Registration Nos. 33-53673
33-53673-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
METROPOLITAN EDISON COMPANY MET-ED CAPITAL, L.P.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
PENNSYLVANIA DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
23-0870160 51-0355042
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
2800 Pottsville Pike Mellon Bank Center
Reading, Pennsylvania 19605 Tenth and Market Streets
(610) 929-3601 Wilmington, Delaware 19801
(302) 654-5893
(Addresses, including zip codes, and telephone numbers, including
area codes, of registrants' principal executive offices)
DON W. MYERS
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:
W. C. MATTHEWS, ESQ. W. EDWIN OGDEN, ESQ.
Secretary Ryan, Russell, Ogden &
Metropolitan Edison Company Seltzer
2800 Pottsville Pike 1100 Berkshire Boulevard
P.O. Box 16001 P.O. Box 6219
Reading, Pennsylvania 19640 Reading, Pennsylvania 19610
(610) 929-3601 (610) 372-4761
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DOUGLAS E. DAVIDSON, ESQ. CLIVE D. CONLEY, ESQ.
Berlack, Israels & Liberman Reid & Priest
120 West 45th Street 40 West 57th Street
New York, New York 10036-4003 New York, New York 10019
(212) 704-0100 (212) 603-2000
____________________
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/
____________________
This Registration Statement shall hereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933 or
on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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SUBJECT TO COMPLETION, DATED JULY 7, 1994
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY , 1994
4,000,000 Preferred Securities
Met-Ed Capital
__% Cumulative Monthly Income Preferred Securities ("MIPS"*),
Series A
(liquidation preference $25 per Preferred Security)
guaranteed on a limited basis by
METROPOLITAN EDISON 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
Met-Ed Capital, L.P., a limited partnership formed under the laws
of the State of Delaware ("Met-Ed Capital"). All of the general
partner interests in Met-Ed Capital are owned by Met-Ed Preferred
Capital, Inc. (the "General Partner"), a Delaware corporation and
a wholly owned subsidiary of Metropolitan Edison Company, a
Pennsylvania corporation (the "Company"). Met-Ed 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 Met-Ed 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 ___________, 1994. The
payment of Dividends, to the extent that Met-Ed 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 "Limited Guarantee").
See "Description of the Limited Guarantee" in the accompanying
Prospectus. If the Company fails to make interest payments on
the ___% Deferrable Interest Subordinated Debentures, Series A
("Series A Deferrable Interest Subordinated Debentures")
purchased by Met-Ed Capital with the proceeds of this offering,
Met-Ed Capital will have insufficient funds to pay Dividends on
the Series A Preferred Securities, and, since the Limited
Guarantee does not cover the payment of Dividends for which Met-
Ed Capital does not have sufficient funds available, the Company
would not be obligated under the Limited Guarantee to make such
undeclared Dividend payments. In such event, the remedy of a
holder of Series A Preferred Securities is to enforce Met-Ed
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Capital's rights under the Series A Deferrable Interest
Subordinated Debentures. See "Description of the Deferrable
Interest Subordinated Debentures - Enforcement of Certain Rights
by Holders of Preferred Securities".
The Company's obligations under the Limited Guarantee and
the Series A Deferrable Interest Subordinated Debentures are
subordinate and junior in right of payment to all present and
future Senior Indebtedness of the Company (which aggregated
approximately $730,000,000 at March 31, 1994). In addition, the
Company may defer interest payments on the Series A Deferrable
Interest Subordinated Debentures for up to 60 consecutive months.
However, during any deferral period (which the Company considers
remote), 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 Met-Ed Capital, in whole or in part, from time to time,
on or after ___________, 1999, at $25 per Series A Preferred
Security plus any accumulated, unpaid and additional Dividends
accrued 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 Deferrable Interest
Subordinated Debentures. See "Description of Preferred
Securities-Mandatory Redemption; Optional Redemption".
If at any time Met-Ed Capital or the Company, due to a
change in law or a pronouncement or decision interpreting or
applying any applicable law, is or would be required to pay
certain additional amounts or to withhold or deduct certain
amounts, the Series A Preferred Securities are redeemable in
whole or in part at the Redemption Price at the option of Met-Ed
Capital. In addition, 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 Met-Ed Capital. Upon the occurrence of
such a special event, Met-Ed Capital may dissolve and cause
Series A Deferrable Interest Subordinated Debentures to be
distributed to the holders of the Series A Preferred Securities
in liquidation of their interests in Met-Ed Capital. See
"Description of Preferred Securities-Optional Redemption; Special
Event Redemption or Distribution" and "Description of the
Deferrable Interest Subordinated Debentures" in the accompanying
Prospectus. If the Series A Deferrable Interest 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 Met-Ed Capital, the
holders of Series A Preferred Securities will be entitled to a
liquidation preference for each Series A Preferred Security of
$25 plus any accumulated, unpaid and additional Dividends accrued
thereon to the date of payment, unless, in connection with such
dissolution, Series A Deferrable Interest Subordinated Debentures
are distributed to the holders of the Series A Preferred
Securities. See "Description of Preferred Securities-Liquidation
Distribution" in the accompanying Prospectus.
___________________
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See "Certain Investment Considerations" for certain
considerations relevant to an investment in the Series A
Preferred Securities, including circumstances under which payment
of Dividends on the Series A Preferred Securities may be deferred
and optional redemption events.
___________________
Application will be made to list the Series A Preferred
Securities on the New York Stock Exchange.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
____________________
Proceeds to
Initial Public Underwriting Met-Ed
Offering Price Commission(1) Capital (2)(3)
Per Series A
Preferred
Security..........$ (2) $
Total..............$ (2) $
________
(1) Met-Ed 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 Deferrable Interest 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".
(3) Expenses of the offering which are payable by the Company
are estimated to be $400,000.
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 , 1994.
________
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* An application has been filed by Goldman, Sachs & Co. with the
United States Patent and Trademark Office for the registration of
the MIPS servicemark.
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Kidder, Peabody & Co. Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
The date of this Prospectus Supplement is , 1994.
<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 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.
<PAGE>
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.
___________________
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The following information concerning the Series A Preferred
Securities, the Limited Guarantee and the Series A Deferrable
Interest 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.
MET-ED CAPITAL
Met-Ed 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. Met-Ed Capital
exists solely for the purpose of issuing its partner interests
and utilizing the proceeds thereof to acquire the Company's
Deferrable Interest Subordinated Debentures. All of the business
and affairs of Met-Ed Capital will be managed by the General
Partner, subject to Met-Ed 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.
METROPOLITAN EDISON COMPANY
The Company, a public utility furnishing electric service
wholly within the Commonwealth of Pennsylvania, is a subsidiary
of General Public Utilities Corporation ("GPU"), a holding
company registered under the Public Utility Holding Company Act
of 1935. In 1993, the Company provided retail service to
approximately 445,000 customers in an area in eastern and south
central Pennsylvania having an estimated population of 950,000.
The Company also sells electricity at wholesale to four
municipalities having an estimated population of over 11,000.
The Company is affiliated with Jersey Central Power & Light
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:
Subordinate Obligations Under the Limited Guarantee and
the Series A Deferrable Interest Subordinated Debentures.
The Company's obligations under the Limited Guarantee and
the Series A Deferrable Interest Subordinated Debentures are
subordinate and junior in right of payment to all present
and future Senior Indebtedness of the Company. At March 31,
1994, Senior Indebtedness of the Company aggregated
approximately $730,000,000. There are no terms in the
Series A Preferred Securities, the Series A Deferrable
Interest Subordinated Debentures or the Limited Guarantee
that limit the Company's ability to incur additional
indebtedness, including indebtedness that ranks senior to
the Series A Deferrable Interest Subordinated Debentures and
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the Limited Guarantee. See "Description of the Limited
Guarantee-Status of the Limited Guarantee" and "Description
of the Deferrable Interest Subordinated Debentures-
Subordination" in the accompanying Prospectus.
Option to Extend Interest Payment Period. The Company
has the right under the Indenture to extend the interest
payment period on the Series A Deferrable Interest
Subordinated Debentures at any time and from time to time to
up to 60 consecutive months, and, as a consequence, monthly
Dividends on the Series A Preferred Securities can be
deferred by Met-Ed 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
Deferrable Interest Subordinated Debentures is paid in full.
Met-Ed Capital and the Company currently believe that the
extension of an interest payment period on the Series A
Deferrable Interest Subordinated Debentures is remote. See
"Description of Preferred Securities-Dividends" and
"Description of the Deferrable Interest Subordinated
Debentures-Option to Extend Interest Payment Period" in the
accompanying Prospectus.
Should an extended interest payment period occur, Met-
Ed 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 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 Met-Ed 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 Tax 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 may elect
to either: (i) redeem the Series A Preferred Securities in
whole (and not in part); or (ii) dissolve Met-Ed Capital and
cause the Series A Deferrable Interest Subordinated
Debentures to be distributed to the holders of the Series A
Preferred Securities in liquidation of such holders'
interests in Met-Ed Capital, provided that Met-Ed Capital
shall have received an opinion of 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
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dissolution and distribution. Alternatively, Met-Ed Capital
may elect to cause the Series A Preferred Securities to
remain outstanding. If an Investment Company Act Event (see
"Description of Preferred Securities - Special Event
Redemption or Distribution" in the accompanying Prospectus)
shall occur and be continuing, Met-Ed Capital must elect
either option (i) or (ii) above.
In April 1994, the Internal Revenue Service 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 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 Series A Deferrable Interest 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, Met-Ed Capital receives an opinion of
counsel to the effect that interest on the Series A
Deferrable Interest Subordinated Debentures would not be
deductible, Met-Ed Capital would have the option to redeem
the Series A Preferred Securities or to dissolve and cause
Series A Deferrable Interest Subordinated Debentures to be
distributed to the holders of the Series A Preferred
Securities, as described under "Description of Preferred
Securities-Special Event Redemption or Distribution" in the
accompanying Prospectus.
USE OF PROCEEDS
The proceeds to be received by Met-Ed Capital from the sale
of the Series A Preferred Securities will be used to purchase
Series A Deferrable Interest Subordinated Debentures of the
Company and will be applied by the Company to the repayment of
outstanding short-term debt, for construction purposes and for
other general corporate purposes, including the redemption of
outstanding senior securities pursuant to the optional redemption
provisions thereof, if economical.
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.
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
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will be cumulative, will accrue from ____________, 1994 and will
be payable monthly in arrears on the last day of each calendar
month of each year, commencing ______________, 1994, 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 Met-Ed Capital, in whole or in part from time to time,
on or after _________________, 1999 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;Optional Redemption; Special Event Redemption or
Distribution" in the accompanying Prospectus.
CERTAIN TERMS OF THE SERIES A DEFERRABLE INTEREST SUBORDINATED
DEBENTURES
The following information should be read in conjunction with
the statements under "Description of the Deferrable Interest
Subordinated Debentures" in the accompanying Prospectus.
General
The Series A Deferrable Interest Subordinated Debentures
will be issued under the Indenture dated as of ______________,
1994 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 Met-Ed 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
Deferrable Interest 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 Deferrable Interest 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 of each year, except as otherwise provided in
the accompanying Prospectus.
The Series A Deferrable Interest Subordinated Debentures
will mature on __________, 2043 and will be redeemable at the
option of the Company at any time on or after _________________,
1999 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 Deferrable Interest Subordinated
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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 Deferrable Interest Subordinated Debentures will be applied to
redeem the Series A Preferred Securities.
UNDERWRITING
Subject to the terms and conditions of the Underwriting
Agreement, Met-Ed Capital has agreed to sell to each of the
several Underwriters named below, and each of the Underwriters,
for whom Goldman, Sachs & Co., Dean Witter Reynolds Inc., A.G.
Edwards & Sons, Inc., Kidder, Peabody & Co. Incorporated, Morgan
Stanley & Co. Incorporated, PaineWebber Incorporated and
Prudential Securities Incorporated are acting as Representatives,
has severally agreed to purchase from Met-Ed Capital the
respective number of Series A Preferred Securities set forth
opposite its name below:
Number of
Series A
Preferred
Underwriter Securities
Goldman, Sachs & Co. . . . . . . . . . . .
Dean Witter Reynolds Inc. . . . . . . . . .
A.G. Edwards & Sons, Inc. . . . . . . . . .
Kidder, Peabody & Co. Incorporated . . . .
Morgan Stanley & Co. Incorporated . . . . .
PaineWebber Incorporated . . . . . . . . .
Prudential Securities Incorporated . . . .
Total . . . . . . . . . . . 4,000,000
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
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.
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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 Deferrable Interest 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 Met-Ed 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 Limited 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 Met-Ed Capital, or any preferred stock or any other
securities of Met-Ed Capital or the Company which are
substantially similar to the Series A Preferred Securities or the
Limited 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 Met-Ed 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. 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.
Met-Ed 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.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Company
and Met-Ed Capital by Berlack, Israels & Liberman, New York, New
York, and Ryan, Russell, Ogden & Seltzer, Reading, Pennsylvania,
and for the Underwriters by Reid & Priest, New York, New York.
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon by Richards, Layton &
Finger, P.A., Wilmington, Delaware, special Delaware counsel to
Met-Ed Capital. Berlack, Israels & Liberman and Reid & Priest
may rely on the opinion of Ryan, Russell, Ogden & Seltzer as to
matters of Pennsylvania law, and Berlack, Israels & Liberman,
Ryan, Russell, Ogden & Seltzer and Reid & Priest may rely on the
opinion of Richards, Layton & Finger, P.A., as to matters of
Delaware law. Members and attorneys of Berlack, Israels &
Liberman own an aggregate of 12,091 shares of the Common Stock of
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the Company's parent, GPU. In addition, one such member holds
986 such shares as custodian for his children. Members and
attorneys of Ryan, Russell, Ogden & Seltzer own an aggregate of
2,000 shares of the Common Stock of GPU.
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SUBJECT TO COMPLETION, DATED JULY 7, 1994
PROSPECTUS
$125,000,000
MET-ED CAPITAL
Preferred Securities
guaranteed on a limited basis by
METROPOLITAN EDISON COMPANY
Met-Ed Capital, L.P. ("Met-Ed Capital"), a Delaware limited
partnership, all of the general partner interests in which are
owned by a wholly owned subsidiary of Metropolitan Edison 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 Met-
Ed 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 (the "Limited Guarantee"). The
Company's obligations under the Limited 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
("Deferrable Interest Subordinated Debentures") will also be
issued and sold from time to time in one or more series by the
Company to Met-Ed Capital in connection with the investment of
the proceeds from the offering of Preferred Securities.
Deferrable Interest Subordinated Debentures subsequently may be
distributed to holders of Preferred Securities in connection with
a dissolution of Met-Ed Capital upon the occurrence of certain
events as described under "Description of Preferred Securities -
Special Event Redemption or Distribution". The Deferrable
Interest 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.
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
<PAGE>
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 ___________, 1994.
<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.
<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 Met-Ed 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 Met-Ed Capital have been
included herein. The Company and Met-Ed Capital do not consider
that such financial statements would be material to holders of
Preferred Securities because Met-Ed 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 "Met-Ed 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, 1993;
2. The Company's Current Reports on Form 8-K
dated February 16, 1994, February 28, 1994 and June 10, 1994; and
3. The Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1994.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of the offering of the securities offered hereby
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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 Metropolitan Edison Company, P.O.
Box 16001, Reading, Pennsylvania 19640, Attention: Secretary.
The Company's telephone number is (610) 929-3601.
METROPOLITAN EDISON COMPANY
The Company, a public utility furnishing electric service
wholly within the Commonwealth of Pennsylvania, is a subsidiary
of General Public Utilities Corporation ("GPU"), a holding
company registered under the Public Utility Holding Company Act
of 1935. In 1993, the Company provided retail service to
approximately 445,000 customers in an area in eastern and south
central Pennsylvania having an estimated population of 950,000.
The Company also sells electricity at wholesale to four
municipalities having an estimated population of over 11,000.
The Company's subsidiary, York Haven Power Company, is the owner
and licensee of the York Haven Hydroelectric Project. The
Company's principal executive offices are located at 2800
Pottsville Pike, Reading, Pennsylvania 19605, and its telephone
number is (610) 929-3601.
For the year 1993, electric sales to residential customers
accounted for about 43% of operating revenues from customers and
36% of kilowatt-hour ("kwh") sales to customers; sales to
commercial customers accounted for about 28% of operating
revenues from customers and 26% of kwh sales to customers; sales
to industrial customers accounted for about 27% of operating
revenues from customers and 35% of kwh sales to customers; and
sales to rural electric cooperatives, municipalities (primarily
for street and highway lighting) and others accounted for about
2% of operating revenues from customers and 3% 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 industrial customer accounted for
approximately 2% of operating revenues from customers for the
year 1993 and the 25 largest industrial customers in the
aggregate accounted for approximately 11% of such revenues.
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The electric generating and transmission facilities of the
Company and its affiliates, Jersey Central Power & Light 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 50% 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 and maintained by GPU Nuclear
Corporation, a subsidiary of GPU. The Company and its affiliates
are seeking regulatory approvals 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 1994 and 1995 Met-
Ed 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 Deferrable Interest
Subordinated Debentures. Pursuant to one or more separate
offerings, the Company expects to offer during such period up to
a maximum aggregate principal amount and stated value of
$250,000,000 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.
CERTAIN COMPANY CONSOLIDATED FINANCIAL INFORMATION (1)
(Dollars In Thousands)
Twelve
Months Ended
March 31, 1994
Years Ended December 31, (unaudited)
1991 1992 1993
Income Summary:
Operating
Revenues $788,462 $821,823 $801,487$802,247
Net Income 62,341 73,077 77,875 88,619
4
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5
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March 31, 1994
(unaudited)
Actual Pro Forma (2)
Amount % Amount %
Capital Structure:
Long-term debt
(including unamortized
net discount)(3) $ 570,314 43.7% $ 570,314
39.9%
Preferred Stock
(including premium) 58,659 4.5 58,659 4.1
Preferred Securities of
Subsidiary - - 125,000
8.7
Common Equity 677,429 51.8 677,429 47.3
Total $1,306,402 100.0 $1,431,402 100.0
________________
(1) This information should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
(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
Deferrable Interest Subordinated Debentures.
(3) Includes obligations due within one year.
COMPANY COVERAGE RATIOS
The Company's Ratio of Earnings to Fixed Charges for each of
the periods indicated was as follows:
Twelve
Months Ended
March 31, 1994
Years Ended December 31, (unaudited)
1989 1990 1991 1992 1993 Actual ProForma(1)
3.88 3.66 2.44 3.41 3.28 3.32 2.81
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.
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<PAGE>
The Company's Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends for each of the periods indicated
was as follows:
Twelve
Months Ended
March 31, 1994
Years Ended December 31, (unaudited)
1989 1990 1991 1992 1993 Actual Pro
Forma(1)
2.92 2.83 1.86 2.55 2.72 2.91 2.52
________________________
(1) Gives effect to the issuance of $125,000,000 aggregate
principal amount of Deferrable Interest Subordinated
Debentures at an assumed interest rate of 9% per annum.
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 Met-Ed Capital from the sale
of the Preferred Securities will be used to purchase Deferrable
Interest 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,
for construction purposes and for other general corporate
purposes, including the redemption of outstanding senior
securities pursuant to the optional redemption provisions
thereof, if economical.
MET-ED CAPITAL
Met-Ed Capital is a limited partnership formed under the
laws of the State of Delaware. All of its general partner
interests, which are non-transferable, are owned by Met-Ed
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 Met-Ed
Capital. Met-Ed Capital's principal executive offices are
located at Mellon Bank Center, Tenth and Market Streets,
Wilmington, Delaware 19801, and its telephone number is (302)
654-5893. As a limited partnership, all of the business and
affairs of Met-Ed Capital will be managed by the General Partner.
Met-Ed Capital exists solely for the purpose of issuing its
7
<PAGE>
partner interests and utilizing the proceeds thereof to acquire
the Company's Deferrable Interest Subordinated Debentures, which
will be issued under and pursuant to the Indenture (the
"Indenture") dated as of ___________________, 1994 between the
Company and United States Trust Company of New York, as Trustee
(the "Trustee").
Met-Ed Capital has been advised by its special Delaware
counsel that, assuming that a holder of Preferred Securities acts
in conformity with the provisions of Met-Ed 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"), a holder of Preferred Securities (other
than the General Partner) will not be liable for the debts,
obligations and liabilities of Met-Ed Capital, whether arising in
contract, tort or otherwise, solely by reason of being a limited
partner of Met-Ed Capital (subject to the obligation of a limited
partner to repay any funds wrongfully distributed to it).
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 Met-Ed Capital will
be owned by the General Partner. The Limited Partnership
Agreement will authorize the General Partner to establish series
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. Met-Ed 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
Met-Ed 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.
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<PAGE>
The Company has the right under the Indenture to extend the
interest payment period on the Deferrable Interest Subordinated
Debentures at any time and from time to time to up to 60
consecutive months and, as a consequence, monthly Dividends on
the Preferred Securities can be deferred (but will continue to
accumulate) by Met-Ed Capital during any such extended interest
payment period. Accrued and unpaid Dividends on the Preferred
Securities will accrue additional Dividends in respect thereof 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. Met-Ed Capital and the Company
currently believe that an extension of an interest payment period
on the Deferrable Interest Subordinated Debentures and thus on
the Preferred Securities is remote. See "Voting Rights" and
"Description of the Deferrable Interest 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.
Met-Ed Capital may not pay a Dividend or make a distribution
to a partner to the extent that at the time of the Dividend or
distribution, after giving effect thereto, all liabilities of
Met-Ed 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 Met-Ed Capital,
exceed the fair value of the assets of Met-Ed 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 Met-Ed Capital only to the extent that the fair
value of that property exceeds that liability.
Dividends on the Preferred Securities must be paid by Met-
Ed Capital in any calendar year or portion thereof to the extent
that Met-Ed Capital has cash on hand sufficient to permit such
payments and funds legally available therefor. It is anticipated
that Met-Ed Capital's earnings will consist only of interest
payable by the Company under the Deferrable Interest Subordinated
Debentures. See "Description of the Deferrable Interest
Subordinated Debentures-Interest".
Dividends on the Preferred Securities will be payable to the
holders thereof as they appear on the books and records of Met-
Ed 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
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<PAGE>
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 Met-Ed Capital
If Dividends have not been paid in full on any series of
Preferred Securities, Met-Ed 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
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 Deferrable Interest
Subordinated Debentures purchased by Met-Ed Capital with the
proceeds of the sale of a series of Preferred Securities or
redeems such Deferrable Interest Subordinated Debentures at any
time as described under "Description of the Deferrable Interest
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, unpaid and additional Dividends
10
<PAGE>
accrued 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 Met-Ed Capital, in whole or in part, at such
time or times as shall be specified in a Prospectus Supplement,
at the Redemption Price.
If at any time after the issuance of any Preferred
Securities, Met-Ed Capital is or would be required to pay
Additional Amounts or the Company is or would be required to
withhold or deduct certain amounts as described under "Additional
Amounts" and "Description of the Limited Guarantee-Additional
Amounts", then Met-Ed Capital may, at its option, redeem the
Preferred Securities in whole or, if such requirement relates
only to certain of the Preferred Securities, the Preferred
Securities subject to such requirement, in each case at the
Redemption Price.
Special Event Redemption or Distribution
If a Tax Event (as defined below) shall occur and be
continuing, Met-Ed Capital may 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 (as
defined below); 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 Met-
Ed Capital or the Company, the General Partner will pursue such
measure in lieu of redemption; or (ii) dissolve Met-Ed Capital
and cause Deferrable Interest 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 Met-Ed Capital, within 90 days following the
occurrence of such Special Event, provided, however, that Met-Ed
Capital shall have received an opinion of 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, Met-Ed Capital may elect to have the Preferred
Securities remain outstanding. If an Investment Company Act
Event (as defined below) shall occur and be continuing, Met-Ed
Capital must elect either option (i) or (ii) above. Either a Tax
Event or an Investment Company Act Event shall be deemed a
"Special Event".
"Tax Event" means that Met-Ed Capital shall have received an
opinion of 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
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<PAGE>
(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 any series of
Preferred Securities, there is more than an insubstantial risk
that (i) Met-Ed Capital will be subject to federal income tax
with respect to interest received on the Deferrable Interest
Subordinated Debentures or Met-Ed Capital will otherwise not be
taxed as a partnership, (ii) interest payable on the Deferrable
Interest Subordinated Debentures will not be deductible for
federal income tax purposes or (iii) Met-Ed 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 Met-Ed 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 Met-Ed 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 Met-Ed 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, Met-Ed Capital is not required to be registered as an
"investment company" within the meaning of the 1940 Act.
After the date fixed for any such dissolution of Met-Ed
Capital and distribution of Deferrable Interest 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 Deferrable Interest 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
Deferrable Interest 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
Met-Ed Capital may not redeem any outstanding Preferred
Securities unless all accumulated and unpaid Dividends have been
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paid on all Preferred Securities for all monthly Dividend periods
terminating on or prior to the date of redemption.
If Met-Ed 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
and will be irrevocable), then, on the redemption date, Met-Ed
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"). If notice of
redemption shall have been given and funds deposited as required,
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 the event that payment of the
Redemption Price in respect of any Preferred Securities is not
made either by Met-Ed Capital or by the Company pursuant to the
Limited Guarantee described under "Description of the Limited
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". In the
case of a partial redemption of a series of Preferred Securities
resulting from a requirement that Met-Ed Capital pay Additional
Amounts or the Company withhold or deduct certain amounts (see
"Optional Redemption"), Met-Ed Capital will (i) cause the global
certificates representing all of such series of Preferred
Securities to be withdrawn from The Depository Trust Company or
its successor securities depository (see "Book-Entry-Only
Issuance-The Depository Trust Company"), (ii) issue certificates
in definitive form representing such series of Preferred
Securities, and (iii) redeem the Preferred Securities subject to
such requirement to withhold or deduct Additional Amounts.
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.
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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, Met-Ed 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 Met-Ed Capital, other than in connection with the
distribution of Deferrable Interest 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 Met-Ed 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, unpaid and additional Dividends accrued thereon
to the date of payment and any accrued and unpaid Additional
Amounts (the "Liquidation Distribution").
If, upon such liquidation, the Liquidation Distribution can
be paid only in part because Met-Ed 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 Met-Ed 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
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, Met-Ed Capital
shall be dissolved and its affairs shall be wound up: (i) upon
the expiration of the term of Met-Ed 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 Met-Ed
Capital (provided that Met-Ed 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 (vi)
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upon the written consent of the General Partner and all of the
holders of the Preferred Securities.
Merger, Consolidation, Amalgamation, etc. of Met-Ed Capital
Met-Ed 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 corpor-
ation or other entity, except with the prior approval of the
holders of not less than 66-2/3% of the aggregate stated liquida-
tion 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 Met-Ed 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 corporation, a limited
liability company, a limited partnership, a trust or other entity
organized as such under the laws of the United States or any
state thereof or the District of Columbia, provided that (i) such
successor entity either (x) expressly assumes all of the terms
and provisions of the Preferred Securities by which Met-Ed
Capital is bound and the other obligations of Met-Ed Capital or
(y) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred 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 Met-Ed Capital, (ii) the Company confirms its
obligation under the Limited Guarantee with regard to the
Preferred Securities or Successor Securities, if any, (iii) such
consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease does not cause any series of Preferred
Securities or Successor Securities, if any, to be delisted by any
national securities exchange on which such series of Preferred
Securities or Successor Securities, if any, is 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 the powers, preferences and other
special rights of holders of Preferred Securities or Successor
Securities, if any, in any material respect, (vi) such successor
entity has a purpose substantially identical to that of Met-Ed
Capital and (vii) prior to such consolidation, amalgamation,
merger, replacement, conveyance, transfer or lease, Met-Ed
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 a
partnership for federal income tax purposes, (y) following such
consolidation, amalgamation, merger, replacement, conveyance,
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<PAGE>
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
adversely affect the limited liability of the holders of
Preferred Securities.
Voting Rights
Except as provided below and under "Merger, Consolidation,
Amalgamation, etc. of Met-Ed Capital", "Description of the
Limited Guarantee-Amendments and Assignment" and "Description of
the Deferrable Interest 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) Met-Ed 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 Limited Guarantee (as
described under "Description of the Limited 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 Met-Ed Capital and the holders of Preferred
Securities (a "Special Representative") to enforce Met-Ed
Capital's rights under the Indenture, including, after failure to
pay interest for 60 consecutive monthly interest periods, the
payment of interest on the Deferrable Interest Subordinated
Debentures, and to enforce the obligations of the Company under
the Limited Guarantee. The Special Representative shall not be
admitted as a partner in Met-Ed Capital or otherwise be deemed to
be a partner in Met-Ed Capital and shall have no liability for
the debts, obligations or liabilities of Met-Ed Capital.
For purposes of determining whether Met-Ed Capital has
failed to pay Dividends in full for 18 consecutive monthly
Dividend periods, Dividends shall be deemed to remain in arrears,
notwithstanding 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 Met-Ed Capital (or
the Company pursuant to the Limited Guarantee) shall have paid in
full all accumulated and unpaid Dividends on the Preferred
16
<PAGE>
Securities or such default or breach, as the case may be, shall
have been cured. Notwithstanding the appointment of any such
Special Representative, the Company shall retain all rights under
the Indenture, including the right to extend the interest payment
period on the Deferrable Interest Subordinated Debentures as
provided under "Description of the Deferrable Interest
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, Met-Ed 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, any other securities
which are pari passu with the Preferred Securities or any general
partner interests of Met-Ed Capital. Holders of Preferred
Securities have no preemptive rights.
The Limited Partnership Agreement provides that the General
Partner will not permit or cause Met-Ed 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 Deferrable Interest Subordinated Debentures
are held by Met-Ed 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 Deferrable Interest
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
17
<PAGE>
Preferred Securities affected thereby, acting as a single class;
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 Deferrable Interest 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 Met-Ed Capital's
partner interests or pursuant to written consent. Met-Ed 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 Met-Ed 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 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.
Additional Amounts
All payments in respect of the Preferred Securities by Met-
Ed Capital will be made without withholding or deduction for or
on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed or levied upon or
as a result of such payment by or on behalf of the United States,
any state thereof or any other jurisdiction through which or from
which such payment is made, or any authority therein or thereof
having power to tax, unless the withholding or deduction of such
taxes, duties, assessments or governmental charges is required by
law. In the event that any such withholding or deduction is
required as a consequence of (i) the Deferrable Interest
Subordinated Debentures not being treated as indebtedness for
United States federal income tax purposes or (ii) Met-Ed Capital
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<PAGE>
not being treated as a partnership for United States federal
income tax purposes, Met-Ed Capital will pay as a Dividend such
additional amounts as may be necessary in order that the net
amounts received by the holders of the Preferred Securities after
such withholding or deduction will equal the amounts which would
have been receivable in respect of such Preferred Securities in
the absence of such withholding or deduction ("Additional
Amounts"), except that no such Additional Amounts will be payable
to a holder of Preferred Securities (or a third party on such
holder's behalf) with respect to Preferred Securities if:
(a) such holder is liable for such taxes, duties,
assessments or governmental charges in respect of such
Preferred Securities by reason of such holder's having
a connection with the United States, any state thereof
or any other jurisdiction through which or from which
such payment is made, or in which such holder resides,
conducts business or has other contacts, other than
being a holder of Preferred Securities, or
(b) Met-Ed Capital has notified such holder of the
obligation to withhold or deduct taxes and requested
but not received from such holder a declaration of non-
residence, a valid taxpayer identification number or
other claim for exemption, and such withholding or
deduction would not have been required had such
declaration, taxpayer identification number or claim
been received.
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.
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
19
<PAGE>
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
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 Met-Ed 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'
20
<PAGE>
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, Met-
Ed 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 Met-Ed 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 that Met-Ed
Capital and the Company believe to be reliable, but neither Met-
Ed 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 Met-Ed Capital. Under such
circumstances, in the event that a successor securities
depository is not obtained, Preferred Security certificates are
required to be printed and delivered. Additionally, Met-Ed
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.
Additionally, in the event that Met-Ed Capital exercises its
option to redeem only a portion of a series of Preferred
Securities because Met-Ed Capital or the Company is or would be
required to withhold or deduct Additional Amounts in regard to
such Preferred Securities to be redeemed, Met-Ed Capital will
cause the global certificates representing all of such series of
Preferred Securities to be withdrawn from DTC (or a successor
depository) and will issue certificates in definitive form
representing such series of Preferred Securities. Thereafter,
the Preferred Securities subject to such requirement to withhold
or deduct Additional Amounts will be redeemed.
Registrar, Transfer Agent and Paying Agent
In the event that the Preferred Securities do not remain in
book-entry-only form, the following provisions would apply:
Mellon Bank, N.A. 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 Met-Ed Capital, but
upon payment (with the giving of such indemnity as Met-Ed Capital
or the transfer agent may require) in respect of any tax or other
governmental charges which may be imposed in relation to it.
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<PAGE>
Met-Ed 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, Met-Ed
Capital in such a way that Met-Ed 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 Deferrable Interest Subordinated
Debentures will be treated as indebtedness of the Company for
federal income tax purposes. In this connection, the General
Partner is authorized to take any action not inconsistent with
applicable law, the Certificate of Limited Partnership of Met-Ed
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 discretion
to be necessary or desirable for such purposes.
DESCRIPTION OF THE LIMITED GUARANTEE
Set forth below is a summary of information concerning the
Limited 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 Limited Guarantee, but does
not purport to be complete. References to provisions of the
Limited Guarantee are qualified in their entirety by reference to
the text of the Limited 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
Securities, the Limited Guarantee Payments (as defined below)
(except to the extent paid by Met-Ed Capital), as and when due,
regardless of any defense, right of set-off or counterclaim which
the Company or Met-Ed Capital may have or assert. The following
payments to the extent not paid by Met-Ed Capital (the "Limited
Guarantee Payments") will be subject to the Limited 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 Deferrable Interest
Subordinated Debentures-Option to Extend Interest Payment
Period")) to the extent that Met-Ed 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 Met-Ed Capital to the extent
that Met-Ed Capital has sufficient cash on hand to permit such
payments and funds legally available therefor, (iii) upon a
liquidation of Met-Ed Capital other than in connection with a
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<PAGE>
Distribution Event, the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of Met-Ed Capital
available for distribution to holders of Preferred Securities in
liquidation of Met-Ed Capital, and (iv) any Additional Amounts
payable by Met-Ed Capital in respect of the Preferred Securities.
The Limited Guarantee further provides that the Company shall (a)
cause the General Partner to declare and pay Dividends to the
extent that Met-Ed Capital has legally available funds and
sufficient cash and (b) so long as any of the Preferred
Securities are outstanding, cause the General Partner to remain
the general partner of Met-Ed 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 Met-Ed Capital (thereby insuring that the full amount
of the Company's payments on its Deferrable Interest 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 Met-Ed Capital.
Accordingly, the Limited Guarantee, together with the related
covenants contained in the Limited Partnership Agreement and the
Company's obligations under the Deferrable Interest 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 Limited 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 Met-Ed Capital to such holders, and may be
enforced directly by or for the benefit of the holders of
Preferred Securities.
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
Deferrable Interest 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 Limited Guarantee or 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 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 Met-Ed
Capital; (ii) cause at least 3% of the total value of Met-Ed
Capital and at least 3% of all interests in the capital, income,
gain, loss, deduction and credit of Met-Ed Capital to be
23
<PAGE>
represented by general partner interests; (iii) not cause Met-Ed
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 Met-Ed Capital and timely perform
all of its duties as general partner of Met-Ed 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 Met-Ed Capital; and (v) use its
reasonable efforts to cause Met-Ed Capital to remain a limited
partnership and otherwise continue to be treated as a partnership
for United States federal income tax purposes.
Additional Amounts
All Limited Guarantee Payments will be made without
withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied upon or as a result of such
payment by or on behalf of the United States, any state thereof
or any other jurisdiction through which or from which such
payment is made, or any authority therein or thereof having power
to tax, unless the withholding or deduction of such taxes,
duties, assessments or governmental charges is required by law.
In the event that any such withholding or deduction is required
as a consequence of (i) the Deferrable Interest Subordinated
Debentures not being treated as indebtedness for United States
federal income tax purposes or (ii) Met-Ed Capital not being
treated as a partnership for United States federal income tax
purposes, the Company will pay such additional amounts as may be
necessary in order that the net amounts received by the holders
of the Preferred Securities after such withholding or deduction
will equal the amount which would have been receivable in respect
of the Preferred Securities in the absence of such withholding or
deduction, except that no such additional amounts will be payable
to a holder of Preferred Securities (or a third party on such
holder's behalf) if:
(a) such holder is liable for such taxes, duties,
assessments or governmental charges in respect of the
Preferred Securities by reason of such holder's having
a connection with the United States, any state thereof
or any other jurisdiction through which or from which
such payment is made, or in which such holder resides,
conducts business or has other contacts, other than
being a holder of Preferred Securities, or
(b) Met-Ed Capital or the Company has notified
such holder of the obligation to withhold or deduct
taxes and requested but not received from such holder a
declaration of non-residence, a valid taxpayer
identification number or other claim for exemption, and
24
<PAGE>
such withholding or deduction would not have been
required had such declaration, taxpayer identification
number or claim been received.
Amendments and Assignment
The Limited 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
Limited 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 an assignment, merger,
sale, transfer or lease involving the Company as may be permitted
under the Indenture (see "Description of the Deferrable Interest
Subordinated Debentures-Consolidation, Merger, Sale or
Conveyance; Assignment"), the Company may not assign its
obligations under the Limited 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 Limited
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 Limited Guarantee
The Limited 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 Met-Ed Capital
or upon consummation of a Distribution Event. The Limited
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 Limited Guarantee.
Status of the Limited Guarantee
The Limited 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 Limited Guarantee.
The Limited Guarantee will constitute a limited guarantee of
payment and not of collection. The Limited 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 Limited Guarantee. If no Special Representative has
been appointed to enforce the Limited Guarantee, the General
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Partner has the right to enforce the Limited Guarantee on behalf
of the holders of the Preferred Securities. If the General
Partner or the Special Representative fails to enforce the
Limited Guarantee, any holder of Preferred Securities may
institute a legal proceeding directly against the Company to
enforce its rights under the Limited Guarantee, without first
instituting a legal proceeding against Met-Ed Capital or any
other person or entity.
DESCRIPTION OF THE DEFERRABLE INTEREST SUBORDINATED DEBENTURES
Set forth below is a description of the Deferrable Interest
Subordinated Debentures which will be purchased by Met-Ed 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 occurance of a
Special Event, Met-Ed Capital may dissolve and cause Deferrable
Interest Subordinated Debentures to be distributed to the holders
of the Preferred Securities in liquidation of their interests in
Met-Ed Capital. See "Description of Preferred Securities-Special
Event Redemption or Distribution".
General
Deferrable Interest Subordinated Debentures will be issued
in series under the Indenture. Each series of Deferrable
Interest 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 Deferrable
Interest Subordinated Debentures directly against the Company.
The Deferrable Interest Subordinated Debentures will become
due and payable, together with (i) all accrued and unpaid
interest to the date of payment, including Additional Interest
(as defined under "Additional Interest"), if any, and (ii) any
accrued interest thereon, on the 49th anniversary of the date of
issuance thereof.
Mandatory Prepayment
If Met-Ed Capital redeems Preferred Securities in accordance
with their terms, the related Deferrable Interest Subordinated
Debentures will become due and payable in a principal amount
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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, including Additional
Interest, if any, and (ii) any accrued interest thereon.
Optional Redemption
The Company will have the right to redeem the Deferrable
Interest 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 Deferrable Interest
Subordinated Debentures being redeemed to the Redemption Date,
including Additional Interest, if any, and (ii) any accrued
interest thereon (collectively, the "Debenture Redemption Price")
(x) in whole or in part at such time or times as
shall be specified in a Prospectus Supplement; and
(y) in whole at any time if the Company is or
would be required to pay Additional Interest on the
Deferrable Interest Subordinated Debentures or in part
at any time if the Company is or would be required to
pay Additional Interest with respect to only a portion
of the Deferrable Interest Subordinated Debentures,
provided that if a partial redemption would, through
the corresponding partial redemption required under the
terms of the related series of Preferred Securities,
result in a delisting of the related series of
Preferred Securities from any national securities
exchange on which such series of Preferred Securities
is then listed, the Company may only redeem the
Deferrable Interest Subordinated Debentures in whole.
In no event, however, shall the Company have the right
to redeem the Deferrable Interest Subordinated
Debentures, or a portion thereof, under this clause (y)
based on a de minimis obligation to pay Additional
Interest. For purposes of the foregoing, in the event
that the Company is advised by counsel (which may be
regular tax counsel to the Company or an affiliate but
not an employee thereof) that more than an
insubstantial risk exists that Met-Ed Capital will
incur penalties, interest or tax under the Internal
Revenue Code of 1986, as amended, or other applicable
law if it does not withhold or deduct certain amounts
as may be required in connection with monthly Dividends
or other payments made by it with respect to the
Preferred Securities, or that the Company will incur
such penalties, interest or tax if it does not withhold
or deduct in connection with payments made by it under
the Deferrable Interest Subordinated Debentures, the
Company shall have the right to redeem the Deferrable
Interest Subordinated Debentures, or a portion thereof,
under this clause (y) unless the obligation to pay
Additional Interest, if Met-Ed Capital or the Company
does so withhold, is a de minimis obligation.
Redemption Procedures
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If the Company gives a notice of redemption in respect of a
series of Deferrable Interest Subordinated Debentures (which
notice will be given not less than 30 nor more than 90 days prior
to the redemption date and will be irrevocable), then, on 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 date of such
deposit, all rights of holders of such Deferrable Interest
Subordinated Debentures so called for redemption will cease,
except the right of the holders of such Deferrable Interest
Subordinated Debentures to receive the Debenture Redemption
Price, but without interest. In the event that any date fixed
for redemption of Deferrable Interest 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 the event that less than all of a series of outstanding
Deferrable Interest Subordinated Debentures are to be so redeemed
following a Distribution Event, the Deferrable Interest
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 Deferrable Interest Subordinated Debentures
by tender, in the open market or by private agreement.
If a partial redemption or a purchase of outstanding
Deferrable Interest Subordinated Debentures by tender, in the
open market or by private agreement would result in a delisting
of such series of Deferrable Interest Subordinated Debentures
from any national securities exchange on which such series of
Deferrable Interest Subordinated Debentures is then listed, the
Company may then only redeem or purchase such series of
Deferrable Interest Subordinated Debentures in whole.
Interest
Each Deferrable Interest 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
Deferrable Interest 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 Deferrable Interest
Subordinated Debentures do not remain in book-entry-only form,
the record dates will be the fifteenth day of each month.
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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 Deferrable
Interest 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 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.
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 Deferrable Interest Subordinated
Debentures, so long as the Company is not in default in the
payment of interest on the Deferrable Interest Subordinated
Debentures, to extend the interest payment period on the
Deferrable Interest Subordinated Debentures to 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 Deferrable Interest 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 make a liquidation payment with
respect to, any of its capital 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 Met-Ed Capital shall be the sole
holder of the Deferrable Interest Subordinated Debentures, the
Company shall give Met-Ed 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 Met-Ed 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 Met-Ed Capital to give
notice of the Company's selection of such extended interest
payment period to the holders of the Preferred Securities. If
Met-Ed Capital shall not be the sole holder of the Deferrable
Interest Subordinated Debentures, the Company will give the
holders of the Deferrable Interest 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 Deferrable Interest
Subordinated Debentures are then listed or other applicable self-
regulatory organization or to holders of the Deferrable Interest
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Subordinated Debentures, but in any event not less than two
Business Days prior to such record date.
Additional Interest
If at any time Met-Ed Capital is required to pay any
Additional Amounts in respect of the Preferred Securities
pursuant to the terms thereof, then the Company will pay as
interest ("Additional Interest") on the Deferrable Interest
Subordinated Debentures an amount equal to such Additional
Amounts. In addition, if Met-Ed 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 Met-Ed Capital after paying any such taxes, duties,
assessments or governmental charges will be not less than the
amounts Met-Ed Capital would have received had no such taxes,
duties, assessments or governmental charges been imposed.
Credit
Prior to a Distribution Event, the Company shall receive a
credit against any payment it is otherwise required to make under
the Deferrable Interest Subordinated Debentures to the extent it
has theretofore made, or is concurrently making, a payment under
the Limited Guarantee.
Subordination
All payments by the Company in respect of the Deferrable
Interest 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 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 Deferrable Interest Subordinated Debentures.
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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
Deferrable Interest 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 Deferrable Interest Subordinated Debentures.
No direct or indirect payment by or on behalf of the Company
of principal of or interest on the Deferrable Interest
Subordinated Debentures whether pursuant to the terms of the
Deferrable Interest 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
Deferrable Interest Subordinated Debentures (or the Special
Representative) has received any payment on account of the
principal of or interest on the Deferrable Interest 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 Deferrable
Interest 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 on such Senior Indebtedness until the Deferrable
Interest 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,
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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 Limited Guarantee.
Book-Entry and Settlement
If Deferrable Interest Subordinated Debentures are
distributed to holders of Preferred Securities, the Deferrable
Interest 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 Deferrable Interest
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 Deferrable Interest
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 Deferrable Interest
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
Deferrable Interest 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 Deferrable Interest Subordinated Debentures. Any
global security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for Deferrable Interest
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 depository from its
Participants with respect to ownership of beneficial interests in
such global security.
Payment; Registration and Transfer
In the event that the Deferrable Interest Subordinated
Debentures do not remain in book-entry-only form, the following
provisions would apply:
Payment of principal of any Deferrable Interest Subordinated
Debenture will be made only against surrender to the Trustee or
the Paying Agent appointed by the Company, if not the Trustee, of
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such Deferrable Interest Subordinated Debenture. Principal of,
and interest on, Deferrable Interest 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 Deferrable
Interest Subordinated Debentures. Payment of interest on a
Deferrable Interest Subordinated Debenture on any Interest
Payment Date will be made to the person in whose name such
Deferrable Interest 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 Deferrable Interest
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.
Deferrable Interest 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 Deferrable Interest Subordinated
Debentures. The Company shall not be required to make, and the
Registrar need not register, the transfer or exchange of (i) any
Deferrable Interest Subordinated Debenture during a period
beginning at the opening of business five days before the mailing
of a notice of redemption of Deferrable Interest Subordinated
Debentures, and ending at the close of business on the day of
such mailing, or (ii) any Deferrable Interest Subordinated
Debenture selected, called or being called for redemption, in
whole or in part, except in the case of any Deferrable Interest
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 Deferrable Interest
Subordinated Debentures which are affected by the amendment or
waiver, to amend the Indenture or the Deferrable Interest
Subordinated Debentures or to waive compliance by the Company
with any provision of the Indenture or the Deferrable Interest
Subordinated Debentures; provided that no such amendment or
waiver may, without the consent of the holder of each outstanding
Deferrable Interest Subordinated Debenture affected thereby, (a)
reduce the principal amount of the Deferrable Interest
Subordinated Debentures, (b) reduce the percentage of principal
amount of outstanding Deferrable Interest Subordinated Debentures
of any series, the consent of holders of which is required for
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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 Deferrable
Interest Subordinated Debentures, (d) change the redemption
provisions applicable to the Deferrable Interest Subordinated
Debentures adversely to the holders thereof, (e) impair the right
to institute suit for the enforcement of any payment with respect
to the Deferrable Interest Subordinated Debentures, (f) change
the currency in which payments with respect to the Deferrable
Interest Subordinated Debentures are to be made, (g) change the
subordination provisions applicable to the Deferrable Interest
Subordinated Debentures adversely to the holders thereof, or (h)
waive a default in the payment of the principal of, or interest
on, any Deferrable Interest Subordinated Debenture. The
Indenture or the Deferrable Interest Subordinated Debentures may
be amended, without the consent of the holders of the Deferrable
Interest 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
Additional Interest, if any) on Deferrable Interest 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 Deferrable Interest 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 Deferrable
Interest Subordinated Debentures then outstanding may declare the
principal of, and all accrued and unpaid interest (including
Additional Interest, if any, and any interest accrued but not
paid during an Extension Period) on, the Deferrable Interest
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
acceleration with respect to the Deferrable Interest Subordinated
Debentures may be rescinded and past defaults (except, unless
theretofore cured, a default in the payment of principal of, or
interest on, the Deferrable Interest Subordinated Debentures) may
be waived by the holders of a majority in principal amount of
the Deferrable Interest Subordinated Debentures then outstanding.
The Indenture provides that the Trustee may withhold notice to
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the holders of the Deferrable Interest Subordinated Debentures of
any continuing default (except in the payment of the principal
of, or interest on, the Deferrable Interest Subordinated
Debentures) if the Trustee considers it in the interests of
holders of Deferrable Interest Subordinated Debentures to do so.
Enforcement of Certain Rights by Holders of Preferred Securities
So long as any Deferrable Interest Subordinated Debentures
are held by Met-Ed 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 Met-Ed Capital's right, as the holder of Deferrable
Interest Subordinated Debentures, to accelerate the principal
amount of the Deferrable Interest Subordinated Debentures and to
enforce the Company's obligations under the Indenture and the
Deferrable Interest Subordinated Debentures directly against the
Company, without first proceeding against Met-Ed 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 Deferrable Interest
Subordinated Debentures and the Indenture and (y) so long as any
Preferred Securities remain outstanding, the Company's
obligations under the Limited Guarantee; (iii) so long as any
Preferred Securities remain outstanding, the successor Person
becomes or acquires the General Partner; 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 Deferrable Interest 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
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 Deferrable Interest
Subordinated Debenture as the absolute owner thereof (whether or
not such Deferrable Interest Subordinated Debenture shall be
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overdue and notwithstanding any notice to the contrary) for the
purpose of making payment and for all other purposes.
Defeasance and Discharge
Under the terms of the Indenture, the Company will be
discharged from any and all obligations in respect of the
Deferrable Interest Subordinated Debentures of any series (except
in each case for certain obligations to register the transfer or
exchange of Deferrable Interest Subordinated Debentures, replace
stolen, lost or mutilated Deferrable Interest 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 Deferrable Interest 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 Deferrable Interest 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 Deferrable Interest Subordinated Debentures
Any mutilated Deferrable Interest Subordinated Debenture
will be replaced by the Company at the expense of the holder upon
its surrender to the Trustee. Deferrable Interest 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 Deferrable Interest Subordinated
Debenture, an indemnity satisfactory to the Trustee and the
Company may be required at the expense of the holder of such
Deferrable Interest Subordinated Debenture before a replacement
Deferrable Interest Subordinated Debenture will be issued.
Governing Law
The Indenture and the Deferrable Interest 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
36
<PAGE>
majority in principal amount of the Deferrable Interest
Subordinated Debentures then outstanding thereunder will have the
right to direct the time, 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 Deferrable Interest Subordinated Debentures held
by Met-Ed 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
Met-Ed 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.
Income from Preferred Securities
In the opinion of Carter, Ledyard & Milburn, Met-Ed Capital
will be treated as a partnership for federal income tax purposes.
37
<PAGE>
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 Met-Ed 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.
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 for 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 Deferrable Interest Subordinated Debentures Upon
Liquidation of Met-Ed Capital
Under certain circumstances described under the caption
"Description of Preferred Securities-Special Event Redemption or
Distribution", Met-Ed Capital may dissolve and cause Deferrable
Interest Subordinated Debentures to be distributed to the holders
of Preferred Securities in liquidation of such holders' interests
in Met-Ed Capital. As described in "Description of Preferred
Securities-Special Event Redemption or Distribution", in the case
of a Special Event, Deferrable Interest Subordinated Debentures
may not be distributed to the holders of Preferred Securities in
connection with a dissolution of Met-Ed Capital unless Met-Ed
Capital receives an opinion of 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 Deferrable Interest Subordinated
Debentures equal to such holder's aggregate tax basis in the
holder's Preferred Securities. A holder's holding period in such
Deferrable Interest Subordinated Debentures would include the
period for which the Preferred Securities were held by such
holder.
Met-Ed 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 Met-Ed 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
38
<PAGE>
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 Met-Ed Capital.
The nominee is required to supply the beneficial owners of
Preferred Securities with the information furnished to Met-Ed
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
Deferrable Interest Subordinated Debentures to a period not
exceeding 60 consecutive months. In the event that the Company
exercises this right, the Company may not, among other things,
declare dividends on any of its capital stock. Met-Ed Capital
and the Company currently believe that the extension of an
interest payment period is remote. In the event that the
interest payment period is extended, Met-Ed 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.
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 Met-Ed Capital. The
tax basis of 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 Met-Ed 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 either case not subject to United States federal
income tax on a net income basis in respect of a Preferred
Security.
39
<PAGE>
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 Met-Ed 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 Met-Ed
Capital through stock ownership, and (c) either: (x)
the beneficial owner of the Preferred Security
certifies to Met-Ed 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
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 Met-Ed
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 Met-Ed 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 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
40
<PAGE>
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.
PLAN OF DISTRIBUTION
Met-Ed Capital may offer or sell Preferred Securities to one
or more underwriters for public offering and sale by them. Met-
Ed 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
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 Met-Ed 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
Met-Ed 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 Met-Ed Capital, to
indemnification against and contribution toward certain
liabilities, including liabilities under the Securities Act, and
to reimbursement by the Company and/or Met-Ed Capital for certain
expenses.
Underwriters and dealers may engage in transactions with, or
perform services for, the Company and/or Met-Ed 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 Met-Ed
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
41
<PAGE>
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 Met-Ed Capital by Berlack, Israels & Liberman, New York, New
York, and Ryan, Russell, Ogden & Seltzer, Reading, Pennsylvania,
and for any underwriters by Reid & Priest, New York, New York.
Certain matters of Delaware law relating to the validity of the
Preferred Securities will be passed upon by Richards, Layton &
Finger, P.A., Wilmington, Delaware, special Delaware counsel to
Met-Ed Capital. Berlack, Israels & Liberman and Reid & Priest
may rely on the opinion of Ryan, Russell, Ogden & Seltzer as to
matters of Pennsylvania law, and Berlack, Israels & Liberman,
Ryan, Russell, Ogden & Seltzer and Reid & Priest may rely on the
opinion of Richards, Layton & Finger, P.A., as to matters of
Delaware law. Members and attorneys of Berlack, Israels &
Liberman own an aggregate of 12,091 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. Members and
attorneys of Ryan, Russell, Ogden & Seltzer own an aggregate of
2,000 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, 1993 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, 1993 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 change in the method of
accounting for unbilled revenues in 1991.
42
<PAGE>
No person has been authorized to
give any information or to make any 4,000,000 Preferred
representations other than those Securities
contained in this Prospectus Supplement
or the Prospectus, and, if given or Met-Ed Capital
made, such information or
representations must not be relied upon guaranteed on a
as having been authorized. This limited basis by
Prospectus Supplement and the Prospectus
do not constitute an offer to sell or a
solicitation of an offer to buy any
securities other than the securities METROPOLITAN
described in this Prospectus Supplement EDISON
or an offer to sell or the solicitation COMPANY
of an offer to buy such securities in
any circumstances in which such offer
or solicitation is unlawful. Neither % Cumulative
the delivery of this Prospectus Monthly Income
Supplement or the Prospectus nor any P r e f e r r e d
Securities,
sale made hereunder or thereunder Series A
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
Met-Ed Capital . . . . . . . . . . .
Metropolitan Edison Company . . . . .
Certain Investment Considerations . .
Use of Proceeds . . . . . . . . . . .
Certain Terms of the Series A
Preferred Securities . . . . . . .
Certain Terms of the Series A
Deferrable Interest Subordinated
Debentures . . . . . . . . . . . .
Underwriting . . . . . . . . . . . .
Legal Opinions . . . . . . . . . . .
Prospectus
Available Information . . . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . .
Metropolitan Edison Company . . . . .
Financing Program . . . . . . . . . .
Certain Company Consolidated Financial
Information . . . . . . . . . . . GOLDMAN, SACHS & CO.
Company Coverage Ratios . . . . . . . DEAN WITTER REYNOLDS
INC.
Use of Proceeds . . . . . . . . . . . A.G. EDWARDS & SONS,
INC.
Met-Ed Capital . . . . . . . . . . . KIDDER, PEABODY & CO.
Description of Preferred Securities . INCORPORATED
Description of the Limited Guarantee MORGAN STANLEY & CO.
Description of the Deferrable Interest INCORPORATED
<PAGE>
Subordinated Debentures . . . . . P A I N E W E B B E R
INCORPORATED
United States Taxation . . . . . . . PRUDENTIAL SECURITIES
Plan of Distribution . . . . . . . . INCORPORATED
Legal Opinions . . . . . . . . . . . Representatives of the
Experts . . . . . . . . . . . . . . . Underwriters
44
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Filing fees - Securities and Exchange
Commission $ 45,104
Printing and engraving 10,000*
New York Stock Exchange listing fee 15,000*
Legal fees:
Berlack, Israels & Liberman 85,000*
Ryan, Russell, Ogden & Seltzer 45,000*
Carter, Ledyard & Milburn 55,000*
Richards, Layton & Finger, P.A. 25,000*
Blue Sky fees and expenses 15,000*
Accounting fees:
Coopers & Lybrand 15,000*
Indenture Trustee fees and expenses 20,000*
Rating agencies fees and expenses 48,125*
Miscellaneous 21,771*
Total $400,000*
_________________
*Estimated
Item 16. Exhibits:
Exhibit No. Description
1-A - Form of Underwriting Agreement relating to
Preferred Securities.
3-D - By-Laws of Met-Ed Preferred Capital, Inc. -
Incorporated by reference to Exhibit A-2,
Application on Form U-1, SEC File No. 70-
8401.
4-A - Form of Subordinated Debenture Indenture -
Incorporated by reference to Exhibit A-8,
Application on Form U-1, SEC File No. 70-
8401.
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-C - Form of Subordinated Debenture - Incorporated
by reference to form of Deferrable Interest
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 Ryan, Russell, Ogden & Seltzer.
<PAGE>
5-C - Opinion of Richards, Layton & Finger, P.A.
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 Ryan, Russell, Ogden & Seltzer
(included in their opinion filed as Exhibit
5-B).
23-C - Consent of Richards, Layton & Finger, P.A.
(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 Executive
Committee of the Company's Board of Directors
authorizing attorney-in-fact to sign the
registration statement.
_________
The Exhibits listed above which have heretofore been filed
with the Securities and Exchange Commission and which are
designated in prior filings as noted above, are hereby
incorporated by reference and made a part hereof with the same
effect as if filed herewith.
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 registrant 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 the 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.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this amendment to its registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Reading, Commonwealth of
Pennsylvania, on the 7th day of July, 1994.
METROPOLITAN EDISON COMPANY
By: *
F.D. Hafer, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Metropolitan
Edison Company and each of its undersigned officers and directors
hereby constitute and appoint each of John G. Graham, Don W.
Myers and Ira H. Jolles his/its true and lawful attorney-in-fact
and agent with full power of substitution and resubstitution for
him/it and in his/its name, place and stead, in any and all
capacities, to sign all or any amendments (including post-
effective amendments) of and supplements to this Registration
Statement on Form S-3 and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each such
attorney-in-fact and agent 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, to all intents and purposes
and as fully as said corporation itself and each said officer or
director might or could do in person, hereby ratifying and
confirming all that each such attorney-in-fact and agent, or his
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this amendment to the registration statement has been signed
below by the following persons in the capacities with respect to
Metropolitan Edison Company and on the dates indicated.
Signature Title Date
* Chairman (Principal July 7, 1994
(J.R. Leva) Executive Officer)
and Director
* President and Director July 7, 1994
(F.D. Hafer)
* Vice President July 7, 1994
(J.G. Graham) (Principal Financial
Officer) and Director
* Comptroller (Principal July 7, 1994
(D.L. O'Brien) Accounting Officer)
3
<PAGE>
Vice President and July 7, 1994
(G.R. Repko) Director
Vice President and July 7, 1994
(R.S. Zechman) Director
Vice President and July 7, 1994
(J.F. Furst) Director
* Vice President and July 7, 1994
(R.C. Arnold) Director
*By:
Don W. Myers, Attorney-in fact
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant has duly caused this amendment to its
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Reading,
Commonwealth of Pennsylvania on the 7th day of July, 1994.
MET-ED CAPITAL, L.P.
By: Met-Ed Preferred Capital, Inc.
its general partner
By:________________________________
F.D. Hafer, President
Pursuant to the requirements of the Securities Act of
1933, this amendment to the registration statement has been
signed below by the following person in the capacity on behalf of
Met-Ed Preferred Capital, Inc., as the general partner of Met-Ed
Capital, L.P., and on the date indicated.
Signature Title Date
President and July 7, 1994
(F.D. Hafer) Director
5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
1-A - Form of Underwriting Agreement relating to
Preferred Securities.
3-D - By-Laws of Met-Ed Preferred Capital, Inc. -
Incorporated by reference to Exhibit A-2,
Application on Form U-1, SEC File No. 70-
8401.
4-A - Form of Subordinated Debenture Indenture -
Incorporated by reference to Exhibit A-8,
Application on Form U-1, SEC File No. 70-
8401.
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-C - Form of Subordinated Debenture - Incorporated
by reference to form of Deferrable Interest
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 Ryan, Russell, Ogden & Seltzer.
5-C - Opinion of Richards, Layton & Finger, P.A.
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 Ryan, Russell, Ogden & Seltzer
(included in their opinion filed as Exhibit
5-B).
23-C - Consent of Richards, Layton & Finger, P.A.
(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 Executive
Committee of the Company's Board of Directors
6
<PAGE>
authorizing attorney-in-fact to sign the
registration statement.
_____________
The Exhibits listed above which have heretofore been filed
with the Securities and Exchange Commission and which are
designated in prior filings as noted above, are hereby
incorporated by reference and made a part hereof with the same
effect as if filed herewith.
7
<PAGE>
EXHIBITS TO BE FILED BY EDGAR
Exhibits:
1-A - Form of Underwriting Agreement relating
to Preferred Securities.
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 Ryan, Russell, Ogden &
Seltzer.
5-C - Opinion of Richards, Layton & Finger,
P.A.
8 - Opinion of Carter, Ledyard & Milburn.
24-A - Certified copy of resolution of the
Executive Committee of the Company's
Board of Directors authorizing attorney-
in-fact to sign the registration
statement.
8
<PAGE>
Exhibit 1-A
MET-ED CAPITAL, L.P.
___% Cumulative Monthly Income
Preferred Securities, Series A
(liquidation preference $25 per Preferred Security)
guaranteed on a limited basis
by Metropolitan Edison Company
Underwriting Agreement
_________, 1994
Goldman, Sachs & Co.,
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Kidder, Peabody & Co. Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Dear Sirs:
Met-Ed Capital, L.P. ("Met-Ed Capital"), a limited partnership
formed under the laws of the State of Delaware, and Metropolitan
Edison Company, a Pennsylvania corporation, as guarantor (the
"Guarantor"), propose, subject to the terms and conditions stated
herein, that Met-Ed Capital issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of
________ preferred partner interests of Met-Ed 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 Met-
Ed 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 "Limited
Guarantee").
1.Each of Met-Ed Capital and the Guarantor jointly and
severally represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 in respect of,
among other things, the Preferred Securities, the Limited
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Guarantee and the ___% Deferrable Interest Subordinated
Debentures due _____ of the Guarantor (the "___% Subordinated
Debentures", and collectively with the Preferred Securities and
the Limited Guarantee, the "Securities") (File Nos. 33-______ and
33-________ - ____), has been filed by Met-Ed Capital and the
Guarantor with the Securities and Exchange Commission (the
"Commission"); such registration statement 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 has
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 Form T-1, 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 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
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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 Met-
Ed 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 Met-
Ed Capital or the Guarantor by an Underwriter through you
expressly for use in the Preliminary Supplemented Prospectus or
the Final Supplemented Prospectus;
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the 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
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warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to Met-Ed 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 or the Exchange Act regulations or any
rule or regulation of the Commission thereunder;
(e) Met-Ed 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 Met-Ed 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 Met-Ed Capital, in any such case otherwise than as set forth
or contemplated in the Final Supplemented Prospectus;
(f) Met-Ed 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 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; Met-Ed Preferred Capital,
Inc., a Delaware corporation, is the sole general partner (the
"General Partner") of Met-Ed 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;
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(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 Met-Ed 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 Met-Ed 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
_________, 1994 between the Guarantor and United States Trust
Company 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, 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 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 in the Final Supplemented Prospectus;
(k) The Amended and Restated Limited Partnership Agreement,
dated as of ______, 1994 (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
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its capacity as general partner of Met-Ed 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 Limited 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 Limited
Guarantee will conform to the description thereof in the Final
Supplemented Prospectus;
(m) All of the issued general and limited partner interests
of Met-Ed 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
Met-Ed 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 Met-Ed
Capital, the compliance by Met-Ed 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 Met-Ed 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 Met-Ed Capital is a party or by which Met-Ed Capital is
bound or to which any of the property or assets of Met-Ed Capital
is subject, nor will such action result in any violation of the
provisions of the Certificate of Limited Partnership of Met-Ed
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 Met-Ed 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 Met-Ed 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 Pennsylvania Public Utility
Commission (the "PaPUC"), and such consents, approvals,
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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 Met-Ed
Capital, the compliance by Met-Ed Capital and the Guarantor with
all of the provisions of this Agreement, the execution, delivery
and performance by the Guarantor of the Limited 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 Articles of Incorporation or By-laws
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 the
Limited Guarantee, the issuance of ___% 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 and
the approval of the Commission under the 1935 Act and the
approvals of the PaPUC 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 Met-Ed Capital nor the Guarantor is in violation
of its charter, or, in the case of Met-Ed 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
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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 Met-Ed Capital or the Guarantor is a party or of
which any property of Met-Ed Capital or the Guarantor is the
subject which, if determined adversely to Met-Ed 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
Met-Ed Capital; and, to the best of Met-Ed Capital's and the
Guarantor's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(r) Neither Met-Ed 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 Met-Ed 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 Met-Ed 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 517.075 of
Florida Statutes (chapter 92-198, Laws of Florida); and
(t) Coopers & Lybrand, 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, Met-
Ed Capital agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly,
to purchase from Met-Ed 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 Limited Guarantee and ___%
Subordinated Debentures concurrently with the issue and sale of
the Preferred Securities as contemplated herein.
The Guarantor hereby guarantees the timely performance by
Met-Ed Capital of its obligations under this Section 2, Section 6
and Section 11. As compensation to the Underwriters for their
commitments hereunder, and in view of the fact that the proceeds
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of the sale of the Preferred Securities will be used to purchase
___% Subordinated Debentures of the Guarantor, the Guarantor
hereby agrees to pay at the Time of Delivery (as defined in
Section 4 hereof) to Goldman, Sachs & Co., for the accounts of
the several Underwriters, an amount equal to $___ per Preferred
Security for the Preferred Securities to be delivered by Met-Ed
Capital hereunder at the Time of Delivery, except that such
amount will be $___ per Preferred Security with respect to those
Preferred Securities 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
Met-Ed Capital with The Depository Trust Company ("DTC") or its
designated custodian and registered in the name of Cede & Co., as
nominee for DTC. Met-Ed Capital will deliver the Preferred
Securities to Goldman, Sachs & 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 Met-Ed Capital in New
York Clearing House (next day) funds, by causing DTC to credit
the Preferred Securities to the account of Goldman, Sachs & Co.
at DTC. Met-Ed Capital will cause the certificate representing
the Preferred Securities to be made available to Goldman, Sachs &
Co. for checking at least twenty-four hours prior to the Time of
Delivery at the office of DTC or its designated custodian (the
"Designated Office"). The time, date and location of such
delivery and payment shall be ______, New York City time, on
_______, 1994 or such other time and date as Goldman, Sachs & Co.
and Met-Ed 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 Goldman, Sachs & Co. in
New York Clearing House funds.
5. Each of Met-Ed 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
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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 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
Met-Ed 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
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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) 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 Goldman, Sachs & 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 Met-Ed Capital, or
any preferred stock or any other securities of Met-Ed Capital or
the Guarantor which are substantially similar to the Preferred
Securities or the Limited Guarantee, or any securities
convertible into or exchangeable for Preferred Securities,
limited partner interests, preferred stock or such substantially
similar securities of either Met-Ed 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
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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 Met-Ed Capital or 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
(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. Met-Ed Capital and the Guarantor jointly and severally
covenant and agree with the several Underwriters that Met-Ed
Capital and the Guarantor will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of Met-Ed
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 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
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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 The Depository
Trust Company; (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. It
is understood, however, that, except as provided in this Section,
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 Met-Ed
Capital and the Guarantor herein are, at and as of the Time of
Delivery, true and correct, the condition that Met-Ed Capital and
the Guarantor shall have performed all of its obligations
hereunder theretofore to be performed, and the following
additional conditions:
(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) Reid & Priest, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to: the incorporation of the Guarantor
and the formation of Met-Ed 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 Limited 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
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matters; provided, that in rendering such opinion, Reid &
Priest may rely upon the opinion of Ryan, Russell, Ogden &
Seltzer delivered pursuant to subsection (c) hereof as to all
matters of Pennsylvania law and upon the opinion of Richards,
Layton & Finger delivered pursuant to subsection (e) hereof as
to matters of Delaware law relating to Met-Ed Capital, the
Preferred Securities and the Limited Partnership Agreement.
(c) Berlack, Israels & Liberman and Ryan, Russell, Ogden &
Seltzer, counsel for Met-Ed 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) Met-Ed 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 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 Met-Ed 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 Met-Ed
Capital;
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(v) The Indenture and the ___% Subordinated Debentures
to be issued thereunder, have been duly authorized; the
Indenture has been duly qualified under the Trust Indenture
Act, and has been duly executed and delivered and constitutes,
and the ___% Subordinated Debentures, when duly executed and
authenticated in accordance with the Indenture and issued and
delivered under the circumstances provided in 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 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 Met-Ed Capital, 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;
(vii) The Limited 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 Limited Guarantee conforms to the
description thereof in the Final Supplemented Prospectus;
(viii) The issue and sale of the Preferred Securities by
Met-Ed Capital, the compliance by Met-Ed 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 Met-Ed 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 Met-Ed Capital is a party or
by which Met-Ed Capital is bound or to which any of the
property or assets of Met-Ed Capital is subject, nor will such
action result in any violation of the provisions of the
Certificate of Limited Partnership of Met-Ed Capital or
Limited Partnership Agreement of Met-Ed Capital or any statute
or any order, of which such counsel is aware, rule or
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regulation of any court or governmental agency or body having
jurisdiction over Met-Ed Capital or any of its properties;
(ix) The issue and sale of the Preferred Securities by
Met-Ed Capital, the compliance by Met-Ed Capital and the
Guarantor with the provisions of this Agreement, the
execution, delivery and performance by the Guarantor of the
Limited 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,
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 Articles of Incorporation or By-laws 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, or
filing with, 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 Met-Ed Capital and
the Guarantor of the transactions contemplated herein except
such as have been made or obtained under the Act, the 1935
Act, the PaPUC, and the Trust Indenture Act, and 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 the
filing of Certificates Pursuant to Rule 24 under the 1935 Act;
(xi) This Agreement has been duly authorized, executed
and delivered by each of Met-Ed 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;
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(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 became effective or were
filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the
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 Met-Ed
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;
(xv) Neither Met-Ed 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 Met-Ed 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 Met-Ed Capital or
the Guarantor is a party or of which any property of Met-Ed
Capital or the Guarantor is the subject which, if determined
adversely to Met-Ed 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 Met-Ed Capital; and, to the best of such counsel's
knowledge, no such proceedings are overtly threatened or
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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, 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 Met-Ed 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 Met-Ed 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 light of the circumstances in
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 Met-Ed 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 light of the circumstances in which they were
made, not misleading;
In rendering their opinions, (A) Berlack, Israels & Liberman
may rely upon the opinion of Ryan, Russell, Ogden & Seltzer as
to all matters involving laws of the Commonwealth of
Pennsylvania, and (B) such counsel may rely, as to matters of
Delaware Law relating to Met-Ed Capital, 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 Met-
Ed 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;
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(e) Richards, Layton & Finger, special Delaware counsel for
Met-Ed 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:
(i) Met-Ed 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,
Met-Ed 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
Met-Ed Capital issued to the General Partner and the Class A
Limited Partner have been duly and validly authorized and
are validly issued;
(iv) The Preferred Securities issued to the limited
partners of Met-Ed 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 Met-Ed Capital,
as to which, assuming that the Preferred Security Holders,
as limited partners of Met-Ed Capital, do not participate in
the control of the business of Met-Ed Capital, the Preferred
Security Holders, as limited partners of Met-Ed Capital,
will have no liability in excess of their obligations to
make payments provided for in the Limited Partnership
Agreement and their share of Met-Ed 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 Met-Ed 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 Met-Ed
Capital, to be deemed to be participating in the control of
the business of Met-Ed 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 Met-Ed Capital, in accordance
with its terms subject to bankruptcy, insolvency,
moratorium, fraudulent conveyance, receivership,
reorganization, liquidation and other similar laws relating
to or affecting the 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);
(vii) Under the Limited Partnership Agreement and DRULPA,
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Met-Ed 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 Met-Ed Capital of this
Agreement, and the performance by Met-Ed Capital of its
obligations hereunder, have been duly authorized by all
necessary partnership action on the part of Met-Ed Capital;
(ix) The issuance and sale by Met-Ed Capital of the
Preferred Securities pursuant to this Agreement and the
execution, delivery and performance by Met-Ed Capital of
this Agreement will not violate (i) any Delaware statute,
rule or regulation, or (ii) the Certificate of Limited
Partnership of Met-Ed 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 Met-Ed Capital of
the Preferred Securities pursuant to this Agreement, the
execution, delivery and performance by Met-Ed Capital of
this Agreement or the consummation of the transactions
contemplated in this Agreement; and
(xi) Such counsel has reviewed the statements in the
Final Supplemented Prospectus under the caption "Met-Ed
Capital" and, insofar as it contains statements of Delaware
law, such statements are fairly presented.
(xii) Assuming that Met-Ed Capital is treated as a
partnership for Federal income tax purposes, and assuming
that Met-Ed Capital derives no income from or connected with
sources within the State of Delaware and has no assets,
activities (other than the maintenance of a registered
office and registered agent in the State of Delaware and the
filing of documents with the Delaware Secretary of State) or
employees in 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 Delaware income taxes solely as a result of
their participation in Met-Ed Capital, and Met-Ed Capital
will not be liable for any Delaware income tax.
(f) On the date of this Agreement and at the Time of
Delivery, Coopers & Lybrand 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 I 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
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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
Met-Ed 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 Met-Ed 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 Met-Ed 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 Met-Ed
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 Met-Ed Capital s Preferred
Securities on the New York Stock Exchange or the
Guarantor's preferred stock on the Philadelphia Stock
Exchange; (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;
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(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) Met-Ed 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 Met-Ed
Capital and the Guarantor herein at and as of such Time of
Delivery, as to the performance by each of Met-Ed 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 Met-Ed Capital and the Guarantor
hereunder, to issue and sell the Preferred Securities,
that a Special Event shall not have occurred and be
continuing.
8. (a) Met-Ed 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
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 Met-Ed 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
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information furnished to Met-Ed Capital or the Guarantor by any
Underwriter through you expressly for use therein; and provided,
further that neither Met-Ed 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 Met-Ed 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 Met-
Ed Capital and the Guarantor against any losses, claims, damages
or liabilities to which Met-Ed 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 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 Met-Ed Capital or the Guarantor by such
Underwriter through you expressly for use therein; and will
reimburse Met-Ed Capital and the Guarantor for any legal or other
expenses reasonably incurred by Met-Ed Capital or the Guarantor
in connection with investigating or defending any such action or
claim as such expenses are incurred.
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(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 so to 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 so to 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 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 on 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
24
<PAGE>
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 Met-Ed
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 Met-Ed 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 Met-Ed 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 Met-Ed 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 Met-Ed 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. Met-Ed
Capital, the 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
25
<PAGE>
(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 Met-Ed Capital and the Guarantor
under this Section 8 shall be in addition to any liability which
Met-Ed 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 Met-Ed
Capital and the Guarantor and to each person, if any, who
controls Met-Ed 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 Met-Ed
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 Met-Ed Capital and the
Guarantor that you have so arranged for the purchase of such
Preferred Securities, or Met-Ed Capital or the Guarantor notifies
you that it has so arranged for the purchase of such Preferred
Securities, you or Met-Ed 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 Met-Ed 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 Met-Ed Capital and the Guarantor as
provided in subsection (a) above, the aggregate number of such
Preferred Securities which remains unpurchased does not exceed
26
<PAGE>
one-eleventh of the aggregate number of all the Preferred
Securities, then Met-Ed 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 Met-Ed 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 Met-Ed 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, Met-Ed Capital or the Guarantor except
for the expenses to be borne by Met-Ed 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.
10. The respective indemnities, agreements,
representations, warranties and other statements of Met-Ed
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 Met-Ed Capital, the
Guarantor, or any officer or director or controlling person of
Met-Ed 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, Met-Ed 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 PaPUC authorizing the issuance and sale of the Securities and
27
<PAGE>
to the extent necessary the other transactions contemplated
hereby), Preferred Securities are not delivered by or on behalf
of Met-Ed Capital (or the related Limited Guarantee and ___%
Subordinated Debentures issuable by the Guarantor are not
concurrently issued by the Guarantor) as provided herein, Met-Ed
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 Limited
Guarantee and ___ % Subordinated Debentures not so issued), but
Met-Ed 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 Goldman, Sachs & 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 Goldman, Sachs & Co., at 85
Broad Street, New York, N.Y. 10004, Attention: Registration
Department; and if to Met-Ed 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 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 Met-Ed
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, Met-Ed 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 Met-Ed 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
28
<PAGE>
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.
29
<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 Met-Ed 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 Met-Ed 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,
MET-ED CAPITAL, L. P.
By: Met-Ed Preferred Capital, Inc.
its General Partner
By:
Name:
Title:
METROPOLITAN EDISON COMPANY
By:
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A.G. Edwards & Sons, Inc.
Kidder, Peabody & Co. Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Acting on its own behalf and
as Representative of the
Several Underwriters referred
to in the foregoing Agreement
By:
(Goldman, Sachs & Co.)
30
<PAGE>
SCHEDULE I
Underwriter Total Number of
Preferred Securities
to be Purchased
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
A.G. EDWARDS & SONS, INC.
KIDDER, PEABODY & CO. INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
31
<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
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<PAGE>
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 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; or
(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 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.
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Exhibit 4-A(1)
METROPOLITAN EDISON 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-D
PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of ________, 1994, is executed and
delivered by Metropolitan Edison Company, a Pennsylvania
corporation (the "Guarantor"), for the benefit of the Holders (as
defined below) from time to time of the Preferred Securities (as
defined below) of Met-Ed Capital, L.P., a Delaware limited
partnership (the "Issuer").
WHEREAS, the Issuer is issuing on the date hereof
$________________ aggregate stated liquidation preference of
preferred limited partner interests of a series designated the
____% Cumulative Monthly Income Preferred Securities, Series A
(the "Preferred Securities"), and the Guarantor desires to enter
into this Guarantee Agreement for the benefit of the Holders, as
provided herein;
WHEREAS, the Issuer will use (i) the proceeds from the
issuance and sale of the Preferred Securities to the Holders and
(ii) the capital contributions relating to the issuance of the
Issuer's general partner interests (the "Common Securities") to
Met-Ed Preferred Capital, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Guarantor (the "General Partner"),
to purchase Subordinated Debentures (as defined below) issued by
the Guarantor under the Indenture (as defined below); and
WHEREAS, the Guarantor desires irrevocably and
unconditionally to agree to the extent set forth herein to pay to
the Holders the Guarantee Payments (as defined below) and to make
certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and other
consideration, receipt of which is hereby acknowledged, the
Guarantor, intending to be legally bound hereby, agrees as
follows:
ARTICLE I
As used in this Guarantee Agreement, the terms set forth
below shall, unless the context otherwise requires, have the
following meanings. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in
the Issuer's Amended and Restated Limited Partnership Agreement
dated as of _______, 1994 (the "Limited Partnership Agreement").
"Guarantee Payments" shall mean the following payments,
without duplication, to the extent not paid by the Issuer: (i)
any accumulated and unpaid monthly distributions on the Preferred
Securities (except for monthly distributions which are not paid
during an Extension Period (as defined in the Indenture)) to the
extent that the Issuer has sufficient cash on hand to permit such
payments and funds legally available therefor, (ii) the
<PAGE>
Redemption Price (as defined below) payable with respect to any
Preferred Securities called for redemption by the Issuer to the
extent that the Issuer has sufficient cash on hand to permit such
payments and funds legally available therefor, (iii) upon a
liquidation of the Issuer other than in connection with a
distribution of Subordinated Debentures (a "Distribution Event")
following a dissolution of the Issuer resulting from a Special
Event (as defined in the Limited Partnership Agreement), the
lesser of (a) the Liquidation Distribution (as defined below) and
(b) the amount of assets of the Issuer available for distribution
to Holders in liquidation of the Issuer, and (iv) any Additional
Amounts (as defined in the Limited Partnership Agreement) payable
by the Issuer in respect of the Preferred Securities.
"Holder" shall mean any holder from time to time of any
Preferred Securities of the Issuer; provided, however, that in
determining whether the Holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any
entity owned more than 50% by the Guarantor, either directly or
indirectly.
"Indenture" shall mean the Indenture dated as of __________,
1994 between the Guarantor and United States Trust Company of New
York, as Trustee.
"Liquidation Distribution" shall mean the aggregate of the
stated liquidation preference of $25 per Preferred Security and
all accumulated and unpaid distributions to the date of payment,
together with any additional distributions accrued thereon.
"Redemption Price" shall mean the aggregate of $25 per
Preferred Security, plus accumulated and unpaid distributions to
the date fixed for redemption, together with any Additional
Distributions (as defined in the Limited Partnership Agreement)
accrued thereon.
"Subordinated Debentures" shall mean the Guarantor's ___%
Deferrable Interest Subordinated Debentures, Series A, due
_______, 2043, issued under and pursuant to the Indenture.
ARTICLE II
SECTION 2.01. (a) The Guarantor hereby irrevocably and
unconditionally agrees to pay in full to the Holders the
Guarantee Payments, as and when due (except to the extent paid by
the Issuer), to the fullest extent permitted by law, regardless
of any defense, right of set-off or counterclaim which the
Guarantor or the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment by the Guarantor to the Holders or by payment of such
amounts by the Issuer to the Holders. Notwithstanding anything
to the contrary herein, the Guarantor retains all of its rights
under Section 4.01(c) of the Indenture to extend the interest
payment period thereunder and the Guarantor shall not be
2
<PAGE>
obligated hereunder to pay during an Extension Period (as defined
in the Indenture) any monthly distributions on the Preferred
Securities which are not paid by the Issuer during such Extension
Period.
(b) All Guarantee Payments shall be made without
withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of
whatever nature imposed or levied upon or as a result of such
payment by or on behalf of the United States, any state thereof
or any other jurisdiction through which or from which such
payment is made, or any authority therein or thereof having power
to tax, unless the withholding or deduction of such taxes,
duties, assessments or governmental charges is required by law.
In the event that any such withholding or deduction is required
as a consequence of (i) the Subordinated Debentures not being
treated as indebtedness for United States federal income tax
purposes or (ii) Penelec Capital not being treated as a
partnership for United States federal income tax purposes, the
Guarantor shall pay such additional amounts ("Additional
Amounts") as may be necessary in order that the net amounts
received by the Holders after such withholding or deduction will
equal the amount which would have been receivable in respect of
the Preferred Securities in the absence of such withholding or
deduction, except that no such additional amounts will be payable
to any Holder (or a third party on such Holder's behalf):
i) if such Holder is liable for such taxes,
duties, assessments or governmental charges in respect
of the Preferred Securities by reason of such Holder's
having a connection with the United States, any state
thereof or any other jurisdiction through which or from
which such payment is made, or in which such Holder
resides, conducts business or has other contacts, other
than being a Holder, or
ii) if the Issuer or the Guarantor has notified
such Holder of the obligation to withhold or deduct
taxes and requested but not received from such Holder a
declaration of non-residence, a valid taxpayer
identification number or other claim for exemption, and
such withholding or deduction would not have been
required had such declaration, taxpayer identification
number or claim been received.
SECTION 2.02. The Guarantor hereby waives notice of
acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 2.03. Except as otherwise set forth herein, the
obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall to the fullest extent
3
<PAGE>
permitted by law in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the
Issuer of any express or implied agreement, covenant,
term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the monthly
distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms
of the Preferred Securities or the extension of time
for the performance of any other obligation under,
arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of
diligence on the part of the Holders to enforce, assert
or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors,
reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency
in, any of the Preferred Securities; or
(f) the settlement or compromise of any
obligation guaranteed hereby or hereby incurred.
The Holders shall have no obligation to give notice to, or obtain
consent of, the Guarantor with respect to the occurrence of any
of the foregoing.
SECTION 2.04. This is a guarantee of payment and not of
collection. A Holder may enforce this Guarantee Agreement
directly against the Guarantor, and the Guarantor will waive any
right or remedy to require that any action be brought against the
Issuer or any other person or entity before proceeding against
the Guarantor. Subject to Section 2.05, all waivers hereunder
shall be without prejudice to the Holders' right at the Holders'
option to proceed against the Issuer, whether by separate action
or by joinder. The Guarantor agrees that this Guarantee
Agreement shall not be discharged except by payment of the
Guarantee Payments in full (to the extent not paid by the Issuer)
4
<PAGE>
and by complete performance of all obligations of the Guarantor
contained in this Guarantee Agreement.
SECTION 2.05. The Guarantor will be subrogated to all
rights of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment by the Issuer
of any amount of distributions in respect of which payment has
been made to the Holders by the Guarantor pursuant to Section
2.01; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) exercise any
rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a
result of a payment under this Guarantee Agreement, if, at the
time of any such payment, any amounts remain due and unpaid under
this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor
agrees to pay over such amount to the Holders.
SECTION 2.06. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the
Issuer with respect to the Preferred Securities and that the
Guarantor shall be liable as principal and sole debtor hereunder
to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (f), inclusive, of Section
2.03 hereof.
SECTION 2.07. The Guarantor expressly acknowledges that (i)
this Guarantee Agreement will be deposited with the General
Partner to be held for the benefit of the Holders; (ii) in the
event of the appointment of a Special Representative pursuant to
the Limited Partnership Agreement, the Special Representative may
enforce this Guarantee Agreement on behalf of the Holders and
take possession of this Guarantee Agreement for such purpose;
(iii) if no Special Representative has been appointed, the
General Partner has the right to enforce this Guarantee Agreement
on behalf of the Holders: (iv) the Holders of not less than a
majority in aggregate stated liquidation preference of the
Preferred Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available
in respect of this Guarantee Agreement, including the giving of
directions to the General Partner or the Special Representative,
as the case may be; and (v) if the General Partner or Special
Representative fails to enforce this Guarantee Agreement as above
provided, any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against
the Issuer or any other person or entity.
Any such Special Representative may enforce the
Issuer's rights against the Guarantor under the Indenture,
including, after failure to pay interest for 60 consecutive
monthly interest periods, the payment of interest on the
Subordinated Debentures, enforce the obligations of the Guarantor
5
<PAGE>
under this Guarantee Agreement and enforce the Guarantor's
obligations under the Indenture and the Subordinated Debentures
directly against the Guarantor; the Guarantor, upon request of a
Special Representative, agrees to execute and deliver such
documents as may be necessary, appropriate or convenient for such
Special Representative with respect to such enforcement.
ARTICLE III
SECTION 3.01. So long as any Preferred Securities remain
outstanding, neither the Guarantor nor any majority-owned
subsidiary of the Guarantor 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 Guarantor by a wholly-owned subsidiary of the
Guarantor) (i) during an Extension Period (as defined in the
Indenture) or (ii) if at such time the Guarantor shall be in
default with respect to its payment or other obligations
hereunder or 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 the Indenture. The Guarantor shall
take all actions necessary to ensure the compliance of its
subsidiaries with this Section 3.01.
SECTION 3.02. The Guarantor covenants, so long as any
Preferred Securities remain outstanding: (i) to maintain direct
or indirect 100% ownership of the Common Securities; (ii) to
cause at least 3% of the total value of the Issuer and at least
3% of all interests in the capital, income, gain, loss, deduction
and credit of the Issuer to be represented by Common Securities;
(iii) not to cause the Issuer to be voluntarily dissolved, wound-
up or terminated, except upon the entry of a decree of judicial
dissolution or in connection with a Distribution Event or certain
mergers, consolidations or other transactions permitted by the
Limited Partnership Agreement; (iv) except as otherwise provided
in the Limited Partnership Agreement, to cause the General
Partner to remain the general partner of the Issuer and timely
perform all of its duties as general partner of the Issuer
(including the duty to pay distributions 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 Guarantor under the Indenture may directly or
indirectly succeed to the duties as general partner of the
Issuer; and (v) to use its reasonable efforts to cause the Issuer
to remain a limited partnership and otherwise continue to be
treated as a partnership for United States federal income tax
purposes.
SECTION 3.03. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all present and
future Senior Indebtedness (as defined in the Indenture) of the
Guarantor, and (ii) senior in right of payment to the Guarantor's
preferred and common stock.
6
<PAGE>
ARTICLE IV
This Guarantee Agreement shall terminate and be of no
further force and effect upon full payment of the Redemption
Price of all Preferred Securities or upon full payment of the
amounts payable to the Holders upon liquidation of the Issuer or
upon consummation of a Distribution Event; provided, however,
that this Guarantee Agreement shall continue to be effective or
shall be reinstated, as the case may be, if at any time any
Holder of Preferred Securities must restore payments of any sums
paid under the Preferred Securities or under this Guarantee
Agreement for any reason whatsoever.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in
this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and
shall inure to the benefit of the Holders. The Guarantor may not
assign its obligations hereunder without the prior approval of
the Holders of not less than 66 2/3% of the aggregate stated
liquidation preference of all Preferred Securities then
outstanding; provided that nothing herein shall preclude any
transaction involving the Guarantor pursuant to Section 5.01 of
the Indenture. No such permitted transaction shall be deemed an
assignment of the Guarantor's obligations hereunder for purposes
hereof.
SECTION 5.02. This Guarantee Agreement may only be amended
by a written instrument executed by the Guarantor; provided that,
so long as any of the Preferred Securities remain outstanding,
any such amendment that materially adversely affects the holders
of Preferred Securities, any termination of this Guarantee
Agreement and any waiver of compliance with any covenant
hereunder 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 all Preferred Securities then
outstanding.
SECTION 5.03. All notices, requests or other communications
required or permitted to be given hereunder to the Guarantor
shall be deemed given if in writing and delivered personally or
by recognized overnight courier or express mail service or by
facsimile transmission (confirmed in writing) or by registered or
certified mail (return receipt requested), addressed to the
Guarantor at the following address (or at such other address as
shall be specified by notice to the Holders):
Metropolitan Edison Company
c/o GPU Service Corporation
100 Interpace Parkway
Parsippany, NJ 07054
7
<PAGE>
Facsimile No.: (201) 263-6397
Attention: Treasurer
All notices, requests or other communications required or
permitted to be given hereunder to the Holders shall be deemed
given if in writing and delivered by the Guarantor in the same
manner as notices sent by the Issuer to the Holders.
SECTION 5.04. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from
the Preferred Securities.
SECTION 5.05. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT
OF LAW PRINCIPLES.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
METROPOLITAN EDISON COMPANY
By ________________________
Name:
Title:
8
<PAGE>
EXHIBIT 5-A
(Berlack, Israels & Liberman Letterhead)
July 7, 1994
Metropolitan Edison Company
2800 Pottsville Pike
Reading, Pennsylvania 19640
Met-Ed Capital, L.P.
Mellon Bank Center
Tenth and Market Streets
Wilmington, Delaware 19801
Re: Registration Statement on Form S-3
Dear Sirs:
Metropolitan Edison Company (the "Company") and Met-Ed
Capital, L.P. ("Met-Ed 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 Statement"), dated May
17, 1994, 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 Met-Ed 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 Met-Ed Capital's
general partner, Met-Ed 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 Met-
Ed Capital of distributions on the Preferred Securities and of
amounts due upon liquidation of Met-Ed Capital or redemption of
the Preferred Securities, all to the extent set forth in the
Guarantee. The Preferred Securities are to be issued by Met-Ed
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
Met-Ed Capital and the transactions that are the subject matter
of the Registration Statement. We have examined such records of
the Company and Met-Ed Capital and such other instruments,
documents, certificates and agreements, including the forms of
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 Pennsylvania law,
we have relied on the opinion of Ryan, Russell, Ogden & Seltzer,
and with respect to all matters of Delaware law, we have relied
on the opinion of Richards, Layton & Finger, P.A., which are
<PAGE>
being filed
<PAGE>
Metropolitan Edison Company
July 7, 1994
Page 2
as Exhibits 5-B and 5-C, respectively, to the Registration
Statement.
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, Met-Ed Preferred
Capital, Inc. and Met-Ed 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>
(LETTERHEAD OF RYAN, RUSSELL, OGDEN & SELTZER)
EXHIBIT 5-B
July 7, 1994
Metropolitan Edison Company
2800 Pottsville Pike
Reading, Pennsylvania 19640
Met-Ed Capital, L.P.
Mellon Bank Center
Tenth and Market Streets
Wilmington, Delaware 19801
Re: Registration Statement on Form S-3
Dear Sirs:
Metropolitan Edison Company (the "Company") and Met-Ed
Capital, L.P. ("Met-Ed 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 Statement"), dated May
17, 1994, 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 Met-Ed 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 Met-Ed Capital's
general partner, Met-Ed 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 Met-
Ed Capital of distributions on the Preferred Securities and of
amounts due upon liquidation of Met-Ed Capital or redemption of
the Preferred Securities, all to the extent set forth in the
Guarantee. The Preferred Securities are to be issued by Met-Ed
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").
<PAGE>
<PAGE>
Metropolitan Edison Company
July 7, 1994
Page 2
We have participated in the preparation of or examined
the Registration Statement; copies, signed, certified or
otherwise proven to our satisfaction, of the Restated Articles of
Incorporation and By-Laws of the Company; the forms of Limited
Partnership Agreement and Indenture; and the securities
certificate and application filed by the Company with the
Pennsylvania Public Utility Commission ("PaPUC"), and the Order
and Opinion of the PaPUC, dated May 4, 1994, registering the
securities certificate and approving the issuance of a
Certificate of Public Convenience, as well as said Certificate of
Public Convenience.
We are familiar with the corporate history of the
Company and the terms of its outstanding securities. We have
also examined such other instruments, agreements and documents
and made such further investigation as we have deemed necessary
as a basis for this opinion.
With respect to all matters of Delaware law, we have
relied upon the opinion of Richards, Layton & Finger, P.A., which
is being filed as Exhibit 5-C to the Application.
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, Met-Ed Preferred
Capital, Inc. and Met-Ed 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
<PAGE>
binding obligation
<PAGE>
Metropolitan Edison Company
July 7, 1994
Page 3
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.
The firm of Berlack, Israels & Liberman is authorized to rely on
this opinion for the purpose of rendering its opinion, dated the
date hereof, which is being filed as Exhibit 5-A to the
Registration Statement.
Very truly yours,
RYAN, RUSSELL, OGDEN & SELTZER
<PAGE>
Exhibit 8
(Letterhead of Carter, Ledyard & Milburn)
July 7, 1994
Metropolitan Edison Company
2800 Pottsville Pike
Reading, Pennsylvania 19605
Met-Ed Capital, L.P.
Mellon Bank Center
Tenth and Market Streets
Wilmington, Delaware 19801
Re: Metropolitan Edison Company and
Met-Ed Capital, L.P. -
Registration Statement on Form S-3
Gentlemen:
We have acted as special tax counsel to Metropolitan
Edison Company, a Pennsylvania corporation (the "Company"), and
Met-Ed Capital, L.P., a Delaware limited partnership ("Met-Ed
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 Met-Ed Capital (the "Preferred
Securities") the proceeds of which together with the capital
contribution of Met-Ed Preferred Capital, Inc., the general
partner of Met-Ed 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 May
17, 1994, 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 Met-Ed Preferred Capital,
Inc., the general partner of Met-Ed 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.
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.
<PAGE>
Metropolitan Edison Company
July 7, 1994
Page 2
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 5-C
(Letterhead of Richards, Layton & Finger)
July 7, 1994
Met-Ed Capital, L.P.
Mellon Bank Center
Tenth and Market Streets
Wilmington, Delaware 19801
Re: Met-Ed Capital, L.P.
Ladies and Gentlemen:
We have acted as special Delaware counsel for Met-Ed
Capital, L.P. a Delaware limited partnership (the "Partnership"),
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 May 10, 1994 (the "Partnership
Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on May 10,
1994;
(b) The Agreement of Limited Partnership of the
Partnership, dated as of May 10, 1994;
(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 (the
"Prospectus Supplement"), filed by Metropolitan Edison Company, a
Pennsylvania corporation, and the Partnership with the Securities
and Exchange Commission on or about July 7, 1994;
(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 Met-Ed Preferred Capital, Inc., a
Delaware corporation (the "General Partner"), relating to the
Preferred Partner Interests (the "Action");
(f) The Certificate of Incorporation of the General
Partner, dated May 6, 1994 (the "Certificate of Incorporation"),
as filed in the office of the Secretary of State on May 6, 1994;
<PAGE>
(g) The By-Laws of the General Partner (the "By-Laws");
<PAGE>
Met-Ed Capital, L.P.
July 7, 1994
Page 2
(h) A certificate of an officer of the General Partner;
(i) A Certificate of Good Standing for the Partnership,
dated July 7, 1994, obtained from the Secretary of State; and
(j) A Certificate of Good Standing for the General
Partner, dated July 7, 1994, 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
<PAGE>
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
<PAGE>
Met-Ed Capital, L.P.
July 7, 1994
Page 3
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 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 Preferred Partner 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
<PAGE>
obligation of a Preferred
<PAGE>
Met-Ed Capital, L.P.
July 7, 1994
Page 4
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 Certificate of Incorporation, the
By-Laws and the Resolutions to execute and deliver, and to
perform its obligations under, the LP Agreement.
3. 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 Ryan, Russell, Ogden & Seltzer'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 and the Prospectus Supplement. 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>
Exhibit 24-A
METROPOLITAN EDISON COMPANY
FURTHER RESOLVED, that, to the extent permitted by the applicable
statutes and the regulations promulgated pursuant thereto,
this Company hereby constitutes and appoints J.G. Graham,
Don W. Myers, I.H. Jolles, Douglas E. Davidson and W. Edwin
Ogden and each of them, with full power to each of them to
act alone, the true and lawful attorney-in-fact, on its
behalf and in its name, place and stead, to sign, execute,
seal, attest, verify and file, in connection with the
proposed issuance and sale by Met-Ed Capital, from time to
time through June 30, 1996, of up to $125,000,000 stated
amount of MIPS, any and all documents, including exhibits
thereto and amendments thereof, required to be filed with
regulatory bodies having jurisdiction with respect to the
said issuance and sale, including, without thereby in
anywise limiting the generality of the foregoing, any
appropriate securities certificates, registration statements
and other documents required to be filed or deemed
appropriate to be filed under the provisions of the
Pennsylvania Public Utility Code, the Securities Act of 1933
and the Public Utility Holding Company Act of 1935, each as
amended, and to take all necessary or appropriate action to
cause the said documents to be registered, become effective,
to be granted, or to be qualified, as the case may be,
hereby granting unto each of said attorneys full power and
authority to take all necessary or appropriate action in
connection therewith.
* * * * * * *
THIS IS TO CERTIFY that the undersigned is Assistant
Secretary of Metropolitan Edison Company, a Pennsylvania
corporation; that the above and foregoing is a true and correct
copy of a resolution duly and regularly adopted by the Executive
Committee of the Board of Directors of Metropolitan Edison
Company at a meeting thereof duly convened and held on the 24th
day of March, 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.
I further certify that the By-Laws of this Company provide
that between meetings of the Board of Directors, the Executive
Committee shall have all the power of the Board of Directors in
management of the business and affairs of this Company and,
further, that the taking of any action by the Executive Committee
shall be conclusive evidence that the Board of Directors was not
in session at the time of such action.
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WITNESS the signature of the undersigned as such officer of
the Company and its corporate seal hereunto affixed this 7th day
of July, 1994.
__________________________________
(SEAL) M.A. Nalewako, Assistant Secretary
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