SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of
earliest event reported): August 11, 1999
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
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1-446 Metropolitan Edison Company 23-0870160
(a Pennsylvania corporation)
2800 Pottsville Pike
Reading, Pennsylvania 19640-0001
Telephone (610) 929-3601
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ITEM 5. OTHER EVENTS.
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On August 11, 1999, Metropolitan Edison Company (the "Company") entered
into a Selling Agency Agreement with Merrill Lynch, Pierce, Fenner & Smith
Incorporated and ABN-AMRO Incorporated, as agents (the "Agents"), providing for
the issuance and sale of up to $150,000,000 aggregate principal amount of Medium
Term Notes, Series D. Reference is made to the Company's Prospectus, dated
August 11, 1999, for further information regarding the offering, including the
use of proceeds.
2
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibit
1. Selling Agency Agreement, dated August 11, 1999, between
Metropolitan Edison Company and Merrill Lynch, Pierce, Fenner
& Smith Incorporated and ABN-AMRO Incorporated, as agents.
3
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
METROPOLITAN EDISON COMPANY
By: /s/ T. G. Howson
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T. G. Howson, Vice President
and Treasurer
Date: August 18, 1999
4
EXHIBIT TO BE FILED BY EDGAR
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(c) 1 Selling Agency Agreement, dated August 11, 1999, between Metropolitan
Edison Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and ABN-AMRO Incorporated, as agents.
Exhibit (c) (1)
of Form 8-K
Metropolitan Edison Company
$150,000,000 Medium-Term Notes
Selling Agency Agreement
August 11, 1999
New York, New York
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 24th Floor
New York, New York 10281
ABN-Amro Incorporated
1325 Avenue of the Americas
10th Floor
New York, New York 10019
Ladies and Gentlemen:
Metropolitan Edison Company, a Pennsylvania corporation (the
"Company"), confirms its agreement with each of you with respect to the issue
and sale by the Company of up to $150,000,000 aggregate principal amount of its
Medium-Term Notes, Series D (the "Notes"). The Notes will be issued under the
Company's Senior Note Indenture, dated as of July 1, 1999, between the Company
and United States Trust Company of New York, as trustee (the "Trustee"), as it
is to be supplemented by one or more Company orders relating to the Notes, said
Indenture, as it is to be supplemented, being hereinafter referred to as the
"Indenture". The Notes will be issued in minimum denominations of $1,000 and
integral multiples thereof, will be issued only in fully registered form and
will have the annual interest rates, maturities and, if appropriate, other terms
set forth in a supplement to the Prospectus referred to below. The Notes will be
issued, and the terms thereof established, in accordance with the Indenture and,
in the case of Notes sold pursuant to Section 2(a) hereof, the Administrative
Procedures attached hereto as Exhibit A (the "Procedures"). The Procedures may
only be amended by written agreement of the Company and you.
Upon the issuance of a series of Notes prior to the Release Date (as
defined in the Prospectus), the Company will simultaneously issue and deliver to
the Trustee, as security for
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all the Notes being issued, a series of the Company's first mortgage bonds
("Senior Note Mortgage Bonds") pursuant to the Company's Indenture dated
November 1, 1944 between the Company and the United States Trust Company of New
York, as successor trustee (the "Mortgage Trustee"), as heretofore amended and
supplemented, and as it is to be further supplemented by a supplemental
indenture (the "Supplemental Indenture") to be dated July 1, 1999, said
Indenture, as heretofore supplemented and as it is to be further supplemented,
being hereinafter referred to as the "Mortgage." The Senior Note Mortgage Bonds
of each series will have the same stated maturity date and corresponding
redemption provisions, and will be in the same aggregate principal amount and
have the same interest as the corresponding series of Notes being issued.
For the purposes of this Agreement: the term "Agent" shall refer to
either of you acting solely in the capacity as agent for the Company pursuant to
Section 2(a) and not as principal (collectively, the "Agents"); the term
"Purchaser" shall refer to one of you acting solely as principal pursuant to
Section 2(b) and not as agent; the term "you" shall refer to you collectively
whether at any time any of you are acting in both such capacities or in either
such capacity; the term "Effective Date" shall mean the later of (i) each date
and time that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and (ii) the date of the filing
with the Securities and Exchange Commission (the "Commission") of the Company's
most recent Annual Report on Form 10-K; the term "Execution Time" shall mean the
date and time that this Agreement is executed and delivered by the parties
hereto; the term "Basic Prospectus" shall mean the form of basic prospectus
relating to the Securities contained in the Registration Statement at the
Effective Date; the term "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement; the term "Registration Statement"
shall mean the registration statement referred to in paragraph 1(a) below,
including incorporated documents, exhibits and financial statements, as amended
at the Execution Time; and the terms "Rule 415" and "Rule 424" refer to such
rules under the Act.
Any reference herein to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement 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 which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Exchange Act") on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
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"supplement" with respect to the Registration Statement, the Basic Prospectus,
the Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective
Date of the Registration Statement or the issue date of the Basic Prospectus,
the Prospectus Supplement or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, you as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Act"), and has filed with the Commission a registration
statement on such Form (Registration Numbers: 333-62967, 333-62967-01 and
333-62967-02), including the Basic Prospectus, which has become effective,
for the registration under the Act of, among other things, $250,000,000
aggregate amount of various securities, including the Notes (the
"Securities"). Such Registration Statement, as it may be amended at the
date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other material
respects with said Rule. The Company has included in such Registration
Statement, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the
Basic Prospectus, relating to the Notes and the plan of distribution
thereof (the "Prospectus Supplement"). In connection with the sale of
Notes, the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act further supplements to
the Basic Prospectus and the Prospectus Supplement specifying the interest
rates, maturity dates, interest payment dates, redemption provisions, if
any, and, if appropriate, other terms of the Notes sold pursuant hereto or
the offering thereof.
(b) As of the Execution Time, on the Effective Date, on the date
when any supplement to the Prospectus is filed with the Commission, as of
the date of any Terms Agreement (as hereinafter defined) and at the date
of delivery by the Company of any Notes sold hereunder (a "Closing Date"),
(i) the Registration Statement, as amended as of any such time, and the
Prospectus, as supplemented as of any such time, and the Indenture and the
Mortgage will each comply in all material respects with the applicable
requirements of the Act and the Trust Indenture Act of 1939, as amended,
and the rules and regulations thereunder (the "Trust Indenture Act"), and
the documents incorporated therein by reference fully complied or will
fully comply in all material respects
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with the Exchange Act; (ii) the Registration Statement, as amended as of
any such time, did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and (iii) the Prospectus, as supplemented as of any such time,
will not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by you specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplement thereto).
(c) Neither the issue and sale of any of the Notes or the Senior
Note Mortgage Bonds nor the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or, other than the lien of the
Mortgage arising upon the issuance of the Senior Note Mortgage Bonds,
result in the imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to,
(i) the charter or by-laws of the Company or any of its subsidiaries, (ii)
the terms of any indenture, contract, lease mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is
a party or bound or to which its or their property is subject, or (iii)
any statute, law, rule, regulation, judgment, order or decree applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of
its or their properties.
(d) The Notes, the Senior Note Mortgage Bonds, the Indenture and the
Mortgage conform in all material respects to the descriptions thereof
contained in the Prospectus (and any supplements thereto).
(e) The Indenture has been duly authorized, executed and delivered,
has been qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding instrument enforceable against the Company in accordance
with its
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terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally from time to time in effect,
and to general principles of equity); and when the Notes have been duly
executed by the Company, authenticated by the Trustee and payment therefor
has been made by the purchaser thereof, they will be valid and binding
obligations of the Company in accordance with their terms and entitled to
the benefits provided by the Indenture.
(f) The Mortgage has been duly authorized, executed and delivered,
has been qualified under the Trust Indenture Act, and constitutes a legal,
valid and binding instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
or other laws affecting creditors' rights generally from time to time in
effect, including, without limitation, the Atomic Energy Act and
applicable regulations of the Nuclear Regulatory Commission thereunder and
to general principles of equity); and when the Senior Note Mortgage Bonds
have been duly executed by the Company, authenticated by the Mortgage
Trustee and delivered to the Trustee as security for the Notes, they will
be valid and binding obligations of the Company in accordance with their
terms and entitled to the benefits provided by the Mortgage.
(g) The Mortgage has been duly recorded, or lodged for record, as a
mortgage upon the property covered thereby in such manner as is necessary
to maintain the lien thereof;
(h) The Mortgage will constitute as security for the Senior Note
Mortgage Bonds, when duly issued, authenticated and delivered to the
Senior Note Trustee, a valid lien on all the property and franchises owned
by the Company (except cash, securities, judgements, contracts, accounts
and chooses in action not specifically subject to its lien, certain
personal property including merchandise, materials or supplies held or
acquired for sale or consumption, and automobiles or trucks) as described
or referred to in the Prospectus under the heading "Description of Senior
Note Mortgage Bonds" subheading "Kind and Priority of Lien", subject to no
prior liens or encumbrances other than those specified or referred to or
as otherwise set forth under said subheading;
(i) The Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto with
respect to the Notes, pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); and no stop order
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suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable requirements of the Act
and the Trust Indenture Act, and the Exchange Act with respect to the
documents incorporated by reference, and the respective rules thereunder;
(j) This Agreement has been duly authorized, executed and delivered
by the Company;
(k) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries incorporated by reference in the
Prospectus and the Registration Statement present fairly in all material
respects the financial condition, results of operations and cash flows of
the Company as of the dates and, for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein).
(l) The Company is duly incorporated and is validly subsisting as a
corporation in good standing under the laws of the Commonwealth of
Pennsylvania with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business as
described in the Prospectus (and any supplements thereto), and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification, or
is subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction.
(m) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Trust Indenture Act, and the approval of the Pennsylvania
Public Utility Commission (the "PaPUC"), and such as may be required under
the blue sky laws of any jurisdiction.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the Company's performance
of this Agreement or the
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consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business,
except as set forth or incorporated by reference in or contemplated in the
Prospectus (exclusive of any supplement thereto); and there is no
franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed as
an exhibit thereto, which is not described or filed as required.
(o) Since the date of the most recent financial statements included
in the Prospectus, there has been no material adverse effect on the
condition (financial or otherwise), business prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser. Subject to the terms and conditions set
forth herein, the Company hereby authorizes each of the Agents to act as its
agent to solicit offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and subject to
the terms and conditions set forth herein, each of the Agents agrees, as agent
of the Company, to use its reasonable best efforts to solicit offers to purchase
the Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures; provided,
however, that each of the Agents in its sole discretion can suspend from time to
time its efforts in offering for sale, and soliciting purchases of, the Notes.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed. Notwithstanding the foregoing, if, at any
time and from time to time during the term of this Agreement, the Company
delivers to each of you a written notification of its decision to suspend the
solicitation of offers to purchase the Notes hereunder, and if no Purchaser
shall
<PAGE>
then hold any Notes as principal purchased pursuant to a Terms Agreement, then
during the period of any such suspension, the Company shall be relieved of its
obligation to provide to you the certificates, opinions and letters required
pursuant to Sections 4(j), 4(k) and 4(l) until such time as the Company has
advised any of you that such solicitation may be resumed, at which time the
Company shall provide to you such certificates, opinions and letters, dated as
of that time, and at which time such obligations shall resume.
The Company agrees to pay each Agent a commission on the Closing
Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage specified
in Schedule I hereto of the aggregate principal amount of the Notes sold by the
Company through such Agent. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by an Agent, as agent for the
Company, at such times and in such amounts as such Agent deems advisable. The
Company may from time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit or accept offers to purchase Notes through any agent
other than an Agent.
Subject to the terms and conditions stated herein, whenever the
Company and one of you determines that the Company shall sell Notes directly to
such of you as Purchaser, each such sale of Notes shall be made in accordance
with the terms of this Agreement and any supplemental agreement relating thereto
between the Company and the Purchaser. Each such supplemental agreement, which
may be oral (confirmed in writing) or written (substantially in the form of
Exhibit B) is herein referred to as a "Terms Agreement". The Purchaser's
commitment to purchase Notes pursuant to any Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto, specify the principal amount of such Notes, the
price to be paid to the Company for such Notes, the rate at which interest will
be paid on the Notes, the Closing Date for such Notes, the place of delivery of
the Notes and payment therefor, the method of payment and any modification of
the requirements for the delivery of the opinions of counsel, the certificates
from the Company or its officers, and the letter from the Company's independent
public accountants, pursuant to Section 6(b). Such Terms Agreement shall also
specify the period of time referred to in Section 4(m). Each Purchaser may
utilize a selling or dealer
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group and may reallow a portion of the discount or commission payable to such
Purchaser to other dealers or purchasers.
3. Offering and Sale of Notes. Each Agent and the Company agree to
perform the respective duties and obligations specifically provided to be
performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes, the
Company will not file any amendment of the Registration Statement or
supplement to the Prospectus (except for a supplement relating to an
offering of Securities other than the Notes) unless the Company has
furnished to Thelen Reid & Priest LLP, counsel for the Agents, a copy for
their review prior to filing and will not file such proposed amendment or
supplement to which such counsel reasonably objects, in writing. Subject
to the foregoing sentence, the Company will cause each supplement to the
Prospectus to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to each of you of such filing. The Company
will promptly advise each of you (i) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to
Rule 424(b), (ii) when, prior to the termination of the offering of the
Notes, any amendment of the Registration Statement shall have been filed
or become effective, (iii) of any request by the Commission for any
amendment of the Registration Statement or supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(v) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary to amend
the Registration Statement or to supplement the Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, the
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Company promptly will (i) notify each of you to suspend solicitation of
offers to purchase Notes (and, if so notified by the Company, each of you
shall forthwith suspend such solicitation and cease using the Prospectus
as then supplemented), (ii) prepare and file with the Commission, subject
to the first sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (iii) supply any supplemented Prospectus to each of you in
such quantities as you may reasonably request. If such amendment or
supplement, and any documents and certificates furnished to each of you
pursuant to paragraph (g) of this Section 4 in connection with the
preparation or filing of such amendment or supplement are reasonably
satisfactory in all respects to counsel for the Agents, each of you will,
upon the filing of such amendment or supplement with the Commission and
upon the effectiveness of any amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) The Company will make generally available to its security
holders as soon as practicable following each calendar quarter, commencing
with the next quarter beginning after the date of this Agreement and
ending with the fifth calendar quarter after the end of the calendar
quarter in which the last sale of Notes effected pursuant hereto occurs,
an earning statement (in form complying with the provisions of Section
11(a) of the Act and which need not be certified by independent public
accountants unless required by the Act) covering a twelve-month period
ending at the close of the next preceding calendar quarter, which earning
statement shall be in the same detail as the statement of income
incorporated by reference in the Registration Statement.
(d) The Company will furnish to each of you and your counsel,
without charge, copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus may be required by the
Act, as many copies of the Prospectus and any supplement thereto as you
may reasonably request.
(e) The Company will file all reports, and amendments thereto,
required to be filed by the Company with the Commission pursuant to
Sections 13, 14 or 15(d) of the Exchange Act subsequent to the effective
date of the Registration Statement and, so long as delivery of a
prospectus may be required by the Act, the Company will furnish to each of
you and your counsel, without charge, as many copies of such reports and
amendments (excluding exhibits) as you may reasonably request.
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(f) The Company will arrange for the qualification of the Notes for
sale under the laws of such jurisdictions as you may designate, will
maintain such qualifications in effect so long as required for the
distribution of the Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional investors; provided,
that the Company shall not be required to qualify as a foreign corporation
or file a general consent to service of process in any jurisdiction.
(g) The Company shall furnish to each of you such information,
documents, and certificates of officers of the Company relating to the
business, operations and affairs of the Company, the Registration
Statement, the Prospectus, and any amendments thereof or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures and the
performance by the Company and you of its and your respective obligations
hereunder and thereunder as you may from time to time and at any time
prior to the termination of this Agreement reasonably request.
(h) The Company shall, whether or not any sale of the Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement, including the fees and disbursements of
its accountants and counsel, the cost of printing or other production and
delivery of the Registration Statement, the Prospectus, all amendments
thereof and supplements thereto, the Indenture, this Agreement and all
other documents relating to the offering, the cost of preparing, printing,
packaging and delivering the Notes, the fees and disbursements, including
fees of counsel, incurred in compliance with Section 4(f) (such amount not
to exceed $7,500), the fees and disbursements of the Trustee and the fees
of any agency that rates the Notes, (ii) reimburse you for all
out-of-pocket expenses (including without limitation advertising expenses)
reasonably incurred by you in connection with this Agreement and (iii) pay
the reasonable fees and expenses of your counsel incurred in connection
with this Agreement.
(i) Each acceptance by the Company of an offer to purchase Notes
will be deemed to be a reconfirmation to you of the representations and
warranties of the Company contained in this Agreement.
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by (i) an amendment or supplement
relating to any offering of Securities other than the Notes or (ii) an
amendment or supplement providing solely for the specification of or a
change in the maturity dates, the interest rates, the issuance prices or
other similar terms of any Notes sold
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pursuant hereto or (iii) the filing of Forms 8-K solely for the purpose of
filing exhibits pursuant to Item 601 of Regulation S-K), and on each
Closing Date, the Company will deliver or cause to be delivered promptly
to you a certificate of the Company, signed by the President or any Vice
President and the principal financial or accounting officer of the
Company, dated the date of the effectiveness of such amendment or the date
of the filing of such supplement, or such Closing Date, as the case may
be, in form reasonably satisfactory to you, of the same tenor as the
certificate referred to in Section 5(e) but modified to relate to the date
of filing of such amendment or supplement or such Closing Date, as the
case may be, and to the Registration Statement and the Prospectus as
amended and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or such Closing Date, as the
case may be.
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by an amendment or supplement (i)
relating to any offering of Securities other than the Notes, (ii)
providing solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other similar terms of
any Notes sold pursuant hereto, or (iii) setting forth or incorporating by
reference financial statements or other information as of and for a fiscal
quarter or year end or in a Form 8-K, unless, in the case of clause (iii)
above, in the reasonable judgment of any of you, such financial statements
or other information are of such a nature that opinions of counsel should
be furnished), and on each Closing Date, the Company shall furnish or
cause to be furnished promptly to each of you written opinions of counsel
of the Company satisfactory to you, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement or such
Closing Date, as the case may be, in forms satisfactory to each of you, of
the same tenor as the opinions referred to in Sections 5(b) and 5(c), but,
in each case, modified to relate to the date of filing of such amendment
or supplement or such Closing Date, as the case may be, and to the
Registration Statement and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the filing of such
supplement or such Closing Date, as the case may be, or, in lieu of such
opinions, each counsel last furnishing any such opinion to you may furnish
you with a letter to the effect that you may rely on such counsel's last
opinion to the same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinion will be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of such Closing Date).
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(l) Each time that the Registration Statement or the Prospectus is
amended or supplemented to set forth or incorporate by reference financial
information, the Company shall cause its independent accountants promptly
to furnish each of you a letter, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form
satisfactory to each of you, of the same tenor as the letter referred to
in Section 5(f) with such changes as may be necessary to reflect the
amended and supplemental financial information included or incorporated by
reference in the Registration Statement and the Prospectus, as amended or
supplemented to the date of such letter; provided, however, that, if the
Registration Statement or the Prospectus is amended or supplemented solely
to include or incorporate by reference financial information as of and for
a fiscal quarter, the Company's independent accountants may limit the
scope of such letter, which shall be satisfactory in form to each of you,
to the unaudited financial statements, and any other information of an
accounting, financial or statistical nature included in such amendment or
supplement, unless, in the reasonable judgment of any of you, such letter
should cover other information or changes in specified financial statement
line items.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser thereunder,
issue or announce the proposed issuance of any of its debt securities,
including Notes, with terms substantially similar to the Notes being
purchased pursuant to such Terms Agreement.
5. Conditions to the Obligations of the Agents. The obligations of
each Agent to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in any certificates
delivered pursuant to the provisions hereof, to the performance and observance
by the Company of all covenants, obligations and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
<PAGE>
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to each Agent the opinion of
Berlack, Israels & Liberman LLP, counsel to the Company, dated the
Execution Time (except as to matters that relate to the recording of the
Supplemental Indenture), to the effect that:
(i) The Company is duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus (and any supplements
thereto), and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires 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 Notes, the Senior Note Mortgage Bonds, the Indenture
and the Mortgage conform as to legal matters to the statements
concerning them contained in the Prospectus (and any supplements
thereto);
(iii)The Indenture has been duly authorized, executed and
delivered, has been qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights generally from time to time in effect,
and to general principles of equity); and when the Notes have been
duly executed by the Company, authenticated by the Trustee and
payment therefor has been made by the purchaser thereof, they will
be valid and binding obligations of the Company in accordance with
their terms and entitled to the benefits provided by the Indenture;
(iv) The Mortgage has been duly authorized, executed and
delivered, has been qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights
<PAGE>
generally from time to time in effect, including, without
limitation, the Atomic Energy Act and applicable regulations of the
Nuclear Regulatory Commission thereunder and to general principles
of equity); and when the Senior Note Mortgage Bonds have been duly
executed by the Company, authenticated by the Mortgage Trustee and
delivered to the Trustee as security for the Notes, they will be
valid and binding obligations of the Company in accordance with
their terms and entitled to the lien of and benefits provided by the
Mortgage;
(v) The Mortgage has been duly recorded, or lodged for record,
as a mortgage upon the property covered thereby in such manner as is
necessary to maintain the lien thereof;
(vi) The Mortgage will constitute as security for the Senior
Note Mortgage Bonds, when duly issued, authenticated and delivered
to the Trustee, a valid lien on all the property and franchises
owned by the Company (except certain real estate not used in the
Company's business, cash other than that deposited with the Mortgage
Trustee, securities, judgments, contracts, accounts and choses in
action not specifically assigned, pledged, deposited or delivered to
the Mortgage Trustee, materials and supplies not installed as a part
of the fixed property of the Company, merchandise, appliances and
supplies acquired for resale, motor vehicles and timber growing upon
or cut from the lands of the Company and other personal property not
necessary or appropriate to the public utility plant and business of
the Company and to its operation as a going concern) as described or
referred to in the Prospectus under the heading "Description of
Senior Note Mortgage Bonds" subheading "Kind and Priority of Lien",
subject to no prior liens or encumbrances other than those specified
or referred to or as otherwise set forth under said subheading;
(vii) The Registration Statement has become effective under
the Act; any required filing of the Prospectus, and any supplements
thereto with respect to the Notes, pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule
424(b); and to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, and no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the Prospectus (other
than the financial statements and other financial and statistical
information contained therein as to which
<PAGE>
such counsel need express no opinion and other than the Form T-1, as
to which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the Act
and the Trust Indenture Act, and the Exchange Act with respect to
the documents incorporated by reference, and the respective rules
thereunder;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in
connection with the transactions contemplated herein, except such as
have been obtained under the Act, the Pennsylvania Public Utility
Code and the Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction;
(x) Neither the issue and sale of any of the Notes or the
Senior Note Mortgage Bonds nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or,
other than the lien of the Mortgage arising upon the issuance of the
Senior Note Mortgage Bonds, result in the imposition of any lien,
charge or encumbrance upon any property or assets of the Company (A)
pursuant to the charter or by-laws of the Company, (B) to such
counsel's knowledge, pursuant to the terms of any indenture,
contract, lease mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a
party or bound or to which its or their property is subject, or (C)
pursuant to any statute, law, rule or regulation, or (D) pursuant to
any judgment, order or decree, known to such counsel, applicable to
the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties; and
(xi) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property, of
a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectus, and to such
counsel's knowledge there is no franchise, contract or other
document of a character
<PAGE>
required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
In addition, 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 (ii) of this
section 5(b), such counsel has no reason to believe that on the Effective
Date (as the Registration Statement may then be amended or supplemented)
the Registration Statement included or includes any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus as of its date and as of the Execution Time and on the
Closing Date included or includes any untrue statement of a material fact
or omitted or omits to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each case,
other than the financial statements and other financial or statistical
information contained therein, as to which such counsel need express no
view and other than the Form T-1, as to which such counsel need express no
view);
In rendering such opinion, (A) Berlack, Israels & Liberman LLP may rely
upon the opinion of Ryan, Russell, Ogden & Seltzer LLP, delivered pursuant
to paragraph (c) hereof, as to matters involving the laws of Commonwealth
of Pennsylvania and (B) as to matters of fact, to the extent they deem
proper, such counsel may rely on certificates of responsible officers of
the Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the dates of such
counsel's opinion.
(c) The Company shall have furnished to each Agent the opinion of
Ryan, Russell, Ogden & Seltzer LLP, Pennsylvania counsel to the Company,
dated the Execution Time, to the effect that:
(i) The Company is duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus (and any supplements
thereto), and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction
<PAGE>
which requires 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 Notes, the Senior Note Mortgage Bonds, the Indenture
and the Mortgage conform as to legal matters to the statements
concerning them contained in the Prospectus (and any supplements
thereto);
(iii) The Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or
other laws affecting creditors' rights generally from time to time
in effect, and to general principles of equity); and when the Notes
have been duly executed by the Company, authenticated by the Trustee
and payment therefor has been made by the purchaser thereof, they
will be valid and binding obligations of the Company in accordance
with their terms and entitled to the benefits provided by the
Indenture;
(iv) The Mortgage has been duly authorized, executed and
delivered, has been qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights generally from time to time in effect,
including, without limitation, the Atomic Energy Act and applicable
regulations of the Nuclear Regulatory Commission thereunder and to
general principles of equity); and when the Senior Note Mortgage
Bonds have been duly executed by the Company, authenticated by the
Trustee and delivered to the Trustee as security for the Notes, they
will be valid and binding obligations of the Company in accordance
with their terms and entitled to the lien of and benefits provided
by the Mortgage;
(v) The Mortgage has been duly recorded, or lodged for record,
as a mortgage upon the property covered thereby in such manner as is
necessary to maintain the lien thereof;
(vi) The Mortgage will constitute as security for the Senior
Note Mortgage Bonds, when duly issued,
<PAGE>
authenticated and delivered to the Trustee, a valid lien on all the
property and franchises owned by the Company (except certain real
estate not used in the Company's business, cash other than that
deposited with the Mortgage Trustee, securities, judgments,
contracts, accounts and choses in action not specifically assigned,
pledged, deposited or delivered to the Mortgage Trustee, materials
and supplies not installed as a part of the fixed property of the
Company, merchandise, appliances and supplies acquired for resale,
motor vehicles and timber growing upon or cut from the lands of the
Company and other personal property not necessary or appropriate to
the public utility plant and business of the Company and to its
operation as a going concern) as described or referred to in the
Prospectus under the heading "Description of Senior Note Mortgage
Bonds" subheading "Kind and Priority of Lien", subject to no prior
liens or encumbrances other than those specified or referred to or
as otherwise set forth under said subheading;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) No consent, approval, authorization, filing with or
order of any Pennsylvania court or Pennsylvania governmental agency
or body is required in connection with the transactions contemplated
herein, except such as have been obtained under the Pennsylvania
Public Utility Code;
(ix) Neither the issue and sale of any of the Notes or the
Senior Note Mortgage Bonds nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or,
other than the lien of the Mortgage arising upon the issuance of the
Senior Note Mortgage Bonds, result in the imposition of any lien,
charge or encumbrance upon any property or assets of the Company (A)
pursuant to the charter or by-laws of the Company, (B) to such
counsel's knowledge, pursuant to the terms of any indenture,
contract, lease mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a
party or bound or to which its or their property is subject, or (C)
pursuant to any statute, law, rule or regulation, or (D) pursuant to
any judgment, order or decree, known to such counsel, applicable to
the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
<PAGE>
jurisdiction over the Company or any of its properties; and
(x) To the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries or its or their property, of
a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Prospectus, and to such
counsel's knowledge there is no franchise, contract or other
document of a character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto, which
is not described or filed as required.
In rendering such opinion, (A) Ryan, Russell, Ogden & Seltzer LLP may rely
on the opinion of Berlack, Israels & Liberman LLP, delivered pursuant to
paragraph (b) hereof, as to matters involving the laws of the State of New
York and (B) as to matters of fact, to the extent they deem proper, such
counsel may rely on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph (c)
include any supplements thereto at the dates of such counsel's opinion.
(d) The Agents shall have received from Thelen Reid & Priest LLP,
counsel for the Agents, such opinion or opinions, dated the Execution
Time, with respect to the issuance and sale of the Notes, the Indenture,
the Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Agents may reasonably require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Agents a certificate of
the Company, signed by the President or any Vice President and the
principal financial or accounting officer of the Company, dated the
Execution Time, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date hereof and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied as a condition to the obligation of the Agents to solicit
offers to purchase the Notes;
<PAGE>
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the respective most recent dates for which
information is given in the Registration Statement or the
Prospectus, there has not occurred any downgrading, nor has any
notice been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of
the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Act.
(f) At the Execution Time, PricewaterhouseCoopers LLP shall have
furnished to each Agent a letter or letters (which may refer to letters
previously delivered to the Agent), dated as of the Execution Time, in
form and substance satisfactory to each Agent, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules and pro forma financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related rules and regulations
adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited interim
financial statements, if any, made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
latest unaudited interim financial statements, if any, made
available by the Company and its subsidiaries; a reading of the
minutes of the meetings of the Board of Directors, Committees of the
Board of Directors, and the Stockholder of the Company; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company
and its subsidiaries as to transactions and events subsequent to
December 31, 1998, nothing came to their attention which caused them
to believe that:
<PAGE>
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act
and the Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included or
incorporated by reference in the Registration Statement and
the Prospectus; and
(2) with respect to the period subsequent to December
31, 1998, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the common
stock, cumulative preferred stock without mandatory
redemption, company-obligated mandatorily redeemable preferred
securities or long-term debt of the Company or decreases in
the common stockholder's equity (except as occasioned by the
declaration of dividends) as compared with the amounts shown
on the December 31, 1998 consolidated balance sheet included
or incorporated by reference in the Registration Statement and
the Prospectus, or for the period from January 1, 1999 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year in operating income
or net income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the Agents;
and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Prospectus and in
Exhibit 12 to the Registration Statement, the information included
or incorporated by reference in Items 1, 2, 6 and 7 of the Company's
Annual Report on Form 10-K, incorporated by reference in the
Registration Statement and the Prospectus, the information included
in "Management's Discussion and Analysis of Financial Condition and
<PAGE>
Results of Operations" included in the Company's most recent
Quarterly Report on Form 10-Q, incorporated by reference in the
Registration Statement and the Prospectus, and the pro forma
information appearing as Exhibit 99 to the Company's Annual Report
on Form 10-K, incorporated by reference in the Registration
Statement and the Prospectus, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of legal
interpretation;
(iv) on the basis of a reading of the unaudited pro forma
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries
of certain officials of the Company who have responsibility for
financial and accounting matters; and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the pro
forma financial statements do not comply as to form in all material
respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
such statements.
References to the Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Prior to the Execution Time, the Company shall have furnished to
each Agent such further information, documents, certificates and opinions
of counsel as the Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Agents and their counsel, this Agreement and all
obligations of the Agents hereunder may be canceled at any time by the Agents.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Berlack, Israels & Liberman LLP, 120 West 45th
Street, New York, New York 10036, at the Execution Time.
<PAGE>
6. Conditions to the Obligations of the Purchaser. The obligations
of the Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the date of any related Terms Agreement and as of the Closing Date for such
Notes, to the accuracy of the statements of the Company made in any certificates
delivered pursuant to the provisions hereof, to the performance and observance
by the Company of all covenants, obligations and agreements herein contained on
its part to be performed and observed and to the following additional conditions
precedent:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) Unless otherwise specified by any related Terms Agreement and
except to the extent modified by such Terms Agreement, the Purchaser shall
have received, appropriately updated, (i) a certificate of the Company,
dated as of the Closing Date, to the effect set forth in Section 5(e)
(except that references to the Prospectus shall be to the Prospectus as
supplemented at the time of execution of the Terms Agreement), (ii) the
opinion of Berlack, Israels & Liberman LLP, counsel for the Company, dated
as of the Closing Date, to the effect set forth in Section 5(b), (iii) the
opinion of Ryan, Russell, Ogden & Seltzer LLP, counsel for the Company,
dated as of the Closing Date, to the effect set forth in Section 5(c),
(iv) the opinion of Thelen Reid & Priest LLP, counsel for the Purchaser,
dated as of the Closing Date, to the effect set forth in Section 5(d), and
(iv) the letter of PricewaterhouseCoopers LLP, independent accountants for
the Company, dated as of the Closing Date, to the effect set forth in
Section 5(f).
(c) Prior to the Closing Date, the Company shall have furnished to
the Purchaser such further information, documents, certificates and
opinions of counsel as the Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and any Terms Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all
<PAGE>
obligations of the Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the respective Closing Date
by the Purchaser. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company agrees that any person who has agreed to purchase and pay for any Note,
including a Purchaser and any person who purchases pursuant to a solicitation by
any Agent, shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, either (a) any condition set forth in Section 5 or 6, as
applicable, shall not be satisfied or (b) subsequent to the agreement to
purchase such Note, any change, or any development involving a prospective
change, in or affecting the business or properties of the Company shall have
occurred the effect of which is, in the judgment of the Purchaser or the Agent
which presented the offer to purchase such Note, as applicable, so material and
adverse as to make it impractical or inadvisable to proceed with the delivery of
such Note.
8. (a) Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each of you, each of your directors, officers,
employees and agents and each person who controls each of you within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which you, they or any of you or
them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the
Prospectus or any preliminary Prospectus, or in any amendment thereof 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 agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by such of you specifically for inclusion therein, and (ii) such
indemnity with respect to the Prospectus or any preliminary Prospectus shall not
inure to the
<PAGE>
benefit of any of you from whom the person asserting any such loss, claim,
damage or liability purchased the Notes concerned, to the extent that any such
loss, claim, damage or liability occurs under the circumstances where it shall
have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company has previously furnished copies of
such Prospectus or preliminary Prospectus to you, (x) delivery of such
Prospectus or preliminary Prospectus was required by the Act to be made to such
person, (y) the untrue statement or omission of a material fact contained in
such Prospectus or preliminary Prospectus was corrected in an amendment or
supplement to such Prospectus or preliminary Prospectus, and (z) there was not
sent or given to such person, at or prior to the written confirmation of the
sale of the Notes to such person, a copy of such Prospectus or preliminary
Prospectus, as amended or supplemented. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each of you, severally and not jointly, agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to you, but only with reference to written
information relating to such of you furnished to the Company by such of you
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
you may otherwise have. The Company acknowledges that the only written
information relating to any of you furnished to the Company by any of you
specifically for inclusion in the documents referred to in the foregoing
indemnity is as follows: (i) the names of the Agents appearing on the cover page
of the Prospectus Supplement and in the first sentence of the first paragraph
under the heading "Plan of Distribution of Notes" in the Prospectus Supplement
and (ii) the sentences in the fourth paragraph under the heading "Plan of
Distribution of the Notes" relating to stabilization and covering transactions.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent such failure results in the loss by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b)
<PAGE>
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel retained in the indemnified party's
reasonable judgment), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the actual or potential
defendants in, or targets of, any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded upon advice of counsel 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, or (ii) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (ii) does
not include any statement as to, or any admission of, fault, culpability or
failure to act by or on behalf of any indemnified party.
(d) In the event that the indemnity provided for in paragraph (a) or
(b) of this Section 8 is held by a court to be unavailable, in whole or in part,
to hold harmless an indemnified party for any reason, the Company and each of
you, severally and not jointly, agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) (collectively
"Losses") to which the Company and any of you may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and by each of you on the other hand from the offering of the
Notes; provided, however that in no case shall any of you (except as may be
provided in any agreement among you relating to the offering of the Notes) be
responsible for any amount in excess of the underwriting discounts or
commissions received by such of you hereunder. If the allocation provided by the
immediately
<PAGE>
preceding sentence is held by a court to be unavailable for any reason, the
Company and each of you, severally and not jointly, agree to contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and each of you on the other
hand in connection with the statements or omissions that resulted in such Losses
as well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by the Company, and benefits received by
each you shall be deemed to be equal to the discounts and commissions received
by such of you. Relative fault shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or such of you on the other hand, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and each of you agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls any of you within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of each of you shall have the same
rights to contribution as such of you, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated by
either the Company as to any of you or any of you insofar as this Agreement
relates to such of you, giving written notice of such termination to such of you
or the Company, as the case may be. This Agreement shall so terminate at the
close of business on the first business day following the receipt of such notice
by the party to whom such notice is given. In the event of such termination, no
party shall have any liability to the other party hereto, except as provided in
the fourth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10.
<PAGE>
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if after the date
of the Terms Agreement and prior to such time (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities, (iii) there shall have occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets or the United States is such as to make it, in the judgment of
the Purchaser, impracticable to market such Notes, (iv) any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, if any,
considered as one enterprise, whether or not arising in the ordinary course of
business or (v) the rating assigned by any nationally recognized securities
rating agency to any debt securities of the Company shall have been lowered or
if any such rating agency shall have publicly announced that it has placed any
debt securities of the Company on what is commonly termed a "watch list" for
possible downgrading.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of you set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of you or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Notes. The provisions of Sections 4(i) and 8 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. Except as otherwise stated herein, all communications
hereunder will be in writing and effective only on receipt, and, if sent to any
of you, will be mailed, delivered or telecopied and confirmed to such of you, at
the address specified in Schedule I hereto; or, if sent to the Company, will be
mailed, delivered or telecopied and confirmed to it at Metropolitan Edison
Company, c/o GPU Service, Inc., 310 Madison Avenue, Morristown, New Jersey
07962-1957, Attention: Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8, and no other
person will have any right or obligation hereunder.
<PAGE>
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
14. Counterparts. This Agreement may be executed in two or more
counterparts, all of which together shall constitute one and the same
instrument.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and you.
Very truly yours,
Metropolitan Edison Company
By: /s/ T. G. Howson
-----------------------------
T. G. Howson
Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date hereof.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/ Scott G. Primrose
---------------------
Scott G. Primrose
Authorized Signatory
ABN-AMRO Incorporated
By: /s/ Linda A. Dawson
----------------------
Linda A. Dawson
Managing Director
<PAGE>
SCHEDULE I
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by such Agent:
TERM COMMISSION RATE
---- ---------------
1 year to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years and more .750%
Address for Notice to you:
Notices to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
directed to it at Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, World Financial Center, North Tower, 15th Floor, New York, NY
10281-1315, Attention: MTN Product Management, Telephone No.: 212-449-7476,
Facsimile No.: 212-449-2234.
Notices to ABN Amro Incorporated shall be directed to it at 1325 Avenue
of the Americas, 10th Floor, New York, New York 10019, Attention: Chris Tung,
Telephone No.: 212-314-1031, Facsimile No.: 212-314-1197.
<PAGE>
EXHIBIT A
---------
Metropolitan Edison Company
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES, SERIES D
------------------------
August 11, 1999
The administrative procedures and specific terms of the offering of
Medium-Term Notes, Series D (the "Notes"), on a continuous basis by Metropolitan
Edison Company (the "Company") pursuant to the Selling Agency Agreement dated as
of August 11, 1999 (the "Agency Agreement") between the Company and each of
Merrill Lynch, Pierce, Fenner & Smith Incorporated and ABN AMRO Incorporated
(each an "Agent" and collectively the "Agents") are explained below. In, and
subject to the terms of, the Agency Agreement, the Agents have agreed to use
their reasonable best efforts to solicit purchases of the Notes. Each Agent, as
principal, may purchase Notes for its own account pursuant to the terms and
settlement details of a Terms Agreement entered into between the Company and
such Agent, as contemplated by the Agency Agreement.
Each Note will be issued under the Company's Senior Note Indenture
dated as of July 1, 1999, as supplemented by one or more Company certificates
relating to the Notes (such Indenture, as supplemented, the "Indenture"),
between the Company and United States Trust Company of New York, as trustee (the
"Trustee"). The Trustee will act as the paying agent (the "Paying Agent") for
the payment of principal of and premium, if any, and interest on the Notes and
will perform, as the Paying Agent, unless otherwise specified, the other duties
specified herein. Notes will bear interest either at fixed or floating rates.
Each Note will be represented by (a) a Global Security (as defined
hereinafter) delivered to the Trustee, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note"), or (b) in certificated form (each, a "Certificated Note") delivered to
the investor or other purchaser thereof or a person designated by such investor
or other purchaser. An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such a Note.
<PAGE>
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the procedures set forth in Part II hereof, as adjusted from
time to time in accordance with changes in DTC's operating requirements, and
Certificated Notes will be issued in accordance with the procedures set forth in
Part III hereof. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Notes, the Indenture or the Agency
Agreement, as the case may be.
To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indenture or the Agency Agreement, the relevant
provisions of the Notes, the Indenture and the Agency Agreement shall control.
Unless otherwise defined herein, terms defined in the Indenture shall be used
herein as therein defined.
<PAGE>
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Procedure for The Company and the Agents will discuss
Rate Setting from time to time the aggregate principal
and Posting: amount of, the issuance price of, and the interest rates
- ----------- to be borne by, Notes that may be sold as a result of
the solicitation of offers by the Agents. If the Company
decides to set prices of, and rates borne by, any Notes
in respect of which the Agents are to solicit offers
(the setting of such prices and rates to be referred to
herein as "posting") or if the Company decides to change
prices or rates previously posted by it, it will
promptly advise the Agents of the prices and rates to be
posted.
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
- --------------- authentication by the Trustee. Each Note shall also bear
an original issue date (each, an "Original Issue Date").
The Original Issue Date shall remain the same for all
Notes subsequently issued upon transfer, exchange or
substitution of an original Note regardless of their
dates of authentication.
Price to Public: Unless otherwise agreed to by the Company and
- --------------- the Agents and specified in a pricing supplement, each
Note will be issued at 100% of the principal amount
thereof.
Maturities: Each Note will mature on a date from one year to 35
- ---------- years from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser and
agreed to by the Company.
Registration: Unless otherwise provided in the applicable pricing
- ------------ supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
- ------------- Supplement, the Notes will be issued in denominations of
$1,000 and integral multiples thereof.
<PAGE>
Interest Rate
Bases applicable
to Floating Rate
Notes: Unless otherwise provided in the applicable pricing
- ---------------- supplement, Floating Rate Notes will bear interest at a
rate or rates determined by reference to LIBOR or such
other interest rate basis or formula as may be set forth
in the applicable pricing supplement, as adjusted by the
Spread and/or Spread Multiplier, if any, applicable to
such Floating Rate Notes.
Redemption/
Repayment: The pricing supplement relating to each Note will
- ---------- describe the option, if any, of the Company to redeem
such Notes and the period or periods within which, or
the date or dates on which, the prices at which and the
terms and conditions upon which, such Notes may be
redeemed, in whole or in part upon the exercise of such
option. Unless otherwise specified in the applicable
pricing supplement, the Notes will be redeemable only
upon at least 30 days, but not more than 60 days prior
notice mailed to the registered address of each holder
of the Note.
The Notes may be subject to repayment at the option of
the Holders thereof in accordance with the terms of the
Notes, which will be fixed at the time of sale and set
forth in the applicable pricing supplement. If no
optional repayment date is indicated with respect to a
Note, such Note will not be repayable at the option of
the Holder prior to its Stated Maturity Date.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
- -------------- payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Interest Rate
Basis or Bases plus or minus the applicable Spread, if
any, and/or multiplied by the applicable Spread
Multiplier, if any.
<PAGE>
Unless otherwise provided in the applicable pricing
supplement, interest on each Floating Rate Note will be
calculated by multiplying its principal amount by an
accrued interest factor. Such accrued interest factor is
computed by adding the interest factor calculated for
each day in the period for which accrued interest is
being calculated. Unless otherwise provided in the
applicable pricing supplement, the interest factor for
each such day is computed by dividing the interest rate
applicable to such day by 360.
Interest: General. Each Note will bear interest in accordance with
its terms. Unless otherwise provided in the applicable
pricing supplement, interest on each Note will accrue
from and including the Original Issue Date of such Note
for the first interest period or from the most recent
Interest Payment Date (as defined below) to which
interest has been paid or duly provided for all
subsequent interest periods to but excluding the next
applicable Interest Payment Date or the Stated Maturity
Date or date of earlier redemption or repayment, as the
case may be. The Stated Maturity Date or date of earlier
redemption or repayment is referred to herein as the
"Maturity Date" with respect to the principal repayable
on such date.
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is
not a Business Day (as defined below), the required
payment to be made on such day need not be made on such
day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such day,
and no interest shall accrue on such payment for the
period from and after such day to the next succeeding
Business Day. If an Interest Payment Date other than the
Maturity Date with respect to any Floating Rate Note
would otherwise fall on a day that is not a Business
Day, such Interest Payment Date will be postponed to the
next succeeding Business Day, except that in the case of
a Floating Rate Note for which
<PAGE>
LIBOR is an applicable interest rate basis, if such
Business Day falls in the next succeeding calendar
month, such Interest Payment Date will be the
immediately preceding Business Day. If the Maturity Date
with respect to any Floating Rate Note falls on a day
that is not a Business Day, the required payment to be
made on such day need not be made on such day, but may
be made on the next succeeding Business Day with the
same force and effect as if made on such day, and no
interest shall accrue on such payment for the period
from and after the Maturity Date to the next succeeding
Business Day. Unless otherwise provided in the
applicable pricing supplement, "Business Day" means each
day that is not a day on which banking institutions or
trust companies in the Borough of Manhattan, the City
and State of New York, or in the city where the
corporate trust office of the Senior Note Trustee is
located, are obligated or authorized by law or executive
order to close; provided that, with respect to Notes for
which LIBOR is an applicable Interest Rate Basis, such
day is also a London Business Day (as defined below).
"London Business Day" means any day on which commercial
banks are open for business (including dealings in the
designated LIBOR currency) in London.
Record Dates. Unless otherwise provided in the
applicable pricing supplement, the "Record Date" for a
Fixed Rate Note shall be the fifteenth day of the
calendar month immediately preceding the applicable
Interest Payment Date and the "Record Date" for a
Floating Rate Note shall be the date 15 calendar days
(whether or not a Business Day) preceding the applicable
Interest Payment Date.
<PAGE>
Interest Payment Dates. Interest payments will be made on
each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue Date;
provided, however, the first payment of interest on any
Note originally issued between a Record Date and an
Interest Payment Date will occur on the Interest Payment
Date following the next succeeding Record Date.
Unless otherwise provided in the applicable pricing
supplement, interest payments on Fixed Rate Notes will be
made semiannually in arrears on August 1 and February 1 of
each year and on the Maturity Date, while interest
payments on Floating Rate Notes will be made as specified
in the Prospectus and the applicable pricing supplement.
Acceptance and
Rejection of
Offers from
Solicitation
as Agents: Each Agent will communicate to the Company, orally, by
- ------------ telephone, in writing or by other appropriate means,
each reasonable offer to purchase Notes solicited by
such Agent on an agency basis, other than those offers
rejected by such Agent. Each Agent has the right, in its
discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such
rejection shall not be a breach of such Agent's
agreement contained in the Agency Agreement. The Company
has the sole right to accept or reject any proposed
purchase of Notes, in whole or in part, and any such
rejection shall not be a breach of the Company's
agreement contained in the Agency Agreement. Each Agent
has agreed to make reasonable efforts to assist the
Company in obtaining performance by each purchaser whose
offer to purchase Notes has been solicited by such Agent
and accepted by the Company.
The Company will promptly notify an Agent presenting an
offer to the Company of its acceptance or rejection of
such offer and will confirm any such acceptance in
writing to such Agent.
<PAGE>
Preparation
of Pricing
Supplement: If any offer to purchase a Note is accepted by the
- ----------- Company, the Company with the approval of the Agent that
presented such offer, will promptly prepare a pricing
supplement reflecting the terms of such Note.
Information to be included in the pricing supplement
shall include:
1. the name of the Company;
2. the title of the Notes and whether it will be a
Book-Entry or Certificated Note;
3. the date of the pricing supplement and the date of
the Prospectus to which the pricing supplement
relates;
4. the name of the Offering Agent (as defined below);
5. whether such Notes are being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as agent
for the Company;
6. with respect to Notes sold to the Offering Agent as
principal, whether such Notes will be resold by the
Offering Agent to investors and other purchasers at
(i) a fixed public offering price of 100% of their
principal amount or at (ii) varying prices related
to prevailing market prices at the time of resale to
be determined by the Offering Agent;
7. the Offering Agent's discount or commission;
8. Net proceeds to the Company;
9. the Principal Amount, Original Issue Date, Stated
Maturity Date, Interest Payment Date(s), Redemption
Date, if any, and, in the case of Fixed Rate Notes,
the Interest Rate, and, in the case of Floating Rate
Notes, the interest rate basis or bases, Index
Maturity (if applicable), initial
<PAGE>
Interest Rate, if any, maximum Interest Rate, if
any, minimum Interest Rate, if any, Initial Interest
Reset Date, Interest Reset Dates, Spread and/or
Spread Multiplier, if any, and calculation agent;
and
10. any other additional provisions of the Notes
material to investors or other purchasers of the
Notes not otherwise specified in the Prospectus.
The Company shall endeavor to send such Pricing
Supplement by telecopy or overnight express (for
delivery by the close of business on the applicable
trade date, but in no event later than 11:00 A.M. New
York City time, on the Business Day following the
applicable trade date) to the Agent which made or
presented the offer to purchase the applicable Note (in
such capacity, the "Offering Agent") at the following
applicable address:
if to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to:
-------------------------------------------------------
Merrill Lynch Production Technologies
44B Colonial Drive,
Piscataway, New Jersey 08854
Attention: Prospectus Operations /
Nachman Kimerling
Tel: 732-885-2768
Fax: 732-885-2774/5/6
if to ABN AMRO Incorporated, to:
---------------------
1325 Avenue of the Americas
10th Floor
New York, N.Y. 10019
Attn: Doug Lawson
Tel: 212-314-1553
Fax: 212-314-1197
The Company shall send a copy of such Pricing Supplement by
telecopy or overnight express (for delivery by the close of
business on the applicable trade date, but in no event later
than 11:00 A.M. New York City time, on the Business Day
following the applicable trade date) to the Trustee, at the
following applicable address:
<PAGE>
114 West 47th Street
New York, New York 10036
Attention: Corporate Trustee, Department B
Tel: 212-852-1671
Fax: 212-852-1626
For record keeping purposes, one copy of such Pricing
Supplement shall also be mailed or telecopied to:
Thelen Reid & Priest LLP 40 West 57th Street New York, New
York 10019-4097.
Attention: Michael F. Fitzpatrick, Jr. Esq.
Tel: 212-603-2000
Fax: 212-603-2001
and to:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 15th Floor
New York, NY 10281-1315
Attention: MTN Product Management
Tel: 212-449-7476
Fax: 212-449-2234
The Company will arrange to have the Pricing supplement
transmitted via EDGAR to the Securities and Exchange
Commission (the "Commission") in accordance with the
applicable paragraph of Rule 424(b) under the Act.
In addition, the Company will file as required copies of the
pricing supplement with the applicable state regulatory
authorities concurrently with the filing of the pricing
supplement with the Commission.
In each instance that a pricing supplement is prepared, the
Offering Agent will provide a copy of such pricing supplement
to each investor or purchaser of the relevant Notes or its
agent. Outdated Pricing Supplements (other than those retained
for files) will be destroyed.
Settlement: The receipt of immediately available funds by the Company in
- ---------- payment for a Note and the authentication and delivery of such
Note shall, with respect to such Note, constitute
<PAGE>
"settlement". Offers accepted by the Company will be settled
in three Business Days, or at such time as the purchaser,
the applicable Agent and the Company shall agree, pursuant
to the timetable for settlement set forth in Parts II and
III hereof under "Settlement Procedure Timetable" with
respect to Book Entry Notes and Certificated Notes,
respectively (each such date fixed for settlement is
hereinafter referred to as a "Settlement Date"). If
procedures A and B of the applicable Settlement Procedures
with respect to a particular offer are not completed on or
before the time set forth under the applicable "Settlement
Procedures Timetable", such offer shall not be settled until
the Business Day following the completion of settlement
procedures A and B or such later date as the purchaser and
the Company shall agree.
The foregoing settlement procedures may be modified with
respect to any purchase of Notes by an Agent as principal if
so agreed by the Company and such Agent.
Procedure for
Changing Rates
or Other
Variable Terms: When a decision has been reached to change the interest rate
- --------------- or any other variable term on any Notes being sold by the
Company, the Company will promptly advise the Agents and the
Trustee by facsimile or electronic transmission and the
Agents will forthwith suspend solicitation of offers to
purchase such Notes. The Agents will telephone the Company
with recommendations as to the changed interest rates or
other variable terms. At such time as the Company notifies
the Agents and the Trustee of the new interest rates or
other variable terms, the Agents may resume solicitation of
offers to purchase such Notes. Until such time, only
"indications of interest" may be recorded. Immediately after
acceptance by the Company of an offer to purchase Notes at a
new interest rate or new variable term, the Company, the
Offering Agent and the Trustee shall follow the procedures
set forth under the applicable "Settlement Procedures".
<PAGE>
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend solicitation of
- ---------- offers to purchase Notes at any time. Upon receipt of such
instructions, the Agents will forthwith suspend solicitation
of offers to purchase from the Company until such time as the
Company has advised the Agents that solicitation of offers to
purchase may be resumed. If the Company decides to amend or
supplement the Registration Statement or the Prospectus (other
than to establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes), it will promptly advise the Agents and
will furnish the Agents and their counsel with copies of the
proposed amendment or supplement. Copies of such amendment or
supplement will be delivered or mailed to the Agents, their
counsel and the Trustee in quantities which such parties may
reasonably request at the following respective addresses:
if to Merrill Lynch, Pierce, Fenner & Smith Incorporated, to:
---------------------------------------------------
Merrill Lynch Production Technologies
44B Colonial Drive,
Piscataway, New Jersey 08854
Attention: Prospectus Operations/
Nachman Kimerling
Tel: 732-885-2768
Fax: 732-885-2774/5/6
if to ABN AMRO Incorporated, to:
---------------------
1325 Avenue of the Americas, 10th Floor
New York, N.Y. 10019
Attn: Doug Lawson
Tel: 212-314-1553
Fax: 212-314-1197
if to the Trustee, to:
114 West 47th Street,
New York, New York 10036
Attention: Corporate Trustee, Department B
Tel: 212-852-1671
Fax: 212-852-1626
<PAGE>
For record keeping purposes, one copy of each such amendment
or supplement shall also be mailed or telecopied to:
Thelen Reid & Priest LLP, 40 West 57th Street New York, New
York 10019-4097.
Attention: Michael F. Fitzpatrick, Jr. Esq.
Tel: 212-603-2000
Fax: 212-603-2001
and to:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 15th Floor
New York, NY 10281-1315
Attention: MTN Product Management
Tel: 212-449-7476
Fax: 212-449-2234
In the event that at the time the solicitation of offers to
purchase from the Company is suspended (other than to
establish or change interest rates or formulas, maturities,
prices or other similar variable terms with respect to the
Notes) there shall be any offers to purchase Notes that have
been accepted by the Company which have not been settled, the
Company will promptly advise the Offering Agent and the
Trustee whether such offers may be settled and whether copies
of the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be delivered in
connection with the settlement of such offers. The Company
will have the sole responsibility for such decision and for
any arrangements which may be made in the event that the
Company determines that such offers may not be settled or that
copies of such Prospectus may not be so delivered.
The Company will transmit to the Commission and other
applicable state regulatory authorities for filing therewith
any amendment or supplement to the Prospectus relating to the
Notes and confirm to the Agents that such amendment or
supplement has been filed with the Commission pursuant to the
applicable paragraph of Rule 424(b).
<PAGE>
Delivery of
Prospectus and
applicable
Pricing
Supplement: A copy of the most recent Prospectus and the applicable
- ---------- pricing supplement, which pursuant to Rule 434 may be
delivered separately from the Prospectus, must accompany
or precede the earlier of (a) the written confirmation
of a sale sent to an investor or other purchaser or its
agent and (b) the delivery of Notes to an investor or
other purchaser or its agent.
If notice of a change in the terms of the Notes is
received by an Agent between the time an order for a Note
is placed and the time written confirmation thereof is
sent by such Agent to a customer or his agent, such
confirmation shall be accompanied by a Prospectus,
Prospectus Supplement and Pricing Supplement setting forth
the terms in effect when the order was placed. Subject to
"Suspension of Solicitation; Amendment or Supplement"
above, each Agent will deliver a Prospectus, Prospectus
Supplement and Pricing Supplement as herein described with
respect to each Note sold by it.
Authenticity
of Signatures: The Agents will have no obligation or
- ------------- liability to the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee or
agent of the Company, or the Trustee on any Note.
Documents
Incorporated by
by Reference: The Company shall supply the Agents with an adequate supply
- --------------- of all documents incorporated by reference in the
Registration Statement and the Prospectus.
Payment of
Expenses: Each Agent shall forward to the Company, on a monthly
---------- basis, a statement of the out-of-pocket expenses incurred
by such Agent during that month which are reimbursable to
it pursuant to the terms of the Agency Agreement. The
Company will remit payment to the Agents currently on a
monthly basis.
<PAGE>
Confirmation: For each offer to purchase a Note solicited by an Agent
------------ and accepted by or on behalf of the Company, the Offering
Agent will issue a confirmation to the purchaser, with a
copy to the Company, setting forth the sale and delivery
and payment instructions.
PART II. ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations
dated July 22, 1999 from the Company and the Trustee to DTC and a Medium-Term
Note Certificate Agreement between the Trustee and DTC, dated as of July 16,
1991, as amended, by Letter Agreement, dated July 15, 1999, to include the
Notes, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having the same
- -------- Issue Price, Original Issue Date, Interest Rate, Interest
Payment Dates, redemption terms, if any, and Stated Maturity
Date (collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Security; and all
Floating Rate Notes issued in book-entry form having the same
Issue Price, Original Issue Date, formula for the calculation
of interest (including the Interest Rate Basis, which may be
LIBOR or any other interest rate basis or formula, and Spread
and/or Spread Multiplier, if any), Index Maturity (if
applicable), minimum Interest Rate, if any, maximum Interest
Rate, if any, redemption terms, if any, Interest Payment
Dates, Interest Reset Dates and Maturity Date (collectively,
the "Floating Rate Terms") will be represented initially by a
single Global Security.
For other variable terms with respect to the Fixed Rate Notes
and Floating Rate Notes, see the Prospectus and the applicable
Pricing Supplement.
Owners of beneficial interests in Book-Entry Notes will be
entitled to physical delivery of Certificated Notes equal in
principal amount to their respective beneficial interests only
upon certain limited circumstances described in the
Prospectus.
<PAGE>
Identification: The Company has arranged with the CUSIP Service Bureau
- -------------- of Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of one series of CUSIP
numbers (including tranche numbers), which series
consists of approximately 900 CUSIP numbers and relates
to Global Securities representing the Book-Entry Notes.
The Company has obtained from the CUSIP Service Bureau a
written list of such series of reserved CUSIP numbers
and has delivered to the Trustee and to DTC's
Underwriting Department a written list of 900 CUSIP
numbers of such series. The Trustee will assign CUSIP
numbers to Global Securities as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that
the Trustee has assigned to Global Securities. At any
time when fewer than 100 of the reserved CUSIP numbers
of the series remain unassigned to Global Securities,
and if it deems necessary, the Company will reserve
additional CUSIP numbers for assignment to Global
Securities representing Book-Entry Notes. Upon obtaining
such additional CUSIP numbers, the Company shall deliver
a list of such additional CUSIP numbers to the Trustee
and DTC's Underwriting Department. Notes issued in
book-entry form in excess of $200,000,000 aggregate
principal amount and otherwise required to be
represented by the same Global Security will instead be
represented by two or more Global Securities which shall
all be assigned the same CUSIP number.
Registration: Unless otherwise specified by DTC, each Global Security
- ------------ will be registered in the name of Cede & Co., as nominee
for DTC, on the Security Register maintained under the
Indenture. The beneficial owner of a Book-Entry Note
(or one or more indirect participants in DTC designated
by such owner) will designate one or more participants
in DTC (with respect to such Note, the "Participants")
to act as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance with
instructions provided by such Participants, a credit
balance with respect
<PAGE>
to such beneficial owner in such Note in the account of
such Participants. The ownership interest of such
beneficial owner in such Note will be recorded through
the records of such Participants or through the separate
records of such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of beneficial ownership in a Book-Entry Note
- --------- will be accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferrees and transferrers of such Note.
Exchanges: The Trustee may deliver to DTC's Reorganization
- --------- Department and the CUSIP Service Bureau at any time a
written notice of consolidation specifying (i) the CUSIP
numbers of two or more outstanding Global Securities
that represent Book-Entry Notes having different
Original Issue Dates but otherwise the same Fixed Rate
or Floating Rate Terms, as the case may be (other than
Original Issue Dates), and for which interest has been
paid to the same date, (ii) a date, occurring at least
thirty days after such written notice is delivered and
at least thirty days before the next Interest Payment
Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single replacement
Global Security and (iii) a new CUSIP number to be
assigned to such replacement Global Security. Upon
receipt of such a notice, DTC will send to its
participants (including the Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date
and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On
the specified exchange date, the Trustee will exchange
such Global Securities for a single Global Security
bearing the new CUSIP number, and the CUSIP numbers of
the exchanged Global Securities will, in accordance with
CUSIP Service Bureau procedures, be canceled and not
immediately
<PAGE>
reassigned. Notwithstanding the foregoing, if the Global
Securities to be exchanged exceed $200,000,000 in
aggregate principal amount, one Global Security will be
authenticated and issued to represent each $200,000,000
of principal amount of the exchanged Global Security and
an additional Global Security will be authenticated and
issued to represent any remaining principal amount of
such Global Securities (see "Denominations" below).
Denominations: Unless otherwise provided in the applicable pricing
- ------------- supplement, Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess thereof that
is an integral multiple of $1,000. Global Securities
will be denominated in principal amounts not in excess
of $200,000,000. If one or more Book-Entry Notes having
an aggregate principal amount in excess of $200,000,000
would, but for the preceding sentence, be represented by
a single Global Security, then one Global Security will
be issued to represent each $200,000,000 principal
amount of such Book-Entry Note or Notes and an
additional Global Security will be issued to represent
any remaining principal amount of such Book-Entry Note
or Notes. In such a case, each of the Global Securities
representing such Book-Entry Note or Notes shall be
assigned the same CUSIP number.
Payment of
Principal and
Interest: Payment of Interest Only. Promptly after each Record
- -------- Date, the Paying Agent will deliver to the Company and
DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Security on
the following Interest Payment Date (other than an
Interest Payment Date coinciding with the Maturity Date)
and the total of such amounts. DTC will confirm the
amount payable on each Global Security on such Interest
Payment Date by reference to the appropriate bond
reports published by Standard & Poor's Corporation. On
such Interest Payment Date, the Company will pay to the
Paying Agent the total amount of interest due on such
Interest Payment Date (other than on the Maturity Date),
and the
<PAGE>
Paying Agent will pay such amount to DTC at the times
and in the manner set forth under "Manner of Payment"
below. If any Interest Payment Date for a Book-Entry
Note is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Interest Payment Date.
Notice of Interest Rates. Promptly after each Interest
Determination Date or Calculation Date, as the case may
be, for Floating Rate Notes issued in book-entry form,
the Trustee will notify at least two nationally
recognized rating agencies of the interest rates
determined as of such Interest Determination Date.
Payments on Maturity Date. On or about the first
Business Day of each month, the Paying Agent will
deliver to the Company and DTC a written list of
principal, premium, if any, and interest (to the extent
known) to be paid on each Global Security maturing on
the Maturity Date in the following month. The Company
and DTC will confirm with the Paying Agent the amounts
of such principal and interest payments with respect to
each such Global Security on or about the fifth Business
Day preceding the Maturity Date of such Global Security.
On the Maturity Date, the Company will pay to the Paying
Agent an amount sufficient to make the required payment
due on such Maturity Date. The Paying Agent will pay
such amounts to DTC at the times and in the manner set
forth below under "Manner of Payment". If the Maturity
Date of a Global Security representing Book-Entry Notes
is not a Business Day, the payment due on such day shall
be made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Maturity Date or the Redemption
Date. Promptly after payment to DTC of the principal and
interest due at the Maturity Date or the Redemption Date
of such Global Security, the Paying Agent will cancel
such Global Security in accordance with the terms of the
Indenture. On the first Business day of each month, the
Trustee will deliver to the Company a written
<PAGE>
statement indicating the total principal amount of
outstanding Global Securities as of the close of
business on the immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Securities
on any Interest Payment Date or on the Maturity Date
shall be paid by the Company to the Paying Agent in
immediately available funds for use by the Paying Agent
no later than 10:00 A.M. New York City time on such
date. The Company will make such payment on such Global
Securities by wire transfer to the Paying Agent or by
the Paying Agent's debiting the account of the Company
maintained with the Paying Agent. The Company will
confirm such instructions in writing to the Paying
Agent. Upon receipt of such funds, the Paying Agent will
pay by separate wire transfer (using Fedwire message
entry instructions in a form previously agreed to with
DTC) to an account at the Federal Reserve Bank of New
York previously agreed to with DTC, in funds available
for immediate use by DTC, each payment of principal
(together with interest thereon) due on Global
Securities on any Maturity Date. Thereafter, on each
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names the Book-Entry Notes
represented by such Global Securities are recorded in
the book-entry system maintained by DTC. Neither the
Company nor the Paying Agent shall have any direct
responsibility or liability for the payment by DTC to
such Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and
withheld by the Participant, indirect participant in DTC
or other Person responsible for forwarding payments and
materials directly to the beneficial owner of such Note.
<PAGE>
Settlement Settlement Procedures with regard to each
Procedures: Book-Entry Note sold by the Company through an Agent, as
- ---------- agent, shall be as follows:
A. The Offering Agent will advise the Company by
telephone or by facsimile transmission or other
acceptable means, of the following settlement
information:
1. Principal Amount and Authorized Denomination:
2. (a) Fixed Interest Notes:
(i) Interest Rate or Bases.
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
(ii) Initial Interest Rate.
(iii) Spread and/or Spread Multiplier,
if any.
(iv) Initial Interest Reset Date and
Interest Reset Dates.
(v) Interest Payment Dates.
(vi) Index Maturity, if any.
(vii) Maximum and/or Minimum Interest
Rates, if any.
(viii) Calculation Agent.
(ix) Other terms, if any.
4. Price to public, if any, of such Note (or
whether such Note is being offered at
varying prices relating to prevailing market
prices at time of resale as determined by
the Agent).
5. Trade Date.
<PAGE>
6. Settlement Date (Original Issue Date).
7. Maturity Date.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Net proceeds to the Company.
11. The Offering Agent's discount or commission.
12. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Agent acting as agent for the Company.
13. Such other information specified with
respect to such Note (whether by Addendum or
otherwise).
B. The Company will advise the Trustee by telephone
or electronic transmission of the information set
forth in Settlement Procedure "A" above, and the
name of the Offering Agent. The Trustee will
assign a CUSIP number to the Global Security
representing such Note. The Trustee will also
notify the Agent of such CUSIP number by telephone
as soon as practicable.
C. The Company will transmit to the Trustee by telex
or facsimile or electronic transmission its
written request for the authentication and
delivery of such Global Security and the name of
such Agent. Each such communication by the
Company shall constitute a representation and
warranty by the Company to the Trustee and each
Agent that (i) the Global Security representing
such Book-Entry Note is then, and at the time of
issuance and sale thereof will be, duly authorized
for issuance and sale by the Company, (ii) the
Global Security representing such Book-Entry Note
will conform to the terms of the Indenture, and
(iii) such Global Security, when
<PAGE>
completed, authenticated and delivered pursuant to
the Indenture, will constitute the valid and
legally binding obligation of the Company. The
Trustee will enter a pending deposit message
through DTC's Participant Terminal System,
providing the following settlement information to
DTC, and such information will be routed to
Standard & Poor's Corporation through DTC for
inclusion in the appropriate daily bond report
published by Standard & Poor's Corporation:
1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of the
Trustee and the Offering Agent.
3. Identification of the Book-Entry Note as a
Fixed Rate Note or Floating Rate Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds
the related record date for DTC purposes
(or, in the case of Floating Rate Notes
which reset daily or weekly, the date five
calendar days preceding the Interest Payment
Date) and, if then calculable, the amount of
interest payable on such Interest Payment
Date (which amount shall have been confirmed
by the Trustee).
5. CUSIP number of the Global Security
representing such Note.
6. Whether such Global Security represents any
other Notes issued or to be issued in
book-entry form.
D. The Trustee will complete and authenticate the
Global Security representing such Note.
<PAGE>
E. DTC will credit such Note to the Trustee's
participant account at DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant's account and credit such
Note to such Agent's participant account and (ii)
debit such Agent's settlement account and credit
the Trustee's settlement account for an amount
equal to the price of such Note less such Agent's
commission. The entry of such a deliver order
shall constitute a representation and warranty by
the Trustee to DTC that (a) the Global Security
representing such Book-Entry Note has been issued
and authenticated and (b) the Trustee is holding
such Global Security pursuant to the Medium-Term
Note Certificate Agreement between the Trustee and
DTC.
G. The Offering Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to such
Agent's participant account and credit such Note
to the participant accounts of the Participants
with respect to such Note and (ii) to debit the
settlement accounts of such Participants and
credit the settlement account of such Agent for an
amount equal to the price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
I. Upon confirmation of receipt of funds, the Trustee
will transfer to a bank account designated by the
Company, in immediately available funds, the
amount transferred to the Trustee in accordance
with Settlement Procedure F.
<PAGE>
J. Upon request, the Trustee will send to the Company
a statement setting forth the principal amount of
Book-Entry Notes outstanding as of that date under
the Indenture.
K. Such Agent will confirm the purchase of such Note
to the purchaser either by transmitting to the
Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
DTC will, upon request of the Company or the
Trustee, promptly furnish to the Company or the
Trustee a list of the names and addresses of the
participants for whom DTC has credited Book-Entry
Notes.
Settlement For orders of Book-Entry Notes solicited
Procedures by an Agent, as agent, and accepted by
Timetable: the Company, Settlement Procedures "A"
--------- through "K" set forth above shall be
completed as soon as possible but not
later than the respective times (New
York City time) set forth below:
Settlement
Procedure Time
--------------
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H-I 4:45 P.M. on the settlement date
J-K 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business
Day after the sale date, (i) Settlement Procedure
A shall be completed by 5 PM on the Business Day
<PAGE>
following the sale date or 11 AM on the Business
Day prior to the Settlement Date, whichever is
earlier, and (ii) Settlement Procedures B and C
shall be completed as soon as practicable but no
later than 2 PM on the Business Day prior to the
Settlement Date.
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing
deadlines and in other events specified in SDFS
operating procedure in effect on the Settlement
Date.
If settlement of a Book-Entry Note is rescheduled
or canceled, the Company will instruct the Trustee
to deliver to DTC a cancellation message to such
effect by no later than 5:00 P.M. on the Business
Day immediately preceding the scheduled settlement
date and the Trustee will enter such order by 2:00
PT.M. through DTC's Participant Terminal System.
Failure to
Settle: If the Trustee or the Agent fails to enter an SDFS
------- deliver order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", the Trustee
may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit such
Note to the Trustee's participant account. DTC
will process the withdrawal message, provided that
the Trustee's participant account contains a
principal amount of the Global Security
representing such Note that is at least equal to
the principal amount to be debited. If a
withdrawal message is processed with respect to
all the Book-Entry Notes represented by a Global
Security, the Trustee will mark such Global
Security "canceled", make appropriate entries in
the Trustee's records and send such canceled
Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures,
be
<PAGE>
canceled and not immediately reassigned. If a
withdrawal message is processed with respect to
one or more, but not all, of the Book-Entry Notes
represented by a Global Security, the Trustee will
exchange such Global Security for two Global
Securities, one of which shall represent the
Book-Entry Notes for which a withdrawal message
has been processed and shall be canceled
immediately after issuance and the other of which
shall represent the Book-Entry Note previously
represented by the surrendered Global Security
with respect to which a withdrawal message has not
been processed and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect
to such Note by the beneficial purchaser thereof
(or a person, including an indirect participant in
DTC, acting on behalf of such purchaser), such
Participants and, in turn, the Agent for such Note
may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "G" and
"F", respectively. Thereafter, the Trustee will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph. If such failure shall have occurred for
any reason other than default by the applicable
Offering Agent to perform its obligations
hereunder or under the Distribution Agreement, the
Company will reimburse such Offering Agent on an
equitable basis for its reasonable loss of the use
of funds during the period when the funds were
credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with its SDFS
operating procedures then in effect. In the event
of a failure to settle with
<PAGE>
respect to one or more, but not all, of the
Book-Entry Notes to have been represented by a
Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the
authentication and issuance of a Global Security
representing the other Book-Entry Notes to have
been represented by such Global Security and will
make appropriate entries in its records.
PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable
-------------- Pricing Supplement, the Certificated Notes will be
issued in denominations of $1,000 and integral
multiples thereof.
Payments of
Principal,
Premium, if any,
and Interest: Upon presentment and delivery of the Certificated
------------- Note, the Paying Agent upon receipt of immediately
available funds from the Company will pay the
principal of, premium, if any, and interest on,
each Certificated Note on the Maturity Date in
immediately available funds. All interest
payments on a Certificated Note, other than
interest due on the Maturity Date, will be made by
check mailed to the address of the person entitled
thereto as such address shall appear in the
security register or registers maintained by the
Trustee.
The Trustee will provide monthly to the Company a
list of the principal, premium, if any, and
interest (to the extent known) to be paid on
Certificated Notes maturing in the next succeeding
month. The Paying Agent will be responsible for
withholding taxes on interest paid as required by
applicable law.
Certificated Notes presented to the Paying Agent
on the Maturity Date for payment will be canceled
by the Trustee. All canceled Certificated Notes
held by
<PAGE>
the Trustee shall be disposed of by the Trustee in
accordance with its customary procedures, and the
Trustee shall furnish to the Company a certificate
with respect to such disposition.
Settlement
Procedures: Settlement Procedures with regard to each
----------- Certificated Note purchased by an Agent, as
principal, or through an Agent, as agent, shall be
as follows:
A. The Offering Agent will advise the Company
by telephone (and confirm in writing by
facsimile or other electronic transmission)
of the following Settlement information with
regard to each Certificated Note:
1. Exact name in which the Certificated
Note(s) is to be registered (the
"Registered Owner").
2. Exact address or addresses of the
Registered Owner for delivery, notices
and payments of principal, premium, if
any, and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal amount and Authorized
Denomination.
5. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Interest Rate Basis or Bases.
<PAGE>
(ii) Initial Interest Rate.
(iii) Spread and/or Spread
Multiplier, if any.
(iv) Initial Interest Reset Date
and Interest Reset Dates.
(v) Interest Payment
Dates.
(vi) Index Maturity, if any.
(vii) Maximum and/or Minimum
Interest Rates, if any.
(viii) Calculation Agent.
(ix) Other terms, if any.
6. Price to public of such Certificated
Note (or whether such Note is being
offered at varying prices relating to
prevailing market prices at time of
resale as determined by the Offering
Agent).
7. Trade Date.
8. Settlement Date (Original Issue Date).
9. Maturity Date.
10. Redemption provisions, if any.
11. Repayment provisions, if any.
12. Net proceeds to the Company.
13. The Offering Agent's discount or
commission.
14. Whether such Note is being sold to the
Offering Agent as principal or to an
investor or other purchaser through
the Offering Agent acting as agent for
the Company.
<PAGE>
15. Such other information specified with
respect to such Note (whether by
Addendum or otherwise).
B. After receiving such settlement information
from the Offering Agent, the Company will
advise the Trustee of the above settlement
information by facsimile transmission
confirmed by telephone. The Company will
transmit to the Trustee by telex or
facsimile its written request for the
authentication and delivery of such
Certificated Note and the name of such
Offering Agent. Each such request by the
Company shall constitute a representation
and warranty by the Company to the Trustee
that (i) the Certificated Note is then, and
at the time of issuance and sale thereof
will be, duly authorized for issuance and
sale by the Company, (ii) the Certificated
Note will conform with the terms of the
Indenture, and (iii) such Certificated Note,
when completed, authenticated and delivered
pursuant to the Indenture, will constitute
the valid and legally binding obligation of
the Company.
C. The Trustee will complete the Certificated
Note and send a copy thereof by facsimile to
the Company for verification.
In the event any Note is incorrectly
prepared, the Trustee shall promptly prepare
a corrected Note in exchange for such
incorrectly prepared Note.
The Trustee will authenticate the
Certificated Note in the form approved by
the Company and the Offering Agent, and will
make three copies thereof (herein called
"Stub 1", "Stub 2" and "Stub 3"):
<PAGE>
1. Certificated Note with the Offering
Agent's confirmation, if traded on a
principal basis, or the Offering
Agent's customer confirmation, if
traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will
deliver the Certificated Note and Stub 2
thereof to the Offering Agent at the
following applicable address:
if to Merrill Lynch, Pierce, Fenner
& Smith Incorporated, to:
------------------------------------
Merrill Lynch Money Markets
Clearance
55 Water Street, Concourse Level
N.S.C.C. Window,
New York, N.Y. 10041
Attn: Al Mitchell
Tel: 212- 855-2403
Fax: 212- 855-2457
if to ABN AMRO Incorporated, to:
---------------------
1325 Avenue of the Americas
10th Floor
New York, N.Y. 10019
Attn: Doug Lawson
Tel: 212-314-1553
Fax: 212-314-1197
; and the Trustee will keep Stub 1.
The Offering Agent will acknowledge receipt
of the Certificated Note through a broker's
receipt and will keep Stub 2. Delivery of
the Certificated Note will be made only
against such acknowledgment of receipt. Upon
determination that the Certificated Note has
<PAGE>
been authorized, delivered and completed as
aforementioned, the Offering Agent will wire
the net proceeds of the Certificated Note
after deduction of its applicable commission
to the Company pursuant to standard wire
instructions given by the Company.
E. In the case of a Certificated Note sold
through the Offering Agent, as agent, the
Offering Agent will deliver such
Certificated Note (with the confirmation) to
the purchaser against payment in immediately
available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes accepted by
---------- the Company, Settlement Procedures A through F set forth
above shall be completed as soon as possible following
the trade but not later than the respective times (New
York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
--------- -----
A 11:00 A.M. on the trade
date or within one hour
following the trade
B 12:00 noon on the trade
date or within one hour
following the trade
C-D 2:15 PT.M. on Settlement
Date
E 3:00 PT.M. on Settlement
Date
F 5:00 PT.M. on Settlement
Date
Failure to
Settle: In the case of Certificated Notes sold through the
---------- Offering Agent, as agent, if an investor or other
purchaser of a Certificated Note from the Company shall
either fail to accept delivery of or make payment for
<PAGE>
such Certificated Note on the date fixed for settlement,
the Offering Agent will forthwith notify the Trustee and
the Company by telephone, confirmed in writing, and
return such Certificated Note to the Trustee.
The Trustee, upon receipt of such Certificated Note from
the Offering Agent, will immediately advise the Company
and the Company will promptly arrange to credit the
account of the Offering Agent in an amount of
immediately available funds equal to the amount
previously paid to the Company by such Offering Agent in
settlement for such Certificated Note. Such credits will
be made on the Settlement Date if possible, and in any
event not later than the Business Day following the
Settlement Date; provided that the Company has received
notice on the same day. If such failure shall have
occurred for any reason other than failure by such
Offering Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will
reimburse such Offering Agent on an equitable basis for
its reasonable loss of the use of funds during the
period when the funds were credited to the account of
the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure
occurred, the Trustee will cancel and dispose of such
Certificated Note in accordance with its customary
procedures, make appropriate entries in its records to
reflect the fact that such Certificated Note was never
issued, and accordingly notify in the Company writing.
<PAGE>
EXHIBIT B
Metropolitan Edison Company
Medium-Term Notes
TERMS AGREEMENT
---------- ----, 199
Metropolitan Edison Company
c/o GPU Service, Inc.
310 Madison Avenue
Morristown, New Jersey 07962-1957
Attention: Treasurer
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated August 11, 1999, between
you and each of Merrill Lynch, Pierce, Fenner & Smith Incorporated and
ABN-Amro Incorporated, the undersigned agrees to purchase the following
Notes of Metropolitan Edison Company:
Aggregate Principal Amount:
Interest Rate:
Maturity Date:
Redemption Dates:
Record Dates:
Purchase Price: % of Principal Amount [plus accrued
interest from -------- ---, 199 ]
Purchase Date and Time:
Modification, if any, in
the requirements to deliver
the documents specified in
Section 6(b) of the
Agreement:
Period during which additional
Notes may not be sold pursuant to
Section 4(m) of the Agreement:
<PAGE>
Other terms: [Purchaser]
By:
--------------------------
Accepted:
By:
-------------------------
Title:
