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As filed with the Securities and Exchange Commission on March 1, 1999
Registration No. 333-65951
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
E'TOWN CORPORATION
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(Exact name of registrant as specified in its charter)
New Jersey
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(State or other jurisdiction of incorporation or organization)
22-2596330
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(I.R.S. Employer Identification No.)
600 SOUTH AVENUE
WESTFIELD, NEW JERSEY 07091-0788
908-654-1234
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(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Walter M. Braswell
Secretary
E'town Corporation
600 South Avenue
Westfield, New Jersey 07091-0788
(908) 654-1234
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
David P. Falck
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Subject to Completion Dated March 1, 1999
P R O S P E C T U S
$75,000,000
E'TOWN CORPORATION
DEBT SECURITIES
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We intend to offer from time to time up to $75,000,000 of our unsecured
debt securities. We will provide specific terms of each issue of debt securities
in a prospectus supplement to this prospectus. You should read this prospectus
and any prospectus supplement carefully before you invest.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE DEBT SECURITIES OR DETERMINED THAT THIS PROSPECTUS
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is _________, 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
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THE COMPANY
E'town Corporation was incorporated under the laws of the State of New
Jersey in 1985 to serve as a holding company for Elizabethtown Water Company and
its wholly owned subsidiary, The Mount Holly Water Company.
Elizabethtown and Mount Holly are regulated water companies serving
customers in central New Jersey. Elizabethtown and Mount Holly are engaged in
the distribution of water for domestic, commercial, industrial and fire
protection purposes and for resale by other water companies and public bodies.
Elizabethtown and Mount Holly are public utilities and are regulated by the New
Jersey Board of Public Utilities. Elizabethtown presently constitutes most of
our assets and contributes most of our earnings.
We also own Edison Water Company, which operates the water system of the
Township of Edison, New Jersey under a long-term contract, and Liberty Water
Company, which operates the water system of the City of Elizabeth, New Jersey
under a long-term contract. Both Edison and Liberty are unregulated. In
addition, we own E'town Properties, Inc. and Applied Water Management, Inc.
which are unregulated subsidiaries. E'town Properties owns various parcels of
real estate in New Jersey. E'town and E'town Properties are in the process of
selling those parcels, and expect to invest the sale proceeds into water utility
and wastewater investments. Applied Water Management develops, owns and operates
private water and wastewater facilities for corporate and municipal clients.
Our subsidiaries serve a total of 230,000 water customers in New Jersey,
53 municipalities (for fire protection service), and 11 municipalities and other
water companies (for wholesale service).
Our executive offices are located at 600 South Avenue, Westfield, New
Jersey 07091-0788. Its telephone number is (908) 654-1234.
WHERE YOU CAN FIND MORE INFORMATION
We are required by the Securities Exchange Act of 1934 to file annual,
quarterly and special reports and other information with the Securities and
Exchange Commission. These reports and other information can be inspected and
copied at the SEC's public reference room at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices at Seven World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material can
also be obtained visiting the SEC's website at http://www.sec.gov and by written
request addressed to the SEC, Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933 with respect to the debt securities offered by this
prospectus. This prospectus does not contain all of the information included
in the registration statement. For further information you should refer to the
registration statement.
The SEC allows us to "incorporate by reference" the information we file
with it, which
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means that we can disclose important information to you by referring to those
documents. The information incorporated by reference is considered to be a part
of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. The information included in
this document is not complete, and should be read together with the information
incorporated by reference. We incorporate by reference the documents listed
below and our future filings with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act until we or any underwriters sell all of the debt
securities:
o E'town's Annual Report on Form 10-K for the year ended December 31,
1997.
o E'town's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998, and September 30, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
E'town Corporation
600 South Avenue
Westfield, New Jersey 07090
Attention: Secretary
Telephone: (908) 654-1234
You should rely only on the information incorporated by reference or
provided in this prospectus or the prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these debt securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges on a
historical basis for each of the five full years ending with the period ended
December 31, 1997 and for the nine months ended September 30, 1998.
Year Ended Nine Months
December 31 Ended September 30,
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1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges 2.65 2.43 2.47 2.18 2.67 3.03
Earnings to Fixed Charges equals the sum of net income, dividends, Federal
income taxes and interest expense (which excludes capitalized interest) divided
by fixed charges. Fixed charges consist of interest paid on long-term and
short-term debt, which includes capitalized interest and amortization of debt
discount.
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USE OF PROCEEDS
Unless otherwise set forth in a prospectus supplement, we will use the
proceeds from the sale of the debt securities:
o together with other funds, to make a loan or equity contribution to
Liberty to enable it to make payments under its contract with the
City of Elizabeth, New Jersey aggregating $50 million through June
2000, or to repay short-term debt incurred for such purpose, and
o for other general corporate purposes, including:
o debt refinancing,
o investments in existing or new subsidiaries,
o acquisitions, and
o working capital.
Pending these uses, we may temporarily invest proceeds in short-term securities.
DESCRIPTION OF DEBT SECURITIES
This prospectus describes certain general terms and provisions of our debt
securities. The particular terms of each series of debt securities we offer for
sale will be described in a prospectus supplement to this prospectus. We will
also indicate in the prospectus supplement whether the general terms and
provisions described here apply to that particular series of debt securities.
Accordingly, you should read both the description set forth below and the
description set forth in the applicable prospectus supplement for the complete
terms of any particular series of debt securities.
The debt securities will be issued from time to time in one or more new
series under an indenture to be dated as of ___________, 1999 between us and
Summit Bank, as trustee. Selected provisions of the indenture and the debt
securities are summarized below. This summary is not complete and is subject to
the detailed provisions of the indenture. You should read the copy of the
indenture which we filed with the SEC as an exhibit to the registration
statement for the debt securities for the complete text of those provisions that
may be important to you. References in parentheses below refer to section
numbers in the indenture.
General
The indenture does not limit the principal amount of debt securities which
we may issue. The debt securities will be our unsecured and unsubordinated
obligations and will rank equally with all of our other unsecured and
unsubordinated obligations.
The prospectus supplement for any new series of debt securities will
describe their specific terms, including the following:
o the title of the debt securities of the series;
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o any limit on the aggregate principal amount of the series;
o the date or dates on which we will pay principal on the debt
securities of the series;
o the rate or rates at which any of the debt securities of the series
will bear interest, the date or dates from which any such interest
will accrue, the dates on which interest will be payable and the
regular record date for the interest payable on any interest payment
date;
o the place or places where the principal of and premium, if any, and
interest on the debt securities of the series will be payable;
o the period or periods within which, the price or prices at which and
the terms and conditions on which any of the debt securities of the
series may be redeemed at our option;
o the terms and conditions of any obligation on our part to redeem or
purchase any of the debt securities of the series pursuant to any
sinking fund or analogous provision or at the option of a holder of
the debt securities;
o the denominations in which the debt securities of the series will be
issued, if other than denominations of $1,000 and any integral
multiple thereof;
o if the amount of principal of or any premium or interest on any of
the debt securities of the series will be determined with reference
to an index or pursuant to a formula, the manner in which those
amounts will be determined;
o if any debt securities of the series will be issued in book-entry
form and, if so, any and all matters incidental to those debt
securities;
o any addition to the Events of Default described in this prospectus
or in the indenture applicable to the debt securities of the series;
o any addition to our covenants for the benefit of the holders of debt
securities described in this prospectus or in the indenture; and
o any other terms of the debt securities of the series not
inconsistent with the provisions of the indenture. (Section 301).
Indenture Restrictions
Under the indenture, we may not voluntarily place any type of lien on any
of the common stock of Elizabethtown unless, at the same time or prior to such
action, we also secure all of the debt securities equally and ratably with, or
ahead of, the debt secured by that lien. (Section 608).
The indenture also prohibits our investment in any entity which is not
primarily engaged in the generation, distribution or sale of electric energy or
natural gas or the distribution or sale of water, or the furnishing of
communications services, or water treatment and analysis services, or in the
treatment of wastewater, unless:
o immediately after giving effect to the investment, the aggregate
value of all such investments by us and our subsidiaries would not
exceed $50,000,000, and
o no Event of Default or event which, after notice or lapse of time or
both, would become an Event of Default under the Indenture would
result.
This restriction will not apply if we consolidate with or merge into another
company, and are not the surviving company. (Section 609).
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Form, Exchange and Transfer
The debt securities of each series will be issuable only in fully
registered form without coupons and in denominations of $1,000 and any integral
multiple thereof. (Sections 201 and 302).
Debt securities of any series may be exchanged for other debt securities
of the same series, of any authorized denomination and of like tenor and
aggregate principal amount in accordance with the terms of the indenture.
(Section 305).
Subject to the terms of the indenture and the limitations applicable to
global securities, debt securities may be presented for exchange or for
registration of transfer at the office of the security registrar or any transfer
agent designated by us. No service charge will be made for any exchange or
registration of transfer, except that we may require reimbursement of any
applicable tax or other governmental charges. We will act as security registrar
for each series of debt securities. Any transfer agent for a series of debt
securities will be named in the applicable prospectus supplement. We may at any
time add or remove a transfer agent or change the office through which any
transfer agent acts, provided we maintain a transfer agent in each place of
payment for the debt securities. (Section 602).
We will not be required to execute, register the transfer of, or exchange
(a) any debt security of any series or tranche during the 15 days prior to
giving notice of redemption for the series or tranche, or (b) any debt security
selected for redemption, except the unredeemed portion of any debt security
being redeemed in part. (Section 305).
Payment and Paying Agents
Payment of interest on a debt security on any interest payment date will
be made to the person in whose name that debt security is registered at the
close of business on the regular record date for such interest. (Section 307).
Principal of and any premium and interest on the debt securities of a
particular series will be payable at the corporate trust office of Summit Bank,
as paying agent, in Hackensack, New Jersey, or at the office of any other
paying agent designated by us for such purpose from time to time. Any other
paying agent for any series of debt securities will be named in the applicable
prospectus supplement. We may at any time add or remove any paying agent or
change the office through which any paying agent acts, provided we maintain a
paying agent in each place of payment for the debt securities. (Section 602).
Redemption
Any terms for the optional or mandatory redemption of any series of debt
securities will be specified in the applicable prospectus supplement. Debt
securities will be redeemable at our option only upon notice mailed not less
than 30 nor more than 60 days' prior to the redemption date. If less than all
the debt securities of a series or tranche are redeemed, the particular debt
securities to be redeemed will be selected in the manner provided for in that
series, or if not so provided, as the security registrar deems fair and
appropriate. (Section 403 and 404).
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We may make any redemption at our option conditional upon the paying
agent's receipt by the redemption date of sufficient money to pay the debt
securities to be redeemed. (Section 404).
Events of Default
The indenture defines any one or more of the following events to be an
"Event of Default" with respect to any series of debt securities:
o failure to pay any interest on any debt security of that series
within 60 days after the same becomes due and payable,
o failure to pay the principal of or premium, if any, on any debt
security of that series when due and payable,
o failure by us to perform or our breach of any other indenture
covenant or warranty (other than a covenant or warranty solely for
the benefit of one or more series of debt securities other than that
series), for 60 days after written notice to us by the Trustee, or
to us and the Trustee by the holders of at least 33% in principal
amount of the outstanding debt securities of that series as provided
in the indenture,
o certain events of bankruptcy, insolvency or reorganization, or
o any other Event of Default specified with respect to the debt
securities of that series. (Section 801).
An Event of Default with respect to a particular series of debt securities
does not necessarily constitute an Event of Default with respect to any other
series of debt securities.
Remedies
If an Event of Default for any series of debt securities occurs and
continues, the trustee or the holders of at least 33% in principal amount of the
debt securities of the series may declare the principal amount (or the
applicable portion of the principal amount of any debt securities of the series
issued as discount securities) of all debt securities of that series to be due
and payable immediately. If, however, an Event of Default applicable to more
than one series of debt securities occurs and continues, the trustee or the
holders of at least 33% in principal amount of the debt securities of all those
series, considered as one class, may declare acceleration, and not the holders
of any one series.
In general, before a judgment or decree for payment has been obtained by
the trustee, a declaration of acceleration with respect to the debt securities
of any series may be rescinded and annulled if we deposit with the trustee
enough money to pay all past due amounts (other than amounts due by
acceleration), including principal, premium and interest, interest upon overdue
interest and any amounts due to the trustee under the indenture. (Section 802).
Subject to certain rights of the trustee, the holders of a majority in
principal amount of the outstanding debt securities of all series affected by an
Event of Default may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust or
power conferred on the trustee, with respect to the debt securities of such
series. (Section
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812).
The holders of a majority in principal amount of the affected debt
securities may waive any past default under the indenture except a payment
default or a default of an indenture covenant or provision which can only be
modified or amended by consent of all holders of the affected debt securities.
(Section 813).
The right of a holder of a debt security to institute a proceeding under
the indenture is subject to certain conditions precedent, but each holder has an
absolute right to receive payment of principal and premium, if any, and
interest, if any, on or after the applicable due date specified in the debt
security and to institute suit for the enforcement of any such payment.
(Sections 807 and 808). Within 90 days after the occurrence of any Event of
Default or event which, after notice or lapse of time or both, would become an
Event of Default with respect to the debt securities of any series, the trustee
must give the holders of those debt securities notice of the default, unless it
is cured or waived. In the case of a payment default on the debt securities of
the series, however, the trustee may withhold notice if the trustee determines
that it is in the interest of the holders to do so. In addition, notice
regarding a covenant Event of Default shall not be given to holders until at
least 75 days after the event occurs. (Section 902).
We must file annually with the trustee a certificate signed by one of our
officers regarding our compliance with all conditions and covenants under the
indenture, without regard to grace periods or notice requirements. (Section
606).
Consolidation, Merger, Conveyance, Transfer or Lease
We cannot consolidate with or merge into any other corporation or sell or
lease our properties and assets substantially as an entirety to any person
unless:
o the successor corporation in the consolidation or merger or the
person acquiring or leasing such property and assets:
o is organized and existing under the laws of the United States
of America, any state thereof or the District of Columbia, and
o expressly assumes the due and punctual payment of the
principal, premium and interest on all outstanding debt
securities and the performance of all of our covenants under
the indenture,
o immediately after giving effect to such transactions, no Event of
Default or event which, after notice or lapse of time or both, would
become an Event of Default has occurred and is continuing, and
o we deliver to the certificate and opinion of counsel required by the
indenture. (Section 1101).
There are no provisions that will afford the holders of debt securities
protection in the event of a highly leveraged transaction involving E'town.
There are also no provisions that will require the repurchase of the debt
securities upon a change in control of E'town.
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Modification of Indenture
The indenture may be amended or modified with the consent of the holders
of a majority in principal amount of the debt securities of all series affected
by such amendment or modification, considered as one class. We may not, however,
without the consent of the holder of each debt security of each series directly
affected thereby, amend or modify the indenture to:
o change the stated maturity of the principal of, or any installment
of principal of or interest on, any debt security, or reduce the
principal thereof or the interest rate (or the amount of any
installment of interest thereon), if any, thereon or redemption
premium thereon, or change the method of calculating the interest
rate thereon, or reduce the principal amount of any discount
security payable upon acceleration of maturity thereof, or change
the currency in which any amount on any debt security is payable or
impair the right to institute suit for the enforcement of any such
payment,
o reduce the percentage in principal amount of debt securities of the
series required to consent to any such amendment or modification or
to any waiver of compliance or default under the indenture or to
reduce the requirements for quorum and voting under the indenture,
or
o modify certain of the provisions of the indenture relating to
supplemental indentures, waivers of certain covenants and waivers of
past defaults.
Without the consent of any holders of debt securities, we and the trustee
may enter into one or more supplemental indentures for certain specified
purposes, including to:
o evidence the assumption by a successor entity of our obligations
under the indenture and the debt securities,
o add to the covenants for the benefit of holders of the debt
securities,
o add any additional Events of Default with respect to all or any
series of debt securities,
o establish the form or terms of debt securities of any series as
permitted by the indenture,
o evidence the acceptance of appointment of a separate or successor
trustee,
o cure any ambiguity, defect or inconsistency in the indenture, or
o make any other change in the indenture that does not adversely
affect holders in any material respect (Section 1201).
Satisfaction and Discharge
Any debt securities will be deemed paid, and our obligations on those debt
securities will be deemed satisfied and discharged, if we irrevocably deposit
with the trustee or any paying agent, in trust:
o money sufficient, or
o U.S. government obligations, which are not redeemable or prepayable
at the issuer's option, the principal of and the interest on which
when due, without regard to reinvestment, will provide moneys which,
together with the money, if any, deposited with or held by the
trustee, will be sufficient, or
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o a combination of the preceding two items which will be sufficient,
to pay when due the principal of and premium, if any, and interest, if any, due
and to become due on the debt securities that are outstanding. For this purpose,
U.S. government obligations include direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America and entitled to the benefit of its full faith and credit and
instruments evidencing a direct ownership interest in, or to any specific
payments due on, such obligations. (Section 701).
Resignation of the Trustee
The trustee may resign at any time by giving us written notice and may be
removed at any time by the holders of a majority in principal amount of
outstanding debt securities. A resignation or removal of the trustee and an
appointment of a successor trustee will not become effective until the successor
trustee accepts the appointment in accordance with the indenture. So long as no
Event of Default or event which, after notice or lapse of time, or both, would
become an Event of Default has occurred and is continuing and except with
respect to a trustee appointed by the holders, if we appoint a successor trustee
and such successor accepts such appointment in accordance with the indenture,
the trustee will be deemed to have resigned and the successor will be deemed to
have been appointed. (Section 910).
The Trustee
We have a commercial banking relationship with Summit Bank.
BOOK-ENTRY SECURITIES
Unless otherwise specified in the applicable prospectus supplement, each
series of debt securities will be issued under a book-entry system in the form
of one or more global securities deposited with The Depository Trust Company,
New York, New York ("DTC"). The global securities will be registered in the name
of DTC or its nominee.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to DTC system is also available to others such as securities brokers and
dealers, banks, and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the SEC.
Purchases of debt securities under DTC's system must be made by or through
Direct Participants, who will receive a credit for the debt securities on DTC's
records. The beneficial
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ownership interest of each actual purchaser of each debt security is in turn
recorded on the Direct and Indirect Participants' records. Beneficial owners
will not receive written confirmation from DTC of their purchase, but are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which they purchased. Transfers of ownership interests in
the debt securities are entered on the books of Participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in debt securities, except if use of the book-entry
system for the debt securities is discontinued.
To facilitate subsequent transfers, all debt securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of debt securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the debt securities. DTC's records
reflect only the identity of the Direct Participants to whose accounts such debt
securities are credited, which may or may not be the beneficial owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
DTC and Cede & Co. will not consent or vote with respect to the debt
securities. Under its usual procedures, DTC mails an omnibus proxy to us as soon
as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
debt securities are credited on the record date (identified in a listing
attached to the omnibus proxy).
Principal, premium, if any and interest payments on the debt securities
will be made to DTC. DTC's practice is to credit Direct Participants' accounts
on the payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on the
payable date. Payments by Participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, agent,
or E'town, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to DTC is the
responsibility of DTC, and disbursement of such payments to the beneficial
owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository for
the debt securities at any time by giving us reasonable notice. If that occurs
and a successor securities depository is not obtained, or if we decide to
discontinue using DTC's book-entry transfer system, debt security certificates
will be printed and delivered.
DTC management is aware that some computer applications, systems and the
like for processing data that are dependent upon calendar dates, including
dates before, on and after January 1, 2000, may encounter "Year 2000 problems."
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its data processing
computer applications and systems relating to the timely payment of
distributions (including principal and income payments) to securityholders,
book-entry deliveries, and settlement of trades within DTC, continue to
function appropriately. This program includes a technical assessment and a
remediation plan, each of which is complete. In addition, DTC's plan includes a
testing phase, which is expected to be completed within appropriate time
frames.
However, DTC's ability to perform its services properly is also dependent
upon other parties, including issuers and their agents, as well as third-party
vendors from whom DTC licenses software and hardware, and third-party vendors
on whom DTC relies for information or the provision of services, including
telecommunication and electric utility service providers, among others. DTC
has informed the financial community that it is contacting (and will continue
to contact) third-party vendors from whom DTC acquires services to: (1) impress
upon them the importance of those services being Year 2000 compliant; and (2)
determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, DTC is in the process of
developing contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to Year 2000 has
been provided to the financial community for informational purposes only and is
not intended to serve as a representation, warranty or contract modification of
any kind.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that E'town believes to be reliable, but E'town
takes no responsibility for the accuracy thereof.
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PLAN OF DISTRIBUTION
We may sell the debt securities:
o through underwriters or dealers,
o directly to one or more purchasers,
o through agents or
o through a combination of any such methods of sale.
The applicable prospectus supplement will set forth the terms of the
offering of the debt securities of a series, including the name or names of any
underwriters, dealers or agents, the purchase price of the debt securities of
the series and the proceeds to us from the sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial public offering
price and any discounts or concessions allowed or reallowed or paid by any
underwriters to dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers by any underwriters may be
changed from time to time.
If underwriters are used in the sale of the debt securities of any series,
the debt securities will be acquired by the underwriters for their own account
and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The underwriters with respect to a particular
underwritten offering of debt securities will be named in the applicable
prospectus supplement and, if an underwriting syndicate is used, the managing
underwriter or underwriters will be set forth on the cover page of such
prospectus supplement. In connection with the sale of debt securities, the
underwriters may receive compensation from us or from purchasers in the form of
discounts, concessions or commissions. The underwriters will be, and any dealers
participating in the distribution of the debt securities may be, deemed to be
underwriters within the meaning of the Securities Act of 1933, as amended. We
have agreed to indemnify the underwriters against certain civil liabilities,
including liabilities under the Securities Act. The underwriting agreement
pursuant to which any debt securities are to be sold will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters will be obligated to purchase all of the debt securities
if any are purchased. However, the agreement between us and the underwriters
providing for the sale of the debt securities may provide that under certain
circumstances involving a default of underwriters, less than all of the debt
securities may be purchased.
Any underwriters utilized may engage in stabilizing transactions and
syndicate covering transactions in accordance with Rule 104 under the Exchange
Act. Stabilizing transactions permit bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the debt securities in the open
market after the distribution has been completed in order to cover syndicate
short positions. Such stabilizing transactions and syndicate covering
transactions may cause the price of the debt securities to be higher than it
would otherwise be in the absence of such transactions.
The debt securities of any series may be sold directly by us or through
agents designated by us from time to time. The applicable prospectus supplement
shall set forth the name of any agent involved in the offer or sale of any debt
securities as well as any commissions payable by us to such agent. Unless
otherwise indicated in the prospectus supplement, any such agent will be acting
on a
12
<PAGE> 14
best efforts basis for the period of its appointment.
If so indicated in the applicable prospectus supplement, we will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase debt securities from us at the public offering price
set forth in such prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject to those conditions set forth in the applicable
prospectus supplement, and such prospectus supplement will set forth the
commission payable for solicitation of such contracts.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from our Annual Report on Form 10-K
for the year ended December 31, 1997 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
LEGALITY
Certain legal matters concerning the offering will be passed upon for us
by Walter M. Braswell, Esq., our Secretary and counsel, and Winthrop, Stimson,
Putnam & Roberts, New York, New York, our special New York counsel. Certain
legal matters will be passed upon for any underwriters, agents or dealers by
McCarter & English, LLP, Newark, New Jersey.
13
<PAGE> 15
[Back Cover]
$75,000,000
E'TOWN CORPORATION
DEBT SECURITIES
TABLE OF CONTENTS
The Company..................................... 2
Where You Can Find More Information............. 2
Ratio of Earnings to Fixed Charges.............. 3
Use of Proceeds................................. 4
Description of Debt Securities.................. 4
Book-Entry Securities........................... 10
Plan of Distribution............................ 12
Experts......................................... 13
Legality........................................ 13
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
Initial
Sale
----
<S> <C>
Registration Statement filing fee $ 22,125
*Rating Agencies' fees 55,000
*Trustees' fees 5,000
*Fees of Company's counsel 50,000
*Fees of Agents' counsel (including blue-sky expenses) 40,000
*Accountants' fees 20,000
*Printing and engraving costs 5,300
*Miscellaneous expenses 5,000
--------
Total Expenses $202,425
========
</TABLE>
* Estimated
Item 15. Indemnification of Directors and Officers.
Article 3, Section 6 of the Company's By-Laws provides that the Company
shall indemnify each director or officer of the Company and any person who, at
the request of the Company, has served as a director, officer or trustee of
another corporation in which the Company has a financial interest against
reasonable costs, expenses and counsel fees paid or incurred (including any
judgments, fines or reasonable settlements exclusive of any amount paid to the
Company in settlement) in connection with the defense of any action, suit or
proceeding in which such person is named as a party by reason of having been
such director, officer or trustee or by reason of any action taken or not taken
in such capacity unless such director, officer or trustee is finally adjudged to
have been derelict in the performance of his duties as director, officer or
trustee. If any such action, suit or proceeding is settled or otherwise
terminated as against such director, officer or trustee without a final
determination on the merits and the Board of Directors of the Company shall
determine that such director, officer or trustee has not in any substantial way
been derelict in the performance of his duties as charged in such action, suit
or proceeding, the Company shall indemnify such director, officer or trustee as
aforesaid.
Such rights of indemnification are not exclusive of any rights to which a
director or officer of the Company may have pursuant to statute or otherwise.
Section 14A:3-5 of the New Jersey Business Corporation Act (the "Act")
gives a corporation the power, without a specific authorization in its
certificate of incorporation or by-laws, to indemnify a corporate agent against
expenses and liabilities incurred in connection with certain proceedings
involving the corporate agent by reason of his being or having been such a
corporate agent, provided that with regard to a proceeding other than one by or
in the right of the corporation, the corporate agent must have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal proceeding, such
corporate agent had no reasonable cause to believe his conduct was unlawful. In
any such proceeding, termination of a proceeding by judgment, order, settlement,
conviction or upon plea of nolo contendere or its equivalent does not of itself
create a presumption that any such corporate agent failed to meet the above
applicable standards of conduct. The indemnification provided by the Act does
not exclude any rights to which a corporate agent may be entitled under a
certificate of incorporation, by-law, agreement, vote of shareholders or
otherwise. No indemnification, other than that required when a corporate agent
is successful on the merits or otherwise in any of the above proceedings shall
be allowed if such indemnification would be inconsistent with a provision of the
certificate of incorporation, a by-law or a resolution of the board of directors
or of the shareholders, an agreement or other proper corporate action in effect
at the time of the accrual of the alleged cause of action which prohibits,
limits or otherwise conditions the exercise of indemnification powers by the
corporation or the rights of indemnification to which a corporate agent may be
entitled.
The Company also has insurance policies which, among other things, provide
officers and directors liability coverage, individually and in the aggregate up
to a limit of $20 million for each loss within a 12-month period.
II-1
<PAGE> 17
Item 16. List of Exhibits.
1 Form of Distribution Agreement*
4(a) Form of Indenture between E'town Corporation and Summit Bank**
4(b) Form of Debt Security**
5(a) Opinion of Walter M. Braswell*
5(b) Opinon of Winthrop, Stimson, Putnam & Roberts, special New York
counsel to E'town Corporation*
12 Computation of Ratio of Earnings to Fixed Charges*
23(a) Consent of Deloitte & Touche LLP, Independent Auditors**
23(b) Consent of Walter M. Braswell, Esq. (incorporated into Exhibit 5(a))*
23(b) Consent of Winthrop, Stimson, Putnam & Roberts (incorporated into
Exhibit 5(b))*
24 Power of attorney for each officer and director signing the Registration
Statement**
25 Statement of eligibility of trustee (Statement of Eligibility and
Qualification on Form T-1 of Summit Bank under the Indenture)*
27 Financial Data Schedule**
- -----------------
* To be filed herewith
** Filed previously
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act; and
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
SEC by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, (the "Exchange Act") that are incorporated by reference
in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual
II-2
<PAGE> 18
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and this Amendment No. 1 has been
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Westfield and State of New Jersey, on the 1st day of March, 1999.
E'TOWN CORPORATION
By: /s/Gail P. Brady
--------------------
Title: Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
*/s/Andrew M. Chapman President and Director March 1, 1999
- ------------------------- (Principal Executive Officer)
/s/Gail P. Brady Treasurer March 1, 1999
- ------------------------- (Principal Financial Officer)
*/s/Thomas J. Cawley Director March 1, 1999
- -------------------------
*/s/Anthony S. Cicatiello Director March 1, 1999
- -------------------------
*/s/Edward A. Clerico Director March 1, 1999
- -------------------------
*/s/Dennis Doll Controller (Principal March 1, 1999
- ------------------------- Accounting Officer)
*/s/Anne Evans Estabrook Director, Chairman of March 1, 1999
- ------------------------- the Board
*/s/James W. Hughes Director March 1, 1999
- -------------------------
*/s/John Kean Director March 1, 1999
- -------------------------
*/s/Robert W. Kean, III Director March 1, 1999
- -------------------------
*/s/Barry T. Parker Director March 1, 1999
- -------------------------
*/s/Hugh M. Pfaltz Director March 1, 1999
- -------------------------
*/s/Chester A. Ring Director March 1, 1999
- -------------------------
*/s/Joan Verplanck Director March 1, 1999
- -------------------------
*By: Gail P. Brady
-------------------------
as Attorney-in-Fact
II-4
<PAGE> 20
Exhibit Index
Exhibit
No. Description
- ------- -----------
1 Form of Distribution Agreement*
4(a) Form of Indenture between E'town Corporation and Summit Bank**
4(b) Form of Debt Security**
5(a) Opinion of Walter M. Braswell*
5(b) Opinon of Winthrop, Stimson, Putnam & Roberts, special New York
counsel to E'town Corporation*
12 Computation of Ratio of Earnings to Fixed Charges*
23(a) Consent of Deloitte & Touche LLP, Independent Auditors**
23(b) Consent of Walter M. Braswell, Esq. (incorporated into Exhibit 5(a))*
23(b) Consent of Winthrop, Stimson, Putnam & Roberts (incorporated into
Exhibit 5(b))*
24 Power of attorney for each officer and director signing the Registration
Statement**
25 Statement of eligibility of trustee (Statement of Eligibility and
Qualification on Form T-1 of Summit Bank under the Indenture)*
27 Financial Data Schedule**
- -----------------
* To be filed herewith
** Filed previously
<PAGE> 1
Exhibit 1
E'TOWN CORPORATION
$75,000,000
Medium-Term Notes
DISTRIBUTION AGREEMENT
________, 1999
_____________, New Jersey
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Legg Mason Wood Walker, Incorporated
100 Light Street, 34th Floor
Baltimore, MD 21202
Dear Sirs:
E'town Corporation, a New Jersey corporation (the "Company"), confirms its
agreement with each of you with respect to the issue and sale by the Company of
up to $75,000,000 aggregate principal amount of its Medium-Term Notes (the
"Notes").
The Company proposes to issue the Notes under its Indenture (the
"Indenture") dated as of ___________, 1999 to Summit Bank and its successors, if
any ("Summit"), as trustee (the "Indenture Trustee").
The Notes will be issued in minimum denominations of $______ and integral
multiples thereof (unless otherwise specified by the Company), 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 or
supplements 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), the Administrative Procedures for the
Notes, attached hereto as Exhibit A (the "Procedures"). The Procedures may only
be amended by written agreement of the
<PAGE> 2
Company and you after notice to, and with the approval of, the Indenture
Trustee. 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, the term "Purchaser" shall refer to either of
you acting solely as principal pursuant to Section 2(b) and not as agent, and
the term "you" shall refer to you together at any time either of you is acting
in both such capacities or in either such capacity.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, you as set forth below in this Section 1. Certain terms used in
this Section 1 are defined in paragraph (c) hereof.
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form (File No. 333-65951), including a basic prospectus,
which has become effective, for the registration under the Act of up to
$75,000,000 aggregate initial offering price of Notes. Such registration
statement, as 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 under the
Act, a supplement or supplements to the form of prospectus included in
such registration statement relating to the Notes and the plan of
distribution thereof (any of such supplements, a "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 under the
Act further supplements to the Prospectus Supplement providing for the
specification of or a change in the interest rates, if any, maturity
dates, issuance prices, redemption terms and prices, if any, and, if
appropriate, other terms of the Notes sold pursuant hereto or the offering
thereof (any such supplement being hereinafter called a "Pricing
Supplement").
(b) At each of the following times: (i) as of the Execution Time,
(ii) on the Effective Date, (iii) when any supplement to the Prospectus is
filed with the Commission, (iv) as of the date of any Terms Agreement (as
defined by Section 2(b)) and (v) at the date of delivery by the Company of
any Notes sold hereunder (a "Closing Date"), (1) the Registration
Statement, as amended as of any such time, and the Prospectus, as
supplemented as of any such time, and the Indenture, each as amended or
supplemented as of any such time, complied or will comply as to form in
all material respects with the applicable requirements of the Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the respective rules thereunder; (2) the Registration Statement, as
amended as of any such time, did not or will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; and (3) the Prospectus, as supplemented as of any such time,
will not include an 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
2
<PAGE> 3
Company makes no representations or warranties as to (A) that part of the
Registration Statement that shall constitute the Statements of Eligibility
and Qualification (Forms T-1) under the Trust Indenture Act of the
Indenture Trustee, (B) any information contained in any Prospectus
Supplement relating to The Depository Trust Company ("DTC") or DTC's
book-entry system or (C) 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) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean the later of
(i) each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective or (ii) the
time and date of the filing of the Company's most recent Annual Report on
Form 10-K. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the form of basic prospectus relating to the Notes
contained in the Registration Statement at the Effective Date (unless such
basic prospectus has been amended by the Company subsequent to the
Effective Date, in which case "Basic Prospectus" shall mean the form of
basic prospectus as so amended). "Prospectus" shall mean the Basic
Prospectus as supplemented by the Prospectus Supplement and as it may be
further amended or supplemented at the particular time referred to.
"Registration Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents, exhibits and
financial statements, as it may be amended at the particular time referred
to. "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 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", "amended",
"amendment" or "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.
(d) Neither the Company nor any of its Subsidiaries (as hereinafter
defined) has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus, any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which has had or is reasonably likely to have a material
adverse effect on the financial position, stockholders' equity or results
of operations of the Company and its
3
<PAGE> 4
Subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Registration Statement and the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (other than pursuant to any stock purchase, dividend reinvestment,
savings, bonus, incentive, or similar plan, or conversions of convertible
securities into common stock) or long-term debt (other than normal
amortization of debt premium and discount, bank or finance company
borrowings and repayments in the ordinary course, or additional issuances
or repurchases of commercial paper) of the Company or its Subsidiaries
(except as may relate to (i) a trust fund relating to certain public
financing for The Mount Holly Water Company relating to its Mansfield
Project, and (ii) debenture payments that may be required pursuant to the
indenture relating to the 6 3/4% Convertible Subordinated Debentures of
E'town Corporation on the death of a holder) or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus.
(e) Each of Elizabethtown Water Company, The Mount Holly Water
Company, E'town Properties, Inc., Applied Water Management, Inc., Liberty
Water Company and Edison Water Company (collectively the "Subsidiaries")
and the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and is
duly qualified to do business in each jurisdiction in which it owns or
leases real property or in which the conduct of its business requires such
qualification except where the failure to be so qualified, considering all
such cases in the aggregate, does not involve a material risk to the
business, properties, financial position or results of operations of the
Company and its Subsidiaries taken as a whole; and all of the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable and are
owned beneficially by the Company subject to no security interest, other
encumbrance or adverse claim.
(f) The creation, issuance and sale of the Notes have been duly and
validly authorized by the Company and, when issued and authenticated in
accordance with the provisions of the Indenture and delivered and paid for
by the purchasers thereof, the Notes will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture equally and ratably with the securities outstanding
thereunder; this Agreement and the Indenture have been duly authorized,
executed and delivered by the Company and constitute valid and legally
binding instruments, enforceable in accordance with their terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
the enforcement of creditors' rights generally, to general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and to an implied covenant of good faith,
reasonableness and fair
4
<PAGE> 5
dealing; and the Notes and the Indenture conform in all material respects
to the descriptions thereof in the Registration Statement and the
Prospectus.
(g) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the
Company is subject (except that, for purposes of this representation and
warranty, compliance with any financial covenant requiring an arithmetic
computation (not determinable at the Execution Time) in respect of any
Notes shall be measured at the time of the establishment of the terms of
such Notes), nor will such action result in any violation of the
provisions of the Company's Certificate of Incorporation, as amended, or
the Bylaws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company or any of its property or assets; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Notes or the consummation by the Company of the other transactions
contemplated by this Agreement or any Terms Agreement or the Indenture
except such as have been obtained prior to the Execution Time under the
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the public offering
of the Notes.
(h) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its Subsidiaries is a party or of which any property of the Company
or any of its Subsidiaries is the subject which, if determined adversely
to the Company or any of its Subsidiaries, would individually or in the
aggregate have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(i) There are no contracts or documents of the Company or any of its
Subsidiaries that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations thereunder that have
not been so described or filed.
(j) The Company is not in violation of any of its organizational
documents or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement to which
the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject.
5
<PAGE> 6
(k) The Company is not, and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
2. Appointment of Agents; Solicitation by the Agent of Offers to Purchase;
Sales of Notes to a Purchaser.
(a) 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 Agent 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. The Company reserves the right, in its sole discretion, to
reject any offer to purchase Notes, in whole or in part. In addition, 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 solicitations of
offers to purchase Notes from the Company until such time as the Company
has advised them that such solicitation may be resumed. 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 pursuant to this subsection, in an amount equal to that percentage
specified in Schedule I hereto of the aggregate principal amount of the
Notes sold by the Company. Such commission shall be payable as specified
in the Procedures. Subject to the provisions of this Section 2 and to the
Procedures, offers for the purchase of Notes may be solicited by the
Agents as agents for the Company at such times and in such amounts as the
Agents deem 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 the Agents unless
(I) such agents have entered into a Distribution Agreement with the
Company providing for the sale of Notes on terms and conditions
substantially similar to those contained herein, and (ii) such
solicitation or acceptance is on terms with respect to commissions
substantially similar to those set forth in Exhibit A hereto and the
Company shall give the Agents reasonable notice of the appointment of such
agent for the purpose of soliciting the Notes.
(b) Subject to the terms and conditions stated herein, whenever the
Company and you determine that the Company shall sell Notes directly to
you as Purchaser, each such sale of Notes shall be made in accordance with
the terms of this Agreement and, unless otherwise agreed by the Company
and the Purchaser, any supplemental agreement relating thereto between the
Company and the Purchaser. Each such supplemental agreement (which shall
be substantially in the form of Exhibit B hereto) 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
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<PAGE> 7
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 auditors, pursuant to Section 6(b). Such
Terms Agreement shall also specify the period of time referred to in
Section 4(m). Delivery of the certificates for Notes sold to the Purchaser
pursuant to any Terms Agreement shall be made as agreed to between the
Company and the Purchaser as set forth in the respective Terms Agreement,
not later than the Closing Date set forth in such Terms Agreement, against
payment of funds to the Company in the net amount due to the Company for
such Notes by the method and in the form set forth in the respective Terms
Agreement.
(c) The Agents shall not have any obligation to purchase Notes from
the Company as principal. However, absent an agreement between an Agent
and the Company that such Agent shall be acting solely as an agent for the
Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from
time to time to purchase Notes from the Company as principal for resale to
investors and other purchasers determined by such Agents. Any purchase of
Notes from the Company by an Agent as principal shall be made in
accordance with this Agreement, including the Administrative Procedures
attached hereto.
3. Offering and Sale of Notes. The Agents 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 (i) periodic or current reports
filed under the Exchange Act, (ii) a Pricing Supplement or (iii) a
supplement relating to an offering of Securities other than the Notes)
unless the Company has furnished you a copy for your review prior to
filing and given you a reasonable opportunity to comment on any such
proposed amendment or supplement. 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 within the
time period prescribed. The Company will promptly advise you (i) when the
Prospectus, and any supplement thereto, shall have been filed with the
Commission pursuant to Rule 424, (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
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<PAGE> 8
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 an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, or 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 Company
promptly will (i) notify you to suspend solicitation of offers to purchase
Notes (and, if so notified by the Company, 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 you in such quantities as you may
reasonably request. If such amendment or supplement, and any documents,
certificates and opinions furnished to you pursuant to paragraph (g) of
this Section 4 in connection with the preparation of filing of such
amendment or supplement are satisfactory in all respects to you, you will,
upon the filing of such amendment or supplement with the Commission and
upon the effectiveness of an amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit offers to
purchase Notes hereunder.
(c) During the term of this Agreement, the Company will timely file
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act. In addition, on the date
(or as soon as practicable thereafter) on which the Company makes any
announcement to the general public concerning earnings or concerning any
other event which is required to be described, or which the Company
proposes to describe, in a document filed pursuant to the Exchange Act,
the Company will furnish to you the information contained in such
announcement. The Company will notify you of any downgrading in the rating
of the Notes or any other debt securities of the Company or its
Subsidiaries, or any public announcement of placement of the Notes or any
other debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act), promptly after the Company learns of any such downgrading or public
announcement.
(d) As soon as practicable, the Company will make generally
available to its security holders and to you an earnings statement or
statements of the Company and its
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<PAGE> 9
Subsidiaries which will satisfy the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
(e) The Company will furnish to you and your counsel, without charge
(except as otherwise provided herein), a reasonable number of 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.
(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 upon your request will arrange for the
determination of the legality of the Notes for purchase by institutional
investors.
(g) During the term of this Agreement, the Company shall furnish to
you (i) copies of all annual, quarterly and other reports furnished to
stockholders, (ii) copies of all annual, quarterly and current reports
(without exhibits but including documents incorporated by reference
therein) of the Company filed with the Commission under the Exchange Act
and (iii) such other information concerning the Company as you may
reasonably request from time to time.
(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, but not limited to, 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 pursuant to Section
4(f), the fees and disbursements of the Indenture Trustee and the fees of
any ratings agency that rates the Notes, (ii) reimburse you on a quarterly
basis for all reasonable out-of-pocket expenses incurred by you in
connection with this Agreement (including, but not limited to, advertising
and promotional expenses), 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 new making to you of the representations and
warranties of the Company in Section 1 (except that such representations
and warranties shall be deemed to relate solely to the Registration
Statement as then amended and to the Prospectus as then amended and
supplemented to relate to such Notes). Each such acceptance by the Company
of an offer for the purchase of Notes shall be deemed to constitute an
additional representation, warranty and agreement by the Company that, as
of the settlement date for the sale of such Notes, after giving effect to
the issuance of such Notes, of any other Notes to be issued on or prior to
such settlement date and of any other Securities to be issued and sold by
the Company on or prior to such settlement date, the
9
<PAGE> 10
aggregate amount of Securities (including any Notes) which have been
issued and sold by the Company will not exceed the amount of Securities
registered pursuant to the Registration Statement of the Company. The
Company will inform you promptly upon your request of the aggregate amount
of Securities registered under the Registration Statement which remain
unsold.
(j) Except as otherwise provided in subsection (n) of this Section
4, each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by a Pricing Supplement) the Company will
deliver or cause to be delivered promptly to you a certificate of the
Company, signed by any of the Chairman of the Board, the President, any
Vice President having responsibilities for financial matters or the
Controller or Treasurer of the Company, dated the date of the
effectiveness of such amendment or the date of the filing of such
supplement, in form reasonably satisfactory to you, of the same tenor as
the certificate referred to in Section 5(d) but modified to relate to the
last day of the fiscal quarter for which financial statements of the
Company were last filed with the Commission 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.
(k) Except as otherwise provided in subsection (n) of this Section
4, each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by a Pricing Supplement), the Company shall
furnish or cause to be furnished promptly to you a written opinions of
Walter M. Braswell, Secretary of, and counsel to, the Company, and
Winthrop, Stimson, Putnam & Roberts ("WSPR"), special New York counsel for
the Company, satisfactory to you, dated the date of the effectiveness of
such amendment or the date of the filing of such supplement, in form
satisfactory to you, of the same tenor as the opinion referred to in
Section 5(b), but modified to relate 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, in lieu of such
opinion, such counsel 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 the effectiveness of such amendment or the filing of such
supplement).
(l) Except as otherwise provided in subsection (n) of this Section
4, each time that the Registration Statement or the Prospectus is amended
or supplemented (other than by a Pricing Supplement) to set forth amended
or supplemental financial information (derived from the accounting records
of the Company subject to the internal controls of the Company's
accounting system or derived directly from such records by computation),
the Company shall cause its independent auditors promptly to furnish 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(e) with such changes
as may be necessary to reflect the amended and supplemental financial
information included or incorporated by reference in the
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<PAGE> 11
Registration Statement and the Prospectus, as amended or supplemented to
the date of such letter.
(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 the Notes, with maturities or other terms substantially similar
to the Notes being purchased pursuant to such Terms Agreement.
(n) The Company shall not be required to comply with the provisions
of subsections (j), (k) and (l) of this Section 4 during any period (which
may occur from time to time during the term of this Agreement) for which
the Company has instructed the Agents to suspend the solicitation of
offers to purchase Notes; provided that, during any such period, any
Purchaser does not then hold any Notes purchased pursuant to a Terms
Agreement. Whenever the Company has instructed the Agents to suspend the
solicitation of offers to purchase Notes for any such period, however,
prior to instructing the Agents to resume the solicitation of offers to
purchase Notes or prior to entering into any Terms Agreement, the Company
shall be required to comply with the provisions of subsections (j), (k)
and (l) of this Section 4, but only to the extent of delivering or causing
to be delivered the most recent certificate, opinion or letter, as the
case may be, which would have otherwise been required under each such
subsection unless the Agents otherwise reasonably request that such
documents in respect of prior periods be delivered.
(o) As soon as practicable after the Execution Time, the Company
will make all recordings, registrations and filings necessary to perfect
and preserve the rights created under the Supplemental Indenture.
5. Conditions to the Obligations of the Agents. The obligations of the
Agents to solicit offers to purchase the Notes shall be subject to (i) the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date and when any
supplement to the Prospectus is filed with the Commission, (ii) the accuracy of
the statements of the Company made in any certificates pursuant to the
provisions hereof, (iii) the performance by the Company of its obligations
hereunder and (iv) the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424, the Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424; 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) The Company shall have furnished to the Agents the opinions of
Walter M. Braswell, Secretary of, and counsel to, the Company, and of
WSPR, special New York counsel for the Company, dated the Execution Time,
to the effect that:
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<PAGE> 12
(i) (To be delivered by Walter M. Braswell) The Company and
each of its Subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority
(corporate and governmental) to own its properties and conduct its
business as described in the Prospectus, as amended or supplemented,
and is duly qualified to do business in each jurisdiction in which
it owns or leases real property or in which the conduct of its
business requires such qualification except where the failure to be
so qualified, considering all such cases in the aggregate, does not
involve a material risk to the business, properties, financial
position or results of operations of the Company, and all of the
outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable and are owned of record and beneficially by the
Company subject to no security interest, other encumbrance, or
adverse claim.
(ii) (To be delivered by Walter M. Braswell) Other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or
of which any property of the Company is the subject which, if
determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of
the Company and its Subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(iii) (To be delivered by Walter M. Braswell) This Agreement
has been duly authorized, executed and delivered by the Company
(iv) (To be delivered by WSPR) This Agreement is legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, to general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and to an implied covenant of good faith, reasonableness and
fair dealing.
(v) (To be delivered by Walter M. Braswell) The Indenture has
been duly authorized, executed and delivered by the Company
(vi) (To be delivered by WSPR) The Indenture is a legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights
generally, to general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and to an implied
12
<PAGE> 13
covenant of good faith , reasonableness and fair dealing; and the
Indenture has been duly qualified under the Trust Indenture Act.
(vii) (To be delivered by Walter M. Braswell) The creation,
issuance and sale of the Notes have been duly and validly authorized
by the Company and, when issued in accordance with the authorizing
resolutions of the Board of Directors of the Company and in
accordance with any applicable orders of regulatory bodies and, when
maturity dates, interest rates and other similar terms have been
inserted therein and such Notes have been executed and authenticated
as specified in the Indenture and delivered against payment of the
consideration therefor determined in accordance with this Agreement,
such notes will be valid obligations of the Company.
(viii) (To be delivered by WSPR) When issued in accordance
with the authorizing resolutions of the Board of Directors of the
Company and in accordance with any applicable orders of regulatory
bodies and, when maturity dates, interest rates and other similar
terms have been inserted therein and such Notes have been executed
and authenticated as specified in the Indenture and delivered
against payment of the consideration therefor determined in
accordance with this Agreement such Notes will constitute legally
binding obligations of the Company enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, and other similar
laws relating to or affecting the enforcement of creditors' rights
generally, to general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law) and to an implied covenant of good faith, reasonableness and
fair dealing, and will be entitled to the benefit provided by the
Indenture equally and ratably with the securities outstanding
thereunder; and the Notes and Indenture conform as to legal matters
in all material respects to the descriptions thereof contained in
the Registration Statement and the Prospectus.
(ix) (To be delivered by both Walter M. Braswell and WSPR, as
noted) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture and
this Agreement and the consummation of the transactions therein and
herein contemplated (except as to compliance with any financial
covenant requiring an arithmetic computation not determinable at the
Execution Time as to which such counsel need express no opinion)
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or material other agreement
or instrument known, as of the date of such opinion, to such counsel
to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject,
nor will such action result in any violation of the provisions of
the Company's Certificate of Incorporation, as amended, or the
Bylaws of the Company or any statute or any order, rule or
regulation known, as of the date of
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<PAGE> 14
such opinion, to such counsel of any (To be delivered by Walter M.
Braswell) [New Jersey] (To be delivered by WSPR) [New York or
Federal]court or governmental agency or body having jurisdiction
over the Company or any of its properties.
(x) (To be delivered by both Walter M. Braswell and WSPR, as
noted) No consent, approval, authorization, order, registration or
qualification of or with any (To be delivered by Walter M. Braswell)
[New Jersey] (To be delivered by WSPR) [New York or Federal] court
or governmental agency or body having jurisdiction over the Company
or any of its properties is required for the issue and sale of the
Notes or the consummation by the Company of the other transactions
contemplated by this Agreement, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the public offering of the Notes.
(xi) (To be delivered by WSPR) The Registration Statement, at
the Effective Date, and the Prospectus, as of the date of such
opinion (except as to the financial statements and other financial
or statistical data contained or incorporated by reference therein
and except as to any information contained in any Prospectus
Supplement relating to DTC or DTC's book-entry system as to which
such counsel need express no opinion) comply as to form in all
material respects with all applicable requirements of the Act, and,
with respect to the documents or portions thereof filed with the
Commission pursuant to the Exchange Act and incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3, the
Exchange Act and the applicable instructions, rules and regulations
of the Commission thereunder; on the basis of information received
from the Commission, at the date of such opinion, the Registration
Statement has become effective under the Act, and, to the best
knowledge of such counsel, no proceedings for a stop order with
respect thereto have been instituted or are pending or threatened
under Section 8 of the Act.
(xii) (To be delivered by both Walter M. Braswell and WSPR, as
noted) Based on such counsel's participation in the preparation of
the Registration Statement (but such opinion may state that such
counsel did not independently check or verify the correctness of the
statements made by the Company or factual information included in
the Registration Statement and Prospectus, and thereby may assume
the correctness thereof, except insofar as such statements or
information relate to such counsel or are stated in the Registration
Statement or Prospectus as having been made on their authority as
experts), no facts have come to the attention of such counsel to
cause them to believe, and such counsel have no reason to believe,
that the Registration Statement, at the Effective Date, contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading (except as to the financial
statements or other financial or statistical
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<PAGE> 15
data Statement and the Prospectus and except as to any information
contained in any Prospectus Supplement relating to DTC or DTC's
book-entry system), or that the Prospectus, as of the date of such
opinion, includes an untrue statement of a material fact or omits 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 (except as to the financial statements or other
financial or statistical data contained in or incorporated by
reference in the Registration Statement and the Prospectus and
except as to any information contained in any Prospectus Supplement
relating to DTC or DTC's book-entry system).
(xiii) The Company is not subject to regulation under the
Public Utility Holding Company Act of 1935.
(xiv) As to factual matters (including relating to the
Company's financial condition) included in said opinion, such
counsel may rely upon certificates of public officials as of a
recent date, the warranties and representations of the Company set
forth in this Agreement, and certificates of the Company made
pursuant to the provisions of this Agreement.
(c) The Agents shall have received from McCarter & English, LLP,
counsel for the Agents, an opinion, 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 reasonably
request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Agents a certificate of
the Company, signed by any of the Chairman of the Board, the President,
any Vice President having responsibilities for financial matters or the
Controller or Treasurer of the Company, dated the Execution Time, to the
effect that the signer of such certificate has carefully examined the
Registration Statement, the Prospectus, any supplement to the Prospectus
and this Agreement and that:
(i) The representations and warranties of the Company in this
Agreement and the Indenture are true and correct in all material
respects 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.
(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.
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<PAGE> 16
(iii) (1) Neither the Company nor any of its Subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Registration Statement
and the Prospectus, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, which has had or is reasonably likely to
have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Registration Statement and the Prospectus and
(2) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been
any change in the capital stock (other than pursuant to any stock
purchase, dividend reinvestment, savings, bonus, incentive, or
similar plan, conversions of convertible securities into common
stock) or long- term debt (other than normal amortization of debt
premium and discount, bank or finance company borrowings and
repayments in the ordinary course, or additional issuances or
repurchases of commercial paper) of the Company or its Subsidiaries
(except as may relate to (i) a trust fund relating to certain public
financing for The Mount Holly Water Company relating to its
Mansfield Project, and (ii) debenture payments that may be required
pursuant to the indenture relating to the 6 3/4% Convertible
Subordinated Debentures of E'town Corporation on the death of a
holder) or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus.
(e) At the Execution Time, Deloitte & Touche LLP shall have
furnished to the Agents a letter, dated as of the Execution Time, in form
and substance satisfactory to the Agents, stating in effect that:
(i) They are independent auditors with respect to the Company
within the meaning of the Act and the applicable published rules and
regulations thereunder.
(ii) In their opinion the financial statements and schedules
of the Company included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, which are incorporated by
reference in the Prospectus and examined by such firm, comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act, and the respective
published rules and regulations thereunder.
(iii) On the basis of procedures (but not an audit in
accordance with generally accepted auditing standards) consisting
of: (A) reading the Annual Report on Form 10-K which contains
audited consolidated financial statements (the "Audited Amounts"),
(B) performing the procedures specified by the
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<PAGE> 17
American Institute of Certified Public Accountants for a review of
interim financial information as described in SAS No. 71, Interim
Financial Information, on the unaudited condensed interim financial
statements of the Company included in the Registration Statement and
the Prospectus (the "Unaudited Statements"), and reading any more
recent unaudited interim financial data of the Company, (C) reading
the minutes of meetings of the shareholders, Board of Directors and
Committees of the Board of Directors of the Company held during the
period from December 31, 1997 as set forth in the minutes book
through a specified date not more than five business days prior to
the date of such letter; and (D) making inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters regarding the specific items for which
representations are requested in Sections 5(e)(iii)(1) to
5(e)(iii)(4), nothing has come to their attention as a result of the
foregoing procedures that caused them to believe that:
(1) the Unaudited Statements incorporated by reference
in the Registration Statement and the Prospectus do not comply
in form in all material respects with the applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in Quarterly Reports on
Form 10-Q under the Exchange Act; or that any material
modifications should be made to said Unaudited Statements for
them to be in conformity with generally accepted accounting
principles;
(2) the Audited Amounts were not derived from the
financial statements of the Company;
(3) at the date of the latest available monthly
consolidated balance sheet of the Company read by such
accountants, there was any change in the capital stock (other
than pursuant to any stock purchase, dividend reinvestment,
savings, bonus, incentive, or similar plan, or conversions of
convertible securities into common stock) or long-term debt
(other than normal amortization of debt premium and discount,
bank or finance company borrowings and repayments in the
ordinary course, or additional issuances or repurchases of
commercial paper) of the Company or its Subsidiaries (except
as may relate to (i) a trust fund relating to certain public
financing for The Mount Holly Water Company relating to its
Mansfield Project, and (ii) debenture payments that may be
required pursuant to the indenture relating to the 6 3/4%
Convertible Subordinated Debentures of E'town Corporation on
the death of a holder), or any decrease in the total
shareholders' equity, as compared with amounts shown on the
latest balance sheet included in the Audited Statements,
except, in all instances, for the above-referenced changes or
changes or decreases which are described in such letter; or
(4) for the period subsequent to the date of the Audited
Statements to the date of the latest available monthly
consolidated income
17
<PAGE> 18
statement of the Company read by such accountants, there were
any decreases, as compared with the corresponding period of
the previous year, in total operating revenues or net income
of the Company, except, in all instances, for changes or
decreases which are described in such letter.
(iv) They have compared certain dollar amounts (or percentages
derived from such dollar amounts) (A) which appear in the Prospectus
under the caption "Ratio of Earnings to Fixed Charges", (B) which
appear or are incorporated by reference in the Company's Annual
Report on Form 10-K incorporated by reference in the Registration
Statement and the Prospectus under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" or (C) which appear in the most recent of the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Ratio of Earnings to Fixed Charges" (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived from the accounting records
of the Company subject to the internal controls of the Company's
accounting system or are derived directly from such records by
computation) to the accounting records of the Company or schedules
prepared from data in such records and have found such dollar
amounts, percentages and other financial information to be in
agreement.
References to the Prospectus in this paragraph (e) include any supplement
thereto at the date of the letter.
(f) The Agents shall have received copies of the letters of
Representations between the Company, the Indenture Trustee and DTC,
satisfactory to each of you, summarizing DTC's agreement to hold, safekeep
and effect book-entry transfers of the Notes.
(g) Prior to the Execution Time, the Company shall have furnished to
the Agents 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 counsel for the Agents 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 at the Execution Time shall be delivered at the
office of WSPR, One Battery Park Plaza, New York, NY 10004-1490.
18
<PAGE> 19
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 herein as of the date
of any related Terms Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and agreements herein
contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for the purpose of
suspending the effectiveness of the Registration Statement shall have been
instituted or threatened.
(b) If 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(d), (ii) the
opinions of Walter M. Braswell, Secretary of, and counsel to, the Company,
and of WSPR, special New York counsel for the Company, dated as of the
Closing Date, substantially to the effect set forth in Section 5(b), (iii)
the opinion of McCarter & English, LLP, counsel for the Purchaser, dated
as of the Closing Date, substantially to the effect set forth in Section
5(c) and (iv) the letter of Deloitte & Touche, LLP, independent auditors
for the Company, dated as of the Closing Date, substantially to the effect
set forth in Section 5(e); provided, however, that references to the
Registration Statement and the Prospectus in such certificate, opinions
and letter shall be to the Registration Statement and the Prospectus as
then amended and supplemented.
(c) Prior to the Closing Date, the Company shall have furnished to
the Purchaser such further information, certificates and documents 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 obligations of the Purchaser
thereunder and with respect to the Notes subject thereto may be canceled
at, or 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 the Agents, 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, there shall have occurred (i) any change in or affecting the
business or properties of the Company and its Subsidiaries, considered as one
enterprise, the effect of which, in the reasonable judgment of such person, has
a material adverse effect on the investment quality of such Note or (ii) any
event described in paragraphs (ii),(iii), (iv) or (v) of Section 9(b).
19
<PAGE> 20
8. Indemnification and Contribution.
(a) The Company will indemnify you and hold you harmless against all
losses, claims, damages or liabilities, joint or several, to which you may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any
other prospectus relating to the Notes, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse you for any legal or other expenses reasonably incurred by you
in connection with investigating or defending any such action or claim;
provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus, any
preliminary prospectus supplement, the Registration Statement, the
Prospectus and any other prospectus relating to the Notes or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by you expressly for use in the
Prospectus.
(b) You will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any other
prospectus relating to the Notes, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any preliminary
prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus and any other prospectus relating to the Notes,
or any amendment or supplement thereto, in reliance upon and in conformity
with written information furnished to the Company by you expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim. The Company acknowledges that the
statements set forth in the last paragraph of the cover page, and under
the heading "Plan of Distribution," of the Prospectus Supplement
constitute the only information furnished in writing by any of you for
inclusion in the documents referred to in the foregoing indemnity, and you
confirm that such statements are correct.
(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
20
<PAGE> 21
the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did
not otherwise learn of such action and such failure results in the
forfeiture 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) 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
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), and the indemnifying party shall bear
the reasonable fees, costs and expenses of one such separate counsel for
all indemnified parties if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) 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 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, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and you on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as other equitable
considerations, including relative fault. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or you on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and you agree that it
would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above
38
<PAGE> 22
in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. 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.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any who
controls any of you within the meaning of the Act or the Exchange Act; and
the obligations of you under this Section 8 shall be in addition to any
liability which you may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the
Act or the Exchange Act.
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 you or by you as to the Company, by giving written notice of
such termination to 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 third paragraph of
Section 2(a), Section 4(h), Section 8 and Section 10.
(b) Each Term 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 prior
to such time (i) the Purchaser shall exercise its right to refuse to
purchase the Notes which are the subject of such Terms Agreement in
accordance with the provisions of Section 7, or (ii) there shall have
occurred any outbreak or escalation of hostilities or other national or
international calamity or crisis, the effect of which shall be such as to
make it, in the reasonable judgment of the Purchaser, impractical to
market the Notes or enforce contracts for the sale of the Notes, or (iii)
trading in any securities of the Company shall have been suspended by the
Commission or a national securities exchange, or if trading generally on
either the American Stock Exchange or the New York Stock Exchange shall
have been suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, by either of said exchanges or by order of the Commission or any
other governmental authority, or if a banking moratorium shall have been
declared by either Federal, new York or New Jersey authorities, or (iv) if
the rating assigned by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) to
the Notes as of the date of the applicable Terms Agreement shall have been
lowered since that date, or (v) the subject matter of any amendment or
supplement to the Registration Statement or the Prospectus prepared and
issued by the Company, or the exceptions set forth in any letter of
Deloitte & Touche LLP furnished pursuant to Section 5(e) hereof, shall
have
22
<PAGE> 23
made it, in the judgment of the Purchaser, impracticable or inadvisable to
market the Notes or enforce contracts for the sale of the Notes.
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 directors, officers, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Notes. The provisions of Sections 4(h) and 8
hereof shall survive the termination or cancellation of this Agreement. The
provisions of this Agreement (including without limitation Section 7 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this Agreement.
If at the time of termination of this Agreement any Purchaser shall own any
Notes with the intention of selling them, the provisions of Section 4 shall
remain in effect until such Notes are sold by the Purchaser.
11. Notices. 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 E'town Corporation, 600 South Avenue, Westfield, NJ
07091-0788 Attention: Mrs. Gail P. Brady
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 hereof, and no other
person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New Jersey applicable to contracts made
and to be performed within the State of New Jersey.
14. Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one and the same instrument. If signed in
counterparts, this Agreement shall not become effective unless at least one
counterpart hereof shall have been executed and delivered on behalf of each
party hereto.
23
<PAGE> 24
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,
E'TOWN CORPORATION
By:___________________________
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
A.G. EDWARDS & SONS, INC.
By: ______________________________
Title:
LEGG MASON WOOD WALKER, INCORPORATED
By: ______________________________
Title:
24
<PAGE> 25
SCHEDULE I
Commissions:
The Company agrees to pay the Agent a commission equal to the following
percentage of the principal amount of each Note sold by the Agent:
<TABLE>
<CAPTION>
Term Commission Rate
---- ---------- ----
<S> <C> <C>
From 1 year to less than 18 months %
From 18 months to less than 2 years
From 2 years to less than 3 years
From 3 years to less than 4 years
From 4 years to less than 5 years
From 5 years to less than 6 years
From 6 years to less than 7 years
</TABLE>
Address for Notice to You:
Notices to A.G. Edwards & Sons, Inc. shall be directed to it at One North
Jefferson, St. Louis, Missouri 63103, Attention: [_________], and to Legg Mason
Wood Walker, Incorporated at 100 Light Street, 34th Floor, Baltimore, MD 21202,
Attention: [__________].
<PAGE> 26
EXHIBIT A
E'town Corporation
Medium-Term Notes
Administrative Procedures
Medium-Term Notes (the " Notes"), are to be offered on a continuing basis
by E'town Corporation (the "Company"). A.G. Edwards & Sons, Inc. and Legg Mason
Wood Walker, Incorporated, as agents (the "Agents"), have agreed to use their
reasonable best efforts to solicit offers to purchase the Notes. The Notes are
being sold pursuant to a Distribution Agreement between the Company and the
Agents dated _______, 1999 (the "Distribution Agreement") to which these
administrative procedures are attached as an exhibit. The Notes will be issued
under the Company's Indenture, dated as of _________, 1999 (the "Indenture"), to
Summit Bank ("Summit"), as trustee (the "Indenture Trustee"). Summit will act as
the paying agent (the "Paying Agent") for the payment of principal and premium,
if any, and interest on the Notes and will perform, as the Paying Agent, unless
otherwise specified, the other duties specified herein.
The Notes will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Company. The Notes have been registered with
the Securities and Exchange Commission (the "Commission") and will bear interest
at fixed rates ("Fixed Rate Notes").
Each Note will be represented by either a Global Security (as defined
hereinafter) delivered to Summit, as agent for The Depository Trust Company
("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the holder thereof or a person designated
by such holder (a "Certificated Note"). Except as set forth in the Prospectus or
in a pricing supplement (as defined in Section 1(c) of the Distribution
Agreement), (i) each Note will be initially issued as a Book-Entry Note and (ii)
an owner of a Book-Entry Note will not be entitled to receive a certificate
representing such Note.
The procedures to be followed during, and the specific terms of, the
solicitation of offers by the Agents and the sale as a result thereof by the
Company are explained below. Book-Entry Notes will be issued in accordance with
the administrative procedures set forth in Part I hereof and Certificated Notes
will be issued in accordance with the administrative procedures set forth in
Part II hereof. Administrative procedures applicable to both Book-Entry Notes
and Certificated Notes are set forth in Part III hereof. Administrative
responsibilities, document control and record-keeping functions will be handled
for the Company by its [Controller and Treasurer]. The Company will promptly
advise the Agents and the Indenture Trustee in writing of those persons handling
administrative responsibilities with whom the Agents and the Indenture Trustee
are to communicate regarding offers to purchase Notes and the details of their
delivery.
A-1
<PAGE> 27
To the extent the procedures set forth below conflict with the provisions
of the Notes, the Indenture or the Distribution Agreement, the relevant
provisions of the Notes, the Indenture and the Distribution Agreement shall
control. Unless otherwise defined herein, terms defined in the Indenture shall
be used herein as therein defined.
PART I: 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, Summit will perform the
custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representations to
be delivered from the Company and Summit to DTC and a Medium-Term Note
Certificate Agreement between Summit, and DTC, dated as of __________, 1998 (the
"MTN Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined under "Settlement"
below) for one or more Book-Entry Notes, the Company will
issue a single global security in fully registered form
without coupons (a "Global Security") representing up to
$[75,000,000] principal amount of all such Notes that have the
same date of maturity, ("Maturity Date"), redemption
provisions, if any, and interest rate. Each Global Security
will be dated and issued as of the date of its authentication
by the Indenture Trustee. No Global Security will represent
any Certificated Note.
Identification
Numbers: 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 _____
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 DTC and the Indenture Trustee a
written list of ___ CUSIP numbers of such series. The Company
will assign CUSIP numbers to Global Securities as described
below under Settlement Procedure "B". It is expected that DTC
will notify the CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global Securities. At
any time when fewer than ___ of the reserved CUSIP numbers of
the series remain unassigned to Global Securities, the
Indenture Trustee shall so advise the Company 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 Indenture Trustee and DTC.
Registration: Each Global Security will be registered in the name of Cede &
Co., as
A-2
<PAGE> 28
nominee for DTC, on the Security Register maintained under the
Indenture. It is expected that 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
it is expected that DTC will record in book-entry form, in
accordance with instructions provided by such Participants, a
credit balance with respect 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 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 transferees and transferors of
such Note.
Consolidations: Upon receipt of written instructions from the Company, Summit
may deliver to DTC and the CUSIP Service Bureau at any time a
written notice of consolidation (a copy of which shall be
attached to the resulting Global Security) specifying (i) the
CUSIP numbers of two or more Outstanding Global Securities
that represent Book-Entry Notes having the same Terms 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, it
is expected that DTC will send to its participants (including
Summit) a written reorganization notice to the effect that
such exchange will occur on such date.
Prior to the specified exchange date, Summit 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, Summit 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 reassigned until the Book-Entry Notes represented by
such exchanged Global securities have matured or been
redeemed.
Maturities: Each Book-Entry Note will mature on a date not less than one
year nor more than 30 years after the date of settlement for
such Note.
A-3
<PAGE> 29
Denominations: 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 $___________.
Interest: General. Interest on each Book-Entry Note will accrue from and
including the original issue date of, or the last date to
which interest has been paid on, the Global Security
representing such Note. Each payment of interest on a
Book-Entry Note will include interest accrued to but excluding
the Interest Payment Date or the Maturity Date or, upon
earlier redemption or repayment, the date of such redemption
or repayment (the "Redemption Date"), as the case may be.
Interest payable on the Maturity Date or the Redemption Date
of a Book-Entry Note will be payable to the person to whom the
principal of such Note is payable. Standard & Poor's
Corporation will use the information received in the pending
deposit message described under Settlement Procedure "C" below
in order to include the amount of any interest payable and
certain other information regarding the related Global
Security in the appropriate weekly bond report published by
Standard & Poor's Corporation.
Record Dates. The record date with respect to any Interest Payment Date
shall be the [December 15 or June 15], as the case may be
(whether or not a Business Day) immediately preceding such
Interest Payment Date (each a "Regular Record Date").
Fixed Rate Book-
Entry Notes: Interest payments on Fixed Rate Book-Entry Notes will be made
semi-annually on [January 1 and July 1] of each year and on
the Maturity Date or the Redemption Date; provided, however,
that in the case of a Fixed Rate Book-Entry Note issued
between a Regular Record Date and an Interest Payment Date,
the first interest payment will be made on the Interest
Payment Date following the next succeeding Regular Record
Date.
Payments of
Interest: Payment of Interest Only. Promptly after each Principal and
Regular 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. It is expected that DTC will confirm the
amount payable on each Global Security on such Interest
Payment Date by reference to the appropriate (daily or weekly)
bond reports published by Standard & Poor's Corporation. The
Company will pay to the Paying Agent the total amount of
interest due on such Interest Payment Date
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(other than on the Maturity Date), and the 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, except that, if such Note is a LIBOR Note and such next
succeeding Business Day is in the next succeeding calendar
month, such payment will be made on the immediately preceding
Business Day; and no interest shall accrue on such payment for
the period from and after such Interest Payment Date.
Payments on
Maturity
Date, Etc.: On or about the first Business Day of each month on which a
payment is due, the Paying Agent will deliver to the Company
and DTC a written list of principal and, to the extent known
at such time, interest to be paid on each Global Security
maturing either on the Maturity Date or the Redemption 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 or the
Redemption Date, as the case may be, of such Global Security.
The Company will pay to the Paying Agent the principal amount
of such Global Security, together with interest due on such
Maturity Date or Redemption Date in the manner set forth below
under "Manner of Payment". 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 or the
Redemption 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, except that, if
such Note is a LIBOR Note and such next succeeding Business
Day is in the next succeeding calendar month, such payment
will be made on the immediately preceding 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.
Manner of
Payment: The total amount of any principal and interest due on Global
Securities on any Interest Payment Date or on the Maturity
Date or the Redemption Date shall be paid by the Company to
the Paying Agent in immediately available funds for use by the
Paying Agent no later than 9:30 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. Prior to 10:00
A.M. (New York City time) on each Maturity Date or Redemption
Date or as soon as reasonably possible
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thereafter, 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 or Redemption Date. On each
Interest Payment Date, interest payments shall be made to DTC
in same day funds in accordance with existing arrangements
between the Paying Agent and DTC. Thereafter, on each such
date, it is expected that 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 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.
Settlement: The receipt by the Company of immediately available funds in
payment for a Book-Entry Note and the authentication and
issuance of the Global Security representing such Note shall
constitute "settlement" with respect to such Note. All orders
accepted by the Company will be settled on the third Business
Day following the date of sale of a Book-Entry Note unless the
Company, the Indenture Trustee and the purchaser agree to
settlement on another day that shall be no earlier than the
next Business Day.
Settlement Procedures with regard to each Book-Entry Note sold
by the Company through an Agent, as agent, shall be as
follows:
A. Such Agent will advise the Company by telephone,
followed by facsimile transmission, of the following
settlement information:
1. Principal amount.
2. Maturity Date.
3. The interest rate.
4. Interest Payment Dates.
5. Redemption provisions, if any, or provisions for
the
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repayment or purchase by the Company at the option
of the Holder, if any.
6. Settlement date.
7. Issue price.
8. Agent's commission, determined as provided in
Section 2(a) of the Distribution Agreement.
9. Original Issue Discount, if any.
B. The Company will assign a CUSIP number to such
Book-Entry Note and will advise Summit by facsimile
transmission or other mutually acceptable means of the
information set forth in Settlement Procedure "A" above,
the name of such Agent and the CUSIP number assigned to
such Book-Entry Note. The Company will notify the Agent
of such CUSIP number by telephone as soon as
practicable. Each such communication by the Company
shall constitute a representation and warranty by the
Company to Summit and the Agent that (i) such Note is
then, and at the time of issuance and sale thereof will
be, duly authorized for issuance and sale by the
Company, and (ii) the Global Security representing such
Note will conform with the terms of the Indenture
pursuant to which such Note and Global Security are
issued.
C. Summit will enter a pending deposit message through
DTC's Participant Terminal System, providing the
following settlement information to DTC, which shall
route such information to such Agent and Standard &
Poor's Corporation:
1. The information set forth in Settlement Procedure
"A".
2. Identification of such Note as a Fixed Rate
Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related Regular Record Date and amount of interest
payable on such Interest Payment Date.
4. CUSIP number of the Global Security representing
such Note.
5. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such
time).
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D. The Indenture Trustee will complete and authenticate the
Global Security representing such Note.
E. It is expected that DTC will credit such Note to
Summit's participant account at DTC.
F. Summit will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC to (i) debit
such Note to Summit's participant account and credit
such Note to such Agent's participant account and (ii)
debit such Agent's settlement account and credit
Summit'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 Summit to DTC that (a)
the Global Security representing such Book-Entry Note
has been issued and authenticated and (b) Summit is
holding such Global Security pursuant to the MTN
Certificate Agreement.
G. Such 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. Summit will, upon confirming receipt of such funds from
the Agent, wire transfer to the account of the Company
maintained at [name of bank] (for credit to E'town
Corporation, Account No. ___________) in immediately
available funds in the amount transferred to Summit in
accordance with Settlement Procedure "F".
J. 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.
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Settlement
Procedures
Timetable: For orders of Book-Entry Notes solicited by an Agent, as
agent, and accepted by the Company for settlement on the first
Business Day after the sale date, Settlement Procedures "A"
through "J" 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. 5:00 P.M. on the sale date
D. 3:00 P.M. on the sale date
E. 8:05 A.M. on the settlement date
F-G 3:00 P.M. on the settlement date
H. 4:30 P.M. on the settlement date
I-J. 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business Day after
the sale date, Settlement Procedures "A", "B" and "C" shall be
completed as soon as practicable but no later than 11:00 A.M.
and 12:00 Noon on the first Business Day after the sale date
with respect to Settlement Procedures "A" and "B",
respectively, and no later than 5:00 P.M. on the first
Business Day after the sale date, with respect to Settlement
Procedure "C". Settlement Procedure "D" shall occur no later
than 3:00 P.M. on the last Business Day prior to the
settlement date. Settlement Procedures "H" and "I" are subject
to extension in accordance with any extension of Fedwire
closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or canceled,
the Company will instruct Summit by no later than 12:00 Noon
on the Business Day immediately preceding the scheduled
settlement date to deliver to DTC through DTC's Participant
Terminal System a cancellation message to such effect and
Summit will enter such message, by no later than 2:00 P.M. on
such Business Day, through DTC's Participation Terminal
System.
Failure to
Settle: If Summit or the Agent fails to enter an SDFS deliver order
with respect to a Book-Entry Note pursuant to Settlement
Procedure "F" or "G," Summit may upon the approval of the
Company deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable, a withdrawal message
instructing DTC to debit such Note to Summit's participant
account,
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provided that Summit'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, Summit will
mark such Global Security "canceled", make appropriate entries
in Summit'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
canceled and not reassigned until the Book-Entry Notes
represented by such Global Security have matured or been
redeemed. 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, Summit will exchange such Global
Security for another Global Security, which shall represent
the Book-Entry Notes 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,
Summit 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 a
default by the Agent in the performance of its obligations
hereunder or under the Distribution Agreement, then the
Company will reimburse such Agent or Summit, as applicable, on
an equitable basis for the loss of the use of funds during the
period when they 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 respect to one or
more, but not all, of the Book-Entry Notes to have been
represented by a Global Security, the Indenture 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 II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
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Summit will serve as registrar in connection with the Certificated Notes.
Maturities: Each Certificated Note will mature on a date not less than one
year and not more than 30 years after the date of delivery by
the Company of such Note.
Price to
Public: Each Certificated Note will be issued at the percentage of
principal amount specified in the Prospectus relating to the
Notes.
Denominations: The denomination of any Certificated Note will be a minimum of
$1,000 or any amount in excess thereof which is an integral
multiple of $1,000.
Registration: Certificated Notes will be issued only in fully registered
form.
Interest: General. Interest on each Certificated Note will accrue from
and including the original issue date of, or the last date to
which interest has been paid on, such Note. Each payment of
interest on a Certificated Note will include interest accrued
to but excluding the Interest Payment Date or the Maturity
Date or, upon earlier redemption, the Redemption Date, as the
case may be. Interest payable on the Maturity Date or the
Redemption Date of a Certificated Note will be payable to the
person to whom the principal of such Note is payable.
Record Dates. Unless otherwise set forth in the applicable Pricing
Supplement, the record dates with respect to the Interest
Payment Dates shall be the Regular Record Dates.
Fixed Rate
Certificated
Notes. Unless otherwise specified pursuant to "Settlement Procedures"
below, interest payments on Fixed Rate Certificated Notes will
be made semi-annually on [January 1 and July 1] and on the
Maturity Date or the Redemption Date; provided, however, that
in the case of a Fixed Rate Certificated Note issued between a
Regular Record Date and an Interest Payment Date, the first
interest payment will be made on the Interest Payment Date
following the next succeeding Regular Record Date.
Payments of
Principal
and Interest: Interest will be payable to the person and in whose name a
Certificated Note is registered at the close of business on
the Regular Record Date next preceding an Interest Payment
Date; provided, however, that, in the case of a Certificated
Note originally issued between a Regular Record Date and an
Interest Payment Date, the first payment of interest will be
made on the Interest Payment Date following the next
succeeding Regular Record
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Date to the person in whose name such Note was registered at
the close of business on such next Regular Record Date. Unless
other arrangements are made acceptable to the Company, all
interest payments (excluding interest payments made on the
Maturity Date or the Redemption Date) on a Certificated Note
will be made by check mailed to the person entitled thereto as
provided above. Summit will pay the principal amount of each
Certificated Note on the Maturity Date upon presentation of
such Certificated Note to Summit at the principal corporate
trust office of Summit in New York, New York. Such payment,
together with payment of interest due on the Maturity Date,
will be made from funds deposited with Summit by the Company.
Summit will be responsible for withholding taxes on interest
paid on Certificated Notes as required by applicable law.
Within 10 days following each Regular Record Date, the
Indenture Trustee will inform the Company of the total amount
of the interest payments to be made by the Company on the next
succeeding Interest Payment Date. The Indenture Trustee will
provide monthly to the Company a list of the principal and
interest to be paid on Certificated Notes maturing in the next
succeeding month.
Settlement
Procedures: The settlement date with respect to any offer to purchase
Certificated Notes accepted by the Company will be a date on
or before the fifth Business Day next succeeding the date of
acceptance unless otherwise agreed by the purchaser, the
Indenture Trustee and the Company and shall be specified upon
acceptance of such offer. The Company will instruct the
Indenture Trustee to effect delivery of each Certificated Note
no later than 1:00 P.M. (New York City time) on the settlement
date to the Presenting Agent (as defined under "Preparation of
Pricing Supplement" in Part III below) for delivery to the
purchaser.
Settlement
Procedures: For each offer to purchase a Certificated Note that is
accepted by the Company, the Presenting Agent will provide
(unless provided by the purchaser directly to the Company) by
telephone and facsimile transmission or other mutually
acceptable means the following information to the Company:
1. Name in which such Note is to be registered (the
"Registered Owner").
2. Address of the Registered Owner and, if different,
address for payment of principal and interest.
3. Taxpayer identification number of the Registered Owner.
4. Principal amount.
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5. Maturity Date.
6. The interest rate.
7. Interest Payment Dates.
8. Redemption provisions, if any, or provisions for the
repayment or repurchase by the Company at the option of
the Holder, if any.
9. Settlement date.
10. Issue price.
11. Agent's commission, determined as provided in Section
2(a) of the Distribution Agreement.
The Presenting Agent will advise the Company of the foregoing
information (unless provided by the purchaser directly to the
Company) for each offer to purchase a Certificated Note
solicited by such Agent and accepted by the Company in time
for the Indenture Trustee to prepare and authenticate the
required Certificated Note. Before accepting any offer to
purchase a Certificated Note to be settled in less than three
Business Days, the Company shall verify that the Indenture
Trustee will have adequate time to prepare and authenticate
such Note. After receiving from the Presenting Agent the
details for each offer to purchase a Certificated Note that
has been accepted by the Company, the Company will, after
recording the details and any necessary calculations, provide
appropriate documentation to the Indenture Trustee, including
the information provided by the Presenting Agent necessary for
the preparation and authentication of such Note.
Note Deliveries
and Cash
Payments: Upon receipt of appropriate documentation and instructions,
the Company will cause the Indenture Trustee to prepare and
authenticate the pre-printed 4-ply Certificated Note packet
containing the following documents in forms approved by the
Company, the Presenting Agent and the Indenture Trustee:
1. Note with customer receipt.
2. Stub 1 - For the Presenting Agent.
3. Stub 2 - For the Company.
4. Stub 3 - For the Indenture Trustee.
Each Certificated Note shall be authenticated on the
settlement date
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therefor. The Indenture Trustee will authenticate each
Certificated Note and deliver it (with the confirmation) to
the Presenting Agent (and deliver the stubs as indicated
above), all in accordance with written or electronic
instructions (or oral instructions confirmed in writing (which
may be given by facsimile transmission) on the next Business
Day) from the Company. Delivery by the Indenture Trustee of
each Certificated Note will be made in accordance with said
instructions against receipts therefor and in connection with
contemporaneous receipt by the Company from the Presenting
Agent on the settlement date in immediately available funds of
an amount equal to the issue price of such Note less the
Presenting Agent's commission.
Upon verification ("Verification") by the Presenting Agent
that a Certificated Note has been prepared and properly
authenticated by the Indenture Trustee and registered in the
name of the purchaser in the proper principal amount and other
terms in accordance with the aforementioned confirmation,
payment will be made to the Company by the Presenting Agent
the same day as the Presenting Agent's receipt of the
Certificated Note in immediately available funds. Such payment
shall be made by the Presenting Agent only upon prior receipt
by the Presenting Agent of immediately available funds from or
on behalf of the purchaser unless the Presenting Agent
decides, at its option, to advance its own funds for such
payment against subsequent receipt of funds from the
purchaser.
Upon delivery of a Certificated Note to the Presenting Agent,
Verification by the Presenting Agent and the giving of
instructions for payment, the Presenting Agent shall promptly
deliver such Note to the purchaser. In the event any
Certificated Note is incorrectly prepared, the Indenture
Trustee shall promptly issue a replacement Certificated Note
in exchange for such incorrectly prepared Note.
Failure
To Settle: If the Presenting Agent, at its own option, has advanced its
own funds for payment against subsequent receipt of funds from
the purchaser, and if the purchaser shall fail to make payment
for the Certificated Note on the settlement date therefor, the
Presenting Agent will promptly notify the Indenture Trustee
and the Company by telephone, promptly confirmed in writing
(but no later than the next Business Day). In such event, the
Company shall promptly provide the Indenture Trustee with
appropriate documentation and instructions consistent with
these procedures for the return of the Certificated Note to
the Indenture Trustee and the Presenting Agent will promptly
return the Certificated Note to the Indenture Trustee. Upon
(i) confirmation from the Indenture Trustee in writing (which
may be given by facsimile transmission) that the Indenture
Trustee has received the Certificated Note and upon (ii)
confirmation from the Presenting Agent in writing (which may
be given by facsimile transmission) that the
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<PAGE> 40
Presenting Agent has not received payment from the purchaser
(the matters referred to in clauses (i) and (ii) are referred
to hereinafter as the "Confirmations"), the Company will
promptly pay to the Presenting Agent an amount in immediately
available funds equal to the amount previously paid by the
Presenting Agent in respect of such Note. Assuming receipt of
the Certificated Note by the Indenture Trustee and of the
Confirmations by the Company, such payment will be made on the
settlement date, if reasonably practical, and in any event not
later than the Business Day following the date of receipt of
the Certificated Note and Confirmations. If a purchaser shall
fail to make payment for the Certificated Note for any reason
other than the failure of the Presenting Agent to provide the
necessary information to the Company as described above for
settlement or to provide a confirmation to the purchaser
within a reasonable period of time as described above or
otherwise to satisfy its obligation hereunder or in the
Distribution Agreement, and if the Presenting Agent shall have
otherwise complied with its obligations hereunder and in the
Distribution Agreement, the Company will reimburse the
Presenting Agent on an equitable basis for its loss of the use
of funds during the period when they were credited to the
account of the Company.
Immediately upon receipt of the Certificated Note in respect
of which the failure occurred, the Indenture Trustee will void
such Note, make appropriate entries in its records and send
such cancelled Note to the Company; and upon such action, the
Certificated Note will be deemed not to have been issued,
authenticated and delivered.
PART III: ADMINISTRATIVE PROCEDURES APPLICABLE TO BOTH BOOK-ENTRY NOTES AND
CERTIFICATED NOTES
Calculation
Of Interest: Fixed Rate Notes. Interest on Fixed Rate Notes (including
interest for partial periods) will be calculated on the basis
of a 360-day year of twelve thirty-day months. (Examples of
interest calculations are as follows: The period from August
15, 1999 to February 15, 2000 equals 6 months and 0 days, or
180 days; the interest payable equals 180/360 times the annual
rate of interest times the principal amount of the Note. The
period from September 17, 1999 to February 15, 2000 equals 4
months and 28 days, or 148 days; the interest payable equals
148/360 times the annual rate of interest times the principal
amount of the Note.)
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Procedure
For Rate
Setting and
Posting: The Company and the Agents will discuss from time to time the
aggregate 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.
Acceptance
of Offers: If the Company posts prices and rates as provided above, each
Agent as agent for and on behalf of the Company, shall
promptly accept offers received by the Agent to purchase Notes
at the prices and rates so posted, subject to (i) any
instructions from the Company received by the Agent concerning
the aggregate principal amount of such Notes to be sold at the
prices and rates so posted or the period during which such
posted prices and rates are to be in effect, (ii) any
instructions from the Company received by each Agent changing
or revoking any posted prices and rates, (iii) compliance with
the securities laws of the United States and all other
jurisdictions and (iv) such Agent's right to reject any such
offer as provided below.
If the Company does not post prices and rates and an Agent
receives an offer to purchase Notes or, if while posted prices
and rates are in effect, the Agent receives an offer to
purchase Notes on terms other than those posted by such
Company, the Agent will promptly advise the Company of each
such offer other than offers rejected by such Agent as
provided below. The Company will have the sole right to accept
any such offer to purchase Notes. The Company may reject any
such offer in whole or in part. Each Agent may, in its
discretion reasonably exercised, reject any offer to purchase
Notes received by it in whole or in part.
Preparation
Of Pricing
Supplement: If any offer to purchase an Note is accepted by the Company,
the Company, with the approval of the Agent that presented
such offer (the "Presenting Agent"), will prepare a pricing
supplement (a "Pricing Supplement") reflecting the terms of
such Note and will arrange to have a copy electronically filed
with the Commission in accordance with the applicable
paragraph of Rule 424 under the Act and the provision of
Regulation S-T thereunder and will supply at least 10 copies
thereof (or additional copies if requested) to the Presenting
Agent. The Presenting
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Agent will cause a Prospectus and Pricing Supplement to be
delivered to the purchaser of such Note.
In each instance that a Pricing Supplement is prepared, the
Agents will affix the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements (other than those
retained for files) will be destroyed.
Procedures
For Rate
Changes: When the Company has determined to change the interest rates
of Notes being offered, it will promptly advise the Agents and
the Agents will forthwith suspend solicitation of offers. Each
Agent will telephone the Company with recommendations as to
the changed interest rates. At such time as the Company has
advised the Agents of the new interest rates, the Agents may
resume solicitation of offers. Until such time only
"indications of interest" may be recorded.
Suspension of
Solicitation,
Amendment or
Supplement of
Prospectus: The Company may instruct the Agents to suspend at any time,
for any period of time or permanently, the solicitation of
offers to purchase Notes. Upon receipt of such 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.
If the Company decides to amend or supplement the Registration
Statement (as defined in Section 1(c) of the Distribution
Agreement) or the Prospectus (except for a supplement relating
to an offering of securities other than the Notes), it will
promptly advise the Agents and the Indenture Trustee and will
furnish the Agent and the Indenture Trustee with the proposed
amendment or supplement in accordance with the terms of, and
its obligations under, the Distribution Agreement. The Company
will, consistent with such obligations, promptly advise each
Agent and the Indenture Trustee whether orders outstanding at
the time each Agent suspends solicitation may be settled and
whether copies of such Prospectus and Prospectus Supplement as
in effect at the time of the suspension, together with the
appropriate Pricing Supplement, may be delivered in connection
with the settlement of such orders. The Company will have the
sole responsibility for such decision and for any arrangements
that may be made in the event that the Company determines that
such orders may not be settled or that copies of such
Prospectus, Prospectus Supplement and Pricing Supplement may
not be so delivered.
The Company will file with the Commission for filing therewith
any
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supplement to the Prospectus relating to the Notes, provide
the Agent with copies of any such supplement, and confirm to
the Agents that such supplement has been filed with the
Commission pursuant to the applicable paragraph of Rule 424.
Confirmation: For each offer to purchase a Note solicited by an Agent and
accepted by or on behalf of the Company, the Presenting Agent
will issue a confirmation to the purchaser, with a copy to the
Company, setting forth the details set forth above and
delivery and payment instructions.
Trustee/Paying
Agent Not to
Risk Funds: Nothing herein shall be deemed to require the Indenture
Trustee/Paying Agent to risk or expend its own funds in
connection with any payment to the Company, DTC, the Agents or
the purchaser or a holder, it being understood by all parties
that payments made by the Indenture Trustee/Paying Agent to
the Company, DTC, the Agent or a purchaser or holder shall be
made only to the extent that funds are provided to the
Indenture Trustee/Paying Agent for such purpose.
Authenticity
of Signatures: The Company will cause the Indenture Trustee to furnish the
Agents from time to time with the specimen signatures of each
of the Indenture Trustee's officers, employees or agents who
has been authorized by the Indenture Trustee to authenticate
Notes, but the Agents will have no obligation or liability to
the Company or the Indenture Trustee in respect of the
authenticity of the signature of any officer, employee or
agent of the Company or the Indenture trustee on any such
Note.
Payment of
Expenses: Each Agent shall forward to the Company, on a monthly basis, a
statement of the reasonable out-of-pocket expenses incurred by
such Agent during that month which are reimbursable to it
pursuant to the terms of the Distribution Agreement. The
Company will remit payment to the Agent currently on a monthly
basis.
Delivery of
Prospectus: A copy of the Prospectus, Prospectus Supplement and Pricing
Supplement relating to a Note must accompany or precede the
earliest of any written offer of such Note, confirmation of
the purchase of such Note or payment for such Note by its
purchaser. If notice of a change in the terms of the Notes is
received by an Agent between the time an order for an 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
A-18
<PAGE> 44
Solicitation; Amendment or Supplement of Prospectus" above,
each Agent will deliver a Prospectus, Prospectus Supplement
and Pricing Supplement as herein described with respect to
each Note sold by it.
A-19
<PAGE> 45
EXHIBIT B
TERMS AGREEMENT
E'town Corporation
600 South Avenue
Westfield, NJ 07091-0788
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement (the "Distribution Agreement"), dated _________ __, 199_, among A.G.
Edwards & Sons, Inc., Legg Mason Wood Walker, Incorporated and E'town
Corporation (the "Company"), the undersigned agrees to purchase the following
principal amount of the Company's ______________ Medium-Term Notes (the
"Notes"):
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: % of Principal Amount [plus accrued interest from , 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor Method of Payment:
Modification, if any, in the requirements to deliver the documents specified in
Section 6(b) of the Distribution Agreement:
Period during which additional Notes may not be sold pursuant to Section 4(m) of
the Distribution Agreement:
Book-Entry Notes or Certificated Notes:
<PAGE> 46
This Agreement shall be governed by and construed in accordance with the
laws of New Jersey.
[Insert name of Purchaser(s)]
By___________________________
Title:
Accepted: , 199_
E'TOWN CORPORATION
By___________________________
Title:
B-2
<PAGE> 1
Exhibit 5(a)
[Opinion of Walter M. Braswell]
March 1, 1999
E'town Corporation
600 South Avenue
Westfield, New Jersey 07090
Ladies and Gentlemen:
I have acted as counsel to E'town Corporation (the "Company") in
connection with the proposed issuance and sale of up to $75,000,000 aggregate
principal amount of Debt Securities (the "Debt Securities") of the Company to be
issued under an Indenture, to be dated as of March 1, 1999, between the Company
and Summit Bank (the "Indenture"). I have reviewed, among other things, the
registration statement on Form S-3 (No. 333-65951), and the prospectus included
therein, with respect to the Debt Securities, as amended by Amendment No. 1
thereto filed under the Securities Act of 1933 on March 01, 1999 (as so
amended, the "Registration Statement"). I have also reviewed and am familiar
with the originals and copies, certified or otherwise identified to my
satisfaction, of pertinent documents, corporate records and other instruments
relating to the issuance of the Debt Securities and other actions and
proceedings relating thereto.
Based upon the foregoing, I am of the opinion that (i) when the
Registration Statement shall have become effective, (ii) when the Debt
Securities are issued in accordance with the authorizing resolutions of the
Board of Directors of the Company and in accordance with any applicable orders
of regulatory bodies, (iii) when maturity dates, interest rates and other
similar terms have been determined therefor, and (iv) when such Debt Securities
have been executed and authenticated as specified in the Indenture and delivered
against payment of the consideration therefor, such Debt Securities will be
valid and legally binding obligations of the Company, except as may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally.
I am admitted to the bar of the State of New Jersey and do not hold myself
out as an expert on the laws of any other jurisdiction. With respect to all
matters of New York law, I have relied upon the opinion of even date herewith
addressed to me of Winthrop, Stimson, Putnam & Roberts, special New York counsel
to the Company filed as Exhibit 5(b) to the Registration Statement.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the heading "Legality" in
the prospectus included in the Registration Statement. In giving this consent, I
do not hereby admit that I am within the category of persons whose consent is
required under Section 7 of the Securities Act or the rule and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
/s/Walter M. Braswell
---------------------
Walter M. Braswell
Secretary
<PAGE> 1
Exhibit 5(b)
[Opinion of Winthrop, Stimson, Putnam & Roberts]
March 1, 1999
Walter M. Braswell, Esq.
Secretary
E'town Corporation
600 South Avenue
Westfield, New Jersey 07090
Dear Mr. Braswell:
We have acted as special New York counsel to E'town Corporation (the
"Company") in connection with the proposed issuance and sale of up to
$75,000,000 aggregate principal amount of Debt Securities (the "Debt
Securities") of the Company to be issued under an Indenture, to be dated as of
March 1, 1999, between the Company and Summit Bank (the "Indenture"). We have
reviewed, among other things, (i) the registration statement on Form S-3 (No.
333-65951), and the prospectus included therein, with respect to the Debt
Securities, as amended by Amendment No. 1 thereto filed under the Securities Act
of 1933 on March 01, 1999, and (ii) your opinion dated the date hereof
addressed to the Company filed as Exhibit 5(a) to said Amendment No. 1 (the
"Opinion"). We have also reviewed and are familiar with the originals and
copies, certified or otherwise identified to our satisfaction, of pertinent
documents, corporate records and other instruments relating to the issuance of
the Debt Securities and other actions and proceedings relating thereto.
Based upon the foregoing, we concur with the Opinion insofar as matters of
New York law are expressed therein.
We are members of the New York bar and, for purposes of this opinion, do
not hold ourselves out as experts on the laws of any jurisdiction other than the
State of New York and the United States of America. This opinion is solely for
your benefit in connection with the Opinion and may not be relied upon by any
other person or for any other purpose without our prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legality" in the
prospectus included in the Registration Statement. In giving this consent, we do
not hereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act or the rule and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Winthrop, Stimson, Putnam & Roberts
<PAGE> 1
Exhibit 12
E'TOWN CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(In Thousands Except Ratios)
<TABLE>
<CAPTION>
NINE MONTHS
TWELVE MONTHS ENDED DECEMBER 31, SIX MONTHS ENDED
ENDED SEPTEMBER 30,
1993 1994 1995 1996 1997 JUNE 30, 1998 1998
------- ------- ------- ------- ------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS:
Net income $13,830 $12,088 $15,296 $15,073 $19,260 $ 9,325 $ 17,880
Federal income taxes 7,960 6,908 8,753 8,361 10,895 5,149 9,822
Interest charges 11,923 11,187 11,698 13,316 17,340 8,534 13,047
------- ------- ------- ------- ------- ------- -------
Earnings available to cover
fixed charges 33,713 30,183 35,747 36,750 47,495 23,008 40,749
------- ------- ------- ------- ------- ------- -------
FIXED CHARGES:
Interest on long-term debt 12,374 11,611 11,696 13,800 14,807 8,033 12,082
Other interest 96 470 2,390 2,645 2,560 500 1,038
Amortization of debt discount -
net 259 354 358 395 411 217 324
------- ------- ------- ------- ------- ------- -------
Total fixed charges 12,729 12,435 14,444 16,840 17,778 8,750 13,444
------- ------- ------- ------- ------- ------- -------
Ratio of Earnings to Fixed Charges 2.65 2.43 2.47 2.18 2.67 2.63 3.03
======= ======= ======= ======= ======= ======= =======
</TABLE>
Earnings to Fixed Charges represents the sum of Net Income, Dividends, Federal
income taxes and Interest Charges (which is reduced by Capitalized interest),
divided by Fixed Charges. Fixed Charges consist of interest on long and
short-term debt (which is not reduced by Capitalized interest) and Amortization
of debt discount.
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
---
(Name of Trustee)
SUMMIT BANK
(I.R.S. Employer Identification No.)
22-0834947
(Address of Principal Executive Offices)
210 Main Street
Hackensack, NJ
07601
(Name of Obligor)
E'town Corporation
(State of Incorporation)
New Jersey
(I.R.S. Employer Identification No.)
22-2596330
(Address of Principal Executive Offices)
600 South Avenue
Westfield, NJ 07091-0788
(Title of Indenture Securities)
Debt Securities
<PAGE> 2
1. GENERAL INFORMATION
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New Jersey Department of Banking Trenton, NJ
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes
2. AFFILIATIONS WITH OBLIGOR
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None (See Note on page 6)
3. VOTING SECURITIES OF THE TRUSTEE
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING SECURITIES
OF THE TRUSTEE: AS OF 12/31/98
<TABLE>
<CAPTION>
Col. A Col. B
------ ------
<S> <C>
Summit Bank, Common Stock 34,590,561 shares
Summit Bank, Preferred Stock 120,000 shares
</TABLE>
4. TRUSTEESHIPS UNDER OTHER INDENTURES
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
Not applicable
<PAGE> 3
5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Anne Evans Estabrook, E'town's Chairman of the Board, serves as a
director of Summit Bank.
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
Not applicable - see answer to item 13
7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter:
Not applicable - see answer to item 13
8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default
by the Trustee:
Not applicable - see answer to item 13
9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE
If the trustee owned beneficially or holding as collateral security for
obligations in default any securities or an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are owned or held by the
trustee:
Not applicable - see answer to item 13
<PAGE> 4
10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
stock of the obligor or (2) is an affiliate, other than a subsidiary,
of the obligor, furnish the following information as to the voting
securities of such person:
Not applicable - see answer to item 13
11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge
of the trustee, owns 50 percent or more of the voting securities of the
obligor, furnish the following information as to each class of
securities of such person any of which are owned or held by the
trustee:
Not applicable - see answer to item 13
12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE
<TABLE>
<CAPTION>
Col. A Col. B Col. C
------ ------ ------
<S> <C> <C>
Nature of Amount Date Due
Indebtedness O/S
Line of Credit $2,500,000 4/27/99
</TABLE>
13. DEFAULTS BY THE OBLIGOR
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such
default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, or is trustee for
more than one outstanding series of securities under the indenture,
state whether there has been a default under any such indenture or
series, identify the indenture or series affected, and explain the
nature of any such default.
None
<PAGE> 5
14. AFFILIATIONS WITH THE UNDERWRITERS
If any underwriter is an affiliate of the trustee, describe each such
affiliation
15. FOREIGN TRUSTEE
Identify the order or rule pursuant to which the trustee is authorized
to act as sole trustee under indenture qualified or to be qualified
under the Act.
Not applicable
16. LIST OF EXHIBITS
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY
1. *Copy of Articles of Association of the Trustee as now in
effect.
2. No certificate of authority of the Trustee to commence
business is furnished since this authority is contained in the
Articles of Association of the Trustee.
3. No copy of the authorization of the trustee to exercise
corporate trust powers is furnished since this authorization
is contained in the Articles of Association of the Trustee.
4. *Copy of the existing By-Laws of the Trustee as now in effect.
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Act.
7. A copy of the latest report of Condition of the Trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
*Exhibits thus designated have heretofore been filed with the
Securities and Exchange Commission, have not been amended since filing
and are incorporated herein by reference (see Exhibits TIA(i) and
TIA(ii) File No. 285667)
<PAGE> 6
NOTE
The Trustee disclaims responsibility for the accuracy or completeness
of information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtained by it through reasonable investigation and
as to which information it has obtained from the obligor and has had to rely or
will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Summit Bank, a corporation organized and existing under the laws of the
State of New Jersey, has duly caused this Statement of Eligibility and
Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Hackensack and State of New Jersey on the 26th
day of February 1999.
SUMMIT BANK
By: /s/ Susan M. Scola
-----------------------
Susan M. Scola
Corporate Trust Officer
<PAGE> 7
CONSENT OF TRUSTEE
Summit Bank, as trustee (the "Trustee") under an indenture to be
entered into between itself and E'Town Corporation. hereby consents to Section
321(b) of the Trust Indenture Act of 1939, as amended, to the furnishing by
Federal State, Territorial or District Authorities to the Securities and
Exchange Commission of all reports, records or other information relating
thereto.
SUMMIT BANK
By: /s/ Susan M. Scola
-----------------------
Susan M. Scola
Corporate Trust Officer
Dated: February 26, 1999
<PAGE> 8
FDIC Certificate Number [ 550 ]
Consolidated Report of Income
for the period January 1, 1998--December 31, 1998
ALL REPORT OF INCOME SCHEDULES ARE TO BE REPORTED ON A CALENDAR YEAR-TO-DATE
BASIS IN THOUSANDS OF DOLLARS.
Schedule RI - Income Statement
<TABLE>
<CAPTION>
1480
Dollar Amounts in Thousands Bil Mil Thou
<S> <C> <C> <C>
1. Interest income:
a. Interest and fee income on loans:
(1) In domestic offices:
(a) Loans secured by real estate 876,803 1.a.(1)(a)
(b) Loans to depository institutions 2,890 1.a.(1)(b)
(c) Loans to finance agricultural production and
other loans to farmers 21 1.a.(1)(c)
(d) Commercial and industrial loans 389,760 1.a.(1)(d)
(e) Acceptances of other banks 0 1.a.(1)(e)
(f) Loans to individuals for household, family, and other
personal expenditures:
(1) Credit cards and related plans 20,881 1.a.(1)(f)(1)
(2) Other 54,997 1.a.(1)(f)(2)
(g) Loans to foreign governments and official
institutions 0 1.a.(1)(g)
(h) Obligations (other than securities and leases)
of states and political subdivisions in the U.S.:
(1) Taxable obligations 59 1.a.(1)(h)(1)
(2) Tax-exempt obligations 0 1.a.(1)(h)(2)
(i) All other loans in domestic offices 14,727 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement
subsidiaries, and IBFs 0 1.a.(2)
b. Income from lease financing receivables:
(1) Taxable leases 54,158 1.b.(1)
(2) Tax-exempt leases 12 1.b.(2)
c. Interest income on balances due from depository
institutions:/1
(1) In domestic offices 1,334 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries,
and IBFs 0 1.c.(2)
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency
obligations 428,986 1.d.(1)
(2) Securities issued by states and political
subdivisions in the U.S.:
(a) Taxable securities 0 1.d.(2)(a)
(b) Tax-exempt securities 8,919 1.d.(2)(b)
(3) Other domestic debt securities 100,044 1.d.(3)
(4) Foreign debt securities 1,397 1.d.(4)
(5) Equity securities (including investments in mutual
funds) 16,490 1.d.(5)
e. Interest income from trading assets 163 1.e.
f. Interest income on federal funds sold and securities
purchased under agreements to resell 12,419 1.f.
g. Total interest income (sum of items 1.a through 1.f) 1,983,050 1.g.
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C> <C> <C>
2. Interest expense: a. Interest on deposits:
(1) Interest on deposits in domestic offices:
(a) Transaction accounts (NOW accounts, ATS accounts,
and telephone and preauthorized transfer
accounts) 41,015 2.a.(1)(a)
(b) Nontransaction accounts:
(1) Money market deposit accounts (MMDAs) 139,502 2.a.(1)(b)(1)
(2) Other savings deposits 46,595 2.a.(1)(b)(2)
(3) Time deposits of $100,000 or more 88,776 2.a.(1)(b)(3)
(4) Time deposits of less than $100,000 284,570 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge
and Agreement subsidiaries and IBFs 0 2.a.(2)
b. Expense of federal funds purchased and securities sold
under agreements to repurchase 133,849 2.b.
c. Interest on demand notes issued to the U.S. Treasury,
trading liabilities and other borrowed money 104,547 2.c.
d. Not applicable
e. Interest on subordinated notes and debentures 11,303 2.e.
f. Total interest expense (sum of items 2.a through 2.e) 908,157 2.f.
3. Net interest income (item 1.g. minus 2.f) 1,074,893 3.
4. Provisions:
a. Provision for credit losses 60,315 4.a.
b. Provision for allocated transfer risk 0 4.b.
5. Noninterest income:
a. Income from fiduciary activities 38,033 5.a.
b. Service charges on deposit accounts in domestic offices 115,011 5.b.
c. Trading revenue (must equal Schedule RI, sum of Memorandum
items 8.a through 8.d) 3,170 5.c.
d.-e. Not applicable
f. Other noninterest income:
(1) Other fee income 105,121 5.f.(1)
(2) All other noninterest income* 19,628 5.f.(2)
g. Total noninterest income (sum of items 5.a through 5.f) 281,163 5.g.
6. a. Realized gains (losses) on held-to-maturity securities 0 6.a.
b. Realized gains (losses) on available-for-sale securities 446 6.b.
7. Noninterest expense:
a. Salaries and employee benefits 287,685 7.a.
b. Expenses of premises and fixed assets (net of rental
income) (excluding salaries and employee benefits and
mortgage interest) 90,311 7.b.
c. Other noninterest expense* 296,511 7.c.
d. Total noninterest expense (sum of items 7.a through 7.c) 674,507 7.d.
8. Income (loss) before income taxes and extraordinary items
and other adjustments (item 3 plus or minus items 4.a.,
4.b, 5.g, 6.a, 6.b and 7.d) 621,680 8.
9. Applicable income taxes (on item 8) 224,404 9.
10. Income (loss) before extraordinary items and other
adjustments (item 8 minus 9) 397,276 10.
11. Extraordinary items and other adjustments, net of income
taxes* 0 11.
12. Net income (loss) (sum of items 10 and 11) 397,276 12.
</TABLE>
- ----------
FN1/ Includes interest income on time certificates of deposit not held for
trading
FN/2 Describe on Schedule RI-E--Explanations.
2
<PAGE> 10
FDIC Certificate Number [ 550 ]
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31,1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC - Balance Sheet
<TABLE>
<S> <C> <C>
ASSETS Dollar Amounts in Thousands Bil Mil Thou
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin /2 1,014,463 1.a.
b. Interest-bearing balances /3 18,179 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B,
column A) 5,683,646 2.a.
b. Available-for-sale securities (from Schedule RC-B,
column D) 3,580,352 2.b.
3. Federal funds sold and securities purchased under
agreements to resell 117,750 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C) 18,509,958 4.a.
b. LESS: Allowance for loan and lease losses 280,408 4.b.
c. LESS: Allocated transfer risk reserve 0 4.c.
d. Loans and leases, net or unearned income, allowance
and reserve (item 4.a minus 4.b and 4.c) 18,229,550 4.d.
5. Trading assets (from Schedule RC-D) 0 5.
6. Premises and fixed assets (including capitalized leases) 179,857 6.
7. Other real estate owned (form Schedule RC-M) 13,931 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) 56,437 8.
9. Customers' liability to this bank on acceptances
outstanding 18,089 9.
10. Intangible assets (from Schedule RC-M) 200,802 10.
11. Other assets (from Schedule RC-F) 410,961 11.
12. Total assets (sum of items 1 through 11) 29,504,017 12.
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) 20,736,955 13.a.
(1) Noninterest-bearing /3 4,574,393 13.a.(1)
(2) Interest-bearing 16,162,582 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II) 0 13.b.
(1) Noninterest-bearing 0 13.b.(1)
(2) Interest-bearing 0 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase 1,861,520 14.
15. a. Demand notes issued to the U.S. Treasury 79,145 15.a.
b. Trading liabilities (from Schedule RC-D) 0 15.b.
16. Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
a. With a remaining maturity of one year or less 1,371,455 16.a.
b. With a remaining maturity of more than one year through
</TABLE>
3
<PAGE> 11
<TABLE>
<S> <C> <C>
three years 791,730 16.b.
c. With a remaining maturity of more than three years 1,935,957 16.c.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding 18,089 18.
19. Subordinated notes and debentures 140,753 19.
20. Other liabilities (from Schedule RC-G) 440,260 20.
21. Total liabilities (sum of items 13 through 20) 27,365,864 21.
22. Not applicable
EQUITY CAPITAL
23, Perpetual preferred stock and related surplus 6,000 23.
24. Common stock 172,953 24.
25. Surplus (exclude all surplus related to preferred stock) 884,721 25.
26. a. Undivided profits and capital reserves 1,272,287 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities 2,182 26.b.
27. Cumulative foreign currency translation adjustments 0 27.
28. Total equity capital (sum of items 23 through 27) 2,138,153 28.
29. Total liabilities and equity capital (sum of items 21
and 28). 29,504,017 29.
</TABLE>
2/ Includes cash items in process of connection and unposted debits.
3/ Includes time certificates of deposit not held for trading.
4
<PAGE> 12
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank
by independent external auditors as of any date during 1997
Number
------------ ----------
N/A M.1.
------------ ----------
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which submits
a report on the bank.
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company (but
not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8. = No external audit work
