest in such
Certificate on the part of any other Person, whether or not the
Partnership shall have actual or other notice thereof.
Section 14.04. Book Entry Interests. The
Certificates, on original issuance, will be issued in the form of
a typewritten Certificate or Certificates representing the Book
Entry Interests, to be delivered to The Depository Trust Company,
the initial Clearing Agency, by, or on behalf of, the
Partnership. Such Certificates shall initially be registered on
the books and records of the Partnership in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Preferred
Partner Interest Owner will receive a definitive Certificate
representing such Preferred Partner Interest Owner's interests in
such Certificate, except as provided in Section 14.06. Unless
and until definitive, fully registered Certificates (the
"Definitive Certificates") have been issued to the Preferred
Partner Interest Owners pursuant to Section 14.06:
(a) The provisions of this Section shall be in
full force and effect;
(b) The Partnership and the General Partner shall
be entitled to deal with the Clearing Agency for all purposes of
this Agreement (including the payment of distributions on the
Certificates and receiving approvals, votes or consents
hereunder) as the Preferred Partner and the sole holder of the
Certificates and shall have no obligations to the Preferred
Partner Interest Owners;
(c) The rights of the Preferred Partner Interest
Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements
between such Preferred Partner Interest Owners and the Clearing
Agency and/or the Clearing Agency Participants. Unless or until
the Definitive Certificates are issued pursuant to Section 14.06,
the initial Clearing Agency will make book entry transfers among
the Clearing Agency Participants and receive and transmit
payments of distributions on the Certificates to such Clearing
Agency Participants;
(d) To the extent that the provisions of this
Section conflict with any other provisions of this Agreement, the
provisions of this Section shall control; and
(e) Whenever this Agreement requires or permits
actions to be taken based upon approvals, votes or consents of a
percentage of the Preferred Partners, the Clearing Agency shall
be deemed to represent such percentage only to the extent that it
34<PAGE>
has received instructions to such effect from the Preferred
Partner Interest Owners and/or Clearing Agency Participants
owning or representing, respectively, such required percentage of
the beneficial interests in the Certificates and has delivered
such instructions to the General Partner.
Section 14.05. Notices to Clearing Agency. Whenever a
notice or other communication to the Preferred Partners is
required under this Agreement, unless and until Definitive
Certificates shall have been issued pursuant to Section 14.06,
the General Partner shall give all such notices and
communications specified herein to be given to the Preferred
Partners to the Clearing Agency, and shall have no obligations to
the Preferred Partner Interest Owners.
Section 14.06. Definitive Certificates. If (a) the
Clearing Agency elects to discontinue its services as securities
depository and gives reasonable notice to the Partnership, or
(b) the Partnership elects to terminate the book entry system
through the Clearing Agency, then the Definitive Certificates
shall be prepared by the Partnership. Upon surrender of the
typewritten Certificate or Certificates representing the Book
Entry Interests by the Clearing Agency, accompanied by
registration instructions, the General Partner shall cause the
Definitive Certificates to be delivered to the holders of
Preferred Partner Interests in accordance with the instructions
of the Clearing Agency. The General Partner shall not be liable
for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Any Person receiving a Definitive Certificate in
accordance with this Article XIV shall be admitted to the
Partnership as a Preferred Partner upon receipt of such
Definitive Certificate. The Clearing Agency or the nominee of
the Clearing Agency, as the case may be, shall cease to be a
limited partner of the Partnership under this Section 14.06 at
the time that at least one additional Person is admitted to the
Partnership as a Preferred Partner in accordance with this
Section 14.06. The Definitive Certificates shall be printed,
lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the General Partner, as evidenced
by its execution thereof.
ARTICLE XV - General
Section 15.01. Power of Attorney. (a) The Class A
Limited Partner and each Preferred Partner constitutes and
appoints the General Partner and the Liquidating Trustee as its
true and lawful representative and attorney-in-fact, in its name,
place and stead, to make, execute, sign, acknowledge and deliver
or file (i) all instruments, documents and certificates which may
from time to time be required by any law to effectuate, implement
and continue the valid and subsisting existence of the
Partnership, (ii) all instruments, documents and certificates
that may be required to effectuate the dissolution and
termination of the Partnership in accordance with the provisions
35<PAGE>
hereof and Delaware law, (iii) all other amendments of this
Agreement or the Certificate of Limited Partnership and other
filings contemplated by this Agreement including, without
limitation, amendments reflecting the withdrawal of the General
Partner, or the return, in whole or in part, of the contribution
of any Partner, or the addition, substitution or increased
contribution of any Partner, or any action of the Partners duly
taken pursuant to this Agreement whether or not such Partner
voted in favor of or otherwise approved such action, and (iv) any
other instrument, certificate or document required from time to
time to admit a Partner, to effect its substitution as a Partner,
to effect the substitution of the Partner's assignee as a Partner
or to reflect any action of the Partners provided for in this
Agreement.
(b) The powers of attorney granted herein (i)
shall be deemed to be coupled with an interest, shall be
irrevocable and shall survive the death, insanity, incompetency
or incapacity (or, in the case of a Partner that is a
corporation, association, partnership, limited liability company
or trust, shall survive the merger, dissolution or other
termination of existence) of the Partner and (ii) shall survive
the assignment by the Partner of the whole or any portion of his
Interest, except that where the assignee of the whole or any
portion thereof has furnished a power of attorney, this power of
attorney shall survive such assignment for the sole purpose of
enabling the General Partner and the Liquidating Trustee to
execute, acknowledge and file any instrument necessary to effect
any permitted substitution of the assignee for the assignor as a
Partner and shall thereafter terminate. In the event that the
appointment conferred in this Section 15.01 would not constitute
a legal and valid appointment by any Partner under the laws of
the jurisdiction in which such Partner is incorporated,
established or resident, upon the request of the General Partner
or the Liquidating Trustee, such Partner shall deliver to the
General Partner or the Liquidating Trustee a properly
authenticated and duly executed document constituting a legal and
valid power of attorney under the laws of the appropriate
jurisdiction covering the matters set forth in this Section
15.01.
(c) The General Partner may require a power of
attorney to be executed by a transferee of a Partner as a
condition of its admission as a substitute Partner.
Section 15.02. Waiver of Partition. Each Partner
hereby irrevocably waives any and all rights that it may have to
maintain an action for partition of any of the Partnership's
property or assets.
Section 15.03. Notices. Any notice permitted or
required to be given hereunder shall be in writing and shall be
deemed given (i) on the day the notice is first mailed to a
Partner by first class mail, postage prepaid, or (ii) on the date
it was delivered in person to a Partner, receipt acknowledged, at
36<PAGE>
its address appearing on the books and records of the
Partnership. Another address may be designated by a Partner by
such Partner giving notice of its new address as provided in this
Section 15.03.
Section 15.04. Entire Agreement. This Agreement,
including the exhibits annexed hereto and incorporated by
reference herein, contains the entire agreement of the parties
hereto and supersedes all prior agreements and understandings,
oral or otherwise, among the parties hereto with respect to the
matters contained herein.
Section 15.05. Waivers. Except as otherwise expressly
provided herein, no purported waiver by any party of any breach
by another party of any of his obligations, agreements or
covenants hereunder, or any part thereof, shall be effective
unless made in a writing executed by the party or parties sought
to be bound thereby, and no failure to pursue or elect any remedy
with respect to any default under or breach of any provision of
this Agreement, or any part hereof, shall be deemed to be a
waiver of any other subsequent similar or different default or
breach, or any election of remedies available in connection
therewith, nor shall the acceptance or receipt by any party of
any money or other consideration due him under this Agreement,
with or without knowledge of any breach hereunder, constitute a
waiver of any provision of this Agreement with respect to such or
any other breach.
Section 15.06. Headings. The section headings herein
contained have been inserted only as a matter of convenience of
reference and in no way define, limit or describe the scope or
intent of any provisions of this Agreement nor in any way affect
any such provisions.
Section 15.07. Separability. Each provision of this
Agreement shall be considered to be separable, and if, for any
reason, any such provision or provisions, or any part thereof, is
determined to be invalid and contrary to any existing or future
applicable law, such invalidity shall not impair the operation
of, or affect, those portions of this Agreement which are valid,
and this Agreement shall be construed and enforced in all
respects as if such invalid or unenforceable provision or
provisions had been omitted.
Section 15.08. Contract Construction. Whenever the
content of this Agreement permits, the masculine gender shall
include the feminine and neuter genders, and reference to
singular or plural shall be interchangeable with the other.
References in this Agreement to particular sections of the Code
or to provisions of the Delaware Act shall be deemed to refer to
such sections or provisions as they may be amended after the date
of this Agreement.
Section 15.09. Counterparts. This Agreement may be
executed in one or more counterparts and each of such
37<PAGE>
counterparts for all purposes shall be deemed to be an original,
but all of such counterparts, when taken together, shall
constitute but one and the same instrument, binding upon all
parties hereto, notwithstanding that all of such parties may not
have executed the same counterpart.
Section 15.10. Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, but shall not be deemed
for the benefit of creditors or any other Persons, nor shall it
be deemed to permit any assignment by a Partner of any of its
rights or obligations hereunder except as expressly provided
herein.
Section 15.11. Further Actions. Each of the Partners
hereby agrees that it shall hereafter execute and deliver such
further instruments and do such further acts and things as may be
required or useful to carry out the intent and purposes of this
Agreement and as are not inconsistent with the terms hereof.
Section 15.12. Governing Law. This Agreement shall be
governed by and construed in accordance with the substantive laws
of the State of Delaware, without regard to conflicts of laws.
Section 15.13. Amendments. Except as otherwise
expressly provided herein or as otherwise required by law, this
Agreement may only be amended by a written instrument executed by
the General Partner provided, however, that any amendment which
would adversely affect the powers, preferences or special rights
of any series of Preferred Partner Interests may be effected only
as permitted by the terms of such series of Preferred Partner
Interests.
38<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
GENERAL PARTNER:
JCP&L PREFERRED CAPITAL, INC.
By:______________________________
Name:
Title:
CLASS A LIMITED PARTNER
______________________________
Terrance G. Howson
39<PAGE>
Exhibit A
Certificate Evidencing Preferred Partner Interests
of
JCP&L Capital, L.P.
___% Cumulative Monthly Income Preferred Partner
Interests, Series __ (liquidation preference
$25 per Preferred Partner Interest)
JCP&L Capital, L.P., a Delaware limited partnership
(the "Partnership"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of ____________ (_______) fully
paid Preferred Partner Interests of the Partnership designated
the ___% Cumulative Monthly Income Preferred Partner Interests,
Series __ (liquidation preference $25 per Preferred Partner
Interest) (the "Series __ Preferred Partner Interests")
representing preferred limited partner interests in the
Partnership transferable on the books and records of the
Partnership, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form
for transfer. The powers, preferences and special rights and
limitations of the Series __ Preferred Partner Interests are set
forth in, and this Certificate and the Series __ Preferred
Partner Interests represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended
and Restated Limited Partnership Agreement dated as of
___________, 1995 of the Partnership as the same may, from time
to time, be amended (the "Partnership Agreement") authorizing the
issuance of the Series __ Preferred Partner Interests and
1<PAGE>
determining, along with any Actions of the General Partner of the
Partnership as authorized under the Partnership Agreement, the
preferred, deferred and other special rights and restrictions,
regarding distributions, voting, redemption and otherwise and
other matters relating to the Series __ Preferred Partner
Interests. The Partnership will furnish a copy of the
Partnership Agreement to the Holder without charge upon written
request to the Partnership at its principal place of business or
registered office. Capitalized terms used herein but not defined
shall have the meaning given them in the Partnership Agreement.
The Holder is entitled to the benefits of the Payment and
Guarantee Agreement of Jersey Central Power & Light Company,
dated as of _____________, 1995 relating to the Preferred Partner
Interests (the "Guarantee") and of the Indenture between Jersey
Central Power & Light Company and United States Trust Company of
New York, dated as of ________, 1995 (the "Indenture"), under and
pursuant to which the related series of Subordinated Debentures
are issued and outstanding, in either case to the extent provided
therein. The Partnership will furnish a copy of the Guarantee
and Indenture to the Holder without charge upon written request
to the Partnership at its principal place of business or
registered office.
The Holder, by accepting this Certificate, is deemed to
have (i) agreed that the Subordinated Debentures issued pursuant
to the Indenture are subordinate and junior in right of payment
to all Senior Indebtedness of Jersey Central Power & Light
Company as and to the extent provided in the Indenture and (ii)
agreed that the Guarantee is subordinate and junior in right of
2<PAGE>
payment to all Senior Indebtedness of Jersey Central Power &
Light Company. Upon receipt of this Certificate, the Holder is
admitted to the Partnership as a Preferred Partner, is bound by
the Partnership Agreement and is entitled to the benefits
thereunder.
IN WITNESS WHEREOF, the Partnership has executed this
Certificate this ____ day of _____________, 1995.
JCP&L CAPITAL, L.P.
By: JCP&L Preferred Capital,
Inc., its General Partner
By: ______________________________
Name:
Title:
3<PAGE>
Exhibit 3-J
Action by the General Partner of JCP&L Capital, L.P.
Creating the ___% Cumulative Monthly Income
Preferred Partner Interests, Series A
Pursuant to Section 13.01 of the Amended and Restated
Limited Partnership Agreement of JCP&L Capital, L.P. dated as of
_______, 1995 (as amended from time to time, the "Partnership
Agreement"), JCP&L Preferred Capital, Inc., as general partner
(the "General Partner") of JCP&L Capital, L.P. (the
"Partnership"), desiring to state the designations, distribution
rights, redemption rights, preferences, privileges, limitations
and other rights of a new series of Preferred Partner Interests,
hereby authorizes and establishes such new series of Preferred
Partner Interests according to the following terms and conditions
(each capitalized term used but not defined herein shall have the
meaning set forth in the Partnership Agreement):
(a) Designation. _________________________________
(_________) interests with an aggregate liquidation preference of
$___________ of the Preferred Partner Interests of the
Partnership, liquidation preference $25 per Preferred Partner
Interest, are hereby designated as "___% Cumulative Monthly
Income Preferred Partner Interests, Series A" (hereinafter the
"Series A Preferred Partner Interests.")
(b) Distributions.
(i) The Preferred Partners who hold the Series A
Preferred Partner Interests shall be entitled to
receive, when, as and if declared by the General
Partner to the extent that the Partnership has
cash on hand sufficient to permit such payments
and funds legally available therefor, cumulative
cash distributions at a rate per annum of ___% of
the stated liquidation preference of $25 per
Series A Preferred Partner Interest per annum,
commencing _______, 1995. Distributions on the
Series A Preferred Partner Interests which accrue
from the date of original issue to _______, 1995
shall be payable on _______, 1995.
(ii) Distributions on the Series A Preferred
Partner Interests must be declared by the General
Partner in any calendar year or portion thereof to
the extent that the General Partner reasonably
anticipates that at the time of payment the
Partnership will have, and must be paid by the
Partnership to the extent that at the time of
proposed payment it has, cash on hand sufficient
to permit such payments and funds legally
available therefor. Distributions on the Series A
Preferred Partner Interests will be deferred if<PAGE>
and for so long as JCP&L defers payments to the
Partnership on the Debentures (as defined below).
Accrued and unpaid distributions on the Series A
Preferred Partner Interests will accrue additional
distributions in respect thereof after the monthly
payment date therefor, to the extent permitted by
law, at the distribution rate per annum applicable
to the Series A Preferred Partner Interests. Such
additional distributions shall be payable at the
time the related deferred distribution is paid,
but in any event by the end of such deferral
period. Distributions declared on the Series A
Preferred Partner Interests will be payable to the
Series A Preferred Partners as they appear on the
books and records of the Partnership on the
relevant record dates, which will be one Business
Day prior to the relevant payment dates, provided
that if the Series A Preferred Partner Interests
are not in book-entry-only form, the record dates
will be the fifteenth day of each month.
(c) Redemption.
(i) The Series A Preferred Partner Interests are
redeemable, at the option of the Partnership in
whole or in part from time to time, on or after
______, 2000, at the Redemption Price (as defined
below).
(ii) Upon payment when due or redemption at any
time of the ___% Subordinated Debentures, Series A
due ______, 2044 (the "Debentures") issued by
JCP&L pursuant to an Indenture dated as of ______,
1995 between JCP&L and United States Trust Company
of New York, as Trustee (the "Indenture"), which
Debentures were purchased by the Partnership from
JCP&L with the proceeds from the issuance and sale
of the Series A Preferred Partner Interests and
the related capital contribution of the General
Partner, the proceeds from such payment or
redemption of the Debentures shall be applied to
redeem the Series A Preferred Partner Interests at
the redemption price of $25 per Preferred Partner
Interest plus accumulated and unpaid distributions
(whether or not declared) to the date fixed for
redemption, together with any additional
distributions accrued thereon (the "Redemption
Price").
(iii) If an Investment Company Act Event shall
occur and be continuing, the Partnership shall
elect to either: (1) redeem the Series A
Preferred Partner Interests in whole but not in
part at the Redemption Price within ninety (90)
days following the occurrence of such Investment
2<PAGE>
Company Act Event, provided that, if at the time
there is available to the General Partner the
opportunity to eliminate, within such ninety (90)
day period, the Investment Company Act Event by
taking some ministerial action, such as filing a
form or making an election, or pursuing some other
similar reasonable measure which would not involve
unreasonable cost or expense, which has no adverse
effect on the Partnership or JCP&L, the General
Partner will pursue such measure in lieu of
redemption; or (2) dissolve the Partnership and,
after satisfaction of liabilities to creditors as
required by the Delaware Act, cause Debentures
(and any rights to interest on such Debentures)
with an aggregate principal amount equal to the
aggregate stated liquidation preference of the
outstanding Series A Preferred Partner Interests
to be distributed to the holders of the Series A
Preferred Partner Interests in liquidation of such
holders' Interests in the Partnership, within
ninety (90) days following the occurrence of such
Investment Company Act Event, provided, however,
that the Partnership shall have received an
opinion of counsel (which may be regular tax
counsel to JCP&L or an Affiliate but not an
employee thereof) to the effect that the holders
of the Series A Preferred Partner Interests will
not recognize any gain or loss for federal income
tax purposes as a result of such dissolution and
distribution.
(iv) If a Tax Event shall occur and be continuing,
the Partnership shall elect to: (1) redeem the
Series A Preferred Partner Interests in whole (but
not in part) at the Redemption Price within ninety
(90) days following the occurrence of such Tax
Event, provided that, if at the time there is
available to the General Partner the opportunity
to eliminate, within such ninety (90) day period,
the Tax Event by taking some ministerial action,
such as filing a form or making an election, or
pursuing some other similar reasonable measure
which would not involve unreasonable cost or
expense, which has no adverse effect on the
Partnership or JCP&L, the General Partner will
pursue such measure in lieu of redemption; (2)
dissolve the Partnership and, after satisfaction
of liabilities to creditors as required by the
Delaware Act, cause Debentures (and any rights to
interest on such Debentures) with an aggregate
principal amount equal to the aggregate stated
liquidation preference of the outstanding Series A
Preferred Partner Interests to be distributed to
the holders of the Series A Preferred Partner
Interests in liquidation of such holders'
3<PAGE>
Interests in the Partnership, within ninety (90)
days following the occurrence of such Tax Event,
provided, however, that the Partnership shall have
received an opinion of tax counsel (which may be
regular tax counsel to JCP&L or an Affiliate but
not an employee thereof) to the effect that the
holders of the Series A Preferred Partner
Interests will not recognize any gain or loss for
federal income tax purposes as a result of such
dissolution and distribution; or (3) have the
Series A Preferred Partner Interests remain
outstanding.
(d) Liquidation Distribution. In the event of any
voluntary or involuntary dissolution and winding up of the
Partnership (other than pursuant to paragraphs (c)(iii) or
(c)(iv) hereof or Section 13.02(f) of the Partnership Agreement),
holders of the Series A Preferred Partner Interests at the time
outstanding will be entitled to receive out of the assets of the
Partnership available for distribution to holders of Preferred
Partner Interests, after satisfaction of liabilities to creditors
as required by the Delaware Act, before any distribution of
assets is made to holders of the general partner interests, but
together with holders of every other series of Preferred Partner
Interests outstanding, an amount equal to, in the case of holders
of Series A Preferred Partner Interests, the aggregate of the
stated liquidation preference of $25 per Series A Preferred
Partner Interest plus accumulated and unpaid distributions
(whether or not declared) to the date of payment, together with
any additional distributions accrued thereon (the "Liquidation
Distribution").
(e) Subordination. The holders of Series A Preferred
Partner Interests are deemed, by acceptance of such Interests, to
have (i) agreed that the Debentures issued pursuant to the
Indenture are subordinate and junior in right of payment to all
Senior Indebtedness as and to the extent provided in the
Indenture and (ii) agreed that the Guarantee relating to the
Series A Preferred Partner Interests is subordinate and junior in
right of payment to all Senior Indebtedness of JCP&L.
(f) Voting Rights. The holders of the Series A
Preferred Partner Interests shall have no voting rights except as
provided in the Partnership Agreement or as required under the
Delaware Act.
4<PAGE>
IN WITNESS WHEREOF, the General Partner has executed
this Action as of _______, 1995.
JCP&L PREFERRED CAPITAL, INC.
By:
Name:
Title:
5<PAGE>
Exhibit 4-A
JERSEY CENTRAL POWER & LIGHT COMPANY
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
As Trustee
INDENTURE
Dated as of _____________ 1, 1995
Providing for the Issuance of Subordinated
Debentures in Series and for the
__% Deferrable Interest Subordinated Debentures,
Series A, due 2044<PAGE>
INDENTURE, dated as of ___________ 1, 1995, by and between
Jersey Central Power & Light Company, a New Jersey corporation
(the "Company"), and United States Trust Company of New York, as
trustee (the "Trustee").
Whereas, the Company desires to borrow money from time to
time and to issue securities from time to time, in one or more
series, including securities to be issued from time to time to
one or more of its Subsidiaries, as in this Indenture provided;
and
Whereas, the Company has authorized the issuance of the
initial series of securities to be known as the __% Deferrable
Interest Subordinated Debentures, Series A, due 2044 (the "Series
A Securities"), and to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture, and all
things necessary to make the Series A Securities when duly issued
and executed by the Company and authenticated and delivered
hereunder, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, in
accordance with its terms, have been done;
Now, therefore, each party, intending to be legally bound
hereby, agrees as follows for the equal and ratable benefit of
the Holders of the Series A Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person.
When used with respect to any Person, "control" means the power
to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf
of such Board, and any resolution of the Board of Directors means
any resolution of the Board of Directors or any committee thereof
duly authorized to act on behalf of such Board.
1<PAGE>
"Business Day" means any day other than a day on which
banking institutions in The City of New York are authorized or
required by law to close.
"Capital Lease Obligations" of a Person means any obligation
which is required to be classified and accounted for as a capital
lease on the face of a balance sheet of such Person prepared in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, rights
to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate
stock, including any Preferred Stock.
"Company" means Jersey Central Power & Light Company until a
Successor replaces it pursuant to Article 5 of this Indenture
and, thereafter, shall mean the Successor.
"Default" means any event which is, or after notice or
passage of time, or both, would be, an Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board.
"Guarantee" means the Payment and Guarantee Agreement, or
other guaranty, if any, of the Company of the payment of periodic
cash distributions, and payments on liquidation or redemption,
with respect to the Preferred Securities of any series.
"Indenture" means this indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including
the provisions of the TIA that are deemed to be a part hereof.
"Interest Payment Date" means the interest payment date
specified in the Securities.
"Issue Date" means the date on which the Securities are
originally issued.
2<PAGE>
"JCP&L Capital" means JCP&L Capital, L. P., a Delaware
limited partnership, all of the Voting Interests of which are
indirectly owned by the Company through a Wholly Owned
Subsidiary. JCP&L Capital also means any successor in interest
to JCP&L Capital, L. P., regardless of its form, including a
business trust.
"Officer" means, with respect to any corporation, the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of such
corporation.
"Officer's Certificate" means a written certificate
containing the applicable information specified in Sections 11.04
and 11.05 hereof, signed in the name of the Company by any one of
its Officers, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the
applicable information specified in Sections 11.04 and 11.05
hereof, by legal counsel who is reasonably acceptable to the
Trustee.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any
other entity.
"Preferred Securities" means the securities representing
limited partner interests of JCP&L Capital of any series with a
preference in respect of cash distributions and amounts payable
on liquidation over the Voting Interests indirectly owned by the
Company. Preferred Securities also means any securities issued
by JCP&L Capital in substitution for the Preferred Securities,
including preferred undivided beneficial interests in the
properties of a business trust.
"Preferred Stock" means any class of Capital Stock of an
issuer that is preferred as to dividends or rights in liquidation
as compared with any other class of Capital Stock of the same
issuer.
"Record Date" with respect to any security means the date
set to determine the holders of any security entitled to
participate in any distribution, dividend, interest or other
payment or to vote, consent, make a request or exercise any other
right associated with such security.
3<PAGE>
"Redemption Date" or "redemption date" means the date
specified for the redemption of Securities in accordance with the
terms of the Securities and Article 3 of this Indenture.
"Redemption Price" or "redemption price", with respect to
any Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture and the Securities.
"Regular Record Date", with respect to an interest payment
on the Securities, means the date set forth on the face of the
Securities for the determination of Holders entitled to receive
payment of interest on the next succeeding interest payment date.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Securities" means any of the securities of any series
issued, authenticated and delivered under this Indenture.
"Series A Preferred Securities" means the securities
representing limited partner interests of JCP&L Capital, with a
preference in respect of cash distributions and amounts payable
on liquidation over the Voting Interests indirectly owned by the
Company, the proceeds of the sale of which are used by JCP&L
Capital to purchase Series A Securities. Series A Preferred
Securities also means any Preferred Securities issued by JCP&L
Capital in substitution for the Series A Preferred Securities
originally issued by JCP&L Capital.
"Series A Securities" means any of the Company's __%
Deferrable Interest Subordinated Debentures, Series A, due 2044,
issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as
amended.
"Securityholder" or "Holder" means a Person in whose name a
Security is registered on the Registrar's books.
"Senior Indebtedness" means, without duplication, (i) the
principal of and premium (if any) in respect of (A) indebtedness
of the Company for money borrowed and (B) indebtedness evidenced
by securities, debentures, bonds or other similar instruments
(including purchase money obligations) for payment of which the
Company is responsible or liable; (ii) all Capital Lease
Obligations of the Company; (iii) all obligations of the Company
issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations
of the Company under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of
4<PAGE>
business); (iv) all obligations of the Company for the
reimbursement of any obligor on any letter of credit, banker's
acceptance, security purchase facility or similar credit
transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
(i) through (iii) above) entered into in the ordinary course of
business of the Company to the extent such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the third Business Day following
receipt by the Company of a demand for reimbursement following
payment on the letter of credit); (v) all obligations of the type
referred to in clauses (i) through (iv) of other Persons for the
payment of which the Company is responsible or liable as obligor,
guarantor or otherwise; and (vi) all obligations of the type
referred to in clauses (i) through (v) of other Persons secured
by any lien on any property or asset of the Company (whether or
not such obligation is assumed by the Company), the amount of
such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so
secured; provided, however, that Senior Indebtedness does not
include endorsements of negotiable instruments for collection in
the ordinary course of business. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include
any indebtedness that is by its terms subordinated to or pari
passu with the Securities or any indebtedness between or among
the Company and any Affiliates.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the
principal of such security is due and payable, including pursuant
to any mandatory prepayment provision.
"Subsidiary" means any corporation, association,
partnership, limited liability company or other business entity
of which more than 50% of the total voting power of all the
Voting Stock or Voting Interests is at the time owned or
controlled, directly or indirectly, by (i) the Company, (ii) the
Company and one or more Subsidiaries, or (iii) one or more
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939, as amended and
as in effect on the date of this Indenture; provided, however,
that if the TIA is amended after such date, TIA means, to the
extent required by any such amendment, the TIA as so amended.
"Trust Officer" means the Chairman of the Board of
Directors, the President, or any other officer or assistant
officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
5<PAGE>
"Trustee" means the party named as the "Trustee" in the
first paragraph of this Indenture until a successor replaces it
pursuant to the applicable provisions of this Indenture and,
thereafter, shall mean such successor.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such
obligations) of the United States of America (including any
agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged
and which are not callable at the issuer's option and repurchase
obligations with respect to any of the foregoing entered into
with any depository institution or trust company incorporated
under the laws of the United States of America or any state
thereof and subject to the supervision and examination by federal
and/or state banking authorities if such repurchase obligation is
by its terms to be performed by the repurchaser within 30 days of
the repurchase agreement.
"Voting Interests" means interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or a
trustee of an entity or to direct the management of the affairs
of such entity.
"Voting Stock" means, with respect to a corporation, all
classes of Capital Stock then outstanding of such corporation
normally entitled to vote in elections of directors.
"Wholly Owned Subsidiary" means a Subsidiary all the Voting
Stock or Voting Interests of which (other than directors'
qualifying shares) are owned by the Company or another Wholly
Owned Subsidiary.
SECTION 1.02 Other Definitions.
TERM DEFINED IN SECTION
"Act" . . . . . . . . . . . . . . . . . . 1.05
"Additional Interest. . . . . . . . . . . 4.01
"Bankruptcy Law" . . . . . . . . . . . . 6.01
"Control" . . . . . . . . . . . . . . . . 1.01
"Custodian" . . . . . . . . . . . . . . . 6.01
"Event of Default". . . . . . . . . . . . 6.01
"Extension Period". . . . . . . . . . . . 4.01
"Legal Holiday" . . . . . . . . . . . . . 11.08
"Notice of Default" . . . . . . . . . . . 6.01
"Paying Agent" . . . . . . . . . . . . . 2.04
"Register" . . . . . . . . . . . . . . . 2.04
"Registrar" . . . . . . . . . . . . . . . 2.04
6<PAGE>
"Successor" . . . . . . . . . . . . . . . 5.01
SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA,
such provision is incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or
Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by SEC rule have the meanings assigned to them by such
definitions.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
7<PAGE>
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in
the plural include the singular;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) whenever the masculine gender is used herein, it shall
be deemed to include the female gender and the neuter,
as well.
SECTION 1.05. Acts of Holders.
(1) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of Holders signing such
instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company, if made in the manner
provided in this Section.
(2) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the
Trustee deems sufficient.
(3) The ownership of Securities shall be proved by the
Register.
(4) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the holder of
every Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Trustee or the
8<PAGE>
Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(5) If the Company solicits from the Holders any request,
demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by or pursuant to a
resolution of its Board of Directors, fix in advance a record
date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent,
waiver or other Act, but the Company shall have no obligation to
do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the
Holders of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding
Securities shall be computed as of such record date.
ARTICLE 2
THE SECURITIES; THE SERIES A SECURITIES
SECTION 2.01 Issue of Securities Generally.
The Securities may be issued in one or more series as from
time to time shall be authorized by the Board of Directors.
The Securities of each series and the Trustee's Certificate
of Authentication shall be substantially in the forms to be
attached
as exhibits to this Indenture or supplemental indenture providing
for their issuance, but in the case of Securities other than
Series A Securities, with such inclusions, omissions and
variations as are authorized or permitted by this Indenture. The
Securities may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange on which the
Securities may be listed, or to conform to usage. Each Security
shall be dated the date of its authentication.
The several series of Securities may differ from the Series
A Securities, and as and between series, in respect of any or all
of the following matters:
9<PAGE>
(a) designation;
(b) date or dates of maturity, which may be serial;
(c) rate (or method of determining the rate) of
interest or Additional Interest, if any;
(d) interest payment dates and the frequency of
interest payments;
(e) provisions, if any, authorizing the Company to
extend the interest payment dates;
(f) authorized denominations;
(g) the place or places for the payment of principal
and for the payment of interest;
(h) limitation, if any, upon the aggregate principal
amount of Securities of the series which may be issued;
(i) provisions, if any, with regard to any obligation
of the Company to permit the exchange of the Securities of
such series into stock or other securities of the Company or
of any other corporations or entities;
(j) provisions, if any, reserving to the Company the
right to redeem all or any part of the Securities of such
series before maturity at such time or times, upon such
notice and at such redemption price or prices (together with
accrued interest to the date of redemption) as may be
specified in the respective forms of Securities;
(k) provisions, if any, for any sinking or analogous
fund with respect to the Securities of such series; and
(l) any other provisions expressing or referring to
the terms and conditions upon which the Securities of such
series are to be issued under this Indenture which are not
in conflict with the provisions of this Indenture;
in each case as determined and specified by the Board of
Directors. The Trustee shall not authenticate and deliver
Securities of any series (other than the Series A Securities)
upon initial issue unless the terms and conditions of such series
shall have been set forth in a supplemental indenture entered
into between the Company and the Trustee as provided in Section
9.01 hereof.
SECTION 2.02 Form of the Series A Securities; Denominations;
Global Security.
10<PAGE>
The Series A Securities and the Trustee's Certificate of
Authentication shall be substantially in the form of Exhibit A
attached hereto. The terms and provisions contained in the Series
A Securities, a form of which is annexed hereto as Exhibit A,
shall constitute, and are hereby expressly made, a part of this
Indenture. The Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
The Trustee shall authenticate and make available for
delivery Series A Securities for original issue in the aggregate
principal amount of $___________ for issuance to JCP&L Capital in
consideration of a cash payment equal to the principal amount
thereof, upon a resolution of the Board of Directors and a
written order of the Company signed by two Officers of the
Company, but without any further action by the Company. Such
order shall specify the date on which the original issue of the
Series A Securities is to be authenticated and delivered. The
aggregate principal amount of Series A Securities outstanding at
any time may not exceed $___________, except as provided in
Section 2.08 hereof.
The Series A Securities shall be issuable only in registered
form without coupons and only in denominations of $25.00 and any
integral multiple thereof.
Initially, the Series A Securities shall be issued as a
temporary certificate in global form, that is, as one Security
for the total principal amount of the Series A Securities to be
outstanding, registered in the name of JCP&L Capital. If and
when the Series A Securities are registered in the name of a
custodian, the custodian shall be responsible for maintaining
records of the names and addresses of, and the principal amounts
owned by, the beneficial owners of its global Security. After
initial issuance, the Series A Securities may be transferred or
exchanged in accordance with Section 2.07 hereof.
SECTION 2.03 Execution and Authentication.
The Securities shall be executed on behalf of the Company by
its Chief Executive Officer, its President or one of its Vice
Presidents, under its corporate seal imprinted or reproduced
thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any such Officer on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper Officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior
11<PAGE>
to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there
appears on such Security a Certificate of Authentication duly
executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security
has been duly authenticated and made available for delivery
hereunder.
The Trustee shall act as the initial authenticating agent.
Thereafter, the Trustee, with the concurrence of the Company, may
appoint an authenticating agent. An authenticating agent may
authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent
has the same rights as a Paying Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.04 Registrar and Paying Agent.
The Company shall maintain or cause to be maintained, within
the State of New York, an office or agency where the Securities
may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities may be
presented or surrendered for redemption or payment ("Paying
Agent"), and an office or agency where notices and demands to or
upon the Company in respect of the Securities and this Indenture
may be served. The Registrar shall keep a register (the
"Register") of the Securities and of their transfer and exchange.
The Register shall be open to inspection by the Company and the
Trustee at all reasonable times. The Company may have one or
more co-Registrars and one or more additional Paying Agents. The
terms Paying Agent and Registrar include any additional paying
agent and co-Registrar. The corporate trust office of the
Trustee at 114 West 47th Street, New York, New York, 10036,
Attention: Corporate Trust Department, Department B, shall
initially be the location for the Registrar, Paying Agent and
agent for service of notice or demands on the Company.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-Registrar (if not the
Trustee or the Company). The agreement shall implement the
provisions of this Indenture that relate to such agent. The
Company shall give prompt written notice to the Trustee of any
change of location of such office or agency. If at any time the
Company shall fail to maintain or cause to be maintained any such
required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee
set forth in Section 11.02 hereof. The Company shall notify the
12<PAGE>
Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar, Paying Agent or agent for service
of notices or demands, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section
7.07 hereof. The Company or any Affiliate of the Company may act
as Paying Agent, Registrar or co-Registrar or agent for service
of notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented
or surrendered for any or all such purposes and may from time to
time rescind such designations. The Company will give prompt
written notice to the Trustee of any such designation or
rescission and of any change in location of any such other office
or agency.
SECTION 2.05 Paying Agent to Hold Money in Trust.
Except as otherwise provided herein, prior to each due date
of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum of money sufficient to pay
such principal and interest so becoming due. The Company shall
require each Paying Agent (other than the Trustee or the Company)
to agree in writing that such Paying Agent shall hold in trust
for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the payment of principal and interest on
the Securities and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the
request of the Trustee, forthwith pay to the Trustee all money so
held in trust and account for any money disbursed by it. The
Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any money disbursed
by it. Upon doing so, the Paying Agent shall have no further
liability for the money so paid over to the Trustee. If the
Company, a Subsidiary or an Affiliate of either of them acts as
Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund.
SECTION 2.06 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Securityholders. If the Trustee is not
the Registrar, the Company shall cause to be furnished to the
Trustee on or before the Record Date for each interest payment
date and at such other times as the Trustee may request in
writing, within five Business Days of such request, a list, in
such form as the Trustee may reasonably require, of the names and
addresses of Securityholders.
13<PAGE>
SECTION 2.07 Transfer and Exchange.
When Securities of any series are presented to the Registrar
or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Securities of the
same series of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if
its requirements for such transactions are met. To permit
registrations of transfer and exchanges of Securities of any
series, the Company shall execute and the Trustee shall
authenticate Securities of the same series, all at the
Registrar's request.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by the Holder or his attorney duly
authorized in writing.
The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with
the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than
any exchange of a temporary Security for a definitive Security
not involving any change in ownership).
The Company shall not be required to make, and the Registrar
need not register, transfers or exchanges of (a) any Security for
a period beginning at the opening of business five days before
the mailing of a notice of redemption of Securities and ending at
the close of business on the day of such mailing or (b) any
Security selected, called or being called for redemption, except,
in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
SECTION 2.08 Replacement Securities.
If (a) any mutilated Security is surrendered to the Company
or the Trustee, or (b) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft
of any Security, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute in exchange for
any such mutilated Security of any series or in lieu of any such
destroyed, lost or stolen Security of any series, a new Security
of the same series and of like tenor and principal amount,
14<PAGE>
bearing a number not contemporaneously outstanding, and the
Trustee shall authenticate and make such new Security available
for delivery.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, or is
about to be redeemed by the Company pursuant to Article 3 hereof,
the Company in its discretion may, instead of issuing a new
Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section
2.08, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and
expenses of the Trustee) in connection therewith.
Every new Security issued pursuant to this Section 2.08 in
lieu of any mutilated, destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and ratably
with any and all other Securities duly issued hereunder.
The provisions of this Section 2.08 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 2.09 Outstanding Securities; Determinations of Holders'
Action.
Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those mutilated,
destroyed, lost or stolen Securities referred to in Section 2.08
hereof, those redeemed by the Company pursuant to Article 3
hereof, and those described in this Section 2.09 as not
outstanding. A Security does not cease to be outstanding because
the Company or a Subsidiary or Affiliate thereof holds the
Security; provided, however, that in determining whether the
Holders of the requisite principal amount of Securities have
given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned
by the Company or any Affiliate or Subsidiary of the Company
(other than JCP&L Capital, so long as any of its Preferred
Securities are outstanding) shall be disregarded and deemed not
to be outstanding; provided, further, that if the Trustee is
making such determination, it shall disregard only such
Securities as it knows to be owned by the Company or any
15<PAGE>
Affiliate or Subsidiary thereof. Securities owned by JCP&L
Capital shall be deemed to be outstanding, so long as any of its
Preferred Securities are outstanding.
Subject to the foregoing, only Securities outstanding at the
time of such determination shall be considered in any such
determination (including determinations pursuant to Articles 3, 6
and 9).
If a Security is replaced pursuant to Section 2.08, it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
fide purchaser.
If the Paying Agent (other than the Company) holds, in
accordance with this Indenture, whenever payment of principal on
the Securities is due, whether at Stated Maturity, upon
acceleration or on a Redemption Date, money sufficient to pay the
Securities payable on that date, then immediately on the date of
Stated Maturity, upon acceleration or on such Redemption Date, as
the case may be, such Securities shall cease to be outstanding,
and interest, if any, on such Securities shall cease to accrue.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may execute temporary Securities, and upon the Company's
written request, signed by two Officers of the Company, the
Trustee shall authenticate and make such temporary Securities
available for delivery. Temporary Securities shall be printed,
lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the
definitive Securities of the same series in lieu of which they
are issued and with such appropriate insertions, omissions,
substitutions and other variations as the Officers of the Company
executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities of any series are issued (except for
the global form of certificate issued initially as described in
Section 2.02 hereof), the Company shall cause definitive
Securities of the same series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the
temporary Securities of the same series shall be exchangeable for
such definitive Securities upon surrender of such temporary
Securities at the office or agency of the Company designated for
such purpose pursuant to Section 2.04 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute a
like principal amount of definitive Securities of the same series
16<PAGE>
of authorized denominations, and the Trustee, upon written
request of the Company signed by two Officers of the Company,
shall authenticate and make such Securities available for
delivery in exchange therefor. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 2.11 Cancellation.
All Securities surrendered for payment, redemption by the
Company pursuant to Article 3 hereof or registration of transfer
or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly
canceled by the Trustee. The Company may at any time deliver to
the Trustee for cancellation any Securities previously
authenticated and made available for delivery hereunder which the
Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the
Trustee. The Company may not reissue, or issue new Securities to
replace, Securities it has paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities canceled as provided in this
Section 2.11, except as expressly permitted by this Indenture.
All canceled Securities held by the Trustee shall be destroyed by
the Trustee, and the Trustee shall deliver a certificate of
destruction to the Company.
SECTION 2.12 CUSIP Numbers.
The Company, in issuing the Securities of any series, may
use "CUSIP" numbers applicable to such series (if then generally
in use), and the Trustee shall use CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that
any such notice shall state that no representation is made as to
the correctness of such numbers either as printed on the
Securities or as contained in any notice of redemption or
exchange and that reliance may be placed only on the other
identification numbers printed on the Securities and any
redemption shall not be affected by any defect in or omission of
such numbers.
SECTION 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities on the interest payment date, it shall pay the
defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders
on a subsequent special record date, and such special record
date, as used in this Section 2.13 with respect to the payment of
any defaulted interest, shall mean the 15th day next preceding
the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15
17<PAGE>
days before the subsequent special record date, the Company shall
mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount
of defaulted interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01 Redemption Right, Obligation; Notice to Trustee.
(a) The Company, at its option, may redeem the Securities
pursuant to paragraph 6 of the Securities, subject to paragraph
(c) hereof.
(b) If JCP&L Capital redeems all or a portion of any series
of Preferred Securities, the Company shall also redeem, pursuant
to paragraph 6 of the Securities, all or a corresponding portion,
as the case may be, of the series of Securities that JCP&L
Capital purchased with the proceeds from the sale of such series
of Preferred Securities.
(c) The Company may not redeem (or otherwise purchase) less
than all of the Securities of any series if as a result of such
partial redemption (or purchase) such series of the Securities
would be delisted from any national securities exchange on which
they are then listed, and in such case if the Company elects to
redeem (or otherwise purchase) any of the Securities of such
series, it shall redeem (or otherwise purchase) all of them. If
as a result of the redemption by JCP&L Capital of any series of
Preferred Securities, such series would be delisted from any
national securities exchange on which such series is then listed,
the Company shall also redeem all of the Securities that were
purchased by JCP&L Capital with the proceeds from the sale of
such series of Preferred Securities.
(d) If the Company elects or is required to redeem
Securities pursuant to paragraph 6 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the
aggregate principal amount of Securities to be redeemed and the
Redemption Price. The Company shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee).
SECTION 3.02 Selection of Securities to be Redeemed.
If less than all the outstanding Securities of any series
are to be redeemed at any time, the Trustee shall select the
Securities of such series to be redeemed in compliance with the
requirements of the principal national securities exchange, if
any, on which the Securities are listed, or if the Securities are
not listed on a national securities exchange, on a pro rata
18<PAGE>
basis, by lot or, any other method the Trustee considers fair and
appropriate. If all of the Securities of the series to be
partially redeemed are held in global form by the Depository
Trust Company or any successor securities depository, as
custodian, it shall select the Securities by lot. The Trustee
shall make the selection at least 30 days, but not more than 90
days, before the Redemption Date from outstanding Securities not
previously called for redemption. Securities and portions of them
the Trustee selects shall be in authorized denominations only.
Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the
Securities or portions of Securities to be redeemed.
SECTION 3.03 Notice of Redemption; Conditional Notice.
At least 30 days but not more than 90 days before a
Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first-class mail, postage prepaid, to
each Holder of Securities to be redeemed at the Holder's last
address, as it appears on the Register. A copy of such notice
shall be mailed to the Trustee when the notice is mailed to
Holders of Securities. At the Company's written request, the
Trustee shall give the notice of redemption in the Company's name
and at its expense.
The notice shall identify the Securities (by series and by
certificate number) to be redeemed, the provision of the
Securities or this Indenture pursuant to which the Securities
called for redemption are being redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number (subject to Section 2.12 hereof);
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(6) if fewer than all the outstanding Securities of any
series are to be redeemed, the identification and principal
amounts of the particular Securities to be redeemed and that, on
and after the Redemption Date, upon surrender of such Securities,
a new Security or Securities of the same series in principal
amount equal to the unredeemed portion thereof will be issued;
and
(7) that, unless the Company defaults in making such
redemption payment, interest will cease to accrue on Securities
called for redemption on and after the Redemption Date.
19<PAGE>
If, when a notice of redemption is mailed, the Company shall
not have irrevocably directed the Trustee to apply towards such
redemption funds deposited with the Trustee or held by it for
the redemption of the Securities called for redemption, such
notice may state that it is subject to the receipt of the
redemption monies by the Trustee on or before the Redemption
Date, and in such case, the notice of redemption shall be of no
effect unless such monies are so received on or before the
Redemption Date.
SECTION 3.04 Effect of Notice of Redemption.
Subject to the provisions of the last paragraph of Section
3.03 hereof, after notice of redemption is given, all Securities
called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon the later of the
Redemption Date and the date such Securities are surrendered to
the Trustee or the Paying Agent, such Securities shall be paid at
the Redemption Price, plus accrued and unpaid interest, including
Additional Interest, if any, and accrued interest thereon, to the
Redemption Date.
SECTION 3.05 Deposit of Redemption Price.
Subject to the provisions of the last paragraph of Section
3.03 hereof, on or prior to a Redemption Date, the Company shall
irrevocably deposit with the Trustee or the Paying Agent (or if
the Company or an Affiliate is the Paying Agent, the Company
shall segregate and hold in trust or cause such Affiliate to
segregate and hold in trust) money sufficient to pay the
Redemption Price of, and accrued and unpaid interest, including
Additional Interest, if any, and accrued interest thereon, on all
Securities to be redeemed on that date. After the Redemption
Date, interest ceases to accrue on the Securities to be redeemed
with respect to which the Company has deposited sufficient money
to pay the Redemption Price and accrued interest whether or not
such Securities are surrendered for payment. Subject to
applicable law, the Trustee or the Paying Agent shall return to
the Company three years after the Redemption Date any money
deposited with it and not applied for redemption.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a Security of any series that is redeemed
in part, the Trustee shall authenticate for the Holder a new
Security of the same series equal in principal amount to the
unredeemed portion of such Security.
ARTICLE 4
COVENANTS
20<PAGE>
SECTION 4.01 Payment of the Securities.
(a) The Company shall pay the principal of and interest
(including interest accruing on or after the filing of a petition
in bankruptcy or reorganization relating to the Company, whether
or not a claim for post-filing interest is allowed in such
proceeding) on the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. An
installment of principal or interest shall be considered paid on
the applicable date due if on such date the Trustee or the Paying
Agent holds, in accordance with this Indenture, money sufficient
to pay all of such installment then due. The Company shall pay
interest on overdue principal and interest on overdue
installments of interest (including interest accruing during an
Extension Period (as hereinafter defined) and/or on or after the
filing of a petition in bankruptcy or reorganization relating to
the Company, whether or not a claim for post-filing interest is
allowed in such proceeding), to the extent lawful, at the rate
per annum borne by the Securities in default, which interest on
overdue interest shall accrue from the date such amounts became
overdue, or from such other date as may be specified in the
Securities.
(b) Notwithstanding paragraph (a) of this Section 4.01 or
any other provision herein to the contrary, if before an event
occurs which, under the terms of the Series A Preferred
Securities, results in a distribution of Series A Securities to
the holders of the Series A Preferred Securities in liquidation
of their interests in JCP&L Capital, the Company makes a payment
under the Guarantee, the Company shall receive a credit for any
payment it makes (i) in lieu of a periodic distribution to the
holders of the Series A Preferred Securities pursuant to the
Guarantee, and the Company shall have no obligation to pay
interest on the Series A Securities in the amount of such payment
and (ii) in lieu of a liquidation or redemption distribution to
the holders of the Series A Preferred Securities pursuant to the
Guarantee, and the Company shall have no obligation to pay the
principal of the Series A Securities in the amount of such
payment. The Company shall notify the Trustee and the Holders of
any credit to which it is entitled hereunder.
(c) Notwithstanding paragraph (a) of this Section 4.01 or
any other provision herein to the contrary, the Company shall
have the right in its sole and absolute discretion at any time
and from time to time while the Series A Securities are
outstanding, so long as an Event of Default under Section 6.01(a)
hereof has not occurred and is not continuing, to extend the
interest payment period for up to 60 consecutive months, but not
beyond the Stated Maturity of such Securities, provided that at
the end of each such period (referred to herein as an "Extension
Period") the Company shall pay all interest then accrued and
21<PAGE>
unpaid (together with interest thereon at the rate specified in
the title of the Series A Securities to the extent permitted by
applicable law); and provided that, during any such Extension
Period, neither the Company nor any Subsidiary, (i) shall declare
or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its Capital Stock
(other than dividends paid to the Company by a Wholly Owned
Subsidiary), or (ii) pay any interest on any Securities of any
other series then outstanding. Prior to the termination of an
Extension Period, the Company may shorten or may further extend
the interest payment period, provided that such Extension Period
together with all such further extensions may not exceed 60
consecutive months. If JCP&L Capital is the sole holder of the
Securities, the Company shall give JCP&L Capital notice of its
selection of such extended interest payment period one Business
Day prior to the earlier of (i) the date any distributions on
Preferred Securities are payable or (ii) the date JCP&L Capital
is required to give notice to any national securities exchange on
which the Preferred Securities are listed or other applicable
self-regulatory organization or to the holders of the Preferred
Securities of the record date or the date such distribution is
payable, but in any event not less than one Business Day prior to
such record date. The Company shall cause JCP&L Capital to give
notice of the Company's selection of such extended interest
payment period to the holders of the Preferred Securities. If
JCP&L Capital shall not be the sole holder of the Securities, the
Company will give the holders of the Securities notice of its
selection of such extended interest payment period ten Business
Days prior to the earlier of (i) the Interest Payment Date or
(ii) the date the Company is required to give notice of the
record or payment date of such related interest payment to any
national securities exchange on which the Securities are then
listed or other applicable self-regulatory organization or to
holders of the Securities, but in any event not less than two
Business Days prior to such record date. The Company shall give
or cause the Trustee to give such notice of the Company's
selection of such extended interest payment period to the
Holders.
(d) If and when JCP&L Capital is required to pay any
federal, state or local taxes, duties, assessments or
governmental charges of whatever nature (other than withholding
taxes), the Company shall pay additional interest ("Additional
Interest") on the Series A Securities in such amounts as shall be
required so that the net amounts received and retained by JCP&L
Capital as a Securityholder after paying such taxes, duties,
assessments and charges will not be less than the amounts that
JCP&L Capital as a Securityholder would have received had no such
taxes, duties, assessments or charges been imposed. The Company
shall furnish the Trustee with an Officer's Certificate or other
written notice reporting the events described in this subsection
and their consequences.
22<PAGE>
(e) If and when JCP&L Capital redeems the Series A
Preferred Securities in accordance with their terms, the Series A
Securities shall become due and payable in a principal amount
equal to the aggregate stated liquidation preference of such
Series A Preferred Securities, together with all accrued and
unpaid interest, including Additional Interest, if any, and
accrued interest thereon to the date of payment. The Company
shall furnish the Trustee with an Officer's Certificate or other
written notice reporting the events described in this subsection
and their consequences.
SECTION 4.02 Prohibition Against Dividends, etc. During an
Event of Default.
Neither the Company nor any Subsidiary shall declare or pay
any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its Capital Stock,
other than dividends paid to the Company by a Wholly Owned
Subsidiary, if at such time (a) there shall have occurred any
event that, with the giving of notice or the lapse of time or
both, would constitute an Event of Default under Section 6.01
hereof, or (b) any Preferred Securities are at the time
outstanding and the Company is in default under the Guarantee.
SECTION 4.03 SEC Reports.
The Company shall file with the Trustee, within 15 days
after it files them with the SEC, copies of its annual report and
of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with
the SEC pursuant to Sections 13 or 15(d) of the Exchange Act. If
the Company is not subject to the reporting requirements of
Sections 13 or 15(d) of the Exchange Act, the Company shall file
with the Trustee and the SEC, in accordance with the rules and
regulations prescribed by the SEC, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Exchange Act, in respect of a
security listed and registered on a national securities exchange
as may be prescribed in such rules and regulations. The Company
shall also comply with the provisions of Section 314(a) of the
TIA.
SECTION 4.04 Compliance Certificates.
(a) The Company shall deliver to the Trustee within 90
days after the end of each of the Company's fiscal years an
Officer's Certificate, stating whether or not the signer knows of
any Default or Event of Default. Such certificate shall contain a
23<PAGE>
certification from the principal executive officer, principal
financial officer or principal accounting officer of the Company
as to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture. For purposes of
this Section 4.04(a), such compliance shall be determined without
regard to any period of grace or requirement of notice provided
under this Indenture. If such Officer does know of such a Default
or Event of Default, the certificate shall describe any such
Default or Event of Default, and its status. Such Officer's
Certificate need not comply with Section 11.04 hereof.
(b) The Company shall, so long as any of the Securities
are outstanding, deliver to the Trustee, as promptly as
practicable after any Officer becomes aware of any continuing
Default or Event of Default, an Officer's Certificate specifying
such Default, Event of Default or other default and what action
the Company is taking or proposes to take with respect thereto.
(c) The Company shall deliver to the Trustee any
information reasonably requested by the Trustee in connection
with the compliance by the Trustee or the Company with the TIA.
SECTION 4.05 Further Instruments and Acts.
Upon request of the Trustee, the Company shall execute and
deliver such further instruments and do such further acts as may
be reasonably necessary or proper to carry out more effectively
the purposes of this Indenture.
SECTION 4.06 Investment Company Act.
The Company shall not become an investment company subject
to registration under the Investment Company Act of 1940, as
amended.
SECTION 4.07 Payments for Consents.
Neither the Company nor any Subsidiary shall, directly or
indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any
Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or
the Securities unless such consideration is offered to be paid or
agreed to be paid to all Holders of the Securities who so
consent, waive or agree to amend in the time frame set forth in
the documents soliciting such consent, waiver or agreement.
ARTICLE 5
SUCCESSOR CORPORATION
24<PAGE>
SECTION 5.01 When the Company May Merge, Etc.
The Company may not consolidate with or merge with or into,
or sell, convey, transfer or lease all or substantially all of
its assets (either in one transaction or a series of
transactions) to, any Person unless:
(1) the Person formed by or surviving such consolidation
or merger or to which such sale, conveyance, transfer or lease
shall have been made (the "Successor") if other than the Company,
is organized and existing under the laws of the United States of
America or any State thereof or the District of Columbia, and the
Successor (a) shall expressly assume by a supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Company under the
Securities and the Indenture, and (b) if any Preferred Securities
are then outstanding, the Successor shall expressly assume the
Company's obligations under the Guarantee, and shall become or
acquire the general partner of, or any person with substantially
equivalent authority to act for, JCP&L Capital; and
(2) the Company delivers to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, conveyance, transfer or lease and
such supplemental indenture comply with this Indenture.
The Successor will be the successor to the Company, and will
be substituted for, and may exercise every right and power and
become the obligor on the Securities with the same effect as if
the Successor had been named as, the Company herein. The
predecessor shall be released from the obligations of the Company
set forth in this Indenture and in the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs if one of the following shall
have occurred and be continuing:
(1) The Company defaults in the payment, when due and
payable, of (a) interest on any Security or Additional Interest,
if any, and the default continues for a period of 15 days, or (b)
the principal of any Security when the same becomes due and
payable at maturity, upon acceleration, on any Redemption Date,
or otherwise; provided that the failure of the Company to pay
interest or Additional Interest on any series of Securities
25<PAGE>
during an Extension Period applicable to the Securities of such
series shall not constitute a default hereunder;
(2) The Company defaults in the performance of, fails to
comply with, any of its other covenants or agreements in the
Securities or this Indenture and such failure continues for 30
days after receipt by the Company of a "Notice of Default";
(3) The Company, pursuant to or within the meaning of any
Bankruptcy Law:
(a) commences a voluntary case or proceeding;
(b) consents to the entry of an order for relief
against it in an involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
and such Custodian is not discharged within 90
days;
(d) makes a general assignment for the benefit of its
creditors; or
(e) admits in writing its inability to pay its debts
generally as they become due; or
(4) A court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company in an
involuntary case or proceeding;
(b) appoints a Custodian of the Company or for all or
substantially all of its properties; or
(c) orders the liquidation of the Company;
and in each case the order or decree remains unstayed and in
effect for 90 days.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary
or involuntary or is effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States
Code, or any similar Federal or state law for the relief of
debtors. "Custodian" means any receiver, trustee, assignee,
26<PAGE>
liquidator, sequestrator, custodian or similar official under any
Bankruptcy Law.
A Default under clause (2) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at
least a majority in aggregate principal amount of the Securities
at the time outstanding notify the Company and the Trustee, of
the Default and the Company does not cure such Default within the
time specified in clause (2) above after receipt of such notice.
Any such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default."
SECTION 6.02 Acceleration.
If any Event of Default other than an Event of Default under
clauses (3) or (4) of Section 6.01 hereof occurs and is
continuing, the Trustee may, by notice to the Company, or the
Holders of at least a majority in aggregate principal amount of
the Securities at the time outstanding may, by notice to the
Company and the Trustee (each, an "Acceleration Notice"), and the
Trustee shall, upon the request of such Holders, declare the
principal of and accrued and unpaid interest, including
Additional Interest, if any, and accrued interest thereon, on all
of the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable
immediately.
The Company shall deliver to the Trustee, as promptly as
practicable after it obtains knowledge thereof, written notice in
the form of an Officer's Certificate of any event which with the
giving of notice and the lapse of time would become an Event of
Default under clause (2) of Section 6.01 hereof, its status and
what action the Company is taking or proposes to take with
respect thereto.
If an Event of Default specified in clauses (3) or (4) of
Section 6.01 hereof occurs, the principal of and interest,
including Additional Interest, if any, on all the Securities
shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee
or any Securityholders.
The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding, by notice to the Trustee,
may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if
all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely
27<PAGE>
because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may, in its own name or as trustee of an express trust,
institute, pursue and prosecute any proceeding, including,
without limitation, any action at law or suit in equity or other
judicial or administrative proceeding to collect the payment of
principal of or interest on the Securities, or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of the
Securities in the proceeding. A delay or omission by the Trustee
or any Securityholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or
constitute a waiver of, or acquiescence in, the Event of Default.
No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults.
Subject to Section 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Securities of any series at the
time outstanding, by notice to the Trustee (and without notice to
any other Securityholder), may waive an existing Default or Event
of Default affecting the Securities of such series and its
consequences. When a Default is waived, it is deemed cured and
shall cease to exist, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05 Control by Majority.
The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial
to the rights of other Securityholders or would involve the
Trustee in personal liability. The Trustee may take any other
action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.06 Limitation on Suits.
28<PAGE>
Except as provided in Section 6.07 hereof, a Securityholder
may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least a majority in aggregate
principal amount of the Securities at the time outstanding make a
written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security and indemnity against any loss, liability or expense
satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60
days after receipt of the notice, the request and the offer of
security and indemnity; and
(5) the Holders of a majority in aggregate principal
amount of the Securities at the time outstanding do not give the
Trustee a direction inconsistent with the request during such 60
days.
A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or
priority over any other Securityholder.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of the principal amount of
or interest on the Securities held by such Holder, on or after
the respective due dates expressed in the Securities (in the case
of interest, as the same may be extended pursuant to the
provisions of this Indenture and the Securities) or any
Redemption Date, or to bring suit for the enforcement of any such
payment on or after such respective dates shall not be impaired
or affected adversely without the consent of each such Holder.
SECTION 6.08 Collection Suit by the Trustee.
If an Event of Default described in Section 6.01(1) hereof
occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company
or any obligor on the Securities for the whole amount owing with
29<PAGE>
respect to the Securities and the amounts provided for in Section
7.07 hereof.
SECTION 6.09 The Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relating to the Company
or its properties or assets, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of the
principal amount and interest on the Securities and to file such
other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding; and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same; and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay the Trustee any
amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.07
hereof.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article
6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Securityholders for amounts due and unpaid on
the Securities for the principal amount,
Redemption Price or interest, if any, as the case
may be, ratably, without preference or priority of
30<PAGE>
any kind, according to such amounts due and
payable on the Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee)
in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees and expenses, against any
party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 hereof or a suit by Holders
of more than 10% in aggregate principal amount of the Securities
at the time outstanding.
SECTION 6.12 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law or any usury or other law wherever enacted,
now or at any time hereafter in force, that would prohibit or
forgive the Company from paying all or any portion of the
principal or interest on the Securities as contemplated herein or
affect the covenants or the performance by the Company of its
obligations under this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE 7
THE TRUSTEE
SECTION 7.01 Duties of the Trustee.
(1) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its
exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
31<PAGE>
(2) Except during the continuance of an Event of Default,
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and (b)
in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(3) No provision in this Indenture shall relieve the
Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except
that:
(a) this paragraph (3) does not limit the effect of
paragraphs (1) and (2) of this Section 7.01;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer
unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith
in accordance with a direction received by it
pursuant to Section 6.05 hereof; and
(d) the Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its
own funds or otherwise incur any financial
liability unless it receives security and
indemnity reasonably satisfactory to it against
any loss, liability or expense.
(4) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (1), (2), (3) and
(5) of this Section 7.01 and to Section 7.02.
(5) Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by
law. The Trustee shall not be liable for interest on any money
held by it hereunder.
SECTION 7.02 Rights of the Trustee.
Except as otherwise provided in Section 7.01 hereof:
32<PAGE>
(1) the Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper
person. The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or
document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee determines to make such further
inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by
agent or attorney;
(2) whenever the Trustee is requested by the Company to act
or refrain from acting hereunder, the Trustee may require an
Officer's Certificate directing it to act or refrain from so
acting, and, if appropriate, an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
the absence of bad faith in reliance on such Officer's
Certificate and Opinion of Counsel;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may in the absence of bad faith on its
part, rely upon an Officer's Certificate;
(4) the Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent
appointed with due care;
(5) the Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers;
(6) the Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon; and
(7) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security and indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction.
33<PAGE>
SECTION 7.03 Individual Rights of the Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal
with the Company or its Affiliates with the same rights it would
have if it were not the Trustee. Any Paying Agent, Registrar or
co-Registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04 The Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the
Securities, and it shall not be responsible for any statement in
this Indenture or the Securities or any report or certificate
issued by the Company hereunder (other than the Trustee's
Certificate of Authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
SECTION 7.05 Notice of Defaults.
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder, as
their names and addresses appear on the Security Register, notice
of the Default within 90 days after it becomes known to the
Trustee unless such Default shall have been cured or waived.
Except in the case of a Default described in Section 6.01(1)
hereof, the Trustee may withhold such notice if and so long as a
committee of Trust Officers in good faith determines that the
withholding of such notice is in the interests of
Securityholders. The second sentence of this Section 7.05 shall
be in lieu of the proviso to TIA Section 315(b). Said proviso is
hereby expressly excluded from this Indenture, as permitted by
the TIA.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 31 beginning with the May 31
next following the date of this Indenture, the Trustee shall mail
to each Securityholder a brief report dated as of such May 31 in
accordance with and to the extent required under TIA Section 313.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the Company, the SEC and each
securities exchange on which the Securities are listed. The
Company agrees to promptly notify the Trustee whenever the
Securities become listed on any securities exchange and of any
delisting thereof.
34<PAGE>
SECTION 7.07 Compensation and Indemnity.
The Company agrees:
(1) to pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company
and the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
advances of its agents and counsel), including all reasonable
expenses and advances incurred or made by the Trustee in
connection with any membership on any creditors' committee,
except any such expense or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee, its officers, directors and
shareholders, for, and to hold it harmless against, any and all
loss, liability or expense, incurred without negligence or bad
faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder.
The Trustee shall have a claim and lien prior to the
Securities as to all property and funds held by it hereunder for
any amount owing it or any predecessor Trustee pursuant to this
Section 7.07, except with respect to funds held in trust for the
payment of principal of or interest on particular Securities.
The Company's payment obligations pursuant to this Section
7.07 are not subject to Article 10 of this Indenture and shall
survive the discharge of this Indenture. When the Trustee renders
services or incurs expenses after the occurrence of a Default
specified in Section 6.01 hereof, the compensation for services
and expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company in
writing at least 30 days prior to the date of the proposed
resignation; provided, however, no such resignation shall be
effective until a successor Trustee has accepted its appointment
35<PAGE>
pursuant to this Section 7.08. The Holders of a majority in
aggregate principal amount of the Securities at the time
outstanding may remove the Trustee by so notifying the Trustee in
writing and may appoint a successor Trustee, which shall be
subject to the consent of the Company unless an Event of Default
has occurred and is continuing. The Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. A successor Trustee shall deliver a
written acceptance of its appointment to the retiring Trustee and
to the Company. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Securityholders. Subject to payment
of all amounts owing to the Trustee under Section 7.07 hereof and
subject further to its lien under Section 7.07, the retiring
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee. If a successor Trustee does
not take office within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders
of a majority in aggregate principal amount of the Securities at
the time outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction
for its removal and the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all its corporate trust
business or assets (including this Trusteeship) to, another
corporation, the resulting, surviving or transferee corporation
without any further act shall, with the concurrence of the
Company, be the successor Trustee.
36<PAGE>
SECTION 7.10 Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of
TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. The
Trustee shall comply with TIA Section 310(b). In determining
whether the Trustee has conflicting interests as defined in TIA
Section 310(b)(1), the provisions contained in the proviso to TIA
Section 310(b)(1) shall be deemed incorporated herein.
SECTION 7.11 Preferential Collection of Claims Against the
Company.
If and when the Trustee shall be or become a creditor of the
Company, the Trustee shall be subject to the provisions of the
TIA regarding the collection of claims against the Company.
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS
SECTION 8.01 Satisfaction and Discharge of Indenture.
The Company shall be deemed to have paid and discharged the
entire indebtedness on all Securities outstanding upon the
deposit referred to in subparagraph (A) below, and the provisions
of this Indenture with respect to the Securities shall no longer
be in effect (except as to (1) the rights of registration of
transfer, substitution and exchange of Securities, (2) the
replacement of apparently mutilated, defaced, destroyed, lost or
stolen Securities, (3) the rights of Holders to receive payments
of principal thereof and interest thereon, (4) the rights of the
Holders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, (5) the
obligation of the Company to maintain an office or agency for
payments on and registration of transfer of the Securities, and
(6) the rights, obligations and immunities of the Trustee
hereunder) and the Trustee shall, at the request and expense of
the Company, execute proper instruments acknowledging the same,
if:
(A) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in
trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders (i) cash in an amount,
or (ii) U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as
will ensure the availability of cash, or (iii) a combination
thereof, sufficient to pay the principal of, and interest
on, all Securities then outstanding, whether at the Stated
Maturity, upon acceleration or upon the redemption of the
Securities;
37<PAGE>
(B) no Default or Event of Default with respect to the
Securities has occurred and is continuing on the date of
such deposit or occurs as a result of such deposit;
(C) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the defeasance contemplated
by this provision have been complied with; and
(D) the Company has delivered to the Trustee (i) either a
private Internal Revenue Service ruling or an Opinion of
Counsel to the effect that the Holders will not recognize
income, gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount and in the
manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred, and
(ii) an Opinion of Counsel to the effect that (A) the
deposit shall not result in the Company, the Trustee or the
trust being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended, and (B) such
deposit creates a valid trust in which the Holders of the
Securities have the sole beneficial ownership interest or
that the Holders of the Securities have a nonavoidable first
priority security interest in such trust. Notwithstanding
the foregoing, the Company's obligations to pay principal of
and interest, including Additional Interest, if any, on the
Securities shall continue until the Internal Revenue Service
ruling or Opinion of Counsel referred to in clause (i) above
is provided with regard to and without reliance upon such
obligations continuing to be obligations of the Company.
SECTION 8.02 Application by Trustee of Funds Deposited for
Payment of Securities.
Subject to Section 8.04 and Article 10 of this Indenture,
all moneys deposited with the Trustee pursuant to Section 8.01
hereof shall be held in trust and applied by it to the payment,
either directly or through any Paying Agent (including the
Company acting as its own Paying Agent), to the Holders of the
particular Securities for the payment or redemption of which such
moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent
required by law.
SECTION 8.03 Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent under this
Indenture shall, upon demand of the Company, be repaid to it or
paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
38<PAGE>
SECTION 8.04 Return of Moneys Held by the Trustee and Paying
Agent Unclaimed for Three Years.
Any moneys deposited with or paid to the Trustee or any
Paying Agent for the payment of the principal or interest on any
Security and not applied but remaining unclaimed for three years
after the date when such principal or interest shall have become
due and payable shall, upon the written request of the Company
and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, be
repaid to the Company by the Trustee or such Paying Agent, and
the Holder of such Security shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Company for
any payment which such Holder may be entitled to collect, and all
liability of the Trustee or any Paying Agent with respect to such
moneys shall thereupon cease.
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders.
From time to time, when authorized by a resolution of the
Board of Directors, the Company and the Trustee, without notice
to or the consent of the Holders of the Securities issued
hereunder, may amend or supplement this Indenture or the
Securities:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5 hereof;
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(4) to make any other change that does not adversely affect
the rights of any Securityholder;
(5) to comply with any requirement of the SEC in connection
with the qualification of this Indenture under the TIA; or
(6) to set forth the terms and conditions, which shall not
be inconsistent with this Indenture, of the series of Securities
(other than the Series A Securities) that are to be issued
hereunder and the form of Securities of such series.
39<PAGE>
SECTION 9.02 With Consent of Holders.
With the written consent of the Holders of at least a
majority in aggregate principal amount of any series of
Securities at the time outstanding, who are affected by any
amendment or waiver, the Company and the Trustee may amend this
Indenture or the Securities or may waive future compliance by the
Company with any provisions of this Indenture or the Securities
of such series. However, without the consent of each
Securityholder affected, such an amendment or waiver may not:
(1) reduce the principal amount of the Securities, or
reduce the principal amount of the Securities the Holders of
which must consent to an amendment of this Indenture or a waiver;
(2) change the Stated Maturity of the principal of, or the
interest or rate of interest on the Securities, change adversely
to the Holders the redemption provisions of Article 3 hereof or
in the Securities, or impair the right to institute suit for the
enforcement of any such payment or make any Security payable in
money or securities other than that stated in the Security;
(3) make any change in Article 10 hereof that adversely
affects the rights of the Holders of the Securities or any change
to any other section hereof that adversely affects their rights
under Article 10 hereof;
(4) waive a Default in the payment of the principal of, or
interest on, any Security; or
(5) change Section 6.07 hereof.
It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent
approves the substance thereof.
If certain Holders agree to defer or waive certain
obligations of the Company hereunder with respect to Securities
held by them, such deferral or waiver shall not affect the rights
of any other Holder to receive the payment or performance
required hereunder in a timely manner, unless such deferral or
waiver complies with the requirements of this Section 9.02.
After an amendment or waiver under this Section 9.02 becomes
effective, the Company shall mail to each Holder affected by such
amendment or waiver a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notices, or any
defect therein, shall not, however, in any way impair or affect
the validity of such amendment or waiver.
40<PAGE>
SECTION 9.03 Compliance with Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article 9 shall comply with the TIA.
SECTION 9.04 Revocation and Effect Of Consents, Waivers and
Actions.
Until an amendment, waiver or other action by Holders
becomes effective, a consent to it or any other action by a
Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting
Holder's Security, even if notation of the consent, waiver or
action is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent, waiver or action as to
such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the consent of the
requisite aggregate principal amount of the Securities at the
time outstanding has been obtained and not revoked. After an
amendment, waiver or action becomes effective, it shall bind
every Securityholder, except as provided in Section 9.02 hereof.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to
consent to any amendment or waiver. If a record date is fixed,
then, notwithstanding the first two sentences of the immediately
preceding paragraph, 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.
SECTION 9.05 Notation on or Exchange of Securities.
Securities authenticated and made available for delivery
after the execution of any supplemental indenture pursuant to
this Article 9 may, and shall, if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and made available for
delivery by the Trustee in exchange for outstanding Securities of
the same series.
SECTION 9.06 Trustee to Sign Supplemental Indentures.
41<PAGE>
The Trustee shall sign any supplemental indenture authorized
pursuant to this Article 9 if the supplemental indenture does not
adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an
Officer's Certificate and Opinion of Counsel stating that such
supplemental indenture is authorized or permitted by this
Indenture.
SECTION 9.07 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article 9, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes and every Holder of Securities
theretofore or thereafter authenticated and made available for
delivery hereunder shall be bound thereby.
ARTICLE 10
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior Indebtedness.
Notwithstanding the provisions of Section 6.01 hereof or any
other provision herein or in the Securities, the Company and the
Trustee and each Holder by his acceptance thereof (a) covenant
and agree that all payments by the Company of the principal of
and interest (which term for purposes of this Article 10 shall
include Additional Interest, if any, and any additional accrued
interest) on the Securities shall be subordinated in accordance
with the provisions of this Article 10 to the prior payment in
full, in cash or cash equivalents, of all amounts payable on
Senior Indebtedness, and (b) acknowledge that holders of Senior
Indebtedness are or shall be relying on this Article 10.
SECTION 10.02 Priority and Payment of Proceeds in Certain
Events; Remedies Standstill.
(a) Upon any payment or distribution of assets or
securities of the Company, as the case may be, of any kind or
character, whether in cash, property or securities, upon any
dissolution or winding up or total or partial liquidation or
reorganization of the Company, whether voluntary or involuntary,
or in bankruptcy, insolvency, receivership or other proceedings,
all amounts payable on Senior Indebtedness (including any
interest accruing on such Senior Indebtedness subsequent to the
commencement of a bankruptcy, insolvency or similar proceeding)
shall first be paid in full in cash, or payment provided for in
cash or cash equivalents, before the Holders or the Trustee on
behalf of the Holders shall be entitled to receive from the
42<PAGE>
Company any payment of principal of or interest on or any other
amounts in respect of the Securities or distribution of any
assets or securities. Before any payment may be made by the
Company of the principal of or interest on the Securities upon
any such dissolution or winding up or liquidation or
reorganization, any payment or distribution of assets or
securities of the Company of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee
on their behalf would be entitled, except for the provisions of
this Article 10, shall be made by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution first to the holders of all
Senior Indebtedness or their representatives to the extent
necessary to pay all Senior Indebtedness in full after giving
effect to any concurrent payment or distribution to the holders
of Senior Indebtedness.
(b) No direct or indirect payment by or on behalf of the
Company of principal of or interest on the Securities whether
pursuant to the terms of the Securities or upon acceleration or
otherwise shall be made if, at the time of such payment, there
exists any default in the payment of all or any portion of any
Senior Indebtedness, or any other default affecting Senior
Indebtedness permitting its acceleration, as the result of which
the maturity of Senior Indebtedness has been accelerated, and the
Trustee has received written notice from any trustee,
representative or agent for the holders of the Senior
Indebtedness or the holders of at least a majority in principal
amount of the Senior Indebtedness at the time outstanding of such
default and acceleration, and such default shall not have been
cured or waived by or on behalf of the holders of such Senior
Indebtedness.
(c) If, notwithstanding the foregoing provision
prohibiting such payment or distribution, the Trustee or any
Holder shall have received any payment on account of the
principal of or interest on the Securities (other than as
permitted by subsections (a) and (b) of this Section 10.02) when
such payment is prohibited by this Section 10.02 and before all
amounts payable on Senior Indebtedness are paid in full in cash
or cash equivalents, then and in such event (subject to the
provisions of Section 10.08 hereof) such payment or distribution
shall be received and held in trust for the holders of Senior
Indebtedness and shall be paid over or delivered first to the
representatives of the holders of the Senior Indebtedness
remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in cash or cash equivalents.
Upon any payment or distribution of assets or securities
referred to in this Article 10, the Trustee and the Holders shall
be entitled to rely upon any order or decree of a court of
competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a
43<PAGE>
certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making any such payment or
distribution, delivered to the Trustee for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 10.
SECTION 10.03 Payments which May Be Made Prior to Notice.
Nothing in this Article 10 or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions
described in Section 10.02 hereof, from making payments of
principal of and interest on the Securities or from depositing
with the Trustee any monies for such payments, or (ii) the
application by the Trustee of any monies deposited with it for
the purpose of making such payments of principal of and interest
on the Securities, to the Holders entitled thereto, unless at
least one day prior to the date when such payment would otherwise
(except for the prohibitions contained in Section 10.02 hereof)
become due and payable, the Trustee shall have received the
written notice provided for in Section 10.02(b) hereof.
SECTION 10.04 Rights of Holders of Senior Indebtedness Not to Be
Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at
any time or in any way be prejudiced or impaired by any good
faith act or omission to act by any such holder, or by any
noncompliance by the Company with the terms and provisions and
covenants herein regardless of any knowledge thereof any such
holder may have or otherwise be charged with.
The provisions of this Article 10 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
Notwithstanding anything to the contrary in this Article 10,
to the extent the Holders or the Trustee have paid over or
delivered to any holder of Senior Indebtedness any payment or
distribution received on account of the principal of, or interest
on, the Securities to which any other holder of Senior
Indebtedness shall be entitled to share in accordance with
Section 10.02 hereof, no holder of Senior Indebtedness shall have
a claim or right against the Holders or the Trustee with respect
to any such payment or distribution or as a result of the failure
44<PAGE>
to make payments or distributions to such other holder of Senior
Indebtedness.
SECTION 10.05 Trustee May Take Action to Effectuate
Subordination.
Each Holder by his acceptance of the Securities authorizes
and directs the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate, as between the holders
of Senior Indebtedness and the Holders, the subordination and the
subrogation as provided in this Article 10 and appoints the
Trustee his attorney-in-fact for any and all such purposes.
SECTION 10.06 Subrogation.
Upon the payment in full, in cash or cash equivalents, of
all Senior Indebtedness, the Holders shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive
payments or distributions of assets of the Company made on such
Senior Indebtedness until the Securities shall be paid in full;
and for the purposes of such subrogation, no payments or
distributions to holders of such Senior Indebtedness of any cash,
property or securities to which Holders of the Securities would
be entitled, except for this Article 10, and no payment pursuant
to this Article 10 to holders of such Senior Indebtedness by the
Holders of the Securities, shall, as between the Company, its
creditors other than holders of such Senior Indebtedness and the
Holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness, it being
understood that the provisions of this Article 10 are solely for
the purpose of defining the relative rights of the holders of
such Senior Indebtedness, on the one hand, and the Holders of the
Securities, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the
provisions of this Article 10 shall have been applied, pursuant
to this Article 10, to the payment of all Senior Indebtedness,
then and in such case, the Holders of the Securities shall be
entitled to receive from the holders of such Senior Indebtedness
at the time outstanding any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount
sufficient to pay, in cash or cash equivalents, all such Senior
Indebtedness in full.
SECTION 10.07 Obligations of Company Unconditional;
Reinstatement.
Nothing in this Article 10, or elsewhere in this Indenture
or in any Security, is intended to or shall impair, as between
the Company and the Holders of the Securities, the obligations of
45<PAGE>
the Company, which are absolute and unconditional, to pay to the
Holders the principal of, and interest on, the Securities as and
when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by
applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article 10 of the holders of such
Senior Indebtedness in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.
The failure to make a scheduled payment of principal of, or
interest on, the Securities by reason of Section 10.02 hereof
shall not be construed as preventing the occurrence of an Event
of Default under Section 6.01 hereof; provided, however, that if
(i) the conditions preventing the making of such payment no
longer exist, and (ii) the Holders of the Securities are made
whole with respect to such omitted payments, the Event of Default
relating thereto (including any failure to pay any accelerated
amounts) shall be automatically waived, and the provisions of the
Indenture shall be reinstated as if no such Event of Default had
occurred.
SECTION 10.08 Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice.
The Trustee or Paying Agent shall not be charged with the
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee or Paying Agent,
unless and until the Trustee or Paying Agent shall have received
written notice thereof from the Company or one or more holders of
Senior Indebtedness or from any trustee or agent therefor or
unless the Trustee or Paying Agent otherwise had actual knowledge
thereof; and, prior to the receipt of any such written notice or
actual knowledge, the Trustee or Paying Agent may conclusively
assume that no such facts exist.
Unless at least one day prior to the date when by the terms
of this Indenture any monies are to be deposited by the Company
with the Trustee or any Paying Agent for any purpose (including,
without limitation, the payment of the principal of or the
interest on any Security), the Trustee or Paying Agent shall,
except where no notice is necessary or where notice is deemed
given in Sections 10.02 and 10.03 hereof, have received with
respect to such monies the notice provided for in the preceding
sentence, the Trustee or Paying Agent shall have full power and
authority to receive and apply such monies to the purpose for
which they were received. Neither of them shall be affected by
any notice to the contrary, which may be received by either on or
after such date. The foregoing shall not apply to the Paying
46<PAGE>
Agent if the Company is acting as Paying Agent. Nothing in this
Section 10.08 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by Section 10.02
hereof. The Trustee or Paying Agent shall be entitled to rely on
the delivery to it of a written notice by a Person representing
himself or itself to be a holder of such Senior Indebtedness (or
a trustee on behalf of, or other representative of, such holder)
to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of
any such holder. The Trustee shall not be deemed to have any
fiduciary duty to the holders of Senior Indebtedness.
SECTION 10.09 Right of Trustee to Hold Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all of
the rights set forth in this Article 10 in respect of any Senior
Indebtedness at any time held by them to the same extent as any
other holder of such Senior Indebtedness, and nothing in this
Indenture shall be construed to deprive the Trustee or any Paying
Agent of any of its rights as such holder.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by operation of subsection (c)
of Section 318 of the TIA, the imposed duties shall control. The
provisions of Sections 310 to 317, inclusive, of the TIA that
impose duties on any Person (including provisions automatically
deemed included in an indenture unless the indenture provides
that such provisions are excluded) are a part of and govern this
Indenture, except as, and to the extent, they are expressly
excluded from this Indenture, as permitted by the TIA.
SECTION 11.02 Notices.
Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail, postage
prepaid, addressed as follows:
if to the Company:
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
Attention: Secretary
Facsimile No.: (201) 984-9423
47<PAGE>
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attn: Corporate Trust Department,
Department B
The Company or the Trustee, by giving notice to the other,
may designate additional or different addresses for subsequent
notices of communications. Upon request from the holder, if any,
of Senior Indebtedness, the Company shall notify such holder of
any such additional or different addresses of which the Company
receives notice from the Trustee.
Any notice or communication given to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address
as it appears on the Register of the Registrar and shall be
sufficiently given if mailed within the time prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice or
communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each
Registrar, Paying Agent or co-Registrar.
SECTION 11.03 Communication by Holders with Other Holders.
Securityholders may communicate, pursuant to TIA Section
312(b), with other Securityholders with respect to their rights
under this Indenture or the Securities. The Company, the Trustee,
the Registrar, the Paying Agent and anyone else shall have the
protection of TIA Section 312(c).
SECTION 11.04 Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officer's Certificate (complying with Section 11.05
hereof) stating that, in the opinion of such Officer, all
conditions precedent to the taking of such action have been
complied with; and
48<PAGE>
(2) if appropriate, an Opinion of Counsel (complying with
Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent to the taking of such
action have been complied with.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each Officer's Certificate and Opinion of Counsel with
respect to compliance with a covenant or condition provided for
in this Indenture shall include:
(1) a statement that each individual making such Officer's
Certificate or Opinion of Counsel has read such covenant or
condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such Officer's Certificate or Opinion of
Counsel are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation
as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement that, in the opinion of such individual,
such covenant or condition has been complied with; provided,
however, that with respect to matters of fact not involving any
legal conclusion, an Opinion of Counsel may rely on an Officer's
Certificate or certificates of public officials.
SECTION 11.06 Severability Clause.
If any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 11.07 Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders. The Registrar and Paying Agent may
make reasonable rules for their functions.
SECTION 11.08 Legal Holidays.
49<PAGE>
A "Legal Holiday" is any day other than a Business Day. If
any specified date (including a date for giving notice) is a
Legal Holiday, the action to be taken on such date shall be taken
on the next succeeding day that is not a Legal Holiday, and if
such action is a payment in respect of the Securities, no
principal or interest installment shall accrue for the
intervening period; except that if any payment is due on a Legal
Holiday and the next succeeding day that is not a Legal Holiday
is in the next succeeding calendar year, such payment shall be
made on the Business Day immediately preceding such Legal
Holiday.
SECTION 11.09 Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York,
as applied to contracts made and performed within the State of
New York, without regard to its principles of conflicts of laws.
SECTION 11.10 No Recourse Against Others.
No director, officer, employee or stockholder, as such, of
the Company shall have any liability for any obligations of the
Company under the Securities or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall
waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the
Securities.
SECTION 11.11 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successors and assigns. All agreements
of the Trustee in this Indenture shall bind its successors and
assigns.
SECTION 11.12 Multiple Original Copies of this Indenture.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together
represent the same agreement. Any signed copy shall be sufficient
proof of this Indenture.
SECTION 11.13 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any
50<PAGE>
Subsidiary. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 11.14 Table of Contents; Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings
of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 11.15 Benefits of the Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any person, other than the parties hereto
and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this
Indenture, except as expressly provided in Article 10 hereof.
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized,
have executed this Indenture on behalf of the respective parties
hereto as of the date first above written.
JERSEY CENTRAL POWER & COMPANY
By:
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
Name:
Title:
51<PAGE>
[FORM OF FACE OF THE SECURITY]
__% Deferrable Interest Subordinated Debentures, Series A,
due 2044
No. __________________
$___________
Jersey Central Power & Light Company, a New Jersey corporation
(the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), promises to pay to
_______________ or registered assigns, the principal amount of
_____________________________ Dollars on _______________, 2044.
Interest Payment Dates: the last day of each month
commencing on ____________, 1995, except as provided in the
Indenture.
Regular Record Dates: the 15th day of each month (or if all
the Securities are held in book-entry-only form, the Business
Day) immediately preceding the applicable Interest Payment Date.
This Security shall not be valid until an authorized officer
of the Trustee manually signs the Trustee's Certificate of
Authentication below.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof which shall for all
purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to
be signed manually or by facsimile by its duly authorized
officers and a facsimile of its corporate seal to be affixed
hereto or imprinted hereon.
Jersey Central Power & Light Company
By: ________________________________
Name: _____________________________
Title: _____________________________
By: ________________________________
Name: ______________________________
Title: _____________________________
Dated: _____________________
52<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK
By: __________________________
Authorized Signatory
53<PAGE>
[FORM OF REVERSE SIDE OF SECURITY]
__ % Deferrable Interest Subordinated Debentures, Series A,
due 2044
1. Payment of Interest and Additional Interest
Jersey Central Power & Light Company, a New Jersey
corporation (the "Company"), promises to pay interest on the
principal amount of this Security (the "Series A Securities") at
the rate per annum shown in its title above. Interest will be
payable monthly on each Interest Payment Date, commencing
_________, 1995. Interest on this Security will accrue for each
day that elapses from the most recent date to which interest has
been paid, or if no interest has been paid, from the date of its
authentication, to the next Interest Payment Date; provided that,
if there is no existing Event of Default in the payment of
interest and if this Security is authenticated between a record
date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Under
certain circumstances, the Company may be required to pay
Additional Interest.
The Company shall pay interest on overdue principal and
interest on overdue installments of interest, to the extent
lawful, at the rate per annum borne by this Security.
2. Deferral of Interest
The Company may at any time and from time to time, if it is
not in default in the payment of interest on the Series A
Securities, extend the interest payment period on the Series A
Securities for up to 60 consecutive months, but not later than
______________, 2044. At the end of such period the Company
will pay all interest then accrued and unpaid (including interest
on such interest if legally permitted), provided that during such
interest extension period, which the Company may shorten at its
option, neither the Company nor any Subsidiary will declare or
pay any dividend on or purchase, redeem or acquire or make a
liquidation payment on its Capital Stock.
3. Method of Payment
The Company will pay interest on the Series A
Securities (except defaulted interest) to the persons who are
registered Holders at the close of business on the 15th day of
the month (or if all the Series A Securities are held in book-
entry-only form, on the Business Day) immediately preceding the
Interest Payment Date even if the Series A Security is thereafter
canceled on registration of transfer or registration of exchange.
Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is
54<PAGE>
legal tender for payment of public and private debts. However,
the Company may pay principal and interest by its check payable
in such money. It may mail an interest payment to a
Securityholder's registered address.
4. Paying Agent and Registrar
Initially, the Trustee will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent or
Registrar without notice, other than notice to the Trustee. The
Company or an Affiliate of the Company may act as Paying Agent,
Registrar or co-Registrar.
5. Indenture
The Company issued the Series A Securities under an
Indenture, dated as of __________, 1995 (the "Indenture"),
between the Company and the Trustee. The Indenture also provides
for the issuance by the Company from time to time of additional
Securities of different series and with different terms and
conditions but subject, nevertheless, to the Indenture. The
terms of the Series A Securities include those stated herein and
in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the
"TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Series
A Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the TIA for a statement of
those terms.
The Series A Securities are general unsecured obligations of
the Company limited to $_______________ aggregate principal
amount.
6. Redemption
At the option of the Company, the Series A Securities are
redeemable from and after __________, 2000, as a whole, or from
time to time in part. The amount to be paid on redemption (the
"Redemption Price") shall be equal to 100% of the principal
amount thereof plus accrued and unpaid interest, including
Additional Interest, if any, and accrued interest thereon, to the
Redemption Date. The Company must notify the Trustee of its
election to redeem the Series A Securities at least 45 days
before the Redemption Date.
If JCP&L Capital, L. P. (or any successor in interest)
redeems the Series A Preferred Securities (or any securities
issued in substitution for the Series A Preferred Securities),
the Company is also required to redeem the Series A Securities
pursuant to this paragraph 6.
7. Notice of Redemption; Conditional Notice.
55<PAGE>
Notice of redemption will be mailed at least 30 days but not
more than 90 days before the Redemption Date to each Holder of
Series A Securities to be redeemed at the Holder's registered
address. Interest on the Securities to be redeemed by the
Company will cease to accrue after the Redemption Date. Series A
Securities in denominations larger than $25.00 of principal
amount may be redeemed in part but only in integral multiples of
$25.00 of principal amount.
If such notice states that it is subject to the receipt by
the Trustee of funds from the Company on or before the Redemption
Date, such notice shall be ineffective unless such funds are so
received.
8. Subordination
The Securities are subordinated to Senior Indebtedness (as
that term - essentially, debt for borrowed money - is defined in
the Indenture). To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The
Company agrees, and each Securityholder by accepting a Security
agrees, to such subordination and authorizes the Trustee to give
it effect.
9. Denominations; Transfer; Exchange
The Series A Securities are in registered form, without
coupons, in denominations of $25.00 of principal amount and
integral multiples of $25.00. A Holder may transfer or exchange
Series A Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Securities for a
period of five days before notice of redemption is given or any
Securities that are selected for redemption (except, in the case
of a Security to be redeemed in part, the portion of the Security
not to be redeemed).
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of this Security for all purposes.
11. Amendment; Waiver
Subject to certain exceptions in the Indenture which require
the consent of every Holder, (i) the Indenture or the Series A
Securities may be amended with the written consent of the Holders
of a majority in aggregate principal amount of the Series A
Securities at the time outstanding, and (ii) certain defaults or
noncompliance with certain provisions may be waived with the
written consent of the Holders of a majority in aggregate
principal amount of the Series A Securities at the time
outstanding. Subject to certain exceptions in the Indenture,
56<PAGE>
without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to bind a successor to the
obligations of the Indenture, to provide for uncertificated
Securities in addition to certificated Securities, to comply with
any requirements of the Securities and Exchange Commission in
connection with the qualification of the Indenture under the TIA,
to make any change that does not adversely affect the rights of
any Securityholder or to provide for the issuance of any other
series of Securities. Amendments bind all Holders and subsequent
Holders.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default
in payment of the principal amount, or interest, in respect of
the Securities when the same becomes due and payable subject, in
the case of interest, to the grace period and any extension
period provided for in the Indenture; (ii) failure by the Company
to comply with its other covenants in the Indenture or the
Securities, subject to notice and lapse of time; and (iii)
certain events of bankruptcy or insolvency of the Company. If an
Event of Default occurs and is continuing, the Trustee, or the
Holders of at least a majority in aggregate principal amount of
the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result
in the Securities becoming due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
refuse to enforce the Indenture or the Securities unless it
receives reasonable indemnity and security. Subject to certain
limitations, Holders of a majority in aggregate principal amount
of the Securities at the time outstanding may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing Default (except a
Default in paying principal and/or interest) if it determines
that withholding notice is in their interests.
13. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the
Trustee, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates
and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee.
14. No Recourse Against Others
A director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of
the Company under the Securities or the Indenture or for any
57<PAGE>
claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
15. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (tenants in
common), TEN ENT (tenants by the entireties), JT TEN (joint
tenants with right of survivorship and not as tenants in common),
CUST (custodian), and U/G/M/A (Uniform Gift to Minors Act).
16. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for three years, the Trustee or Paying Agent will pay
the money back to the Company at its request. After that,
Holders entitled to such money must look to the Company for
payment.
17. Discharge Prior to Maturity
If the Company deposits with the Trustee or Paying Agent
money or U.S. Government Obligations sufficient to pay the
principal of and interest on the Securities to maturity, the
Company will be discharged from the Indenture under certain
conditions and except for certain provisions thereof.
18. Successor
When a successor Person to the Company assumes all the
obligations of its predecessor under the Securities and the
Indenture in accordance with the Indenture, such predecessor
shall be released from those obligations.
19. Governing Law
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
58<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to:
_________________________________________________________________
(Insert assignee's social security or tax I.D. number)
_________________________________________________________________
(Print or type assignee's name, address and zip code)
a n d i r r e v o c a b l y a p p o i n t
__________________________________________ agent to transfer this
Security on the books of the Company. The agent may substitute
another to act for him.
Dated: ________________ Signature: ________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guaranty: ________________________
(New York commercial bank or trust company or member
of an accepted medallion guaranty)
59<PAGE>
INDENTURE BETWEEN JERSEY CENTRAL POWER & LIGHT COMPANY
AND UNITED STATES TRUST COMPANY OF NEW YORK
DATED AS OF ________________, 1995
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions. . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitions. . . . . . . . . . . . 6
SECTION 1.03 Incorporation by Reference of Trust
Indenture Act. . . . . . . . . . . . . . 7
SECTION 1.04 Rules of Construction. . . . . . . . . . 7
SECTION 1.05 Acts of Holders. . . . . . . . . . . . . 8
ARTICLE 2
THE SECURITIES; THE SERIES A SECURITIES
SECTION 2.01 Issue of Securities Generally. . . . . . 9
SECTION 2.02 Form of the Series A Securities;
Denominations; Global Security. . . . . 10
SECTION 2.03 Execution and Authentication. . . . . . 11
SECTION 2.04 Registrar and Paying Agent. . . . . . 12
SECTION 2.05 Paying Agent to Hold Money in Trust. . 13
SECTION 2.06 Securityholder Lists. . . . . . . . . . 13
SECTION 2.07 Transfer and Exchange. . . . . . . . . 13
SECTION 2.08 Replacement Securities. . . . . . . . . 14
SECTION 2.09 Outstanding Securities; Determinations
of Holders' Action. . . . . . . . . . . 15
SECTION 2.10 Temporary Securities. . . . . . . . . . 16
SECTION 2.11 Cancellation. . . . . . . . . . . . . . 17
SECTION 2.12 CUSIP Numbers. . . . . . . . . . . . . 17
SECTION 2.13 Defaulted Interest. . . . . . . . . . . 17
ii<PAGE>
ARTICLE 3
REDEMPTION
SECTION 3.01 Redemption Right, Obligation; Notice to
Trustee. . . . . . . . . . . . . . . . 18
SECTION 3.02 Selection of Securities to be Redeemed. 18
SECTION 3.03 Notice of Redemption; Conditional
Notice. . . . . . . . . . . . . . . . . 19
SECTION 3.04 Effect of Notice of Redemption. . . . . 20
SECTION 3.05 Deposit of Redemption Price. . . . . . 20
SECTION 3.06 Securities Redeemed in Part. . . . . . 20
ARTICLE 4
COVENANTS
SECTION 4.01 Payment of the Securities. . . . . . . 20
SECTION 4.02 Prohibition Against Dividends, etc.
During an Event of Default. . . . . . . 23
SECTION 4.03 SEC Reports. . . . . . . . . . . . . . 23
SECTION 4.04 Compliance Certificates. . . . . . . . 23
SECTION 4.05 Further Instruments and Acts. . . . . . 24
SECTION 4.06 Investment Company Act. . . . . . . . . 24
SECTION 4.07 Payments for Consents. . . . . . . . . 24
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01 When the Company May Merge, Etc. . . . 24
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default. . . . . . . . . . . 25
SECTION 6.02 Acceleration. . . . . . . . . . . . . . 27
SECTION 6.03 Other Remedies. . . . . . . . . . . . . 27
SECTION 6.04 Waiver of Past Defaults. . . . . . . . 28
SECTION 6.05 Control by Majority. . . . . . . . . . 28
iii<PAGE>
SECTION 6.06 Limitation on Suits. . . . . . . . . . 28
SECTION 6.07 Rights of Holders to Receive Payment. . 29
SECTION 6.08 Collection Suit by the Trustee. . . . . 29
SECTION 6.09 The Trustee May File Proofs of Claim. . 29
SECTION 6.10 Priorities. . . . . . . . . . . . . . . 30
SECTION 6.11 Undertaking for Costs. . . . . . . . . 30
SECTION 6.12 Waiver of Stay, Extension or
Usury Laws. . . . . . . . . . . . . . . 31
ARTICLE 7
THE TRUSTEE
SECTION 7.01 Duties of the Trustee. . . . . . . . . 31
SECTION 7.02 Rights of the Trustee. . . . . . . . . 32
SECTION 7.03 Individual Rights of the Trustee. . . . 33
SECTION 7.04 The Trustee's Disclaimer. . . . . . . . 34
SECTION 7.05 Notice of Defaults. . . . . . . . . . . 34
SECTION 7.06 Reports by Trustee to Holders. . . . . 34
SECTION 7.07 Compensation and Indemnity. . . . . . . 34
SECTION 7.08 Replacement of Trustee. . . . . . . . . 35
SECTION 7.09 Successor Trustee by Merger. . . . . . 36
SECTION 7.10 Eligibility; Disqualification. . . . . 36
SECTION 7.11 Preferential Collection of Claims
Against the Company. . . . . . . . . . 37
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE;
DEFEASANCE OF CERTAIN OBLIGATIONS; UNCLAIMED MONEYS
SECTION 8.01 Satisfaction and Discharge of
Indenture. . . . . . . . . . . . . . . 37
SECTION 8.02 Application by Trustee of Funds
Deposited for Payment of Securities. . 38
SECTION 8.03 Repayment of Moneys Held by Paying
Agent. . . . . . . . . . . . . . . . . 38
iv<PAGE>
SECTION 8.04 Return of Moneys Held by the Trustee and
Paying Agent Unclaimed for Three Years. 38
ARTICLE 9
AMENDMENTS
SECTION 9.01 Without Consent of Holders. . . . . . . 39
SECTION 9.02 With Consent of Holders. . . . . . . . 39
SECTION 9.03 Compliance with Trust Indenture Act. . 40
SECTION 9.04 Revocation and Effect Of Consents,
Waivers and Actions. . . . . . . . . . 41
SECTION 9.05 Notation on or Exchange of Securities. 41
SECTION 9.06 Trustee to Sign Supplemental
Indentures. . . . . . . . . . . . . . . 41
SECTION 9.07 Effect of Supplemental Indentures. . . 42
ARTICLE 10
SUBORDINATION
SECTION 10.01 Securities Subordinated to Senior
Indebtedness. . . . . . . . . . . . . . 42
SECTION 10.02 Priority and Payment of Proceeds in
Certain Events; Remedies Standstill. . 42
SECTION 10.03 Payments which May Be Made Prior to
Notice. . . . . . . . . . . . . . . . . 44
SECTION 10.04 Rights of Holders of Senior Indebtedness
Not to Be Impaired. . . . . . . . . . . 44
SECTION 10.05 Trustee May Take Action to Effectuate
Subordination. . . . . . . . . . . . . 44
SECTION 10.06 Subrogation. . . . . . . . . . . . . . 45
SECTION 10.07 Obligations of Company Unconditional;
Reinstatement. . . . . . . . . . . . . 45
SECTION 10.08 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. . . . 46
SECTION 10.09 Right of Trustee to Hold Senior
Indebtedness. . . . . . . . . . . . . . 47
ARTICLE 11
v<PAGE>
MISCELLANEOUS
SECTION 11.01 Trust Indenture Act Controls . . . . . 47
SECTION 11.02 Notices. . . . . . . . . . . . . . . . 47
SECTION 11.03 Communication by Holders with Other
Holders. . . . . . . . . . . . . . . . 48
SECTION 11.04 Certificate and Opinion as to Conditions
Precedent. . . . . . . . . . . . . . . 48
SECTION 11.05 Statements Required in Certificate or
Opinion. . . . . . . . . . . . . . . . 48
SECTION 11.06 Severability Clause. . . . . . . . . . 49
SECTION 11.07 Rules by Trustee, Paying Agent and
Registrar. . . . . . . . . . . . . . . 49
SECTION 11.08 Legal Holidays. . . . . . . . . . . . . 49
SECTION 11.09 Governing Law. . . . . . . . . . . . . 50
SECTION 11.10 No Recourse Against Others. . . . . . . 50
SECTION 11.11 Successors. . . . . . . . . . . . . . . 50
SECTION 11.12 Multiple Original Copies of this
Indenture. . . . . . . . . . . . . . . 50
SECTION 11.13 No Adverse Interpretation of Other
Agreements. . . . . . . . . . . . . . . 50
SECTION 11.14 Table of Contents; Headings, Etc. . . . 50
SECTION 11.15 Benefits of the Indenture. . . . . . . 51
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 51
[FORM OF FACE OF THE SECURITY] . . . . . . . . . . . . . . 52
Trustee's Certificate of Authentication . . . . . . . . 53
[FORM OF REVERSE SIDE OF SECURITY] . . . . . . . . . . . . 54
1. Payment of Interest and Additional Interest . . . 54
2. Deferral of Interest . . . . . . . . . . . . . . 54
3. Method of Payment . . . . . . . . . . . . . . . . 54
4. Paying Agent and Registrar . . . . . . . . . . . 55
5. Indenture . . . . . . . . . . . . . . . . . . . . 55
6. Redemption . . . . . . . . . . . . . . . . . . . 55
7. Notice of Redemption; Conditional Notice . . . . 55
8. Subordination . . . . . . . . . . . . . . . . . . 56
9. Denominations; Transfer; Exchange . . . . . . . . 56
vi<PAGE>
10. Persons Deemed Owners . . . . . . . . . . . . . . 56
11. Amendment; Waiver . . . . . . . . . . . . . . . . 56
12. Defaults and Remedies . . . . . . . . . . . . . . 57
13. Trustee Dealings with the Company . . . . . . . . 57
14. No Recourse Against Others . . . . . . . . . . . 57
15. Abbreviations . . . . . . . . . . . . . . . . . . 58
16. Unclaimed Money . . . . . . . . . . . . . . . . . 58
17. Discharge Prior to Maturity . . . . . . . . . . . 58
18. Successor . . . . . . . . . . . . . . . . . . . . 58
19. Governing Law . . . . . . . . . . . . . . . . . . 58
ASSIGNMENT FORM . . . . . . . . . . . . . . . . . . . . . . 59
vii<PAGE>
Exhibit 4-A(1)
JERSEY CENTRAL POWER & LIGHT COMPANY
CROSS-REFERENCE TABLE
of Provisions of the Indenture
Required by the Trust Indenture Act of 1939
Trust Indenture Provision of
Act Section Indenture
Section 310(a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311(a) 7.11
(b) 7.11
(c) Not Applicable
Section 312(a) 2.06
(b) 11.03
(c) 11.03
Section 313(a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314(a) 4.03; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315(a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.09
(b) 6.07
Section 317(a)(1) 6.08
(a)(2) 6.09
(b) 2.05
Section 318(a) 11.01
________________________
Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be part of the Indenture.<PAGE>
Exhibit 4-A(1)
JERSEY CENTRAL POWER & LIGHT COMPANY
CROSS-REFERENCE TABLE
of Provisions of the Indenture
Required by the Trust Indenture Act of 1939
Trust Indenture Provision of
Act Section Indenture
Section 310(a)(1) 7.10
(a)(2) 7.10
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 7.08; 7.10; 11.01
(c) Not Applicable
Section 311(a) 7.11
(b) 7.11
(c) Not Applicable
Section 312(a) 2.06
(b) 11.03
(c) 11.03
Section 313(a) 7.06
(b)(1) Not Applicable
(b)(2) 7.06
(c) 7.06; 11.02
(d) 7.06
Section 314(a) 4.03; 11.02
(b) Not Applicable
(c)(1) 2.02; 11.04
(c)(2) 2.02; 11.04
(c)(3) Not Applicable
(d) Not Applicable
(e) 11.05
(f) Not Applicable
Section 315(a) 7.01(2)
(b) 7.05; 11.02
(c) 7.01(1)
(d) 7.01(3)
(e) 6.11
Section 316(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) Not Applicable
(a)(last sentence) 2.09
(b) 6.07
Section 317(a)(1) 6.08
(a)(2) 6.09
(b) 2.05
Section 318(a) 11.01
________________________
Note: This Cross-Reference Table shall not, for any purpose,
be deemed to be part of the Indenture.<PAGE>
EXHIBIT 5-A
[Berlack, Israels & Liberman Letterhead]
April 21, 1995
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
JCP&L Capital, L.P.
Mellon Bank Center
Second Floor
919 N. Market Street
Wilmington, Delaware 19801
Re: Registration Statement on Form S-3
Dear Sirs:
Jersey Central Power & Light Company (the "Company") and
JCP&L Capital, L.P. ("JCP&L Capital") have filed with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "1933 Act"), a
Registration Statement on Form S-3 (the "Registration State-
ment"), dated March 2, 1995, and Amendment No. 1 thereto, dated
today's date, of which this opinion is to be a part. The
Registration Statement relates to the proposed issuance and sale
by JCP&L Capital of up to 5,000,000 preferred securities,
representing preferred limited partner interests (the "Preferred
Securities"), the proceeds of which, together with the capital
contribution of JCP&L Capital's general partner, JCP&L Preferred
Capital, Inc., a wholly owned subsidiary of the Company, will be
used to purchase subordinated debentures issued by the Company
(the "Subordinated Debentures"). The Company will guarantee (the
"Guarantee") the payment by JCP&L Capital of distributions on the
Preferred Securities and of amounts due upon liquidation of JCP&L
Capital or redemption of the Preferred Securities, all to the
extent set forth in the Guarantee. The Preferred Securities are
to be issued by JCP&L Capital pursuant to an Amended and Restated
Limited Partnership Agreement and one or more Actions thereunder
(collectively, the "Limited Partnership Agreement") and the
Subordinated Debentures are to be issued by the Company pursuant
to an indenture between the Company and United States Trust
Company of New York, as Trustee (the "Indenture").
We have been counsel to the Company for many years. In such
capacity, we are familiar with the affairs of the Company and
JCP&L Capital and the transactions that are the subject matter of
the Registration Statement. We have examined such records of the
Company and JCP&L Capital and such other instruments, documents,
certificates and agreements, including the forms of Guarantee,
Limited Partnership Agreement and Indenture, and made such
further investigation as we have deemed necessary as a basis for
this opinion. With respect to all matters of New Jersey law, we
have relied on the opinion of Richard S. Cohen, Esq., and with
respect to all matters of Delaware law, we have relied on the
opinion of Richards, Layton & Finger, which are being filed as<PAGE>
Exhibits 5-B and 5-C, respectively, to the Registration
Statement.<PAGE>
Jersey Central Power & Light Company
April 21, 1995
Page 2
For the purposes of this opinion, we have assumed that (1)
the proposed transactions are carried out on the basis set forth
in the Registration Statement and in conformity with the
requisite authorizations, approvals, consents or exemptions under
the securities laws of the various States and other jurisdictions
of the United States, (2) all necessary corporate and partnership
action required on the part of the Company, JCP&L Preferred
Capital, Inc. and JCP&L Capital shall have been duly taken, (3)
the Commission shall have issued an order declaring effective (a)
the Registration Statement under the 1933 Act and (b) the
Company's related Application, as amended, and as may be further
amended, on Form U-1 under the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act"), (4) the Indenture shall
have been qualified under the Trust Indenture Act of 1939, as
amended, and (5) the issuance and sale of the Preferred
Securities and Subordinated Debentures do not violate Section
12(f) of the 1935 Act or Rule 70 thereunder.
Based upon the foregoing, we are of the opinion that,
subject to the foregoing assumptions and qualifications, (1) the
Preferred Securities to be issued and sold in accordance with the
Registration Statement, when properly issued, delivered and paid
for, will be legally issued, fully paid and non-assessable
limited partner interests, and (2) when properly authenticated
and delivered by the Trustee under the Indenture, the
Subordinated Debentures will be legally issued and will be
binding obligations of the Company and, when properly executed
and delivered, the Guarantee will be legally issued and will be a
binding obligation of the Company, subject, in each case, to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors
rights generally (including, without limitation, the Atomic
Energy Act and applicable regulations of the Nuclear Regulatory
Commission thereunder) and general equitable principles.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and as a part thereof. We
also consent to the reference to our firm under "Legal Opinions"
in the Prospectus which is a part of the Registration Statement.
Very truly yours,
BERLACK, ISRAELS & LIBERMAN<PAGE>
EXHIBIT 5-B
[Richard S. Cohen Letterhead]
April 21, 1995
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
JCP&L Capital, L.P.
Mellon Bank Center
Second Floor
919 N. Market Street
Wilmington, Delaware 19801
Re: Registration Statement on Form S-3
Dear Sirs:
Jersey Central Power & Light Company (the "Company") and
JCP&L Capital, L.P. ("JCP&L Capital") have filed with the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "1933 Act"), a
Registration Statement on Form S-3 (the "Registration State-
ment"), dated March 2, 1995, and Amendment No. 1 thereto, dated
today's date, of which this opinion is to be a part. The
Registration Statement relates to the proposed issuance and sale
by JCP&L Capital of up to 5,000,000 preferred securities,
representing preferred limited partner interests (the "Preferred
Securities"), the proceeds of which, together with the capital
contribution of JCP&L Capital's general partner, JCP&L Preferred
Capital, Inc., a wholly owned subsidiary of the Company, will be
used to purchase subordinated debentures issued by the Company
(the "Subordinated Debentures"). The Company will guarantee (the
"Guarantee") the payment by JCP&L Capital of distributions on the
Preferred Securities and of amounts due upon liquidation of JCP&L
Capital or redemption of the Preferred Securities, all to the
extent set forth in the Guarantee. The Preferred Securities are
to be issued by JCP&L Capital pursuant to an Amended and Restated
Limited Partnership Agreement and one or more Actions thereunder
(collectively, the "Limited Partnership Agreement") and the
Subordinated Debentures are to be issued by the Company pursuant
to an indenture between the Company and United States Trust
Company of New York, as Trustee (the "Indenture").
I am corporate counsel of the Company. In such capacity, I
am familiar with the affairs of the Company and JCP&L Capital and
the transactions that are the subject matter of the Registration
Statement. I have examined such records of the Company and JCP&L
Capital and such other instruments, documents, certificates and
agreements, including the forms of Guarantee, Limited Partnership
Agreement and Indenture, and made such further investigation as I
have deemed necessary as a basis for this opinion. <PAGE>
Jersey Central Power & Light Company
JCP&L Capital, L.P.
April 21, 1995
Page 2
For the purposes of this opinion, I have assumed that (1)
the proposed transactions are carried out on the basis set forth
in the Registration Statement and in conformity with the
requisite authorizations, approvals, consents or exemptions under
the securities laws of the various States and other jurisdictions
of the United States, (2) all necessary corporate and partnership
action required on the part of the Company, JCP&L Preferred
Capital, Inc. and JCP&L Capital shall have been duly taken, (3)
the Commission shall have issued an order declaring effective (a)
the Registration Statement under the 1933 Act and (b) the
Company's related Application, as amended, and as may be further
amended, on Form U-1 under the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act"), (4) the Indenture shall
have been qualified under the Trust Indenture Act of 1939, as
amended, and (5) the issuance and sale of the Preferred
Securities and Subordinated Debentures do not violate Section
12(f) of the 1935 Act or Rule 70 thereunder.
Based upon the foregoing, I am of the opinion that, subject
to the foregoing assumptions and qualifications, insofar as
matters governed by the laws of the State of New Jersey are
concerned, (1) the Preferred Securities to be issued and sold in
accordance with the Registration Statement, when properly issued,
delivered and paid for, will be legally issued, fully paid and
non-assessable limited partner interests, and (2) when properly
authenticated and delivered by the Trustee under the Indenture,
the Subordinated Debentures will be legally issued and will be
binding obligations of the Company and, when properly executed
and delivered, the Guarantee will be legally issued and will be a
binding obligation of the Company, subject, in each case, to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors
rights generally (including, without limitation, the Atomic
Energy Act and applicable regulations of the Nuclear Regulatory
Commission thereunder) and general equitable principles.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and as a part thereof. I also
consent to the reference to me under "Legal Opinions" in the
Prospectus which is a part of the Registration Statement.
Very truly yours,
Richard S. Cohen<PAGE>
Exhibit 5-C
(Letterhead of Richards, Layton & Finger)
April 21, 1995
JCP&L Capital, L.P.
Mellon Bank Center
Second Floor, 919 N. Market Street
Wilmington, Delaware 19801
Re: JCP&L Capital, L.P.
Ladies and Gentlemen:
We have acted as special Delaware counsel for JCP&L
Capital, L.P. a Delaware limited partnership (the "Partnership"),
and JCP&L Preferred Capital, Inc., a Delaware corporation (the
"General Partner") in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth,
our examination of documents has been limited to the examination
of originals or copies of the following:
(a) The Certificate of Limited Partnership of the
Partnership, dated as of February 21, 1995 (the "Partnership
Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on February
21, 1995;
(b) The Agreement of Limited Partnership of the
Partnership, dated as of February 21, 1995;
(c) Amendment No. 1 to the registration statement (the
"Registration Statement") on Form S-3, including a related
prospectus (the "Prospectus") and a prospectus supplement, filed
by Jersey Central Power & Light Company, a New Jersey
corporation, and the Partnership with the Securities and Exchange
Commission on April 21, 1995;
(d) A form of Amended and Restated Limited Partnership
Agreement of the Partnership, attached as an exhibit to the
Registration Statement (the "Agreement");
(e) A form of Action of the General Partner relating to
the Preferred Partner Interests (the "Action");
(f) The Certificate of Incorporation of the General
Partner, dated February 21, 1995 (the "Certificate of
Incorporation"), as filed in the office of the Secretary of State
on February 21, 1995;
(g) The By-Laws of the General Partner (the "By-Laws");<PAGE>
JCP&L Capital, L.P.
April 21, 1995
Page 2
(h) A certificate of an officer of the General Partner;
(i) A Certificate of Good Standing for the Partnership,
dated April , 1995, obtained from the Secretary of State; and
(j) A Certificate of Good Standing for the General
Partner, dated April , 1995, obtained from the Secretary of
State.
The Agreement as amended and supplemented by the Action is
hereinafter referred to as the "LP Agreement." Initially
capitalized terms used herein and not otherwise defined are used
as defined in the LP Agreement.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a)
through (j) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (j) above) that is referred to in or incorporated by
reference into the LP Agreement or the Registration Statement.
We have assumed that there exists no provision in any document
that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth
therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us as
authentic originals, (ii) the conformity with the originals of
all documents submitted to us as copies or forms, and (iii) the
genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
LP Agreement constitutes the entire agreement among the parties
thereto with respect to the subject matter thereof, including
with respect to the admission of partners to, and the creation,
operation and termination of, the Partnership, and that the LP
Agreement and the Partnership Certificate are in full force and
effect and have not been amended, (ii) that the Board of
Directors of the General Partner has duly adopted resolutions
(collectively, the "Resolutions") authorizing the General
Partner's execution and delivery of, and the performance of its
obligations under, the LP Agreement, (iii) that the Certificate
of Incorporation and the By-Laws are in full force and effect and
have not been amended, (iv) except to the extent provided in
paragraph 1 below, the due organization or due formation, as the
case may be, and valid existence in good standing of each party
to the documents examined by us under the laws of the
jurisdiction governing its organization or formation, (v) the
legal capacity of natural persons who are parties to the
documents examined by us, (vi) except to the extent set forth in
the last sentence of paragraph 2 below, that each of the parties<PAGE>
JCP&L Capital, L.P.
April 21, 1995
Page 3
to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such
documents, (vii) the due authorization, execution and delivery by
all parties thereto of all documents examined by us, including
the LP Agreement, (viii) the receipt by each Person to be
admitted to the Partnership as a limited partner of the
Partnership in connection with its purchase of Preferred Partner
Interests (each, a "Preferred Partner" and collectively, the
"Preferred Partners") of a Certificate and the payment for the
Preferred Partner Interests acquired by it, in accordance with
the LP Agreement, (ix) that the books and records of the
Partnership set forth all information required by the LP
Agreement and the Delaware Revised Uniform Limited Partnership
Act (6 Del. C. Section 17-101, et seq.) (the "Act"), including
all information with respect to all Persons to be admitted as
Partners and their contributions to the Partnership, and (x) that
the Preferred Partner Interests are issued and sold to the
Preferred Partners in accordance with the Registration Statement
and the LP Agreement. We have not participated in the
preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have
considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set forth
herein, we are of the opinion that:
1. The Partnership has been duly formed and is validly
existing in good standing as a limited partnership under the Act.
2. Assuming that the Preferred Partners, as limited
partners of the Partnership, do not participate in the control of
the business of the Partnership, upon issuance and payment as
contemplated by the LP Agreement, the Preferred Partner Interests
will be validly issued and, subject to the qualifications set
forth herein, will be fully paid and nonassessable limited
partner interests in the Partnership, as to which the Preferred
Partners, as limited partners of the Partnership, will have no
liability in excess of their obligations to make payments
provided for in the LP Agreement and their share of the
Partnership's assets and undistributed profits (subject to the
obligation of a Preferred Partner to repay any funds wrongfully
distributed to it). The General Partner has the requisite
corporate power and authority under the General Corporation Law
of the State of Delaware (8 Del C. Section 101, et seq.), the<PAGE>
JCP&L Capital, L.P.
April 21, 1995
Page 4
Certificate of Incorporation, the By-Laws and the Resolutions to
execute and deliver, and to perform its obligations under, the LP
Agreement.
3. Assuming that the Preferred Partners, as limited
partners of the Partnership, do not participate in the control of
the business of the Partnership, subject to the liabilities
described in paragraph 2 above, the Preferred Partners, as
limited partners of the Partnership, will have no personal
liability for the debts, obligations or liabilities of the
Partnership.
4. There are no provisions in the LP Agreement the
inclusion of which, subject to the terms and conditions therein,
or, assuming that the Preferred Partners, as limited partners of
the Partnership, take no action other than actions permitted by
the LP Agreement, the exercise of which, in accordance with the
terms and conditions therein, would cause the Preferred Partners,
as limited partners of the Partnership, to be deemed to be
participating in the control of the business of the Partnership.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. We also consent to Berlack, Israels &
Liberman's and Richard S. Cohen, Esquire's relying as to matters
of Delaware law upon this opinion in connection with opinions to
be rendered by them in connection with the Registration
Statement. In addition, we hereby consent to the use of our name
under the heading "Legal Opinions" in the Prospectus. In giving
the foregoing consents, we do not thereby admit that we come
within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission
thereunder. Except as stated above, without our prior written
consent, this opinion may not be furnished or quoted to, or
relied upon by, any other person or entity for any purpose.
Very truly yours,
RICHARDS, LAYTON & FINGER<PAGE>
(LETTERHEAD OF CARTER, LEDYARD & MILBURN)
Exhibit 8
April 21, 1995
Jersey Central Power & Light Company
300 Madison Avenue
Morristown, New Jersey 07962-1911
JCP&L Capital, L.P.
Mellon Bank Center
Second Floor, 919 N. Market Street
Wilmington, Delaware 19801
Re: Jersey Central Power & Light Company and
JCP&L Capital, L.P.
Registration Statement on Form S-3
Gentlemen:
We have acted as special tax counsel to Jersey Central
Power & Light Company, a New Jersey corporation (the "Company"),
and JCP&L Capital, L.P., a Delaware limited partnership ("JCP&L
Capital"), in connection with the proposed issuance and sale of
up to a maximum of $125,000,000 aggregate initial offering price
of limited partner interests of JCP&L Capital (the "Preferred
Securities") the proceeds of which together with the capital
contribution of JCP&L Preferred Capital, Inc., the general
partner of JCP&L Capital, will be used to purchase Subordinated
Debentures of the Company pursuant to a prospectus (the
"Prospectus") which constitutes a part of a registration
statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), which was initially filed on
March 2, 1995, with the Securities and Exchange Commission (the
"Registration Statement").
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of those agreements,
certificates and other statements of corporate officers and other
representatives of the Company and of JCP&L Preferred Capital,
Inc., the general partner of JCP&L Capital, as we have deemed
necessary as a basis for this opinion. In such examination we
have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and
the conformity with the originals of all documents submitted to
us as copies.<PAGE>
Jersey Central Power & Light Company
April 21, 1995
Based on and subject to the foregoing, we are of the
opinion that the section entitled "United States Taxation" in the
Prospectus contains an accurate general description, under
currently applicable law, of the material United States federal
income tax considerations that apply to holders of the Preferred
Securities.
We consent to the filing of this opinion as an Exhibit
to the Registration Statement and to the references to our firm
under the caption "United States Taxation" in the Prospectus. In
giving this consent we do not hereby agree that we come within
the category of persons whose consent is required by the
Securities Act or the rules and regulations promulgated
thereunder.
Very truly yours,
CARTER, LEDYARD & MILBURN<PAGE>
Exhibit 24-A
JERSEY CENTRAL POWER & LIGHT COMPANY
RESOLVED, that this Company hereby constitutes and appoints
Richard S. Cohen, John G. Graham, Terrance G. Howson, Ira H.
Jolles and Douglas E. Davidson, and each of them (with full power
to each of them to act alone), its true and lawful attorney-in-
fact and agent, for it and on its behalf and in its name, place
and stead, to sign, execute and file any and all of the following
documents and any and all amendments thereto relating to the
proposed issuance and sale of the Preferred Securities,
Debentures and Guarantee: (a) the Petition to the NJBPU and any
and all amendments thereto; (b) a Registration Statement on Form
S-3 with the SEC and any and all amendments thereto; and (c) an
Application on Form U-1 with the SEC and any and all amendments
thereto; in all cases with all exhibits and other documents in
connection therewith, granting unto said attorneys, and each of
them, full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the
premises in order to effectuate the same as fully to all intents
and purposes as this Company might or could do;
******************
THIS IS TO CERTIFY that the undersigned is Assistant
Secretary of Jersey Central Power & Light Company, a New Jersey
corporation; that the above and foregoing is a true and correct
copy of a resolution duly and regularly adopted by the Board of
Directors of Jersey Central Power & Light Company at a meeting
thereof duly convened and held on the 27th day of September, 1994
at which meeting a quorum was present and voted; and that said
resolution has not been annulled, revoked or amended in any way
whatsoever but is in full force and effect.
WITNESS the signature of the undersigned as such officer of
the Company and its corporate seal hereunto affixed this 21st day
of April, 1995.
/s/ M. A. Nalewako
M. A. Nalewako, Assistant Secretary
(SEAL)<PAGE>
